Understanding the Basics of Dropshipping Dropshipping is a retail method in which a business doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a supplier and has it shipped directly to the customer. This means that the store never sees or handles the product, making it an efficient and cost-effective method of running an e-commerce business. Dropshipping allows merchants to offer a wider variety of products without the added expense of storing and shipping inventory.