Can dropshipping still make you money? A lot of people have tried it, and a lot of them have failed. Before getting involved, it makes a lot of sense to look at the numbers and make a decision based on what you know.
Even though it’s true that many people made a lot of money through dropshipping, there are also many more who lost a lot of money. And when people lose money on a business, their first instinct is to blame others by saying that dropshipping companies like Shopify are scams.
Some people have taken dropshipping courses, opened a store, and never made a sale. With so many dropshippers in the market, can this business model really make you money?
How does dropshipping work?
Dropshipping is a way to do business in which you find a supplier for a product that you want to sell. This supplier has the goods in stock or can make them quickly, and he keeps them in his warehouse.
In your online store, you, as the seller, will sell the manufacturer’s goods. When a customer places an order, you send the order to the manufacturer or supplier, who then sends the order to the customer.
It’s a great way to run a business because you don’t need to rent your own store. You don’t have to pay rent for a warehouse, and you don’t have to pay for the goods before they sell.
When you sell the item for more than you bought it for, you make a profit. If the goods are sold by the supplier for $10 plus $5 for shipping, you buy them for $15 and then sell them for $25. You get to keep the extra $10. You can even raise the price if you want to.
Why do people fail then? And since this business is easy to do, which means that a lot of people are doing it, will you still make money?
Statistics on Dropshipping
In 2017, dropshipping was thought to be used in about 23% of all online sales around the world. If you think that all of the products on Amazon come straight from the company that makes them, you are wrong. A lot of people who sell on eBay and Amazon don’t even have the items they’re selling with them. They sell things and only order them after you’ve bought something.
23% of online sales around the world is about $85.1 billion. It’s a lot of cash. Also, dropshippers are in charge of about 33% of all online stores in the world.
E-Commerce is growing all the time. You can buy anything online these days. Even your toothbrush and groceries can be ordered online. Every year, online sales grow by a steady 17%.
This means that more and more people are leaving brick-and-mortar stores and buying online because they feel safer doing so. This includes things like gifts, clothes, shoes, hobby supplies, furniture, and a lot more.
As more and more people buy things online, dropshippers get more chances to make money. As more college graduates get jobs each year, more people will be able to buy things they need or want.
How Dropshipping Makes Money
To make money with dropshipping, all you have to do is figure out the difference between your expenses and your capital.
The problem is that people always do this wrong. They only think about adding a markup to the cost of the product and shipping, but they never think about the cost of their own time, the cost of marketing, or the cost of running an online store.
If the item you are selling costs $15, and that price already includes shipping, you would be happy to add $10 to it and make a $10 profit.
You’ll find out later that you’re not making any money. You also have to find leads, make sales, and run your online store, which are all difficult tasks.
People are most likely to make the mistake of thinking that dropshipping is free. Even though it’s free to make a website, find a product, and add items to your store, it’s not free to process payments. It doesn’t cost anything to advertise, find leads, or deal with unhappy customers who want their money back.
The business of dropshipping is a serious one. Only people who are really committed will be able to do it. And just like any other serious business, the only way to make money is to spend money.
It’s dangerous to not learn.
Many people fail at this type of business because they spent 15 minutes watching a YouTube video, another 15 minutes looking for a product, and then the next two hours building a website.
After that, they hope to start making sales. Since they aren’t making any sales, they start to advertise on Facebook or Instagram. They start to pay bloggers and people who make graphics.
Still no sales.
Even though experts make it sound easy, it’s not easy to get a potential customer to part with his money. For someone to pay you for something, you have to be someone they can trust. First of all, you’re not a well-known brand.
You need to know how to make sales, find leads, get your name out there, get your website on the first page of Google, and do your ads right, among other things. And you shouldn’t just learn them, you should get good at them.
It’s dangerous to not learn much. Even though you watched a video, that doesn’t mean you can now start a business.
People who bought a course are in the same boat. Even if you did what was said, that doesn’t mean you will succeed. Think of the course like going to college. Not everyone who finishes college gets a job that is related to what they studied. Your success doesn’t depend on Shopify or the dropshipping expert who taught you about the business model. It depends on you.
Why doing things right is important
So, is dropshipping still a way to make money?
The answer is a resounding YES, as long as you do the right things. Building a successful store takes time, and here is a little guide to help you get started.
- Choose a niche and do some research.
- Pick a provider
- Create a store
- Set up a business procedure
- Sell your things.
Only five steps are needed. Even though they sound easy, they aren’t. Each phase is hard, and you need to put in a lot of time to learn about it and do it right.
You don’t have to think about how you feel when choosing your niche. Even if you love shoes, that doesn’t mean it will be easy to sell them. You have to do research to find out what people want to buy. Are they getting sneakers or high heels?
If you know what sells, you need to find out where your customers are coming from. Even though the US has the largest economy, that doesn’t mean you can sell your goods there.
When choosing a supplier, you should find out if they can be trusted. You have to buy the item on your own. People often make a mistake by not ordering the product. So, they don’t know how long it actually takes to ship, and they don’t know if the product is bad. They also don’t know if the supplier will take back items and give money back.
The first thing a customer sees is a store. If your design is bad, your clients will leave. Take your time and make a store that looks like it belongs in a business. Make sure your store is mobile-friendly and that it loads quickly so that customers don’t have to wait forever for your product pages to load.
The next step is to have a plan. How will you place your order? What can you tell your customers about the time it will take for shipping and processing? Think about how you will handle customer service and how much you will charge for your products to make sure you make a profit. A business process is just a set of standard steps that help your business run smoothly.
Lastly, you should know how to sell your products. Even if you made an ad and put it on Facebook, that doesn’t mean it will work. You need to learn about things like Facebook Pixels, retargeting, branding, SEO, and so much more. If you do everything right, your ads will reach the right people, and you can expect to make sales.
Summary
Dropshipping is a good way to run a business. Soon, it might even pass other businesses. It’s a way to run a business that makes products cheaper because you don’t have to pay for things like storage. Also, there is no need to pay a lot of people because many systems are now run by computers.
Dropshipping can make you money if you do it right. Not only can you make money, but you can make a lot of it, which will help you become financially independent.