NAME: DESCARTIN, REJEAN DATE: OCTOBER 16, 2019

YR&SECTION: BTLED-ICT IIG3

1. What is drop shipping?

Drop shipping is a retail fulfillment method where a store doesn't keep the products it sells in
stock. Instead, when a store sells a product, it purchases the item from a third party and has it
shipped directly to the customer. As a result, the merchant never sees or handles the product.

The biggest difference between drop shipping and the standard retail model is that the selling
merchant doesn't stock or own inventory. Instead, the merchant purchases inventory as needed
from

2. How is drop shipping being done?

So as simple as possible, this is drop shipping in 4 steps.

Step 1 - You list the supplier’s product on your store for customers to buy.
Step 2 - The customer purchases something from your eCommerce store.
Step 3 - You order that same exact item that the customer paid for from your supplier.
Step 4 - Your drop shipping supplier ships this item directly to your customer. So your
customer receives the item that they’ve ordered from you.

To explain a little further, it all starts with building your own eCommerce store
and listing products on your website. I recommend building this store on Shopify and
customizing it to fit your target customer. But whose products are you selling? Well,
these are different suppliers’ and brands’ products. You may be thinking, “why don’t
these companies sell their products directly?” The thing is there are companies that only
focus on innovating products that rely on retailers to sell them. That’s where you come in
as a drop ship retailer, you’ll be selling for these brands who don’t sell to the public.
They look for people to sell their products, to make them money, and grow their business
for them. You are one of these retailers.
You’ll want to focus on getting approved to sell for these different companies. After
you’re approved you’ll put their products on your Shopify store. Then you will advertise
to bring people to your store. Customers come to the store, and after they purchase, you
contact your suppliers. Then they ship the items directly to the customer. You aren’t
buying any inventory. All you’re doing is making an agreement with the drop ship
supplier to sell their products on your website. You get their price lists and put their
products for sale on your site. When someone buys, you place that order with the
supplier. You only order the product after the customer has paid you. Then you’ll contact
that supplier, and say “ship item XYZ to customer ABC.” Then they ship it and charge
you. The difference between your retail price and what you pay your supplier is the net
profit. From my experience, when you drop ship the right way, you’re looking at about
25 to 30 percent average net profit. That means if you sell a $1,000 item, you make $250.
That’s the average I’ve seen in my experience. Sometimes it’s higher, sometimes it’s
lower, but that’s a good goal to shoot for. It’s a realistic expectation.
NAME: PEDRANO, PAULA MAE DATE: OCTOBER 16, 2019
YR&SECTION: BTLED-ICT IIG3

1. What is drop shipping?

Dropshipping is a type of business model which enables a company to operate without

maintaining inventory, owning a warehouse to store their products, or even having to ship their
products to their customers themselves. How it works is that the retailer partners up with a
dropship supplier that manufactures and/or warehouses products, packages the products, and
ships them directly to the retailer’s customer, on the retailer’s behalf.

2. How is drop shipping being done?

So as simple as possible, this is drop shipping in 4 steps.

Step 1 - You list the supplier’s product on your store for customers to buy.
Step 2 - The customer purchases something from your eCommerce store.
Step 3 - You order that same exact item that the customer paid for from your supplier.
Step 4 - Your drop shipping supplier ships this item directly to your customer. So your
customer receives the item that they’ve ordered from you.

To explain a little further, it all starts with building your own eCommerce store
and listing products on your website. I recommend building this store on Shopify and
customizing it to fit your target customer. But whose products are you selling? Well,
these are different suppliers’ and brands’ products. You may be thinking, “why don’t
these companies sell their products directly?” The thing is there are companies that only
focus on innovating products that rely on retailers to sell them. That’s where you come in
as a drop ship retailer, you’ll be selling for these brands who don’t sell to the public.
They look for people to sell their products, to make them money, and grow their business
for them. You are one of these retailers.
You’ll want to focus on getting approved to sell for these different companies. After
you’re approved you’ll put their products on your Shopify store. Then you will advertise
to bring people to your store. Customers come to the store, and after they purchase, you
contact your suppliers. Then they ship the items directly to the customer. You aren’t
buying any inventory. All you’re doing is making an agreement with the drop ship
supplier to sell their products on your website. You get their price lists and put their
products for sale on your site. When someone buys, you place that order with the
supplier. You only order the product after the customer has paid you. Then you’ll contact
that supplier, and say “ship item XYZ to customer ABC.” Then they ship it and charge
you. The difference between your retail price and what you pay your supplier is the net
profit. From my experience, when you drop ship the right way, you’re looking at about
25 to 30 percent average net profit. That means if you sell a $1,000 item, you make $250.
That’s the average I’ve seen in my experience. Sometimes it’s higher, sometimes it’s
lower, but that’s a good goal to shoot for. It’s a realistic expectation.