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Dropshipping | Habefast

Habefast Dropshipping Glossary

Dropshipping is a practice more and more used in e-commerce although it is very criticized by some people who consider that it is abusive and constitutes a scam… But what exactly does it consist of? Is it really legal?

Dropshipping: definition

Dropshipping is a form of online commerce where the seller has no stock, all products are managed by the supplier who also ensures the delivery of the product to the customer. The seller is only an intermediary between the customer and the wholesaler (supplier).

Generally the sellers are only pure players (online sales only) and do not communicate, or even hide most of the time, the identity of the wholesaler.

The stages of dropshipping

  1. The supplier offers its products to vendors

  2. The seller promotes the supplier's products on his website or via marketplaces (with a higher price)

  3. The final customer buys the product from the seller (on his website or on a marketplace like Amazon)

  4. The customer is delivered directly by the supplier

  5. The seller then pockets his margin without having any stock or shipment to manage

Infography Habefast Blog Dropshipping English

The advantages of dropshipping

  • Make start-up costs less expensive
  • Offer and promote items almost instantly, as the seller does not have to wait to receive stock
  • Offer a wider range of products
  • Test new products without risk
  • Optimize work time 

Critics of dropshipping

Many criticisms are made about this practice which is however totally legal. Consumers who are generally unaware of this practice when they buy on a dropshipping website are particularly suspicious.

The reason is that sellers often buy from Chinese wholesalers like Alibaba and then make a very large margin on the products that will be displayed on the seller’s website. If the partnership between the seller and the wholesaler is not quality controlled, the end consumer may be surprised about the quality of the product and the delivery time and feel cheated. Also, some sellers claim to have created their products from scratch, yet consumers find exactly the same products on Alibaba.

Fortunately, this is not the case for all retailers as some will really work in team with suppliers to create unique products according to their desires.Â