If we told you it was possible to become a millionaire while working just one and a half hours per week, you probably wouldn’t believe us. Yet dropshipping has emerged as a low-effort, high-reward way of making money online.
You might have heard of the brands Shopify, Oberlo, and Printful… but what are they and how do they relate to dropshipping?
Keep reading to learn all about dropshipping and why you should consider launching your own dropshipping business.
What Is Dropshipping?
Let’s start by exploring exactly what is dropshipping and how it works. Dropshipping is effectively acting as the middleman between a product supplier and the consumer. As a dropshipping business, you never stock, ship, or see the items yourself.
Here’s a quick flow of the transaction journey to demonstrate:
- First, you (the retailer) advertise products on your website or with a third party (such as Amazon or Etsy)
- These products are marked up compared to the supplier’s prices, allowing for a profit to be made
- When a consumer purchases a product online, the supplier can be automatically notified, or informed by the retailer
- The supplier then ships the product to the consumer under the name of the retailer
We can see that very little work is needed on the part of the retailer (otherwise known as the dropshipper). It’s also clear that the consumer is not aware of the process that takes place before they receive their product. It’s likely that you have bought items in the past, presuming that you are purchasing directly from the goods’ supplier, but in fact, going through a dropshipping middleman.
What Are the Benefits of Dropshipping?
There are widespread advantages to dropshipping, as we will now discover. We’ve already shared that dropshipping requires little input once the business is up and running, so let’s dive in.
It’s Easy to Get Going
Unlike other forms of e-commerce businesses, it’s quick and simple to start dropshipping. This is in part because of the lack of resources needed: no storage space, products to stock, or even capital. Dropshippers only buy the stock once the customer has made the purchase, so you can start with as little as $20.
Most dropshippers run their businesses from home. Until the business picks up, it’s easy to do alongside a full-time job. This is especially true in the era of Covid-19 when many of us are working from home. Here is a great resource for starting your ecomm business from home!
Another great benefit of dropshipping is the ease with which you can scale the business. Dropshipping is far easier to scale than traditional e-commerce businesses, as the onus to keep up with sales falls to the supplier rather than the retailer.
Only an hour or two is needed per week to keep up with administrative tasks for most dropshipping businesses, so there are no costs associated with hiring employees.
A final important reason to start a dropshipping business is the flexibility involved. It’s straightforward to run a dropshipping business alongside other business ventures, and all that’s needed is an internet connection.
Dropshipping is a popular option among many digital nomads and travelers, as it’s easy to make money from dropshipping anywhere in the world.
How Does It Work?
It’s time to dive into the nitty-gritty of dropshipping. There are several key tools that many dropshipping businesses utilize to make life easier.
Shopify is almost synonymous with dropshipping, as it’s the market leader for hosting online stores. It allows you to choose your website theme, process payments, and learn data about who’s buying your products and other helpful insights.
Next, Shopify hosts a useful app called Oberlo, which we’d recommend to all aspiring dropshippers. Oberlo is a tool that helps you to search for and source products for your dropshipping business. It works hand in hand with Shopify, and allows for easy editing of products, and can even sync with your AliExpress account.
The last tool we’ll take a look at here is Printful. This is a great avenue to explore if you’re starting out in dropshipping, as customized products are extremely popular. Printful allows you to create custom products which are then sent directly to your customers.
How Should You Get Started?
If you’re wondering how to start a dropshipping business, listen up. The first stage is working out what you will sell: the best dropshipping business ideas are those that identify a great product.
You want to find a product that is popular right now, as this will give you a sufficient volume of sales and ensure marketing costs are low. It’s easy to find data on trending products thanks to tools such as Amazon, Google Trends, and Wish.com.
Many dropshippers choose to start with a market related to their hobbies or interests. This makes sense as you’ll already have a good knowledge of the trends, even if you still need to research the different niches that exist.
A great dropshipping business model also selects products that are:
- Small and lightweight
- Not offered by any major brands
- Non-seasonal, so popular year-round
- Retail for between $10 and $180
Once you’ve found your niche and lined up your suppliers, you can set up your selling profile. This might be via Shopify, eBay, Amazon, or equivalent options. You’ll then need to get yourself a sales tax ID and develop your branding and marketing strategies.
Are You Ready to Launch a Dropshipping Business?
As we’ve seen, dropshipping is a simple concept with an incredible capacity for making easy money. It’s crucial to find your niche, then develop the marketing skills to promote your products.
If you want to join the thousands of people making money from their dropshipping business, we’re here to help. Thanks to our courses, free tools, and extensive resources, you can get all the support your need to get started. Subscribe to The Boardroom to receive our best e-commerce tips, exclusive offers on our courses, and much more.