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Since the e-commerce boom of the late-1990s, Dropshipping has established itself as a prominent player. It’s both a business model and a logistical outsourcing solution: a company sells a product online that they never actually hold in stock; instead, the order is passed onto a third party wholesaler or manufacturer who ships directly to the customer.
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New businesses are attracted to Dropshipping because it involves very little capital at the outset, while established businesses use it as a cost-effective complement to their usual operations. But while there are numerous tall tales of wily entrepreneurs sitting at home with a laptop, a nice marketing plan and a lucrative niche, watching the big bucks roll in, the reality is different.
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Analysts talk about fierce competition, a saturated market and super-slim profit margins. To stand any chance against the big boys, value has to be added in non-pricing terms: through personalising the shopping experience, knowing the product inside out and understanding the customer’s needs.
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