What is dropshipping? 6 things to consider before you start it as a side hustle

tech.hindustantimes.com:

What is dropshipping? You buy a new phone case from an online retailer. The phone case arrives safely at your house, the online retailer makes a small profit and everyone is happy. But the phone case didn't come from the retailer's premises. It was sent directly from the manufacturer. The only thing the online retailer did was take your order and organise for the factory to deliver the case to your home. This is “dropshipping”: where an online seller organises to have purchased products sent to buyers directly from the wholesaler or manufacturer, rather than sending it themselves. Many see dropshipping as, if not their main business, then as a valuable side hustle to help bolster income when the cost-of-living crunch is making it hard to make ends meet.

In other words, the seller doesn't own a warehouse of products ready for shipping. They're a middleman. They organise delivery of products to customers without taking physical possession.

Dropshipping may sound like an appealing side hustle to help offset the cost-of-living crunch but there are downsides, too.

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So, what do you need to know before you become a dropshipper?

Dropshipping has doubled since 2020, and is expected to double again by 2027.

Websites with e-commerce features are also increasingly affordable, and since the barrier to entry for starting a dropshipping business is low, it has become a popular method for making extra money.

1. buying the products upfront

2. paying warehouse rent, and

3. paying staff to package and ship.

Since dropshippers don't need to hold any inventory, they're able to offer a wider selection of products to sell. Low startup costs also make dropshipping more accessible to a wider range of people than