Building a business from scratch can feel like a daunting process, especially when budgets are tight or logistics seem too complicated. Dropshipping is a low-barrier ecommerce model that helps newcomers get going without needing large stockpiles of merchandise or much overhead. It’s a straightforward idea: a business sells goods it doesn’t physically store, and a supplier ships those orders for the business. This process can be a welcome relief for first-time entrepreneurs or online sellers who’d rather focus on marketing, brand identity, and connections with customers.

Dropshipping has gained a following over the last decade because it cuts down on many of traditional retail’s challenges. The global dropshipping market was valued at over $351 billion USD in 2024, and it’s expected to reach around $2.5 trillion USD by 2034. But while the path to launching a dropshipping store is more straightforward than opening a brick-and-mortar shop, it still requires making thoughtful decisions. You’ll need to pick the right product lineup, find reliable suppliers, set up a store platform that fits your goals, and design a payment flow.

Below, you’ll learn what dropshipping is, why it’s so appealing, and the practical steps to guide you from early planning to scaling your business.

What’s in this article?

• What is a dropshipping business, and how does it work?
  
• Why start a dropshipping business?
  
• What are the steps to start a dropshipping business?
  
• How does Stripe support payments for dropshipping businesses?
  
• What are common challenges in dropshipping, and how can you overcome them?
  

What is a dropshipping business, and how does it work?

Dropshipping is an online retail model that removes the need for sellers to hold physical products. A seller lists items in its store, and once a buyer places an order, the seller’s supplier sends the item directly to the buyer.

As a seller, your role is to build your product catalog, set prices, and collect payment. When orders come in, you transmit them to the supplier—often through automated apps or plugins—and pay the supplier’s wholesale rate. The supplier then packages and ships the product with the details you provide. Your profit is the difference between what the customer pays and the supplier’s cost.

Dropshipping can be attractive to entrepreneurs who want to quickly test demand for different items. There’s less risk of ending up with unsold stock, and sellers can make fast changes to their catalog to catch trends. Sellers also won’t be stuck with boxes that gather dust if the market for a certain product is soft. Plus, sellers can run a dropshipping store from nearly anywhere with a solid internet connection.

Why start a dropshipping business?

Dropshipping is a straightforward entry point if you’re an ecommerce founder. Traditional shops can consume your resources with bulk inventory purchases, warehouse rentals, and shipping logistics; meanwhile, dropshipping can help eliminate those costs. You only pay for items when you actually sell them, and the supplier does the heavy lifting. This setup can help lower your financial risk and give you room to experiment.

The flexibility of dropshipping also appeals to those who want to manage their schedules or combine it with another job. You don’t need a special facility, and you’re not tied to rigid warehouse hours. That freedom means you can work on your store whenever it fits into your life, wherever that might be. The ability to shift quickly—whether that involves testing a new product niche or adjusting your promotional strategy—lets you stay nimble in a fast-moving market.

The biggest draw is often the simplicity of daily operations. You can concentrate on what really resonates with customers, such as better product descriptions, engaging ad campaigns, or extra-responsive customer service. While it’s not a guarantee of overnight success, dropshipping is a relatively low-commitment avenue that can blossom into a serious venture if you invest consistent energy and continue to learn.

What are the steps to start a dropshipping business?

Below are some core steps to take you from idea to launch. Each step has its own nuances, so take your time to build a solid foundation before going live.

Pinpoint a product niche

Market research is highly beneficial here. Browse marketplaces such as Amazon, Etsy, or eBay to identify categories that have active buyers but not too much saturation. Some store owners analyze social media trends or monitor popular hashtags to see what’s catching customers’ interest. Focusing on a specific category—such as eco-friendly home goods or workout gear for a specific sport—can help you cultivate a more defined audience.

