Dropshipping is a legitimate online sales model that does not require a warehouse or pre-prepared stock of products, and the retailer is only an intermediary in sales. The products are purchased from a third party or supplier (wholesale store) who then delivers the product on behalf of the trader. You don’t have to worry about storage, packaging, inventory, and delivery because everything is done by a third party. The product never gets into the hands of the trader but is delivered directly to the buyer.

How does everything work?

We will explain with a very simple example. The customer buys your product at a retail price of $200, you pay that product $150 at the wholesale price from the supplier, and you have a profit of $50. The supplier then delivers the product to the customer without you ever seeing it or having to worry about how it will be delivered. Sounds like very easy earnings, right?

It can be, but only if you know to highlight your product because the competition is big. Therefore, excellent marketing knowledge is essential.

Source: https://www.oberlo.com/blog/how-to-start-a-dropshipping-business

What is the difference between dropshipping and a regular web store?

When you have your “ordinary” web store, you must have a warehouse, and therefore you need MTU (minimum technical requirements), stocks of goods for delivery, you do the packaging and delivery of these products, you have insight into the product and are familiar with its quality.
For dropshipping, you do not need anything listed except the supplier and good marketing. The cost of dropshipping is much lower, but it can also be unprofitable if you spend a lot of money advertising your products and no one buys them.

How to start?

The first option is to organize the entire business plan yourself, which would mean finding products that are currently in trend, finding a potential supplier, and updating the inventory of your store yourself.
Another option is the ability to sign up for drop shipping platforms that do the work for you. They help you find the right supplier, do market research on current trends, and automatically put selected products on your website, and more.

The best dropshipping platforms are:

1. Oberlo
2. Shopify
3. Salehoo

Is it profitable?
We are all already familiar with the adage that success does not come overnight, and so in this case. The competition is big, and you need to know how to attract customers, advertise in the right way, understand the sales funnel, do good copywriting, and much more that will ultimately result in the purchase itself. If, as in the example above, you earn $50 or less, you need to sell a lot of products to cover your advertising costs, site maintenance, and thus your working hours. Before embarking on this way of doing business, we advise you to first do market research and a financial plan.

Sources:

• https://www.thebalancesmb.com/best-drop-shipping-companies-5070342
• https://www.oberlo.com/blog/how-to-start-a-dropshipping-business
• https://geek.hr/clanak/sto-je-dropshipping-kako-funkcionira-i-kako-izbjeci-prevarante/#ixzz7DteYY35o
• https://magento.com/resources/dropshipping
• https://www.it-akademija.com/sta-je-dropshipping