This is a business in which the products bought from an online store are not physically stocked by the business, but by the supplier. It’s having a third-party taking care of the selling of the goods between you and the actual supplier.
Pros:
- You don’t have to allocate space for products.
- Less costly to start or build further.
- More flexible.
- Easier to expand.
Cons:
- You are not in control of shipping and handling products.
- More people involved creates higher likelihood of issues and human errors.
- Less profit.
- Product quality is out of your hands.
- More likely to have dissatisfaction with customers.
- A lot of people see dropshipping as something to be a victim of.
Personally, I wouldn’t create such a store because I wouldn’t want to deal with the hassle of having to be a middleman between suppliers and customers where I wouldn’t be in control of shipping, handling, or quality of a product.