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dropshipping what is it?
Let’s start by explaining what dropshipping is. Dropshipping is a business model in which a retailer sells products without keeping inventory. When a customer places an order, the retailer passes the request on to the supplier, who then ships the product directly to the customer. This reduces operating costs, as the seller does not need to invest in inventory or deal with logistics. Dropshipping allows online stores to offer a variety of products quickly and with less financial risk, making it a popular option for e-commerce entrepreneurs.
dropshipping how does it work?
Dropshipping works simply: the retailer creates an online store and displays products from suppliers. When a customer makes a purchase, the retailer passes the order to the supplier, who ships the product directly to the customer. The retailer does not maintain inventory or deal with shipping logistics, reducing operational costs. This model allows the seller to focus on marketing and customer service, while the supplier takes care of production and delivery of the products.
What is a dropshipper?
A dropshipper is a person or company that sells products and passes on orders to the supplier to ship them. They act as an intermediary between customers and suppliers, creating online stores and displaying products. Consider an example of a dropshipping online store that sells pet supplies. Someone goes there and buys a collar. From there, the store passes the order on to the supplier, which is a warehouse full of products in the industry. The product is paid for by the end consumer to the store, which only pays the wholesale price plus packaging, handling and shipping costs to the supplier and keeps the difference. The dropshipper focuses on attracting customers, managing the store and ensuring a good shopping experience, while the supplier takes care of the production, storage and shipping of the products.
What are dropshipping suppliers?
Dropshipping suppliers are companies that sell and ship products using this model. Their customers are the stores that make the sale to the end customer and pass on the order. They act as an intermediary between the customer and the supplier, creating an online store and displaying products that, when sold, are sent directly by the supplier to the end consumer. The dropshipper focuses on attracting customers, managing the store and ensuring a good shopping experience, while the supplier takes care of the production, storage and shipping of the products. It is possible to work with individual suppliers or dropshipping platforms such as FFOrder.
How does dropshipping work?
Here is a step-by-step guide to how the dropshipping scheme works:
1. Partner with a supplier
The first thing you need to do is find a dropshipping supplier who has the products you want to sell. Once you sign a contract or accept the terms, the supplier will be responsible for packaging and shipping each order.
You can partner with an individual company or use a specialized dropshipping application that allows you to purchase from multiple suppliers.
2. Open an online store
You will need to open an online store or operate on a marketplace to start dropshipping. Once you know the price you will pay to the supplier, you will make a final decision about the pricing of your products, keeping in mind the need to maintain a healthy profit margin.
If you have a Shopify store, it’s easy to add a dropshipping app to update listings and automatically forward orders.
3. Customer places an order
When a customer visits your store and places an order, the checkout process goes as usual: they pay, receive a confirmation, and wait for delivery.
4. The order is forwarded to the supplier
Once payment has been received, the seller forwards the data to the dropshipping supplier. If an app is used, this process is fully automated.
5. The supplier prepares the package and ships the product
At this stage, the supplier packages the product and ships it directly to the buyer. It is even possible to customize the packaging and the invoice with your brand.
6. The buyer receives the product
Once the product has been received, the store is responsible for providing customer service, exchanges, refunds or clarifying any doubts.
Is dropshipping a crime?
Dropshipping is not a crime, but the entrepreneur must comply with the law. Among other definitions, it is important to highlight that it is necessary to have a CNPJ to issue invoices and the activity is not permitted for MEIs (Individual Microentrepreneurs).
Dropshipping is not a crime. What happens is that many people start working in the area without knowing the obligations foreseen for this type of e-commerce and, often, suffer impediments or fines for failing to comply with some rule or tax obligation.
What deserves the most caution are scams and irregular activities. Scammers often take advantage of the advantages of dropshipping to offer extremely profitable proposals, but which can, in fact, result in great losses.
Dropshipping is just a business model with its advantages and disadvantages. The retailer does not need to manage inventory, but also has less control over the quality, availability and delivery of products, which can generate many problems when customers are frustrated.
Therefore, be very cautious with promises of easy money or big gains in a short time and with minimal investment.
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