Dropshipping

Dropshipping is a retail fulfillment method in which a merchant does not keep goods in stock. Instead, when a customer places an order, the merchant purchases the item from a third party—usually a wholesaler or manufacturer—and has it shipped directly to the customer. This business model allows the merchant to operate without maintaining a physical inventory, significantly reducing overhead costs such as storage and upfront purchases of goods.

However, dropshipping can result in longer delivery times compared to traditional retail models where items are shipped from readily available stock. Additionally, because the merchant does not handle the product directly, issues with quality control can arise, leading to discrepancies between the product advertised and what the customer receives. These factors can increase the likelihood of customer dissatisfaction, resulting in a higher rate of chargebacks due to shipping delays or complaints about product quality. Dropshipping merchants need to carefully select reliable suppliers and maintain excellent customer service to mitigate these risks and ensure customer satisfaction.