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Dropshipping has become a popular business model for entrepreneurs looking for new ways to make money in ecommerce. When using dropshipping money, a retailer can sell products in an online marketplace (Amazon, Walmart Marketplace, eBay, etc.) without needing to pay for storage or shipping. That鈥檚 because these aspects of the business are handled by a third-party vendor, the dropshipper.

Sellers can partner with dropshippers to buy their inventory in bulk, where it is stored in the dropshipper鈥檚 own warehouse. Then, as customers place orders in the seller鈥檚 online store, their order information is forwarded to the dropshipping provider. That provider then packages and ships the item on their own without involvement from the seller.

For marketplace sellers, this arrangement offers a simple, low-cost way to operate a business online. Many retailers have already used this strategy successfully, and there are dozens of dropshipping providers available as well. Some, such as  are major businesses of their own with massive inventories.

In spite of its popularity, it鈥檚 still reasonable to ask, “Is dropshipping worth it?”.

The dropshipping business model is not without its drawbacks and complications. This guide will explain whether or not dropshipping is still viable, as well as its risks and benefits.

Does Dropshipping Still Work?

Dropshipping has become more popular in recent years, but it has actually existed for . However, beginning in 2020, the effects of the pandemic thrust dropshipping into the limelight for ecommerce. As businesses were forced to temporarily close their physical stores, they needed to turn to online retail to stay afloat. With limited storage and fulfillment resources available to many of these businesses, dropshipping presented an obvious solution.

Despite its relative novelty, many people today are asking: Does dropshipping still work? And is dropshipping profitable? The answer to both questions is yes.

Dropshipping has been, and continues to be, an effective business model for a couple of reasons.

First and foremost, dropshipping comes with little to no overhead costs. This is what sparked the dropshipping trend in the first place. Sellers who use dropshipping never need to pay for manufacturing, storage, shipping, or handling. All they need to do is buy an inventory and facilitate customer purchases. This allows business owners to focus their time and resources on other aspects of the business, such as marketing. The low cost of dropshipping remains as valid today as it was several years ago.

Another reason behind the viability of dropshipping is that it allows for incredible product diversity. Businesses can use dropshipping to sell anything from clothing to electronics and appliances. They can also carry an extremely wide variety of products and sell them for profit.

The product diversity of dropshipping leads to another major benefit: excellent scalability. It is much easier to expand your business when using dropshipping than it would be in traditional business. Dropshipping allows businesses to expand their inventory and market reach without increasing overhead costs.

Is Dropshipping Legit?

Some business owners may be concerned about the legitimacy of dropshipping. But dropshipping, when done properly, is completely legitimate and ethical. However, it is important to note the difference between dropshipping and simple reselling.

With dropshipping, sellers use a third-party vendor for storage and shipping services. Sellers still purchase their inventory wholesale from these vendors. In some cases, sellers even have the opportunity to customize some of their dropshipping inventory. For instance, many companies sell custom T-shirt designs through dropshipping. The key to dropshipping is that the inventory is purchased in bulk for the express purpose of resale.

Some online marketplaces, like eBay, have . That is, sellers are not allowed to buy an individual product and then immediately resell it to their own customers. However, eBay, and most other platforms, allow dropshipping and are home to many stores that use dropshipping retail mod