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What is Dropshipping and How Does it Work?

What is dropshipping and how does it work? Dropshipping has become a highly lucrative business, and a simple one at it.  It involves a wholesaling business, a dropshipper (marketer), and a customer. You might want to start a business but lack capital, dropshipping is a perfect option for you.

What is Dropshipping?

Dropshipping 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.

Who is a dropshipper?

A dropshipper markets products or services to customers acting as a middleman. The dropshipper does not own these goods or services in stock but places orders and the business owner accounts for deliveries and inventories.

How to Start a Dropshipping Business (what is dropshipping and how does it work)

  • Choose a niche:

Select a specific market or product category to focus on. There are a lot of niches and they are all on-demand. When you have done your research on problems to be solved around your vicinity or nationality, you can pick a niche through the following reflection;

           What do I enjoy doing or love having around me?

           What problem is my locality in need of a solution for?

           What can I effortlessly market?

          What is trending and has less availability?

Note; you do not create a problem, but solve an existing problem.

You can also pick a trending niche if you are willing to gain more knowledge and market strategically. Selling seasonal products can bring big sales numbers, but it’s necessary to get the timing right when deciding what to market.

  • Research suppliers:

Find reliable suppliers who offer dropshipping services for the products you want to sell. Some businesses are offering dropshipping services or those that are not aware of this market value. You can educate them about it. Strike a deal and get more insight into the business marketing terms.

  • Set up an online store:

Create a website or use an e-commerce platform to showcase your products. You can also start with a social media platform. Optimize the website, e-commerce store, or social platform right. Update the market value, upload market content, and fill in every detail regarding the business.

List products: Add products to your store from your chosen suppliers (you can request them), or search for stock photos and videos. For every store you create, make sure to consider; the time and cost required to set up your site, features and ease of use, scalability, customization options, marketing tools, integrations with suppliers, customer support, pricing, benefits as a user, etc.

  • Conduct Market Research:

Research other marketers or business owners in your niche and observe their strategies. It is good to look at what they’re selling, how they’re marketing those products, and what they charge. It’s key to look for any product gaps that you might be able to capitalize on to gain some traction in your chosen niche.

  • Market your store:

Use various marketing strategies to attract customers to your store and generate sales.

The best marketing strategy for dropshipping depends on your niche, target audience, and budget. Some effective marketing tactics are inducing digital marketing strategies such as; social media marketing, influencer partnerships, search engine optimization (SEO), content marketing, email marketing, and running targeted advertisements.

  • Friends and Families:

Let them know about your business and assist in marketing it for you. Marketing close to home is the easiest form of marketing. There is a level of trust established already.

How to grow your business from home.

Popular platforms for dropshipping 

Shopify, WooCommerce (with the Dropshipping extension), BigCommerce, and Magento. These platforms offer various features and integrations to help streamline the dropshipping process.

Benefits of Dropshipping

Low, startup costs:

You don’t need to invest in inventory upfront. If it were only the traditional marketing way, you would have been running from stores to companies to pass messages on orders. I am grateful for the internet (social media), and dropshipping made easy.


You can run your business from anywhere with an internet connection.


It’s relatively easy to scale your business as you don’t have to worry about inventory management.

Wide product selection:

You can offer a wide range of products without the hassle of stocking them yourself.

Reduced risk:

Since you don’t purchase inventory until you’ve made a sale, you can minimize the risk of unsold inventory.

How Dropshippers Get Paid?

Dropshippers make money by charging a higher retail price for the items they sell than the wholesale price they pay for them. When someone buys a product through a dropshipper, the dropshipper gets the difference between the retail and wholesale price. The dropshipper receives the money directly or from the seller.


Starting a dropshipping business can be interesting but daunting at the same time. You will have to put in effort in the marketing aspect, it’s when you sell that you earn or gain from it. It is advised to learn deeply about any niche you decide to focus on, establish policies, know customer management techniques, and how to manage inventories.  

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Naomi Obialor

A Digital Marketer with a passion for writing and sharing knowledge in any little way I can, I hope you learned something new today?