These days, it is easier to earn a living without stepping out of the house. With a laptop and an internet connection, anyone can build a successful and lucrative business online. From blogging to vlogging, freelancing to transcription, affiliate marketing to an SEO specialist, and eCommerce to dropshipping, there are dozens of businesses to choose from online. In this guide, we discuss the A-Z of dropshipping: what is dropshipping, how it works, the pros and cons of dropshipping, and why you should dropship. Does dropshipping work? You’ll find out soon.
If you don’t know that serving as a middleman can fill your pockets well I’m here to educate you. Does dropshipping work? You can act as a bridge between wholesalers and customers, delivering items to them without owning a physical store or renting a warehouse. The dropshipping business model is centered on this. What makes the dropshipping business model attractive to retailers is that it requires little capital to get started. It is also easier to set up than other types of eCommerce business models, making it seem like easy money.
So, can dropshipping work? In this guide, we will show you how the dropshipping business model works, how you can save the cost of renting a physical store or warehouse, pay overhead costs, and stocking an inventory. You will also learn the magic behind selling other people’s goods and taking a certain percentage as profit for yourself. Many entrepreneurs from around the globe have taken advantage of dropshipping, using it to build a successful brand. If you approach this business model in the right way, you can make additional income for yourself without hassle.
What Is Dropshipping
Dropshipping is an online retail order fulfillment method where an individual or a business doesn’t stock products in a store; rather, he or she redirects orders to a third-party supplier after receiving an order from a consumer. In dropshipping, the third-party supplier ships items directly to your customers, saving you a lot of hassles like finding a warehouse to store products as well as order fulfillment. Dropshipping is quite different from the traditional retail model in that the merchant doesn’t own or maintain inventory. They simply get a manufacturer or wholesaler to purchase inventory as needed and fulfill orders. As more people tune to shopping online, dropshipping continues to gain ground as a useful eCommerce business model. Learn how dropshipping works.
How Dropshipping Work
The dropshipping business model eliminates the cost of warehousing and inventory. Also, you do not need to have a physical business address to start dropshipping. So, how does dropshipping work? The working principles of dropshipping include these four steps:
1. A store owner publishes different products he/she wishes to sell online.
2. The customer sees the product, likes it, and then places an order on the website.
3. Having received details about the order, the retailer forwards (either automatically or manually) the customer’s details to the third-party supplier or dropship supplier.
4. The required products are packaged and shipped by the supplier directly to the customer with the store owner’s branding.
5. The retailer’s profit will be the difference between the supplier’s price and the price listed in his store.
Some of the most profitable dropshipping niches are:
· Beauty and health
· Eco-friendly products
· Tech supplies
· Stuffed toys
· Jewelry
· Drones and accessories
· Pet products
· Smartphone covers
· Lifestyle niche
· Power tools
Pros And Cons Of Dropshipping
We’ve highlighted how dropshipping can be a lucrative business model for aspiring entrepreneurs to start with. However, as there are many benefits of dropshipping, there are also several downsides attached to it. Below we discuss the pros and cons of dropshipping.
DROPSHIPPING PROS
1. Setting up a dropshipping business is very easy
Getting started with dropshipping is very easy and stress-free. All you need is to find the right dropship supplier, look for a niche, set up an online store, promote your products and start selling.
2. Dropshipping requires little or no investment cost
Besides its simplicity, dropshipping does not require much investment. Depending on how much effort you want to invest, you can start with zero capital or hundreds of dollars. Dropshipping eliminates the need to rent a shop to sell or a warehouse to stock products. You don’t also need to pay additional bills such as telephone, electricity, or stationary expenses. If you are to pay any dime when setting up, it’ll be the cost of running and maintaining your website.
3. Flexibility to work from anywhere
To run a dropshipping business, you do not need to walk down to your physical store daily. With your laptop or smartphone and a fast internet connection, you can promote and sell your goods without hassles.
4. No pressure to sell your inventory
Since there is no inventory, the store owner won’t be pressurized to sell off inventory. This is beneficial especially when it involves perishable goods.
5. No bonds
You can choose any drop shipper supplier or niche that you like. You are not bonded with only one supplier neither are you obliged to sell from one niche.
6. Easier to test
With dropshipping, you don’t have to stock products in a large amount without first trying it out. Dropshipping makes it easier to test new products before commitment.
DROPSHIPPING CONS
Price reduction is an effective strategy that new retailers use to ward off fierce competition. As a result, many items listed on dropshipping stores are sold at very low prices. Low pricing implies a lower profit margin.
2. Restricted control
With dropshipping, the retailer has no control over the inventory or shipping procedures. This may lead to order cancellation and customer dissatisfaction.
3. Limited customization and branding
Since the supplier takes care of packaging and shipping, the retailer has little or no chance of personalizing his brand.
4. The retailer bears the liability
If your supplier disappoints in the delivery process and the customer gets dissatisfied, the store owner will have to bear the consequences (poor reviews, bad reputation, money returns, etc.).
Does Dropshipping Still Work?
