Dropshipping
A sales model in which the seller does not hold the product in stock and, when an order arrives, the supplier ships it directly to the customer.
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Why it matters
Dropshipping lowers start-up costs, but margins are thin and quality, delivery times and stock information are in the supplier's hands. The customer, however, holds the seller responsible. Legally too, the seller must meet its obligations to the consumer.
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Example
A dropshipping shop does not update its site when the supplier's delivery time grows to two weeks; as complaints rise, real delivery times are written on product pages and a local supplier is added.
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Common mistake
Not syncing the supplier's stock and delivery information regularly. Taking orders for sold-out products ends in cancellations and negative reviews.
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Related terms
Related services and guides
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