Did you know that dropshipping can change your life and that you can do it from home or anywhere for that matter. If you’ve always loved the idea of working from home but haven’t yet found the business idea that works for you, then this might just be the perfect match.
From little beginnings to date, dropshipping has raised many millionaires including Irwin Dominguez, Anton Kraly, Scott Hilse, among others. You too can. But before we get into the details, it is important to establish one fact; dropshipping is not a get rich quick scheme or HYIP.
It is a legitimate online business that anyone can do anytime, anywhere.
In this post we’ll be looking at dropshipping, what it is, how to start and run it and how to make money from it, all from the comfort of your home.
Perhaps at this point you’re asking and wondering
So, What is Dropshipping?
Dropshipping is an e-commerce fulfillment model or business that allows you sell other people’s products at your own price, without having to buy stock or keep physical inventory.
It’s a tripartite arrangement featuring The dropshipper, suppliers and customers as seen below:
And here’s typically
How Dropshipping Works
- Dropshipper obtains and imports product images from Suppliers at a set price (cost price)
- Dropshipper displays imported products on own site and sets own price (selling price)
- Customers buy from dropshipper at selling price and submit contact info
- Dropshipper takes profit and forwards cost price plus customers info to Suppliers
- Suppliers pack and ship orders out to customers anywhere in the world
Following is a
15-Year Google Trends Chart of Online Shopping and Dropshipping
Over the past decade and a half, both online shopping and dropshipping have witnessed steady increase in interest.
Some Interesting E-commerce and Dropshipping Statistics
- Global e-commerce revenue will top $4.48 tr by 2021
- 96% of Americans shop online with 8% of millennial shopping daily
- 92 billion people are expected to buy or shop online in 2019
- In 2011, dropshipping accounted for 34% of products sold on Amazon which brought in $14.2 billion
- By 2019, e-commerce will account for 13.7% of total retail sales worldwide
- Convenience and 24/7 access are the top reasons why people shop online
- Average eCommerce conversion rate is 2.86%
- Mobile e-commerce will account for 67.2% of online digital sales by 2019
- Younger people spend a lot more time shopping online than older folks
- 35% of Google product searches turn into purchases within 5 days
Here are some
Pros of Dropshipping
- Low entry barrier
- Low startup cost
- Low running cost
- Easy entry, easy exit
- No need to buy own stock
- No need to keep own physical inventory
- No need for own storage/warehouse
- No need for own delivery or fulfillment trucks/team
- Good margins and profitability
- Lots of learning resources
And here are some
Cons of Dropshipping
- High competition
- High premium startup cost
- Initial high cost of ads and add-ons
- No industry regulators yet to set minimum standards
- No hands on experience in stocking physical products
- No experience with keeping physical inventory
- Zero experience with storage and warehousing
- Zero knowledge of how delivery/fulfillment really works
- Higher prices for customers
- A seeming information overload resulting in analysis paralysis
10 Key Things You Need to Start Dropshipping Business
- Knowledge of how dropshipping really works
- An e-commerce platform e.g Shopify, BigCommerce, and others to choose from
- An e-commerce store with your own domain name
- Dropshipping automation tools e.g Oberlo
- Other dropshipping apps and plugins for different functions
- A good niche or in-demand products
- Reliable dropshipping suppliers
- Knowledge of online marketing
- Payment processor to receive payments, e.g PayPal
- Patience and determination to succeed
Here’s a typical
Dropshipping Startup Cost Estimate
This would depend on how big or small you want to start. At a minimum you’ll need:
- Shopify basic plan at $29.99/mo (after 14 days free trial)
- dot com domain name ($14/yr if you buy through Shopify)
- Oberlo (forever free for up to 500 products and unlimited monthly orders, then $29.90/mo for basic plan for up to 10, 000 products)
So you can get started for $43.99.
Going further, you may want to add
- Product samples (e.g $30, so you can see what your customers get)
- Apps (e.g $100 for 5 major apps. Apps extend store functionalities, sometimes the more, the merrier)
- Marketing (e.g $250 on Facebook ads to reach 20,000 users)
And now, let’s see
Some Benefits of Being a Dropshipper
- Become your own boss
- Freedom to live the laptop lifestyle and pursue your dreams
- Work from home
- Work from anywhere, anytime, any day
- Zero daily commute to and from work
- Low risk investment
- Zero need for physical stock and inventory
- No need for rent or warehouse
- Ability to turn high profits
- Plenty of verified suppliers to choose from
- Unlimited products to sell
- Ability to sell globally and earn forex
How to Succeed at Dropshipping
Firstly, learn and understand how the business works. There are a ton of resources that teach you how to succeed at it.
This is essential. Because the entry barrier is low, every Tom, Dick and Harry can jump in, even without adequate preparation, which can lead to frustration and failure. Another reason you must keep learning is because things change really fast online, so you can stay updated.
Secondly, choose a good e-commerce platform. This can greatly affect your business or online store from quality hosting to themes, design, aesthetics, look and feel, user interface, user experience, payment gateways, apps and plugins, support, etc. Shopify is the most popular e-commerce platform out there.
Thirdly, choose a good and profitable niche, and only use verified suppliers to save yourself some headaches with poor packaging or low quality products. Additionally, order samples of the products you intend to sell so you can see what it looks like in real life plus how long it took to arrive.
Fourthly, market, market, market, and market some more. That’s where the hard work comes in. Leverage social media, blogging, ads, word of mouth and every possible marketing channel or tactic you know, while keeping your expenses low.
Doing these will help you position your dropshipping business for success. As earlier mentioned, this is not a get rich quick scheme, but it can make you rich if you understand it and work really hard at it.