Fundamentals Flashcards
7 cards from real Dropshipping practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Fundamentals flashcards as text
In a dropshipping model, who is responsible for storing inventory and shipping products to the customer?
Answer: The supplier
The supplier holds inventory and ships directly to the customer in dropshipping.
What is the primary financial advantage of starting a dropshipping business?
Answer: Low upfront inventory investment
Dropshipping requires little to no upfront capital because you don't buy inventory in advance.
What term describes the difference between the price you charge and the price your supplier charges you?
Answer: Profit margin
Profit margin is the spread between your selling price and your supplier cost.
Which of these is a common disadvantage of dropshipping?
Answer: Low profit margins due to competition
Because barriers to entry are low, competition drives margins down.
What does 'order fulfillment' refer to in dropshipping?
Answer: Processing and shipping a customer's order
Order fulfillment is the process of getting the ordered product to the customer.
Why is supplier reliability critical in dropshipping?
Answer: You depend on them for product quality and shipping times
Since suppliers ship directly, their reliability affects your customer satisfaction and reputation.
Which platform is most commonly associated with building a dropshipping store?
Answer: Shopify
Shopify is a leading e-commerce platform widely used for dropshipping stores.