Explained: The Process of Dropshipping and its benefits to different businesses
If you’ve ever thought about the possibility of starting your own business, you may have heard of the dropshipping process before. The online business model Dell, which requires very little explicit investment, shopify print on demand is booming in the field of entrepreneurship. If you don’t know much about it, this concept may seem overwhelming, but it’s not as complicated as it sounds! With a little explanation, you can understand the dropshipping process and be on your way to starting your own online business!
The following dropshipping process is:
- The consumer store buys products from the online store
- The online store orders a similar product from their designated supplier
- The supplier completes the order and delivers the ship directly to the customer
- The online store provides shipping details to the consumer and assists after the product is received.
Although the above process seems simple and concise, there is still a lot going on behind the scenes leading to print on demand shopify. The detailed guide below gives you a complete understanding of the dropshipping process.
Benefits of Dropshipping to different niches
Before proceeding, you must familiarize yourself with these terms.
Supply Chain: It describes the entire process of converting raw materials into products and delivering them to customers. If a company is part of a supply chain, it is either a manufacturer, supplier, distributor, wholesaler, retailer or anything else related to the production or movement of goods.
Suppliers: A supplier is an individual or entity that provides goods, raw materials or services to other companies in the supply chain. Suppliers often have multiple levels. For example, a company may obtain cast iron from its supplier in a mine. Then, they make it into steel and supply it to another company to convert it into car parts. It then supplies the car parts to the car manufacturer. The car manufacturer then supplies the finished car to the dealership, sold it to the end-user. Each of those companies is a supplier to the companies that use what they produce.
Entrepreneur: An entrepreneur is a person who takes responsibility for starting his own business. They often take the risk of succeeding and attribute their success to themselves and not to anyone else.
Merchant: A merchant sells products manufactured by other companies directly to customers instead of reselling them. Merchants are also known as dealers, merchants or retailers.
Seller: A seller is a person or company to whom they offer something for sale, usually a limited or specific area of their product line-ups, such as an ice cream vendor, office fee supply seller, or clothing seller. Vendors are usually suppliers of large retail stores such as Target or Walmart that sell many items but do not produce their items.
Wholesalers: Wholesalers sell large quantities of goods at relatively low prices to individuals and companies who are not end-users of the products. Wholesalers send to restaurants, retailers and other commercial users for resale or commercial use.
Manufacturer: A manufacturer is a person or company that produces, develops or harvests goods for sale.
Distributor: A distributor is an agent or company that supplies goods for resale to other companies. They may be wholesalers, but they are not always. In many cases, manufacturers will give the distributor the exclusive right to distribute that particular product, so anyone who wants to buy that product must go through the same distributor.
ECommerce: eCommerce means “electronic commerce” and describes the process of selling goods online. To learn more about this, see our article What is eCommerce fulfilment?
You may be surprised to learn that “Drop Shipper” is not a real title. The shopify drop shipping is a process involving many people, such as manufacturers, distributors and merchants, so there is no single person who has the title of “drop shipper”.
Also Read: How to handle warehousing and fulfilment services for your eCommerce business?
Importance of the Dropshipping Process
Although all stores have about 33% of the dropshipping in print on demand stores, it is generally impossible to know which stores use dropshipping and their inventory. Behind the scenes, however, the process looks very different from the typical supply chain.
When a customer orders a product from a dropshipping company, the integrated software on the company’s website automatically confirms the purchase and immediately sends a confirmation email to the customer. At the same time, he sends another email to alert the sales merchant. The merchant also gets paid for the sale automatically.
The merchant must then review the order and forward the order information to the supplier. In addition, the merchant must pay the supplier the cost of the item and the cost of transporting it. After that, the supplier will pack the item in the boxes labelled with the merchant’s branding so that the customer sees the brand he identifies on the box. The supplier then sends the customer directly to the ship from their warehouse. Depending on the agreement between the merchant and the supplier, the supplier may send an invoice to the merchant after completing the advance order instead of requiring advance payment.
After all, the customer receives their purchase, and there is no indication that they are coming from anywhere but the merchant who bought it. Throughout the product’s journey, the merchant never came in contact with it.
In the traditional supply chain model, the goods will be sent to the merchant first and then to the customers from the merchant’s collection. By cutting that step in the meantime, you can reduce total shipping costs as each box needs to be shipped only once.
Is Dropshipping Profitable for on-demand print business?
So far, you may be wondering if this business model is profitable, especially as more and more entrepreneurs turn to dropshipping to earn revenue. Well, according to Grand Review Research, the dropshipping industry will grow rapidly with the growth of eCommerce, as more consumers show a preference for shopping online shopping. The value of the dropshipping market in 2025 is estimated at US $557.9 billion!
So how do you benefit from a on demand print business model? Let’s look at an example.
Suppose you are advertising a supplier’s reusable water bottle on your website. It costs about $5 to make water bottles. The supplier charges traders and retailers $15 per bottle of water, giving them a profit of $10 per bottle. You, the merchant, advertise a $25-plus bottle of water for shipping and handling on your site, giving you a profit of 10 dollars.
This works because the supplier does not sell directly to customers. It only sells to retailers and merchants like you, so your prices don’t seem too high. In addition, the profit you make depends on the agreement between you and your supplier, the competition in your specific product category, and your marketing efforts.
