Drop shipping is a fulfillment model wherein online retailers market products and take orders from shoppers, but third-party suppliers (drop shippers), which are often product distributors or brokers, fulfill those orders. The retailer does not inventory, handle, or ship any of the drop-shipped products.
1. Low Overhead Costs
When an online retailer employs drop shipping, overhead expenses can be very low.
There is no need to warehouse products. The business doesn’t need to carry inventory. For a very small ecommerce operation, this might mean that you won’t have to stack boxes in a storage unit or your garage. A mid-sized or larger ecommerce business might save thousands of dollars a month in warehouse lease payments and utility bills.
2. Scale Quickly
