Hi,
In this week’s blog post, we are going to talk about dropshipping. You probably have heard this term already. Anyone who has started or even done online business has probably come across the term “ drop shipping “
What is “ drop shipping”?
This is a type of e-commerce business. It simply allows a merchandiser or a merchandising company to operate without purchasing inventory. They do not have to store, distribute or ship their products as that’s the “supplier’s” job. That’s why you have to choose a reliable supplier as over time many problems might occur due to the complexities of this process.
How does it work?
Now, it is clear what does “ drop shipping “ means but the question is - How does it work? The retailer partners up with a dropship supplier that manufactures and packages the products, and also ships them directly to the client, on the merchandiser’s behalf. As a result, the merchandiser never sees or handles the product. Let’s see it step by step:
1. The client places an order for a particular product.
2. The merchandiser forwards the order and the client’s details to their supplier.
3. The supplier packages and ships the order directly to the client in the merchandiser’s name.
And that is how it works.
Pros and Cons of Dropshipping
Let’s start with the Pros of running a dropshipping business.
It’s easy to get started
Running this type of e-commerce business is easier when you don’t have to deal with physical products, managing warehouses, or constantly ordering new products. To get started, you have to find a good supplier, set up your great-looking website, and start selling!
Low risk
If your business isn’t working you aren’t losing any money. This means that If you aren’t selling, you also aren’t losing anything, so the pressure is less to none.
Flexible Location
You can run your business from anywhere. You don’t have to think about an office place, a warehouse, or hiring employees. All you need is your laptop and Internet connection.
Variety of products
Since you don’t have to pre-purchase the products that you sell, you can offer a variety of products to your clients.
Cons of drop shipping
Lower profit margins
Depending on different elements like location or your niche, suppliers will probably charge you higher prices for dropshipping products. This will interfere with your profit margins.
Level of competition
The level of competition is relatively high. The business model attracts many people which means more merchandisers in every niche.
Liability
Be careful when it comes to choosing a supplier. If anything goes wrong with the purchase, even if it is the supplier’s fault you take full responsibility. After all, you are the face of merchandising.
Keep track of the inventory
Unfortunately, it’s almost impossible to keep track of the inventory of your supplier. Be cautious because sometimes due to miscommunication you can lose clients or purchases which reflects your business. Remember, it will be easier to manage your inventory by using reliable software.
This business model has some advantages but it also comes with several complexities and problems that you will have to address. The good news is that with a clear strategy and some planning, most of these problems can be determined. You can build a profitable dropshipping business if you have the patience and if you are willing to put enough effort into achieving your goal.
Dropshipping in 2026: the rules and costs that changed
The model described above still works, but the economics are different from when this post was written, especially if you sell to customers in the United States using overseas suppliers.
Duty-free low-value imports into the US have ended. For years, cheap parcels shipped straight from overseas suppliers entered the US without duties under the "de minimis" rule, which is what made AliExpress-style dropshipping so cheap. Executive Order 14324, signed July 30, 2025, suspended duty-free de minimis treatment for goods from all countries from August 29, 2025. On June 24, 2026 U.S. Customs and Border Protection published rules making the suspension for international mail shipments indefinite and creating a new informal entry process for postal parcels (CBP e-commerce page, updated August 2026). The same page shows how big this channel was: 1.36 billion de minimis shipments worth $64.6 billion in fiscal year 2024, and 942.5 million worth $48.1 billion in fiscal year 2025 up to August.
What this means for you: duties now apply to low-value imported orders, and either you or your customer pays them. Customers who are surprised by an import charge at delivery tend to refuse the parcel or ask for a refund, so price your products on the full landed cost (product + shipping + duty + carrier fees), say clearly at checkout who pays duties, and look harder at suppliers who already hold stock inside the country you sell to.
You are responsible for delivery times, not your supplier. In the US, the FTC's Mail, Internet or Telephone Order Merchandise Rule requires you to have a reasonable basis for the shipping time you advertise, or to ship within 30 days if you state none. If an order will be late, you must tell the customer and offer the choice of agreeing to the delay or cancelling for a full refund. Refunds must be made within seven working days for cash, check or money order payments, or within one billing cycle for credit sales, and you cannot give store credit instead. This is why the "low risk" point above needs a caveat: when a supplier runs out of stock or ships slowly, the legal and financial risk is yours.
Supplier directories now charge subscriptions. SaleHoo, mentioned below, currently sells three plans built around connecting a Shopify store: Starter at $9/month billed annually (or $299 one-time), Pro at $49/month billed annually (or $1,699 one-time) and Enterprise at $499/month billed annually, each with a 60-day money-back guarantee (SaleHoo pricing, October 2026). Count these tools as a fixed cost in your margin calculation.
Checklist before you choose a supplier
| Check | Why it matters in 2026 |
|---|---|
| Where is the stock shipped from? | Domestic warehouses avoid import duties and surprise charges for the customer. |
| Real delivery time to your main market | You must be able to justify the shipping time you advertise. |
| Who pays duties and carrier fees? | Undisclosed charges at delivery lead to refused parcels and refunds. |
| Live stock feed or inventory sync | Selling items that are out of stock forces delay notices or cancellations. |
| Returns address and policy | Customers will return to you, not to the supplier. |
| Test order | Check packaging, branding and tracking yourself before you list the product. |
What companies do dropshipping?
Here, I listed a few examples of companies that do drop shipping.
· Dropshipper.com
· AliExpress.
You probably have heard of AliExpress. This is another wholesale and dropshipping platform that connects drop shippers to suppliers and also to products.
· SaleHoo.
SaleHoo is a wholesale supplier directory. It connects drop shippers to suppliers.
