Dropshipping All You Need to Know: 5-min Guide

Want to start your own online business? Have an idea of what products to sell, but don’t have money to invest in them? Then dropshipping is for you! Dropshipping lets you get started with little to no investment, and if done right, can pay off in high profits. Curious? Keep reading.

👀 In this article, we’ll give you an overview of dropshipping and how it can help you grow your online business.

How Does Dropshipping Work?

Dropshipping essentially means you advertise a product that you don’t physically handle. You source your products from a supplier and never hold physical inventory yourself. Clients buy products through your site, but it’s the supplier who takes care of sending the product directly to the customer.

Generally, the dropshipping process works like this:

You set up your own online store for selling products;
Search for and source any interesting products that you’d like to sell (many dropshippers use marketplaces like AliExpress and Taobao);
A customer makes a purchase through your online store at your set retail price;
Your store forwards the order to the supplier and pay for the item;
The supplier sends the order directly to the customer!

👉 In general you don’t handle the physical product but mainly just the:

online store and website;
positioning, marketing, branding;
customer purchasing process.

🚀 Dropshipping is a type of e-commerce for which you technically just need a computer, an internet connection and an online store platform for setting up your business! It removes many of the challenges that come with warehousing and logistics. And, naturally, the profit you make is the difference between the retail price you set and the price you pay to the actual supplier.

🔍 Keep reading! We give you some resources for easily getting started with dropshipping below. One good place to begin is reading our step-by-step guide: Dropshipping for Dummies: What is it & How Can You Get Started.

📌 Main Platforms for Setting up Your Dropshipping Store

Did you know some platforms can greatly simplify the process of setting up your online store? Shopify, for instance, is a safe bet, but know there are also plenty of alternatives!

E-commerce platforms allow merchants to build and customize an online store and sell their products in multiple places (web, mobile, social media). Most of the tools to manage products, inventory, payments, shipping are all in one place and make it easy for you to grow your business.

🔍 Can’t choose between Shopify, Big Cartel or something else? Read this 👉 Best E-commerce Platforms Comparison (2023)

📌 Main Suppliers for Sourcing Your Products

Choice is yours when it comes to picking the best dropshipping supplier. The dropshipping supplier is the marketplace which you can source your products from.

Of course, they differ from one another in terms of location (i.e. USA, China), quality, price and discounts, services, etc.
Some platforms like Alibaba or AliExpress surely ring a bell and offer a surprisingly wide range of products! Other alternatives include SaleHoo, Worldwide Brands, Doba, Spocket, etc.

👋 Are you using an e-commerce platform and collecting customer personal data?

You’ll need to disclose this in your privacy documents!

👉 Check out our e-commerce Privacy Policy example here

📌 Dropshipping All You Need to Know: Protecting Your Online Business when Using Dropshipping

We have seen the benefits of dropshipping, but, like most things, it comes with some cons:

Limited control over product quality;
Little control over shipping times;
Dependence on the supplier.

That’s why we strongly recommend following these steps for limiting your liability in the case of issues arising:

🚀 First things first, you need to select your supplier carefully and make sure that they have some processes in place themselves in the case of issues (buyer protection, forms for dispute resolution requests, complaints, etc.);
🚀 Even if you have transferred some responsibilities to the supplier, you are still most likely in charge of interacting with customers, ensuring customer satisfaction, etc. You might want to have a solid e-commerce return and refund policy! Here are some tips on how to draft one;
🚀 Most importantly, make sure you have solid Terms and Conditions in place to protect you.

👋 Do you have this legal document in place?

A crucial document for protecting your online store is Terms and Conditions. They contain legally-mandated disclosures (i.e. withdrawal rights), so they have to be professional. To avoid any risks, we don’t recommend trying to write your own. If you run an online business, they are a MUST.

👉 Here are 5 reasons why you need Terms and Conditions