Select dependable suppliers

Before you commit to a supplier, read reviews, check for hidden fees, confirm shipping speeds, and review return policies. Ask about minimum order quantities or any special terms. If possible, establish a direct line of communication with someone on the supplier’s team so you can address issues: fast replies are key when you operate across borders. Additionally, pay attention to time zones and language differences.

Select an ecommerce platform

Decide on a platform that suits your design preferences, budget, and the integrations you need. Some sellers select Shopify for its user-friendly tools and easy integrations with suppliers. Shopify hosts more than 4.82 million active stores worldwide, which is 27% of all ecommerce websites globally. Others use WooCommerce for its customization options and cost benefits. Research whether the platform supports discount codes, analytics, and multiple currencies (if you plan to serve international shoppers). Many platforms offer free trials, so test a few of them to see which interface feels most intuitive.

Craft a brand identity

Competition in online retail can be fierce, and creating a strong personality for your store can make the difference between a casual visit and a loyal buyer. This includes your site’s color palette, logo, and your writing style for product descriptions. You’ll need to figure out the tone that represents your business’s brand identity. For example, if you sell pet products, you might choose a warm, playful voice; or if you sell tech accessories, you might choose a sleek, minimalist tone.

Set up payment and shipping details

Configure your payment gateway to set up the checkout flow you want. For shipping, check if your supplier has multiple warehouse locations to reduce transit times for customers in different areas. Make your payment and shipping policies easy to find and include approximate shipping timelines so shoppers aren’t surprised.

Test your store and refine

A small-scale test can help you spot mistakes that might hurt your reputation. Share your store link with a few friends or a small focus group. Then, gather feedback on the layout, how clear your product descriptions are, and the overall flow from browsing to purchasing. Ask them to place test orders, so you can see exactly how it works. A few adjustments can lead to major conversion gains.

How does Stripe support payments for dropshipping businesses?

Stripe can support dropshippers with its comprehensive suite of payment processing solutions. Here’s how Stripe benefits these businesses:

• The Stripe Checkout application programming interfaces (APIs) allow businesses to create a branded, user-friendly checkout experience.
  
• Stripe enables dropshipping stores to accept a wide range of payment methods, including credit and debit cards, digital wallets (e.g., Apple Pay, Google Pay), and local payment methods.
  
• Stripe supports payments in more than 135 currencies.
  
• Stripe provides merchant account functionality as part of its payment processing services.
  
• Stripe has transparent pricing, which makes it easier for dropshippers to predict costs.
  
• If your dropshipping store supports subscriptions or memberships (e.g., to drop exclusive products), Stripe manages recurring payments with automated billing features.
  
• Stripe Radar uses AI to detect and prevent fraudulent transactions, and it can help protect dropshipping businesses from chargebacks.
  

What are common challenges in dropshipping, and how can you overcome them?

Dropshipping lowers many barriers, but it comes with its own hurdles. Staying on top of dropshipping challenges involves diligence and open lines of communication—particularly with suppliers and customers. Being transparent goes a long way toward earning loyalty. Below are a few of the challenges store owners face and how to address them.

Unreliable suppliers

If your supplier runs out of stock or delays shipping, it can damage your store’s reputation. Working with more than one supplier can lower this risk, and keeping a close eye on current stock levels helps you be proactive. Communication matters. If you anticipate any delays, let customers know, so they can set expectations.

Customer support

You don’t always see items before they’re mailed, and this can complicate product queries. Try to build a solid connection with your supplier, so you can quickly get specs or images. Ordering samples ahead of time is a good practice to establish familiarity with the products you sell.

Quality control

Because you’re not the one packing boxes, oversight can be difficult. Be sure to place test orders, so that if the item arrives damaged or looks different from the listing, you’ll find out before buyers do. This can save you some costly returns and refunds later.

Returns and refunds

Even if you don’t ship the goods yourself, you’re still the face of the store. A well-defined policy that explains how returns are handled, who covers shipping costs, and how refunds are issued can mean fewer issues later. Make sure your supplier is aware of these terms, so there’s no confusion.