Why Is Dropshipping Popular?
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If you’ve spent any time reading or watching videos online, you’ve probably stumbled across people advertising their dropshipping courses and guides. There are hundreds of videos on YouTube as well, offering free tutorials for those looking to get in the business.
Why is it so popular? Are those saying it’s just a scam right or wrong?
Today, we’ll review the entire business model, and we’ll give you an answer to those questions.
Dropshipping explained
Dropshipping revolves around partnership, but there’s not an explicit contract. A seller contacts a supplier for the products he offers, but most sellers never met their suppliers personally.
A seller only needs to contact them, and even some skip that part. You have supplier-focused sites like Alibaba, and you can subscribe to websites with full databases of suppliers in any country you need.
Once the seller chooses their supplier and products, they’ll offer it on the internet. Many build websites for this, but Amazon, Facebook, and eBay are other popular choices.
The only task for the seller is to run the marketing side successfully and handle customer support. Even if they don’t have the product physically, they still need to know how it works, how its supplier handles refunds, and the shipping time.
The seller only needs to buy the items once their clients purchase it. Once the payment is done, the supplier handles shipping. That means you also skip handling couriers besides the entire inventory keeping.
The seller only needs to make the purchase, placing his customer’s shipping address instead of his.
How profits work
Seller profit from selling the products priced higher than the original price tag. For example, if the product costs $10, and shipping costs $7, then the seller would ask for more than $20 to keep a profit. If the final price is $25, then each sale will net them $8, and the supplier keeps the rest.
Before pricing, sellers must take into account their expenses: internet, ads costs, and everything in-between.
If you’re getting 10 sales each day, and you chose $7 as your profit, then that would total $70 daily, for a whopping $2,100 monthly just by dedicating a few daily hours to the business.
Why is it popular?
You can make out some of the reasons for its popularity from the previous explanations. However, let’s summarize each advantage on its own for simplicity’s sake.
Zero inventory
You don’t have to purchase every item you sell. You only need to buy them as your customers place their orders; if anything, you should keep one for yourself to try it out and learn about it. You want to do that before you start offering so you can make sure you’re offering quality products and diminish complaints.
Easy management
Skipping the inventory means you won’t have to worry about monitoring your stock or the amount of sales; you needn’t worry about running out during high-demand periods. Even more so, there are apps that can handle the rest of the management tasks like updating your prices according to your supplier’s rates.
Zero logistics
You don’t have to go printing shipping labels, pack any items, taking them to a courier service, etc. Your supplier does all those steps for you, and your only responsibility is to market the products and ensure the sales.
Easy on capital
Your only expenses relate to creating your website, hosting, and buying one item to test it before listing. However, you can take advantage of platforms like eBay or Amazon; that means you also get to save money on hosting and setting up your store. You can even start your business for free if you want to.
Zero real estate
You can work from your home or a cyber café, whatever you prefer. That means no spending on offices or dedicated spaces; you can even keep track of your business from your phone. Not keeping an inventory also means you don’t have to rent a depot or a warehouse for your stock. Even if you hire staff, you can have them work from their homes as well.
Wide variety
There are thousands of suppliers, all adding up to millions of different products. You can set your sights on a specific niche or research the best-selling products and get in on the action.
Large market
You can sell to anyone anywhere in the world. You can contact suppliers anywhere, and your online presence makes it so that anyone with access to the internet and social media can visit your catalogue. You only need to get your business out there and choose a supplier near your target region if you want to reduce your shipping costs.
Easy to start
You don’t need a college degree to start as long as you’re willing to dedicate some time to learning the business model. Even if you want to have your own website, there are dozens of great platforms with intuitive features that let you have a website running after a couple of hours at most.
Willing suppliers
Suppliers have a lot of weight lifted off their shoulders when someone else handles their marketing; it means they can concentrate on production instead of getting sales. If one suppliers gets 100 dropshippers offering their items, they can even lower their prices to wholesale rates since they’re saving up on an entire department.
How to learn dropshipping
First, you have thousands of videos from hundreds of YouTube creators dedicated solely to offering dropshipping-related content. There are also countless online courses and guides.
If you’re looking to go for a dedicated course, then there are a few things you want to learn from it.
First, you want to understand dropshipping: what it is and how it works (with more depth than you’re getting here). Then, you want to learn how to start from scratch, including how to find products, suppliers, and build your store.
Finally, you want the course to teach you how to start selling and growing your business. That includes SEO if you have a store, how to run ads on different social media sites, and how to create a profitable and viable plan.
How to start
Building an online store is relatively simple, especially if you choose intuitive platforms and tools like Shopify. Nevertheless, dropshipping is a business like any other; it requires time and dedication, and it should show on your website.
You want to find a high-selling product and the right supplier for you, taking into account things like rates and physical location. Your store has to look professional but easy to navigate through, and you want to offer a payment processor that’s comfortable for your customers.
Don’t forget to study before setting your price and policies (refunds, privacy, etc.), and that also applies to your marketing; don’t be lazy.
Conclusion
Dropshipping is popular simply because sellers can make noticeable profits without investing a lot. The most important investment here is time and dedication.
Make sure you take your time when studying and researching; don’t rush anything just because it’s “cheap”. Look for the best courses and resources and try to focus on just a few (or one, it’s better).
Find your own approach and niche. Don’t try to cover all markets and techniques or you’ll be overwhelmed and reach no one.
