Drop-shipping
What is drop-shipping?
Drop-shipping is a retail fulfilment method where a business sells products without holding them in stock. Instead, when a customer places an order, the retailer purchases the item from a third party – usually a wholesaler or manufacturer – who then ships it directly to the customer. The seller never handles the physical product.
This approach allows online store owners to offer a wide range of products without investing in inventory or warehouse space.
Table of Contents
How drop-shipping works
Drop-shipping involves three key parties:
- The customer, who places an order on an online store
- The retailer, who markets and sells the product
- The supplier, who stores, packs and ships the product
The process typically follows these steps:
- A customer buys a product from the retailer’s online store.
- The retailer forwards the order to a third-party supplier.
- The supplier fulfils the order and ships it directly to the customer.
The retailer earns profit by charging a markup on the supplier’s price.
Benefits of drop-shipping
Drop-shipping offers several advantages compared to traditional retail or holding stock in-house:
- Lower upfront costs: There is no need to invest in inventory, warehousing or equipment.
- Reduced risk: Products are only purchased after a customer places an order, which limits the chance of unsold stock.
- Flexible product range: Retailers can offer a wide selection of items without needing to buy or store them.
- Location independence: The business can be managed remotely, making it ideal for online entrepreneurs.
- Simplified operations: Logistics, packing and shipping are handled by the supplier, freeing up time to focus on marketing and customer service.
At Barrington Freight, we specialise in making your importing and exporting straightforward. From customs clearance to finding the right commodity codes, our expert team is here to assist. Don’t let the complexities of global trade hold you back. Reach out to Barrington Freight for efficient and reliable shipping solutions.
Challenges to consider
While drop-shipping has clear advantages, there are also some potential drawbacks:
- Lower profit margins: Because the supplier handles fulfilment, margins may be thinner compared to buying in bulk.
- Limited control: Retailers rely on third parties for stock levels, packaging and shipping times, which can affect the customer experience.
- High competition: Popular products may be sold by many retailers, making it harder to stand out.
- Supplier issues: Mistakes or delays by the supplier can still impact the seller’s reputation.
Is drop-shipping right for your business?
Drop-shipping is a useful model for entrepreneurs who want to start an online shop with minimal upfront investment. It suits businesses focused on marketing and customer acquisition rather than inventory management. However, success often depends on choosing reliable suppliers, maintaining competitive pricing and offering excellent customer service.
Need help shipping goods directly to your customers?
We don’t just move freight – we make things easier for your business. Whether you’re drop-shipping across Europe or importing stock from overseas, we’ll sort the logistics and customs paperwork for you.
Get in touch today – let’s save you time and money.
About the Author
Simon Poole began his career in production planning, quickly rising to manage 24-hour manufacturing lines and oversee a team of 140 staff. In 2007, he joined Barrington Freight, where he brought his operational expertise into the logistics sector. Appointed Operations Director in 2021, Simon now leads all day-to-day operations, including sea, air and European freight, working closely with clients and partners worldwide.
We’re friendly, easy to work with, honest and we don’t charge the earth.
For advice and information on shipping time from China to the UK, call 01268 525444 or email us today.
