You ever wondered how people in the product business maintain the bulk of inventory and keep track of it? Well, the number of people you see today running their business online does not hold inventory. Yes! They do not. It is primarily because of the business model Ii.e, dropshipping. Understanding the working mechanism of a General Dropshipping Store can help you grab the idea of selling without keeping an inventory. Whether it is a Shopify General or Shopify Niche dropshipping store, they all differ from the traditional business models.

In this article, we will elaborate on how the dropshipping model works? How this business model integrates with Shopify General and Shopify Niche Stores. 

Apart from this, we will also see if the dropshipping business model is worth it or not.

So, let’s get started with one of the fastest-growing business models, i.e., dropshipping.

What is Dropshipping?

Dropshipping is a business model and a bit different from traditional business models. Instead of selling goods directly to the end consumers, keeping and managing an inventory stock, in dropshipping model delivery of the products rests with the manufacturer/ third party supplier. 

There are three entities involved in this business model. i.e., a manufacturer of the goods (third party supplier), a middle man/store owner (drop shipper), and the end consumer.

The middle man or the store owner or the drop shipper markets and sells the products manufactured by a third party, also known as a dropshipping supplier. As soon as the store owner receives an order from the customer, he forwards the order details to the supplier. And afterward, the supplier is responsible for packaging and delivering the product to the customer.

In this way, the store owner or the business owner gets rid of the hassle of keeping an inventory and managing it or keeping track of it. 

Dropshipping is all about selling products without having an inventory. 

Shopify General Dropshipping Store

There are several store types common among e-commerce websites. Akin to this, at Shopify, a variety of stores operating on different business models are present. While dropshipping being among the popular ones. 

A Shopify General Dropshipping Store does not merely focus on one niche. Instead, it is a store that sells products from multiple niches. That means it has a wide array of products targeting the masses. It intends to offer everyone something. 

Shopify Niche Dropshipping Store

Shopify Niche Dropshipping Store works the same way as a general dropshipping store, selling without keeping an inventory. However, a slight difference is in the orientation of the store. A niche dropshipping store does not engage in multiple niches. Instead, it focuses on selling products from a single niche. 

Selling products from a single niche can not accommodate everyone. Instead, it depends on a particular segment of the population, and thus the customer turnover is low compared to that of a general store.  

How does Shopify Dropshipping Work?

As mentioned earlier, dropshipping allows you to work freely without carrying any inventory. Therefore, it is one of the most growing business models. Shopify, which is an e-commerce website, enables you to build an online dropshipping store. The type of store depends on what you select to achieve your business goals. i.e., a general, niche, or one product store.

Once you have decided on the type of store, you are ready to implement the dropshipping model by following the simple steps mentioned in Shopify Dropshipping guidelines. 

These simple steps include naming the store, creating a Shopify account, working the store settings, launching and designing the store, and connecting it with the Oberlo marketplace. Integrating the Oberlo app with your store lets you explore hundreds of dropshipped products. One can select the dropshipped products and import these to the store. 

And there you go with making your first sale!

Is Dropshipping Worth It?

Well, considering the popularity of dropshipping as an order fulfillment model, it is worth all your effort and investment. Like other business models that have their pros and cons, dropshipping also does. But it has the edge over other business models due to the following facts:

• Requires less capital to start your dropshipping business as no inventory upfront cost is involved.

• Easy to launch because one does not have to worry about packaging or to deliver the product.

• Reduced overhead cost because neither inventory nor warehouses are needed.

• This model has a global reach, as you can connect to suppliers all around the globe.

• Products can be tested easily before starting the dropshipping.

• Less pain and easy to scale without increasing the workload. 

Risks Related to Dropshipping

With all the advantages of dropshipping, there are a few risks related to dropshipping business as well. These risks are usually regarding low-profit margins due to low investment, inventory being out of stock, shipping issues on the supplier end, and almost no control on customization or branding of the product itself.

The Bottom Line

Whatever business model you implement is going to have its positives and negatives. Similarly, dropshipping business is not all roses. There are some pain points that one must resolve for turning your Shopify General or Shopify Niche Dropshipping Store into a successful dropshipping business.

The tools that Shopify offers for dropshipping stores make it less stressful for store owners to achieve their business goals.