Dropshipping is an order fulfillment method where a business doesn't keep the products it sells in stock. Instead, the seller purchases inventory as needed from a third party—usually a wholesaler or manufacturer—to fulfill orders.

No more up front inventory costs or shipping logistics. With dropshipping, products are sent directly from your supplier to your customers. Here's how it works:

1. Your customer places an order from your Shopify store
2. Your store automatically sends the order to your dropshipping supplier
3. Your dropshipping supplier prepares your customer's order
4. Your supplier ships the order directly to your customer and they can track it all the way to their doorstep

Dropshipping has the potential to be profitable. For starters, online shopping continues on an upward trajectory. Further, merchants don't need to make inventory investments upfront, so this keeps more capital at the ready for other purposes.

Here's how to start a dropshipping business:

1. Choose a dropshipping business idea
2. Do competitive research
3. Choose a dropshipping supplier
4. Build your ecommerce store
5. Decide on a business structure
6. Get your finances in order
7. Market your dropshipping store
8. Analyze and improve your offering

The best products for dropshipping have high demand and low market competition. For example, some dropshippers chose to sell trendy products like colored LED lights. Dropshippers might also chose more industrial products like heat lamps or car parts. Finding a great dropshipping niche usually includes market research and some experimentation.