Dropshipping.
aka drop shipping, direct fulfilment by supplier, no-inventory retail
Selling products you never touch, from stock you never bought.
What it actually means
Dropshipping is a retail model in which the store takes the order and the payment, then passes the order to a supplier who ships the product directly to the customer. The store holds no inventory. It earns the difference between the retail price and the supplier's price, and it remains legally responsible for the sale.
The appeal is obvious: no stock to fund, no warehouse, and a catalogue that can be as wide as the supplier's. A store can be opened in a weekend.
The costs are less visible. Margins are thin because anyone can list the same product. Delivery speed and quality are in the supplier's hands while complaints land in yours. And shipping single low-value parcels across borders got dearer when the US ended its duty-free threshold in 2025 and the EU added a flat €3 duty on small parcels in July 2026.
Where you'll hear it
I do not keep any stock. When someone orders, my supplier ships it straight to them and I keep the margin.
Translation: I am a shop window and a customer-service desk. The product, the warehouse and the delivery belong to someone else.
Also in “start a business with no money” videos, in marketplace seller forums, and in established retailers' operations, where dropshipping bulky or slow-selling items from suppliers is a routine, unglamorous tactic.
The pop-culture version
You open a restaurant with a menu, tables and waiters, and no kitchen. When a customer orders, you phone the place next door, they cook it, and it arrives at the table on your plates.
You have no ovens to buy and no food going off. You also cannot fix a slow kitchen, you cannot change the recipe, and the restaurant across the street can use the same kitchen and undercut you by a euro.
If the food is late or cold, the customer blames you. Your name is on the door.
Dropshipping is a way to test demand cheaply. Stores that last usually move their best sellers into stock they control.
Say it like you mean it
“We dropship the long tail from a domestic supplier and stock the twenty best sellers ourselves.”
Uses the model where it fits and admits its limits.“Dropshipping is passive income.”
Customer service, returns, advertising and supplier problems are all active. Only the warehouse is missing.Ask a dropshipper two questions: where does the product ship from, and what is the margin after ads? The answers tell you whether it is a business.
Four inventory models compared on capital, margin, cash and risk.
Decoded next
Decoded by the Kurums editorial team. Kurums Decoded translates the language of business for people who are new to it. Definitions are kept short on purpose; the serious version above goes deep. Nothing here is financial, legal or career advice.
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