Retailer (Drop shipper)
They are usually small-scale entities that buy goods from the wholesaler in not-so-large amounts and sell in bits to customers. However, when a retailer decides to do Dropshipping, he doesn't need to buy goods or stock. He can advertise them on his online platform and pass the order to a manufacturer, wholesaler, or any other party involved; the manufacturer charges you, the retailer (Drop shipper) for the service, and you charge the customer a slightly higher price.
Generally, in Dropshipping, the smaller your supply chain, the higher your profit. This is because fewer parties are taking a cut. A very short supply chain is when you contact the manufacturer directly for an order. A very long one can involve manufacturers, wholesalers, and even other intermediaries!
Although Dropshipping might look like a relatively easy, low risk and stress-free way to make money online and have a growing business, it is not exactly a bed of roses.
The dropshipping business works on low-profit margins meaning there is a slight difference (Profit) between what you pay the 3rd party who delivers the goods and what you get from the customer, which shows getting high gains might not be easy or as fast as you thought.
Also, most experts say that it is more suitable if you already have a stable business and use Drop Shipping as a compliment to boost your online platform or if you have a source of high online traffic.
All in all, while the process of Dropshipping might look to be simple, you advertise and sell manufacturers' goods and take a percentage for yourself. There are a lot of factors involved, and it is how you as a Dropshipper manage these factors that would decide whether or not you can have a successful Dropshipping model; all you might need to build a good business would be provided in the article later on.
But before you decide to dive in entirely, it is always good to know the pros and cons that Dropshipping offers.