What Is Dropshipping?
Dropshipping is a retail model in which a store sells products without keeping them in stock: when a customer orders, the store buys the item from a supplier who ships it directly to the customer. It lowers upfront inventory costs, but the seller has less control over shipping times and product quality.
Profit Per Order
Profit = selling price − supplier cost − shipping − payment processing and marketplace fees − advertising per order. Thin margins make these costs decisive.
Responsibilities
The seller remains responsible to the customer for returns, delays, and complaints.
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Online Seller Fee & Profit Calculator
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Markup & Margin Calculator
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🔗 Related Terms
More Business & Sales Terms
- Accounts Payable
- Accounts Receivable
- Average Order Value (AOV)
- Balance Sheet
- Break-Even Point
- Burn Rate
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.