The business framework for the dropshipping business model is based on the full understanding of the foundations of the business. The starting point for the business involved the many customers that wished to access products in new and imaginative ways outside the traditional methods of trading. It had become clear that there was an element of monopoly that had taken over the understanding of the business model that we had been accustomed to. The customer service is normally the first victim to fall in these circumstances because the traders feel that they are at liberty to do anything that they want to do. It is not uncommon to consider the dropshipping model as a framework for responding to customer requirements.
The merchants then saw a business opportunity that was hard to miss in the circumstances. In looking at the dropshipping phenomenon the initially motives for all the parties was self interest. While the customers wanted a greater variety in products at a limited price, the merchants wanted to maximize their profits by increasing the avenues through which they could carry out business. The end result satisfied all these objectives to a limited extent and that is why dropshipping became a successful venture.
The merchant websites were always looking for opportunities to make a profit by providing a forum for the communication between the suppliers and the middle men that made dropshipping such a lucrative business. They essentially set up a kind of forum through which the individual merchants could have some access to the generality of the suppliers. They could then make contact and make the business deals that form the foundation of dropshipping. Meanwhile the merchant website would make a profit by charging a fee for the privilege of accessing the forum.
The involvement of the suppliers was rather more straightforward: as they increased their production levels it became necessary to find new avenues for selling the products that they made. The business model provided the perfect opportunity to build on the successes that they had made so that they could make the whole process more profitable in the long run. For them it was always a winning position when a product was successfully sold on the web because they always had their production costs and markup guaranteed at the beginning of the contracting process. Perhaps the suppliers gained the most from the dropshipping model.
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