Dropshipping Cheat Sheet

The core ideas of Dropshipping distilled into a single, scannable reference — perfect for review or quick lookup.

PiqCue — piqcue.com/dropshipping/cheatsheet

Quick Reference

Fulfillment Model

The system by which a retailer delivers products to customers. In dropshipping, fulfillment is outsourced entirely to a third-party supplier who stores, packages, and ships products on behalf of the retailer.

Profit Margin

The difference between the retail price charged to the customer and the wholesale cost paid to the supplier, minus additional expenses such as advertising, platform fees, and transaction costs. Dropshipping margins typically range from 15% to 45%.

Niche Selection

The process of identifying a specific, focused market segment to target with curated products. Effective niche selection balances demand volume, competition intensity, and profit potential to find underserved markets.

Supplier Relationship Management

The practice of vetting, onboarding, and maintaining reliable partnerships with third-party suppliers. Strong supplier relationships ensure consistent product quality, accurate order fulfillment, and timely shipping.

Product Sourcing

The process of finding and selecting products to sell in a dropshipping store. Sourcing involves evaluating suppliers on platforms like AliExpress, Spocket, or CJ Dropshipping based on price, quality, reviews, and shipping capabilities.

Customer Acquisition Cost (CAC)

The total cost of marketing and advertising required to acquire a single paying customer. In dropshipping, CAC is a critical metric because thin margins mean that inefficient advertising can quickly make a store unprofitable.

Conversion Rate Optimization (CRO)

The systematic process of increasing the percentage of website visitors who complete a desired action such as making a purchase. CRO involves testing product pages, checkout flows, trust signals, and calls to action.

Private Labeling

The practice of branding generic or white-label products with the retailer's own brand name, logo, and packaging. Private labeling allows dropshippers to build brand equity and reduce direct price comparisons with competitors.

Chargebacks and Returns

Chargebacks occur when customers dispute a transaction with their bank, forcing the retailer to refund the purchase. Returns are customer-initiated product returns. Both are significant challenges in dropshipping due to long shipping times and quality inconsistencies.

Marketing Funnel

The multi-stage journey a potential customer takes from first becoming aware of a product to completing a purchase. In dropshipping, the funnel typically includes social media ads, a landing page, product page, cart, and checkout.

Key Terms at a Glance

AliExpress:A Chinese online retail marketplace commonly used by dropshippers for sourcing products at wholesale prices with single-unit ordering.

Average Order Value (AOV):The average amount of money a customer spends per transaction on a store.

Branded Dropshipping:A strategy focused on building a unique brand identity rather than selling generic unbranded products.

Chargeback:A forced reversal of a credit card transaction initiated by the cardholder's bank, often due to fraud or customer dissatisfaction.

CJ Dropshipping:A sourcing and fulfillment platform offering product sourcing, warehousing, and global shipping services for dropshippers.

Conversion Rate:The percentage of website visitors who complete a desired action, typically a purchase.

Cost of Goods Sold (COGS):The direct cost of producing or purchasing the goods sold by a business, including supplier price and shipping.

Customer Acquisition Cost (CAC):The total cost of marketing and sales efforts required to acquire one new customer.

Dropshipping:A retail fulfillment method where the retailer does not hold inventory and instead relies on a third-party supplier to ship products directly to customers.

ePacket:An affordable shipping method from China and Hong Kong offering tracking and relatively fast delivery to select countries.

Facebook Pixel:A JavaScript tracking code installed on websites to monitor user behavior and optimize Facebook advertising campaigns.

Fulfillment:The complete process of receiving, processing, packaging, and shipping customer orders.

Marketing Funnel:The stages a potential customer passes through from initial awareness to final purchase.

Niche:A specialized segment of a larger market, defined by specific customer needs, demographics, or product categories.

Payment Gateway:A service that authorizes and processes credit card payments for online transactions, such as Stripe or PayPal.

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