Many people are not aware of how much money one can make from dropshipping, however, this is quickly becoming an extremely popular business. Unfortunately, this means that you will have to move fast if you want a piece of this highly profitable cake.
If you look online, you will come across quite a few people who have made six-figure incomes from this business, mentioning that they are only at the beginning of their road. Truth be told, it is completely in the realm of possibility to make two or three times the amount that most claim to be making.
Why is it so easy to be successful with dropshipping? Because there is a constant demand for it. This is a great business model that offers a lot of potential for a minimum amount of invested time, money, and energy.
Dropshipping is a great choice for anyone who wants to start a business that will effectively be their main source of income, but it is equally practical for entrepreneurs who like to have 3-4 businesses generating money simultaneously. This having been said, this isn’t a get-rich-quick scheme or a guaranteed business.
There are risks, and there are disadvantages. You will have to decide if this type of business is a good fit for you. Many people used to argue that dropshipping would cease to be profitable at the end of 2013, however, even now, after 5 years, the business model is as strong as ever and continues to generate an amazing profit.
The best moment to start a new business is along with the start of the year. This way you can accurately measure your efforts, and decide if it is worth it to continue one more year or to cut your losses. This guide will present both the advantages, as well as the disadvantages that come with this business so that you can make an informed decision regarding what could be an amazing opportunity.
Why is it a great idea to start a dropshiping business in 2018?
The answer is quite simple: It’s a business that requires very little money or knowledge to start, and it is easy to manage.
Basically, you can get things started for less than $1,000. Also, it doesn’t take long to start making a profit, and it’s the easiest way to get into the world of e-commerce due to the fact that you won’t have to worry about handling any inventory. The business model gives you access to an almost endless supply of products, without having to pre-buy any of them or to handle any warehousing.
You will basically get all the perks of owning a physical products business, without having to worry about any of the issues that typical businesses of this kind usually have.
Why work with physical products?
While many may think that it’s actually easier to get started with digital products, due to the fact that you don’t need to worry about delivery times, inventory, etc., it’s far more difficult than with physical products.
Digital products have one main disadvantage. They’re heavily pirated, which can affect sales. On the other hand, physical products are far more constant in terms of prices, due to the fact that the only way someone can own them is by making a purchase. Let’s take a movie and a piece of furniture as examples. There are several ways people can acquire the movie, some of which are legal, and some of which are not; they can buy the film as a digital download, they can view it on a platform like Netflix, they can rent it from various online services, or they can pirate it.
It’s a lot easier to make money from a piece of furniture due to the fact that the only way someone can own it is if they buy it. This means that you’ll actually get to capitalize on the entirety of the product’s sales potential, not just on a fragment.
Furthermore, there is a big difference in terms of pricing between digital products and physical ones. Most people can’t see the value of a piece of software, however, everyone will understand why a beautiful table is $400. This means that physical products are a lot easier to sell than digital products that are in the same price range.
These products also enable you to offer a few options to win customers over and make them return when they need something else. For example, you can offer free shipping for your products, or include various, small presents.
Dropshipping is better than opening a store through Fulfilled by Amazon
Fulfilled by Amazon is growing in popularity, and this is a good way to determine exactly how good it is. The service currently enables a large number of people to make money through largely the same business model like dropshipping. First of all, Amazon handles all inventory and shipping, leaving the owner of the online store to handle only branding and other related matters.
This having been said, opening an FBA store would be less productive than starting your own dropshipping business. The reason behind this is the fact that working through Amazon requires a larger initial investment, and takes more time to yield a profit.
Basically, you’ll need to order a few thousand dollars’ worth of products, before being able to actually start doing business. Unfortunately, the amount of money that you have to spend is not the only issue here. You will need to order samples before spending all that money, and it may take close to a month for the items to get to you. After that, it will take another month for your first order to be ready. This means that you won’t even be able to start doing business until after the second month.
Starting a dropshipping business is not only cheaper and faster, but it also offers more flexibility. FBA ties you to Amazon, and when the platform changes its rules, it affects your business, however, if you start your own company, you get to decide what you do and when you do it.
By starting your own company, you can use Shopify to set up the store, take payments through Stripe or PayPal, and advertise through Facebook and Google. In other words, you can set up your own system, and work through what platforms you are the most comfortable with.
The downsides of dropshipping
Dropshipping also has some disadvantages, like any other business. Some are larger than others and it is up to you do decide if any of them are deal breakers. First of all, any business requires a great deal of effort and dedication, and this one is no different. Also, you will have to be smart about how you invest your money. Choose your products carefully and you should be alright, however, sell things that are of poor quality and you will a lot of time and money.
One of the biggest disadvantages of this business model is the low entry barrier. Pretty much anyone can start a dropshipping business. Now, the fact that many entrepreneurs sell poor quality products will show that your company is superior, however, the sheer number of businesses will make it difficult you yours to get noticed.
Furthermore, consumers who have a bad experience with a company may be skeptical of their future orders, regardless from whom they buy.
