What is dropshipping?

Dropshipping is an ecommerce business model where an online retailer sells products without stocking inventory or handling the items directly. When a customer places an order, the retailer forwards the order details to a third-party supplier-usually a wholesaler or manufacturer-who then ships the product directly to the customer. This setup allows the retailer to focus on marketing and customer service while minimizing upfront costs, storage needs, and shipping logistics. The retailer earns profit by charging a retail price that exceeds the supplier’s wholesale price, making dropshipping a popular model for new entrepreneurs and low-risk online store setups.

How does dropshipping work?

Dropshipping works by allowing online retailers to sell products without managing inventory or shipping. When a customer places an order, the store automatically forwards the order details to a third-party supplier, who then ships the product directly to the customer. This hands-off fulfillment model lets entrepreneurs focus on marketing, branding, and customer service while keeping startup costs low. Dropshipping is especially popular with print-on-demand businesses, where custom products like phone cases or apparel are made to order. Learn more about dropshipping and how it compares to print-on-demand on the Podbase blog or explore our guide to starting a print-on-demand business.