Drop shipping

In drop shipping, the store markets the product and takes payment, then passes the order to a supplier, wholesaler or manufacturer that packs and ships it under the store's name. The store never touches the goods. How an order flows: 1. A customer buys from your store at your price. 2. The order is sent to the supplier, often automatically by an app. 3. You pay the supplier the wholesale price. 4. The supplier ships to the customer and sends tracking back. The upside: - Little upfront cash, because you don't buy inventory. - You can test many products quickly. - No warehouse or packing work. The downside: - Thin margins, since the supplier keeps much of the price. - Little control over stock, packaging, quality or delivery time. - Many stores sell the same products, so competition comes down to price and ads. - Customers blame you for every late or damaged order. Drop shipping vs a 3PL. With a third-party logistics company, you own the stock and pay someone to store and ship it. With drop shipping, the supplier owns the stock. For subscriptions, drop shipping is risky. Subscribers expect the same product on time every cycle. A supplier stockout or a slow shipment turns into skips, support tickets and cancellations. Brands that subscribe customers to drop-shipped goods need a supplier with reliable stock and a backup plan for when an item runs out.