In order to hide from competition, many dropshippers tend to be very secretive with their niches and the URL addresses of their websites
Other than these, there aren’t any other downsides. You may find people mentioning other issues, however, those depend on each entrepreneur’s way of doing business and on how each individual builds a community around his store.
Some may argue that dropshipping yields smaller profits than other e-commerce businesses, but these individuals are usually exterior observers who are trying to rationalize why they didn’t get in on this deal when they had the chance.
One more thing that should be mentioned about this business is that there is no guarantee that you will succeed. As with any other opportunity, you will have to work hard and be smart about how you approach various things. You need to choose your niche carefully or you won’t sell anything, and you will also have to identify the best way to reach out to people and turn them from one-time buyers into permanent customers.
More flexibility means that there will be more moving parts that you will have to take care of. Automatically, there will also be more things that can go wrong. If you want to make money from dropshipping, then you will have to take a few risks, and also to be prepared to make a few mistakes.
Every entrepreneur does business in a different way and targets a different niche, so there is no recipe for success.
Most entrepreneurs agree that the disadvantages are small when considering how little money, time, and effort are required in order to get started
Who should start a dropshipping business?
Most people have the green light. It would be easier to specify who shouldn’t start a dropshipping business. Those who already have a successful business, and are happy with the amount of money they’re making should not risk diverting their resources to this project. In order words, if you have a good thing going, don’t complicate your life.
Let’s say that a designer already has a company and is earning a decent amount of money. If you want another channel to sell your services and products, then look for a better platform, or create one yourself.
While it may not take a lot to start this business, you will have to build it from scratch, and this means that you will have to learn new skills and get used to new ways of doing things, while still having to work in order to keep the old job.
Furthermore, not everyone buys things online. People in some countries tend to ignore the fact that they can purchase things from online stores due to various economic issues. Others actually live in a place where shipping items is difficult.
It’s vital that you take these things into consideration before making a decision. It doesn’t matter how good of a businessman you are if the endeavor is doomed to fail from the beginning. Usually, it’s a good idea to look at how well other people in the same region are doing. If their dropshipping businesses are going well, then you can start formulating a plan.
How to get started
If you’ve taken into consideration all the things mentioned above and have decided that you can start a dropshipping business and be successful, then it’s time to look at how you can actually get started. You’ll need to establish a few things before starting to make money.
First of all, you will have to think about how much of your time and resources are you realistically able to put into this business. Naturally, the more you work, the faster the business will develop, however, there may be other things that require your time.
In terms of time spent, you should be able to get started in about two months. This having been said, you should always take into account the fact that unforeseen things may happen. If you have other obligations, then you may have to focus more on them and less on dropshipping, and this may slow down your progress.
Ideally, you should make sure that you can dedicate around 30 hours per week, to this business, for around 2 or 3 months. In this time, you will have to spend a bit of money in order to pay for an online course that will teach you the basics and walk you through everything that you have to do. After that comes the money that you will spend on building your dropshipping store and ad campaign; usually, the store and ads will all cost you somewhere between $200 and $400.
There are several good courses online, and each of them has pros and cons. You will have to choose the one that you feel most comfortable with.
When it comes to setting up the store, Shopify is a popular platform among dropshippers, but you can choose whichever you like.
Once you choose a course and get started, be smart about how you do business, but also about how you advertise. Remember that there are a lot of people who are constantly trying to have their company grow in popularity, and the easiest way for them to do that is to come into direct competition with you. They may not sell quality products, but if they drop their products enough, they will get a boost in sales. After a while, their clients may catch on to what they’re doing and come back to you, but that isn’t a risk that you should take.
Focus on doing your own thing and don’t try to make your business more profitable by stealing customers from other stores. Earn them, instead, and always be on the look-out for ways to make both your store, as well as your ad campaigns better.
Get ready for a great adventure
2018 is a great year to start a dropshiping business, and there are a lot of opportunities to make large profits. While you will make quite a bit of money, there are other great advantages to this business model.
First of all, it releases you. You will essentially be your own boss, and this means that you decide when you start work, when you go home, and how things will go. You will have time to spend with your loved ones and to focus on the things that you enjoy in life.
You will also be location independent, which means that you can manage your business from anywhere in the world. If you decide that it’s time to spend a month in Italy, you will be able to pack your things and work from there. The only things that you need are a laptop, a phone, and an internet connection.
There are already a lot of people who have literally gone on holiday for a few weeks and decided to not come back home. You can work from anywhere in the world, and with what you make it will be easy to sustain yourself. And if moving to a foreign country isn’t for you, then you can work while on the road. Let’s say that you always wanted to go on a trip across Asia or Europe, but were never able to get enough time off from work. Now you can, and you will still be making money while enjoying an amazing adventure.
If you like the idea of being your own boss, of doing things your way, and have a couple of months to learn how to start this business, then you definitely shouldn’t miss this opportunity.
This can be your year!