How dropshipping works
Your customer buys from your store. You arrange fulfilment with the supplier, which sends the order to the customer under the agreed terms. You manage the customer relationship and monitor the order.
Delivery, stock information and returns depend on the supplier arrangement. Vello investigates the practical implications for the business we propose.
When holding stock may help
Buying in volume may unlock better buying prices and give you more control over availability, packaging and dispatch. It can also create scope for bundles or a more distinctive customer experience.
Those benefits must outweigh storage, handling, insurance, obsolete stock and cash tied up in inventory. A cheaper unit price is not necessarily a better overall return.
Compare the full trade-off
Dropshipping can reduce upfront inventory exposure, but you rely more heavily on supplier stock accuracy and dispatch performance. Holding stock increases responsibility and capital needs, even if the buying margin improves.
Some businesses may later combine both approaches. That decision depends on actual demand, available capital and supplier terms.
What Vello normally builds
Vello predominantly starts with dropshipping and checks supply, delivery and returns arrangements during research. Stock purchasing is an optional later decision, not a requirement of every build.
As the retailer, you still have customer-facing obligations. Supplier arrangements do not remove applicable consumer rights. Use the official guidance below and obtain advice where your products or sales model require it.
Compare the two models
| Consideration | Dropshipping | Buying stock |
|---|---|---|
| Inventory payment | Usually per order | Usually before sales |
| Dispatch control | Supplier-dependent | You or your fulfilment partner |
| Stock risk | Lower owned inventory exposure | Cash tied up in unsold goods |
| Margin | Depends on supplier terms | Volume savings may help; overheads may rise |
Further reading
General information, not a forecast or personalised financial, tax or legal advice. Research reduces uncertainty; it does not remove business risk. Confirm your individual position with an appropriate professional where needed.