Drop-shipping essentially means that products listed on a website are shipped by a third-party, usually the manufacturer. This means, the store that sells the products doesn’t have to hold any stock, nor pick and pack orders, which cuts operations costs dramatically.
Drop-shipping is often used by marketplaces, such as Hart Home Decor or etsy, where lots of small businesses have their own mini stores and can log on to upload their products and maintain their stores themselves.
One of the many advantages of selling on a marketplace is that you don’t need your own website and can instead leverage off the marketplace’s established audience, marketing and website traffic.
Up next: Read our interview with Tiffany Benn, founder of Hart Home Decor, on the challenges of running your own drop-ship marketplace.