Dropshipping is a retail strategy where products purchased from an online store are shipped directly to customers by the supplier or manufacturer.
This business model is a straightforward and increasingly popular way to start an online business. It eliminates common retail hurdles like purchasing, storing, and shipping inventory.
When a dropshipping store receives an order, the retailer forwards the order details to a supplier, who takes care of packaging and delivery to the customer. This allows business owners to focus on marketing, branding, and customer engagement.
In this article, you’ll learn about the dropshipping model, how it operates, and how to start your journey as a dropshipper.
What is dropshipping?
Dropshipping is a retail approach where an online store does not hold physical stock.
Dropshipping is a retail approach where an online store does not hold physical stock. Instead, when a customer places an order, the store sends the order and payment details to a supplier, who fulfills the request and ships the product directly to the customer.
Entrepreneurs are drawn to dropshipping because it transfers the logistical work of order fulfillment to suppliers. This eliminates the need for warehouse storage and reduces the risk of unsold inventory. Business owners can then allocate resources to areas like marketing and customer relationship management.
According to recent data, dropshipping contributes to over $300 billion in global e-commerce sales annually.
For more on finding the right supplier for your dropshipping business, check out our guide: How to Find a Manufacturer or Supplier for a Product (2025).
What is a dropshipper?
A dropshipper is a retailer or business that accepts customer orders and forwards them to suppliers for fulfillment.
Dropshippers often operate online storefronts, promoting and selling various products. Once a customer places an order, the dropshipper coordinates with a supplier to fulfill it.
For example, imagine a customer purchases a dog leash from your online pet store. As a dropshipper, you forward the order to your supplier, who packages and ships the leash to the customer.
What are dropshipping suppliers?
Dropshipping suppliers are the businesses or platforms that store inventory, package items, and deliver orders on behalf of retailers. These suppliers can be manufacturers, wholesalers, or even independent businesses.
In the pet store example, the supplier would be the entity managing the stock of dog leashes, packaging them, and ensuring they reach your customer.
How does dropshipping work?
Here’s a step-by-step guide to understanding the typical dropshipping process:
1. Find a dropshipping supplier
Identify a supplier offering the products you want to sell. After agreeing on terms, they’ll handle product storage, order packaging, and shipping logistics.
Explore Pygmy Commerce Knowledge Base for tips and resources to streamline your supplier search.
2. Set up your online store
Create your online store, showcasing the products from your supplier. You’ll decide the pricing for each item, factoring in your desired profit margin.
If you’re exploring e-commerce platforms, discover 6 Best Shopify Alternatives for Your Online Store to find the right fit for your business.
3. Receive customer orders
When customers visit your store and place an order, the checkout process runs as usual. They pay, receive an order confirmation, and anticipate their delivery.
4. Forward the order to your supplier
Once payment is made, you send the order details to the supplier. This step is often automated with the right tools.
5. Supplier fulfills the order
The supplier packages the item and ships it directly to your customer. Some suppliers offer branded packaging options to align with your store’s branding.
6. Customer receives the product
The customer gets their order, while you handle any post-sale inquiries or customer service needs.
Is dropshipping right for you?
Wondering if dropshipping suits your business model? Consider whether it aligns with your goals and capabilities.
For insights into customer behavior and engagement strategies, read 8 Types of Online Shoppers and How to Engage Them.
Dropshipping in 2025
In 2025, dropshipping remains a popular choice for online store owners, side hustlers, and established retailers.
Here’s how to start with Pygmy Commerce:
- Sign up for a free trial with some basic information about your business.
- Personalize your store with a logo, helpful content, and a free theme that fits your brand.
- Add your dropshipping ideas to connect your Pygmy Commerce store with dropshipping suppliers.
- Import products to your store and set prices that include a profit margin.
- Start selling and marketing your products.
For additional guidance, visit the Pygmy Commerce Knowledge Base.