Since 2006 when dropshipping began gaining popularity in the United States, dropshipping has helped numerous entrepreneurs to create their brand. As the search for a reliable way to make money online increases, dropshipping continues to thrive as one of the most lucrative businesses. Top eCommerce platforms like Amazon, eBay, and Shopify have allowed beginners to set up an online store, leverage their marketing tools, and huge customer base to sell their offerings. Here’s how they work.
eBay allows dropshipping in the form of product sourcing. They encourage dropshipping by ensuring customer satisfaction and holding the vendor accountable for a safe delivery within the specified timeframe. Also, in eBay dropshipping, retailers are not obliged to state in their listings that an item is coming directly from the supplier. So, if you are among those asking does dropshipping work on eBay? Yes, it does.
Amazon is a globally recognized brand and the most visited online marketplace in the world. And, just like on eBay, you can also dropship on Amazon through their Fulfilled by Amazon program. The FBA program involves shipping your products to Amazon where they receive the inventory and ship directly to your customers after an order has been placed. It is quite technical so sellers need to first review Amazon’s dropshipping policy before they can get started.
Shopify is another leading eCommerce platform that enables entrepreneurs to create their own online stores and start selling without inventory. The Shopify platform is easy to use and requires no technical ability. How does dropshipping work on Shopify? In Shopify dropshipping, the seller regulates the price in their Shopify store while they pay the wholesale price to the supplier. You do not need to stock inventory or ship items yourself when using Shopify dropshipping. The supplier takes care of all of that; however, using Shopify isn’t free. You may read Shopify’s dropshipping policy before getting started.
Is Dropshipping Profitable?
Thanks to the global pandemic, 2020 further increased the popularity of eCommerce. Many giant companies including Wayfair, Fab, Gilt, and Zappos have built successful businesses using the dropshipping business model. If you already know what is dropshipping and have considered the pros and cons, then you must have a better understanding of whether it can be profitable for you or not. Anyways, starting a dropshipping business online can be cheaper, easier, and more profitable than traditional brick and mortar outlets. However, hard work, discipline, dedication, and a little patience are required to start and build a successful dropshipping business. does dropshipping work? If you find the right supplier, choose the right niche, and target the right audience to market your product, then dropshipping can be a profitable venture for you.
Talking about profit margins, you can make about 15% to 45% profit from normal items but for consumer items like electronics or luxuries like jewelry, the profit margin can scale up to 100%. Don’t get excited yet, the dropshipping business model comes with some disadvantages as we’ve discussed above, and you will need to address each. You can streamline your dropshipping process by carefully planning, creating user-friendly and easy to navigate web pages, and implementing different payment methods. This way, dropshipping can be a thriving, profitable business for anyone.
Start Dropshipping In 3 Steps
Dropshipping business model is completely legal which means just anyone can kick-start the business anytime anywhere. So, how does this business model work? We highlight this business model in three steps.
1. Select a domain name and hosting plan for your store
You need a website to run most businesses online. A website consists of a domain name and hosting plan. A domain name is your business address where customers can find you online. Your domain name should be memorable, unique, and should resonate with your niche so that customers can easily understand what your brand is all about. Luckily, several dropshipping services like Shopify and WooCommerce provide website design tools that make it easier for retailers to create their own website within hours. WooCommerce is a free WordPress plugin but you will need to purchase a domain name and hosting plan before using this platform. Shopify is a fully automated platform, but you will have to pay charges for setting up the store, listing products, and the likes.
2. Choose a niche
Identifying your niche is crucial in dropshipping. Different products are categorized under niches. While most niches are in-demand, some are evergreen. Endeavor to research a niche that will generate the desired profit for your store.
3. Select products
Different products make up a niche. For example, under the “jewelry” niche, you will find products like earrings, bracelets, rings, bangles, etc. You need to choose products that are in-demand and with the potential to sell faster. Google Trends is a great tool to help you identify trendy and in-demand products.
4. Choosing the right dropshipping supplier
The supplier plays a crucial role in the success of a dropshipping business. They can make or break your business. So, choosing the right supplier can expand your business and help you achieve success. Fortunately, there are many different suppliers in different parts of the world including the USA, UK, Dubai, China, and Germany; however, only a few suppliers are trustworthy and can deliver as promised. For beginners, finding the right dropshipping supplier can be hectic. Before you start your search, it is worth knowing the characteristics of reputable suppliers. The right supplier must:
- Attend to customers quickly
- Offer very fast delivery around 2-4 days delivery
- Own centrally located warehouses throughout the world
- Offer high-quality products that will sell very fast
- Offer discounts on bulk purchases
- Low pricing
- Favorable return policy
Through research, only a few dropship supplier checks all these boxes. The SaleYee platform makes the list because it has made dropshipping easier for every online seller. SaleYee.com offers high-quality products at low pricing, meaning, you can buy goods cheaply, sell, and make high profits. That’s amazing. While most dropshipping platforms charge retailers for listing, membership, and so on, SaleYee.com is completely free. All you need after setting up your store is to import products right away. There are many benefits of using the SaleYee platform. Take advantage of the low pricing offered by the SaleYee platform, you may become an member of SaleYee.com for more information.
Conclusion
Does dropshipping really work? Yes, it does and it is a great option for beginners. It is a great way to kickstart your adventure on the internet. If you can choose the right product and get a reputable drop ship supplier, then you can build a successful eCommerce business in no time. This online business model comes with a few drawbacks but always remember that no complexity is beyond resolution. To your success online.
