Dropshipping is actually a supply chain model and understanding this is close to understanding the dropshipping process.
Supply chain is a process that starts with manufacturing and ends at delivering to the target audience. To understand this in the context of dropshipping there are four major parties that work as the foundation of dropshipping supply chain.
Manufacturer – The one who manufactures the product
Wholesaler – The one who sells to the retailer
Retailer – The one who sells to the consumer
Fulfillment – The one who delivers the product to the consumer
Before understanding these foundation let me remind you dropshipping one more time. As a dropshipper, you do not manufacture, retail or fulfill the order. You just connect the dots to provide the product to the end consumer.
A basic supply chain model works in this way
Manufactures —> Wholesaler —> Retailer—> Buyer
In dropshipping supply model, there is a couple of additional channels
Manufactures —> Wholesaler —> Retailer —> Dropshippers —> Buyer
This means that as a dropshipper, either you get the suppliers in the form of the manufacturer, retailer or wholesaler, who would deliver the product directly to your customer or in other words they would provide fulfillment services for you.
Here is the illustration of how dropshipping supply chain works.
In other cases; you get the product and deliver it via fulfillment service or you tell the supplier to ship the products to fulfillment center.
Manufactures —> Wholesaler —> Retailer —> Dropshippers —> Fulfillment Service —> Buyer.
I hope the dropshipping supply process must be clear now 🙂