You’ve come to the right place if you’ve ever wondered what dropshipping is or how it works.
While setting up an online store isn’t tricky, choosing what products to sell and how you want your business to work can be difficult.
Dropshipping is one of the most popular business models for new eCommerce businesses.
This blog post will go over what dropshipping means, whether it’s worth it in 2022, and how to start dropshipping if you’re interested in creating a new eCommerce business.
What is dropshipping
Dropshipping is a retail fulfilment method in which a store does not keep the goods it sells in stock.
Instead, the store purchases goods from a third party and then sells them to consumers.
The third party (usually the manufacturer) ships the goods to the consumer. This process is also called “ship from the manufacturer.”
Benefits of drop shipping
Here are some of the benefits of dropshipping:
- Ease of use. Drop shipping is straightforward, making it easy for even novices to get started. You won’t have to invest in any inventory or storage space, which means you can be up and running with your store in no time at all.
- Low startup costs. You don’t need a lot of money upfront to begin drop shipping; you need a website and an online store! That makes it much easier than starting a traditional brick-and-mortar business or opening up your storefronts at retail locations across town or across the country (which would cost quite a bit).
- No inventory storage expenses. Suppose you choose not to order products yourself from manufacturers. In that case, all the work of storing those items falls on someone else’s shoulders—those who manufacture them!
Cons of dropshipping
Dropshipping is a great way to start a business, but it’s not for everyone. If you’re considering dropshipping, here are some things to consider:
- Dropshipping can be challenging to scale. The best way to scale your business is by hiring more people or expanding into new markets with more inventory—but if you’re selling through third-party platforms like Shopify and Oberlo, this isn’t possible unless those platforms allow it (which they don’t).
- Dropshipping is not a passive income source. Many drop shippers look at the low cost of starting up their business as an opportunity for passive income—but in reality, once your store has been live for long enough and making sales enough that orders are coming in every day, there will be plenty of work left over from managing inventory, marketing campaigns, customer service requests (including returns), Etc.
Drop shipping for beginners
Dropshipping is a process through which you can sell products without investing in inventory, storage, shipping or sales.
To make money from dropshipping, you need to find a supplier with the product you want to sell and set up an account with them.
When it comes time for your customer to place their order with you, they will direct you back to the original supplier’s website to complete their buy.
You then receive payment from the supplier on behalf of your client and pass this along as profit once it has cleared into your account.
Is Dropshipping for You
Dropshipping is an excellent option if you’re looking for an eCommerce business to start.
It’s easy to get started and can be run from anywhere—no storefront required!
Plus, if you’re an entrepreneur who likes to keep things simple, this might be a perfect choice.
Dropshipping is also scalable: as your business grows and becomes more successful, you can hire staff or move into different areas of the supply chain (like warehousing).
This means that even though certain aspects of your business may change over time, there will always be growth opportunities.
Is Dropshipping Profitable
Yes, dropshipping is a profitable business model.
The first step to making money with drop shipping is an attractive product selection and a solid marketing plan.
The second step is to find the right drop shippers who can manage your supply chain and fulfil your orders.
Many people think that if they have a successful website, they will attract customers and make money.
This is not true! Dropshipping requires hard work, patience and determination to succeed long-term.
There are many challenges along the way, such as keeping up with supplier quality control and finding reliable suppliers.
And dealing with customer complaints or returns from faulty products shipped by sellers themselves rather than from 3rd party suppliers like Amazon FBA sellers do this all day long, every day, so why should I?
It would help stay committed even when things don’t work out exactly as planned (and things won’t always go according to plan).
How do drop shippers make money
Drop shippers don’t have to pay for inventory because they don’t stock their goods.
They also don’t have to pay for shipping since the manufacturer does that. Drop shippers charge customers a fee for handling and delivery.
Drop shippers also save money on storage space and rent since they aren’t storing anything themselves.
Also, drop shippers cut the need for marketing or advertising: The product is already being marketed by the company that makes it!
The only costs that drop shippers need to deal with are the fees associated with accepting credit card payments (which can be negligible) and any necessary fees from their suppliers (for example, if your supplier charges a monthly fee).
Is dropshipping legal
Dropshipping is legal in the US, UK, Canada, and Australia. It also has a meagre startup cost as compared to other businesses.
Drop shipping as a Side Hustle
Dropshipping as a side hustle can be a great way to make extra money.
It’s also an excellent way to test your product idea or even a new market.
For example, if you’re thinking about starting your business selling clothing on Shopify but don’t want to commit all the time and money needed up front (like buying inventory), dropshipping is a great way to test this idea without the spending; any money at all!
If it doesn’t work out after six months, no harm is done: move on with your life!
Can you do dropshipping on Amazon
You can dropship on Amazon. It’s an excellent place for beginners to start their dropshipping journey.
Amazon is one of the most trusted sites globally and has millions of customers who browse through its pages every day looking for products they want or need.
It’s also an easy way to learn about dropshipping before diving into eCommerce platforms like Shopify or Magento.
When you sell your products on Amazon as an individual seller, you have access to plenty of benefits that don’t come with selling as an official merchant:
- You get free storage space in FBA fulfilment centres across the US and Europe, so you don’t have to pay for shipping your products yourself (and don’t have to worry about making sure they arrive at their destination).
Dropshipping as a Full-Time eCommerce Business
As you can imagine, it takes much work to start and run a dropshipping business. You need to be able to work long hours and be very organized.
It’s also essential that you’re able to handle the customer service aspect of things—you’ll be the one fielding questions about products, returns, refunds and more.
You may want to start with small-scale dropshipping to get your feet wet before diving into wholesale sourcing or physical inventory management.
The Dropshipping Process
The dropshipping process is simple. You, the store owner, buy a product from a manufacturer and then sell it to your customer.
You do not handle any inventory or shipping; instead, the manufacturer handles all those tasks and sends the products to your customers.
As a result, you can set up an online store with no financial investment in inventory or shipping costs.
The main advantage of dropshipping is that it allows you to sell products without dealing with large quantities of inventory or risk losing money on unsold items if you’re unable to sell them at a total retail price after buying them in bulk from the manufacturer’s wholesale prices.
Is dropshipping worth it in 2022
Dropshipping is a great way to get started in eCommerce. If you’re looking for an easy way to start as a side hustle or on Amazon, dropshipping can be excellent.
There are many reasons why dropshipping is worth it in 2022:
- Dropshipping allows you to sell products without buying them first. This means that you don’t have to take any risks with your capital. There’s no need for storage space or other overhead expenses associated with owning inventory. All it takes is an online store, some knowledge of marketing and sales techniques, and the ability to outsource labour (if necessary).
Now that you know the answer to “what is dropshipping?”, it’s time to decide if it’s a suitable business model.