If you wanted to start a retail business in the usual way then you would have to have a huge amount of money to invest in order to get your self started. Even an online retail business, which would reduce the costs because you would not need to rent out an actual physical shop, only create a website which can be done much more cheaply, would require a very substantial capital investment in order to buy all of the stock that you would need.
Drop shipping is a way to get around this, enabling anyone to set up a new retail business with minimal investment. In fact, if you wanted to you could set up a business like this for just $20 - which you would need to create an account withe a drop shipping supplier - and then sell your products through a free seller account on amazon, or through a similar channel. Basically drop shipping means that you are able to buy a single units of a product at a wholesale price and have them delivered to any address with no branding or references to the drop shipping company. This means that you can list things for sale and then only buy them yourself from your wholesaler after a customer has placed an order and paid you, and have your supplier deliver them directly to your customer.
Things You Will NeedTo get yourself started with a business like this you need to have an account with a drop shipping company. Usually you will have to pay to create an account, and that may be a one off fee or a small monthly fee.
Obviously you also need somewhere to sell your products. That may mean creating a website, or it may mean signing up for accounts on ebay, amazon or other similar site.
And that's it! If you have those two things then you are in business.
Using this method to start your own business allows anyone to become an online entrepreneur without needed to have money to invest and with a minimum of risk. But it does take a lot of work, and should not be thought of as a quick and easy way to riches.
Tips & WarningsUsing a drop shipping supplier is a great way to get a good range of products without having tens or even hundreds of thousands of dollars to invest, but your profit margins will be lower than if you were buying wholesale in a convential way. If possible it is best to have a few of your own products as well, which you promote the most as they make you more money, and then bulk it out with your drop shipped products so that you have a more complete and diverse range of products to attract customers. You don't even need to have anywhere to keep them - amazon offer a fulfillment service where you buy wholesale and have your products delivered to amazon's warehouse - and they then send them out for you when you get an order.
Most suppliers will have a few products that they can offer to you at a cheap price, and others that are not so cheap. Creating accounts with several suppliers and spending some time looking for their best deals can help you to find a larger number of products on which you can add a decent profit and still remain competitive.