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How to start dropshipping in 2026: models, budget and COD

By ReadyStore TeamPublished 21 October 20267 min read

Before you work out how to start dropshipping, it helps to be clear on what the model is: you sell a product online without storing it yourself, and a supplier or service provider ships each order straight to the customer. You focus on the store, the offer and the ads. It appeals because it needs little capital up front, but nothing about it is automatic: margins, lead times, quality and customer service remain your responsibility.

This guide defines dropshipping, compares its three main models (from China, with a local supplier, and cash on delivery with stock held in a center), then walks through how to start in 2026, with what budget and which rules to follow.

What is dropshipping?

In a traditional store, the seller buys stock, stores it and ships each order. With dropshipping, the seller never handles the product: when a customer orders, the details go to the supplier or provider, who packs and ships the parcel. The seller earns the difference between the price the customer pays and all their costs (product, delivery, ads, tools).

The term actually covers several very different setups. Comparing them before you start avoids bad surprises on lead times, payment method and margin.

The three dropshipping models

How to start dropshipping: three models, shipping from China, local supplier, cash on delivery with stock in a center — Three setups behind the same word.

Comparing dropshipping models
Criterion	From China	Local supplier	COD dropshipping (stock in a center)
Who ships	The Chinese supplier, parcel by parcel	A wholesaler or manufacturer in the country	The service center, from stock already in the country
Customer payment	Online, when ordering	Online or on delivery, depending on the supplier	On delivery, in cash or by the courier’s methods
Delivery time	Long (international shipping)	Short	Short
Stock to buy	None	None	A first batch, sent to the center
Best-suited markets	Countries where card payment is common	Your own country	Africa, the Gulf and other markets where COD dominates

The COD model with stock in a center is covered in our pillar guide to starting a COD ecommerce business.

From China: the “original” dropshipping, through platforms such as AliExpress. It mostly works where customers pay by card and accept a wait. Local supplier: short lead times and simple returns, but a narrower catalog and often higher purchase prices. COD dropshipping: you buy a first batch in China, it is stored in a service center in the country you sell to, which confirms, delivers, collects and remits the cash to you (see our guide to choosing a COD fulfillment center).

Classic dropshipping vs COD dropshipping

The differences that matter for profitability
Point	Classic dropshipping	COD dropshipping
Getting paid	Immediately, through the payment provider	After delivery, then remitted by the center
Main risk	Refunds and payment disputes	Orders not confirmed or refused at the door
Key metric	Conversion rate and cost per purchase	Confirmation rate, delivery rate, cost per delivered order
Extra step	None	Confirming each order by call or message

With COD, an order received isn’t a sale yet: that’s why order confirmation and your delivery rate decide the outcome as much as your ads do.

How to start dropshipping in 2026, step by step

Pick the market: the country sets the payment method, language, currency and logistics partner. Start with one country.
Find a product: a clear problem, easy to show on video, with enough margin after delivery and ads (see how to find winning products).
Choose the supplier: order samples, check quality and lead times; in China, a sourcing agent can negotiate and inspect for you.
Set up logistics: direct shipping, a local supplier or stock in a service center, depending on your model.
Build the store: a clear, fast mobile product page and a short order form (see how to create a COD online store).
Measure: install the Pixel and the Conversions API before your first ad.
Test small: a limited budget, a few creatives and a decision rule written in advance (see the product test campaign).

How much does it cost to start dropshipping?

Dropshipping costs less than a business with a warehouse, but it isn’t free. The cost items are always the same: the store and domain, samples or a first batch, test advertising and, with COD, delivery and return fees that also apply to refused parcels. Our guide to the budget to start a COD business breaks down each item.

Worked example (assumptions): a product costing ₦4,000 landed at the center, sold for ₦25,000 delivery included, with ₦3,000 delivery per delivered parcel and ₦1,500 per return. Out of 100 orders received, with 60% confirmed and 70% of confirmed orders delivered, you deliver 42 parcels: 42 × 25,000 = ₦1,050,000 in revenue, minus 42 × (4,000 + 3,000) = ₦294,000 and 18 × 1,500 = ₦27,000 in returns. That leaves ₦729,000 to cover ads and center fees: if the 100 orders cost more than that, the offer loses money. Run your own numbers in the COD profit calculator.

Pros and cons of dropshipping

What the model makes possible, and what it doesn’t solve
Pros	Cons
Little capital tied up in stock	Margins squeezed by delivery and ads
Test several products quickly	Quality and lead times depend on the supplier
No warehouse or logistics team	Strong competition on easy-to-find products
Sell in several countries from home	Customer service and returns remain your job

Is dropshipping legal?

Yes, dropshipping is a legal way of selling, but the seller stays responsible to the customer. In the European Union, for example, consumers have a legal guarantee of at least two years from the seller, even when a third party shipped the product. Elsewhere, business registration, tax and import rules vary by country: check with local authorities or a professional before selling.

Tools to start dropshipping
Need	Free option	Paid option
Spot products	Meta Ad LibraryActive ads by country and keyword.	MineaPaid ad and product research tool.
Find and check a supplier	Alibaba.comFree sign-up, samples and wholesale orders.	QIMAPaid pre-shipment quality inspection at the factory.

Summary

Dropshipping lets you sell without running a warehouse, but each model has its constraints: lead times from China, margins with a local supplier, confirmation and delivery with COD. To start dropshipping, pick one market, one product and run a costed test, then grow what earns a real margin per delivered order. Create your ReadyStore store to launch your first COD test.

Sources

Your Europe — Guarantees and returns (European Union) (accessed 21 October 2026)
Meta — Ad Library (accessed 21 October 2026)

By ReadyStore Team

The ReadyStore team builds the cash on delivery store platform and writes these guides from how the product actually works and from verified public sources.

Frequently asked questions

What is dropshipping, in simple terms?

It means selling a product online that you don’t store. When a customer orders from your store, a supplier or service center packs and ships the parcel. You earn the difference between the selling price and your costs: product, delivery, ads and tools.

Can you start dropshipping with no money?

Not really. Even without stock, you pay for the store or domain, samples and above all test ads; with COD, you also need a first batch and should plan for return fees. Start with a limited budget you can lose without hardship.

How much can you make dropshipping?

Nobody can tell in advance: the result depends on the product, the market, ad costs and, with COD, confirmation and delivery rates. Work out your margin per delivered order before raising your budget, and be wary of any income promise.

What is the difference between dropshipping and regular ecommerce?

In regular ecommerce, the seller buys and stores the goods, then ships them. In dropshipping, a third party stores and ships. The COD model with stock in a center sits in between: you buy a first batch, but the center stores it, delivers and collects the cash.

Does dropshipping work with cash on delivery?

Yes, provided the stock is in the country you sell to. International parcel-by-parcel shipping is too slow for COD. The usual model puts a first batch in a service center that confirms, delivers, collects and remits the payments.

Related guides

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