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Dropshipping

In: Digital Marketing

Author

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  • Klaus Solberg Söilen

    (Halmstad University)

Abstract

Dropshipping is a supply chain management method where retailers do not keep goods in stock but transfer customer orders to manufacturers or wholesalers, who then ship directly to the customer. This approach allows businesses to expand product offerings without significant capital investment in inventory, making it easier to scale and adapt to market demands. Implementing dropshipping involves establishing efficient services like payment methods, return policies, and packaging strategies, and designing compatible information systems for seamless communication between manufacturers and retailers. Successful dropshipping can streamline operations, reduce overhead costs, and allow businesses to focus on marketing and customer service. Challenges include lower profit margins and potential inventory issues, which can be mitigated through careful planning and reliable suppliers. Applications of dropshipping include targeted advertising, customer insights, rewards for loyal customers, attracting new clients, and measurable marketing results. Key geolocation marketing techniques relevant to dropshipping are geotargeting, geofencing, and beacons. Ensuring compliance with data protection regulations like GDPR is essential for ethical and legal marketing practices. Future trends in dropshipping include advancements in AI, sustainability, global market exploration, enhanced customer experiences, and niche market targeting.

Suggested Citation

  • Klaus Solberg Söilen, 2024. "Dropshipping," Springer Texts in Business and Economics, in: Digital Marketing, chapter 31, pages 313-320, Springer.
    • Handle: RePEc:spr:sptchp:978-3-031-69518-6_31
    DOI: 10.1007/978-3-031-69518-6_31
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