The Truth about Drop Shipping: What You Need to Know

💡Drop shipping is an ecommerce business model where an online store does not carry inventory and instead purchases products from a wholesale supplier who ships directly to the end customer.

🚫Running a successful drop ship store is not as easy as it seems and requires careful consideration of the pros and cons.

💰Drop shipping has lower margins compared to other ecommerce business models, which makes it less profitable.

⏱️Drop shipping can be a great way to start selling online with low upfront costs, but it is best used as a stepping stone to create your own branded products.

🌎Drop shipping is a global business model that can be automated, but customer service is still essential.

Is drop shipping legal?

—Yes, drop shipping is legal as long as you work with legitimate dropship suppliers and use officially licensed distributors for the brands you carry.

Do I need a seller's permit and a business license for drop shipping?

—In the US, you typically need a seller's permit to legally sell online and a business license if your locality requires it. Drop shipping is a real business and must be registered as such.

How profitable is drop shipping?

—Drop shipping has lower margins compared to other ecommerce business models, with typical margins ranging from 10% to 30%.

When should I use drop shipping?

—Drop shipping is best used for product research and testing, as well as for starting an ecommerce business with low upfront costs. It is not a long-term, highly profitable business model.

Who pays for shipping when drop shipping?

—The drop shipper charges their own shipping rates, and you can choose to pass the shipping costs to your customers or cover them yourself.

00:00Drop shipping has pros and cons that go beyond common misconceptions.

00:16Drop shipping is an ecommerce business model where an online store does not carry inventory.

00:36Running a successful drop ship store requires careful consideration of the pros and cons.

02:53Drop shipping has lower margins compared to other ecommerce business models.

06:36Drop shipping can be a great way to start selling online with low upfront costs.

09:54Drop shipping is a global business model that can be automated, but customer service is still essential.