Dropshipping

Dropshipping is a way of running an online store without buying inventory up front. The store lists products, takes the order and the payment, then passes the order to a supplier who packs and ships it directly to the customer. The store keeps the difference between its selling price and the supplier's price.

The model is cheap to start, which is why so many new stores use it, but it has trade-offs:

• Thin margins. Anyone can list the same supplier product, so prices get pushed down.
• Slower shipping. Suppliers are often far from the customer, which raises refund requests and chargebacks.
• Little control over quality. The store owner rarely sees the product before the customer does.

Most dropshipping stores live or die on paid ads, so the work is mostly product selection and creative testing. That is why dropshippers study other stores' best sellers and ad libraries before they spend money. Many successful dropshippers later move to private label products once a winning product proves itself, to protect their margin. The guide on how to find winning products covers the research side step by step.