Written by Ava Grzegorczyk
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What is a Dropshipper?

A dropshipper is any company that carries an inventory of products and works with online or retail vendors by shipping specific orders to the vendors' individual customers. In some cases, a dropship wholesaler also ships in bulk to retail stores. There can be tremendous advantages for all parties in the transactions if everyone is geared to offering quality products and services.

Let's look at some of the advantages for the vendors. Working with a dropship company, a vendor is not required to carry any inventory at all. You may wonder how a vendor can sell without inventory, but that's the beauty of the arrangements between vendors and dropship wholesalers. Inventory is expensive and can be a big risk. If you purchase products that don't sell, you have a loss. You also have to pay for warehousing and insurance. Using a dropship company eliminates all of those expenses and risks.

Dropshipper Process

As noted above, the dropship company carries all of the costs and risks associated with carrying an inventory. Many of them offer impressive lines of products in the tens of thousands of different items. Some of them segregate different product types into "warehouses" to which the vendors gain access according to the wholesaler's terms. A vendor may, for example, be required to pay a monthly fee for access to wholesalers' catalogs.

Once the purchase relationship and payment method have been established between the vendor and wholesaler, everything is ready to begin shipping. The process starts when a vendor takes an online order and receives payment in advance (usually online) from the customer. The vendor then notifies the dropship wholesaler about the order. The wholesaler follows through by gathering the items, packing them in boxes with the vendor's logo and information, and sending them out. The customers never know that their products have been shipped from a warehouse owned by a third party.

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