Throwback to the time when the only kinds of businesses we knew were either having your physical shops or working as an employee in those shops. However, decades later, technology has taken a leap where everything is slowly and steadily becoming digital. Experts anticipate that in the next ten years, all the physical shops will become virtual, and the work from home approach will be prevalent. Just like astrology, knowing about the future dynamics of the market gives all the aspiring, passionate individuals a force to plan in a direction that will keep them stay a step ahead of all. One such step can be towards dropshipping, which can allow you to earn ample money from the comfort of your home that you will never look back to your 9 to 5 job.
Keep reading to learn more about the miraculous business idea!
What is Dropshipping?
Dropshipping is a form of retail fulfillment where the items sold are not kept in storage by a company. Alternatively, when a retailer follows the dropshipping approach to sell a product, they buy the product from a third party and ship it directly to the buyer. Due to this approach, the seller does not have to manage the products on their own. The major difference between dropshipping and the regular retail system is that the one selling the product doesn't have the product with them. Rather, the retailer purchases products from a third party— typically a wholesaler or manufacturer— for order fulfillment if required.
Reasons Behind Dropshipping Popularity
Dropshipping is highly popular for several reasons. In a nutshell, it offers a lot of benefits for both the seller and the supplier. Here are a few reasons for dropshipping's popularity:
Escape the Burden of Inventory
It's a big problem to manage your inventory. You will need storage space. Moreover, you will also have to keep an account of your product inventory. By freeing yourself from these obligations, you will have much more time to expand your venture.
Increased Product Variety
Without the space constraints and overhead costs, a virtual shop is free to offer a different variety of products to the clients. Dropshipping allows stores to have a large inventory that is constantly changing as per the requirements of the potential buyers, rendering purchases more possible.
No logistic Headaches
You will not have to print a sticker for shipping. You don't have to pack the things and then go to FedEx. It will be the manufacturers working for you who will carry out all these tasks directly. All you have to do is sell it.
Small Capital Needed
You can launch your dropshipping store for as little as $30, unlike many other businesses. As you don't have to buy the products, the only money you need is payment for a host platform. If you don't want to spend on that, you can carry out dropshipping from Amazon or eBay and start your virtual store free of charge. You can work in your living room or kitchen and can also recruit freelancers to support your business model.
The whole world can be a marketplace in the dropshipping business. Because you can find suppliers from all around the world, such as the USA, UK, Australia, China, etc. You can offer your goods with fast shipping times to countries near the supplier.
Drawbacks of Dropshipping
Despite being an highly popular business model dropshipping also has it's drawbacks.
Reliance on Stock
Even though one of the advantages of dropshipping is that you are free to respond to customer requirements, it also implies that you are vulnerable to unexpected scarcity in supplies. If an object is popular all of a sudden, you could miss selling it, since the seller will have no stock left.
Less Competitive Pricing
Dropshipping implies no more bulk storage, meaning no more bulk sales. When dropshipping, you'll more likely pay more for every single item, so that suggests that your prices won't be as attractive.
So, What do you Need to Start Making Money with Dropshipping?
Step #1: Start Your Dropshipping Store
In reality, setting up your dropshipping store is the easiest part of this process, since many "simple to use" solutions are available on the market. Your decisions regarding your eCommerce site will be focused on your budget parameters.
Here are the top two platforms where you can set up your virtual store:
Shopify is a completely hosted shopping cart application that manages everything to get you going. Shopify provides you with a secure site after sign-up and free integrated credit card payment methods so you can start taking orders as soon as possible. A major disadvantage of Shopify is that it is one of the most expensive platforms; however, you can start your virtual store without having to learn anything about coding. We strongly recommend you to go with Shopify.
We all know about Amazon, but did you know that dropshipping is legal on Amazon?Amazon has grown in popularity as it helps merchants to market their products on their website. Manufacturers and retailers can sell their products on Amazon as an additional sales outlet. You'll be able to start selling on Amazon once they accept your Amazon seller account. Not all brands and goods are accepted on Amazon, as it has very strict selection criteria.
Step #2: Product Hunting
Product hunting is the toughest step of all other steps. It requires blood, sweat, and many tireless days and nights. As dropshipping margins are generally lower, goods that carry a higher price tag are the best dropshipping items to sell.
If you're a beginner, here are some product hunting tips for you:
- The inherent value of the item should be unclear. Commanding higher prices for goods that are not readily comparable to shopping is much better. Consequently, try to stay away from electronics and concentrate on things that have no inherent value.
- Choose a niche with tons of related items. Cross-selling the items is essential to run a successful dropshipped shop. ⠀
- Sell products with an average order size of a minimum of $50, as due to lower margins in dropshipping, you should ensure that you can achieve decent profit per order.
- Sell timeless goods and avoid products that become outdated within a short period. Moreover, the more often a good turn in, the more you will be updating your product listings and keep the page updated.
- Are the items you are selling consumable? The selling of consumer goods such as wipes, cosmetics, and food items is beneficial because they contribute to repeat sales. You should set up a monthly fee-based service where at the start of each month, packages are directly sent to the clients.
- Create attractive and catchy content for your goods. Search engine optimization is critical for a dropshipping shop to generate free online traffic. The more content you create, the more search visitors you'll receive. Remember, content is the king.
Step #3: Find Dropship Suppliers
Since dropshipping has become common, and the internet is saturated with fraudsters, you must first know how to spot a fake supplier.
First of all, a REAL wholesaler would never charge monthly extra for the privilege of viewing his/her product inventory. Legitimate drop ship wholesalers are basically dealers, and their aim is to sell their goods in volume, not operate a member platform every month.
Secondly, an individual manufacturer who dropships will never market the goods at wholesale prices to the end consumer. Note, the main client of a wholesaler is a retail shop, so dealing with their clients would go against their long-term interests.
Usually, most dropshippers find their products on Aliexpress. Here's a guide on how to find winning products on Aliexpress.
Should I start a Dropshipping Store?
Absolutely! Dropshipping is an excellent business model to get the first step in the digital market. Like any business, dropshipping can be a hit or miss. However, what can keep it a hit is when you are thinking from the perspective of a buyer.
Dropshipping has everything regarding what it takes to sell a product; all it requires is proper dedication and marketing strategies.
Frequently Asked Questions
- How much money can I make from dropshipping?
Dropshipping is a real business model so you can pretty much make hundreds of thousands of dollars from it. There are a lot of people around the world making a very good living only from dropshipping. It's all up to you.
- What if I've never used Shopify or Amazon?
Being a highly known business model, there are tutorials all over the web on how to build a Shopify or an Amazon store. We recommend you to watch the videos we've uploaded above as they explain in extreme detail how to create a shopify or an amazon store.
- How much money will I have to invest for this method to work?
We cannot give you an estimated amount since this depends on many factors, however, we do not recommend you to start a dropshipping store if you don't have at least 100$ to start with.
- Do you guarantee any results?
We do not guarantee any results using this or any other method available on our website. Making money online starts and depends entirely on YOU. Not methods. Not courses. Not Google. It's all about you.