Dropshipping: How It Works, What Small Businesses Need to Know – NerdWallet

Dropshipping is a fulfillment method where a business relies on a third party to ship orders instead of keeping inventory in stock. Retailers that dropship products will market and sell products but never handle them. Many small-business owners are adopting dropshipping as a stand-alone model or a supplement to shipping directly from their brick-and-mortar stores. Here’s what to know if you’re thinking about starting a dropshipping business.

How does dropshipping work?

In the dropshipping flow, a business markets a product made by a different manufacturer.

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