Eli5. What’s drop shipping?


So I’m new to this. Seen like 5 vids on tik tok and wanna learn more. Because you buy a item for like 10$ from a customer, then you sell it for the same 10$ or what? That would be 0 profit. Do you sell it for more? If that’s the case, why would people buy it from you then?

In: 4

They sell it for more. People buy from them because they didn’t shop around very well, or because maybe they were like “I don’t like Amazon and I want to pay a little more to support a small bussiness.” And then they get *really* disappointed when the item shows up from Amazon.

It’s another name for reselling. It really only works for people of the less smart varieties.

Normally, a store buys inventory from a manufacturer, takes possession in their store or warehouse, and then sells and/or ships it to customers. Drop shipping is when the retailer takes an order for a good and then has the manufacturer fulfill the order directly to the customer, without the retailer having ever taken possession of the item.

A retailer would be paying wholesale, so while they’re charging their customer $10 they are paying the manufacturer $5 (or maybe $7 to cover the one off shipping vs. shipping a case at a time to a warehouse).

the idea is that you have something like a webstore where you sell things you don’t actually own and if anyone buys something you buy it directly from china and have them ship directly to the customer who ordered it from you.

It is incredibly easy to set up. there are tools that allow you to create your own online store and populate it with wares from Chinese vendors in a very short time and with very little know how. All you need to do is to advertise your webstore and get people to buy things from you for slightly more than you buy them.

It sounds like an easy way to make money with very little work, right?

The problem is that it is too easy. Everyone can do it and you end up competing against a large number of people trying to do exactly the same thing.

There might have been a small fortune to be made with that before everyone jumped up on the bandwagon, but right now that time has passed and there isn’t really an easy way to make money with this method anymore.

So why are you hearing and seeing so many people talking about it?

Because many of the idiots who figured out that they can’t make money with drop shipping also figure that they can make money selling other people the idea of drop shipping. They can make videos about it and advertise courses and tricks to make money with drop shipping.

A smart move right. After all the way to get rich in a gold rush is to sell shovels not to dig for gold.

Unfortunately right now that ship has sailed too. You could have made a lot of money telling people how to do drop shipping a few years ago, but right now that field too is over saturated with ex-drop shippers who are trying to find new ways of making money.

It is all just a money sink now.

Of course this is not absolute. There a re specif niches where a person might have the right sort of knowledge and connections to advertise and consult a customer on what product is right for them and then drop ship that to them, but this is not for everyone. It only works for the very few who actually have a somewhat rare expertise .

If it was easy everyone would be doing it.

Alibaba/Aliexpress is a popular source for many cheap made-in-China products. What most drop shippers do is list these products for sale and just order from there and use the customers info for shipping.

So yes, it’s a useless middle-man. Now, some have evolved to actually buying the popular items ahead of time and housing them in order to offer faster shipping.