What is Dropshipping? Simple Explanation

Drop shipping is a method in which you as the seller do not keep the products in your inventory. Instead, you work with a supplier who sends the products directly to your buyers.

Dropshipping illustration
What is Dropshipping? Simplified

Your profit comes from the price difference between the payment you receive from the buyer and the amount you paid to your supplier.

An example:

You sell phones on your store for R1000
A customer from Durban (Sihle) buys a Phone from you
You contact your supplier (AKA – Dropship Supplier) in Johannesburg and provide him/her with the shipping details of Sihle.
You pay your supplier R700 and he ships it to Sihle.
Your gross margin is R1000–700=R300

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