Dropshipping

Dropshipping is an ecommerce business model in which the store owner does not keep inventory. When a customer places an order, the store forwards it to a supplier, who ships the product directly to the customer. The store earns the difference between its selling price and the supplier's price, minus fees and advertising costs.

How it works

1. A customer buys a product from your online store.
2. You pay the supplier the wholesale or agreed price.
3. The supplier packs and ships the order to the customer.
4. You handle marketing, customer service and the returns policy.

Advantages

• Low upfront investment, since you do not buy stock in advance.
• Easy to test many products quickly.
• No warehouse or fulfilment operation to run.

Challenges

• Thin margins: supplier costs, shipping, fees and ads can leave little profit. Use the dropshipping profit calculator before launching.
• Shipping times and quality control: you depend on the supplier for both.
• Competition: popular products are often sold by many stores running similar ads.
• Customer trust: slow delivery or poor quality affects your brand, not the supplier's.
• Compliance: product safety, labelling and consumer rights rules in the EU and UK still apply to the seller.

In practice

Successful dropshippers usually treat product research and creative as core skills, and know their break-even ROAS and unit economics. Many start by testing for a winning product, then move towards white label or private label products to build a brand. Researching how other stores advertise in the PixelSpyer library and inspecting their storefronts with Store Spy can speed up that research.