1 Learn the concept
Dropshipping is a business model that lets an online store sell products without keeping them in stock. When a customer orders, a supplier ships the item directly to them. This lowers the upfront cost and risk, but it also means you rely on the supplier for quality and speed, and margins can be thin. This lesson explains how dropshipping works and how to find and compare suppliers.
2 See it in action
- The model: you take the order and payment, the supplier ships.
- Advantages: low upfront cost and no stock to manage.
- Risks: shipping time, product quality and thin profit margins.
- Choosing suppliers: order samples, check reviews and compare terms.
Worked example
Comparing two suppliers
Supplier A: $8 per unit, ships in 3 days, good packaging, sample arrived undamaged.
Supplier B: $6 per unit, ships in 18 days, sample arrived late and scratched.
Selling price: $19.
Profit before ads: A is $11 per sale, B is $13, but B risks refunds and bad reviews.
Decision: choose A. A two-dollar saving is not worth slow delivery and returns.
3 Study an example
Example scenario
A store owner orders samples from three suppliers and finds one ships in three days with good packaging while another takes three weeks. She chooses the faster supplier even though the price is slightly higher.
4 Apply it and download
- List three possible suppliers for a product.
- Compare price, shipping time and quality.
- Complete the supplier comparison sheet.
Worksheet Supplier comparison sheetOpen, print or save as PDF