Merchant

Definition

A merchant is a business or individual that sells products or services to customers. In e-commerce, the merchant is typically the owner of the online store that offers products for sale.

Explanation

In dropshipping, the merchant is the store owner who markets products and processes customer orders, while third-party suppliers handle inventory and shipping.

The merchant is responsible for the customer-facing side of the business. This includes managing the store, attracting traffic, setting prices, and providing customer support. Even though the merchant does not physically handle the products, they remain the main point of contact for the customer.

Key responsibilities of a dropshipping merchant include:

• Creating and managing the online store
• Selecting products to sell
• Setting pricing and promotions
• Running marketing campaigns (ads, SEO, social media)
• Handling customer service and order issues

Because the merchant controls the storefront and customer relationship, their marketing strategy and user experience play a major role in the success of the business.

Example

An entrepreneur launches a Shopify store selling kitchen gadgets:

• The merchant lists several products on the store.
• A customer orders a vegetable slicer.
• The merchant forwards the order to a supplier.
• The supplier ships the product directly to the customer.

The merchant manages the sale and customer relationship, while the supplier handles fulfillment.

Key Takeaway

In dropshipping, the merchant is the online store owner who sells products to customers and manages the business operations, while suppliers handle inventory and shipping.