A dropshipping scheme consists of a chain – producer, intermediary, and buyer. The intermediary-dropshipper, in turn, organizes deals: advertises products, searches for a buyer, transfers orders to the supplier. In the end, all the participants in the chain win.
How dropshipping works: a clear scheme
The dropshipping scheme has its peculiarities. The seller creates a website on the web or organizes sales on social networks. In this case, the purchase of goods by investing their own money is not necessary. Dropshipping business ideas are different. The intermediary only needs to think through channels for promotion, choose the right products, organize an advertising campaign.
The dropshipping scheme in simple words is as follows:
- The intermediary finds a buyer and takes the order.
- Then the intermediary forwards the request to the manufacturer.
- The manufacturer sends the item to the buyer.
- After the transaction, the intermediary takes a percentage of the item’s value.
The intermediary does not ship, pack or purchase anything. He or she acts as a liaison between the buyer and the manufacturer. His main task is to find buyers and sell them goods. That is, in simple words, a dropshipper is a procurement organizer.
The minimum sale party – 1 unit of product. Investments are not needed, which leads to the popularity of the earnings method. The scheme is simple, but it must be fine-tuned to bring profit to all participants in the chain.
In conditions of high competition, the intermediary must find a product that is guaranteed to interest the buyer. The easiest way is to look among proven suppliers with low prices for products.
This scheme is also advantageous for the client because he or she makes a purchase in a couple of clicks via the Internet and waits a short time for delivery. The cost of one unit of product for the buyer and the intermediary will be different.
Dropshipping options: individual and classical
Work on dropshipping organized by the following schemes:
The classic scheme involves direct delivery without prepayment. Under the individual, the manufacturer takes an advance payment, thereby insuring itself against financial risks.
A successful example of selling goods on the dropshipping system
A concrete example will help you better understand the scheme of dropshipping. Several years ago kinetic sand kits appeared. The intermediary, organizing the sale, chose a proven Chinese supplier. Kinetic sand became a market breakthrough, as it was suitable for gifts, was liked by children and adults, was a novelty, and was inexpensive at the same time.
The detailed scheme of work on dropshipping for the intermediary selling the sand looked like this:
- The intermediary tested the product through specialized services.
- The intermediary created a platform for the sale, at that time it was mainly a landing page.
- Started advertising his site and product.
- Received requests for goods.
- Placed orders with the manufacturer or wholesaler.
- Then the goods were delivered to the buyer.
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