The pros and cons of dropshipping are in fact different from the elements of a good and bad dropshipping store. The pros and cons detail the benefits and disadvantages of the service model for you as a supplier. It is not difficult to learn how to make money from dropshipping. The key is to understand the pros and cons and prepare for them.
Pros ?
- Dropshipping allows greater flexibility when managing your business. Cuts many elements, such as shipping, packaging and storage. Therefore, you can spend time and money on other aspects of your business, such as research and marketing.
- There are many products to choose from when dropshipping. If you go to Amazon, each of these products can be shipped by dropship.
- Startup costs are low, as you only need to pay for a website, advertising and partner with a dropshipping provider.
- The risks are much less, since you can streamline a new product at any time, you are not investing thousands of dollars in inventory and there is no need to sign contracts with suppliers.
- The products cost you less, as there is no need for storage and delivery.
- You tend to receive better shipping rates, as suppliers tend to sign large contracts with companies like UPS and FedEx.
- The logistics are incredibly easy to handle. You link your website to your supplier’s order management platform. After that, they handle everything from packaging to shipping.
- Dropshipping offers you the chance to focus a large part of your time on quality customer service, as it is definitely necessary in the dropshipping business.
- Dropshipping is allowed on other platforms like eBay and Amazon, expanding its market reach to other points on the Internet.
Cons ?
- It is difficult to build a brand. Your logo is probably not being placed on the boxes. You probably have no control over the marketing content being placed in the box. In short, credit for your work goes to someone else most of the time. You may find a dropshipper who puts a piece of paper in each box for you.
- You can find bad suppliers. If they are doing something illegal or are bad at meeting deadlines, you really need to do your research when looking for suppliers.
- You have virtually no control over products and the supply chain. Do you want to speed up deliveries? Do you want to check the product quality? Do you want to ensure that products are packaged correctly? You generally have no control over this with dropshipping.
- Dropshipping is competitive because you are also competing with non-dropshippers. Low overheads are good, but it means that everyone is experiencing dropshipping. Not only that, but the big retailers are still there, selling similar items for cheaper prices, with better brand recognition, faster delivery and incredible return policies.
- Profit margins are incredibly low. Again, low overhead is a great reason to join dropshipping. A bankrupt college student has the means to start a dropshipping business. However, after selling a few items, you may cringe at the little you receive. Since suppliers are handling most of the logistics, you receive only a small piece of the pie. In addition, you should consider the costs per unit of advertising, marketing and website management.
We all want to learn how to make money from dropshipping. Just because there are disadvantages, it doesn’t mean that you can’t do it. The best business people accept these cons and use them to their advantage or at least prepare for them.
How to Make Money Dropshipping: Starting Your Business
Researching and finding the right products depends primarily on you. In fact, this is what differentiates big dropshipping businesses from those that fail. We cannot teach you how to put work and research into finding high-performance products. We could recommend using Amazon, SaleHoo , Google Trends and a multitude of other tools for your research, but it’s more about how you use these tools.
However, we can provide the types of elements needed to create your website and launch your dropshipping logistics plan.
What platforms are needed?
Dropshipping is no different than other online businesses, as you still need an e-commerce platform and a way to connect with suppliers.
As the dropshipping industry evolved, we began to see apps that automatically pair it with suppliers and link it to inventory. This is a big help.
As for the general configuration of your operation, here is what we recommend:
An e-commerce platform
Shopify , BigCommerce , Volusion and WooCommerce all work is wonderful when it comes to building your own online store for a small price per month.
WordPress and WooCommerce are free, but you’ll need hosting, which comes at the same price for a complete Shopify e-commerce platform.
We usually recommend Shopify for dropshipping , as it has a large collection of Shopify dropshipping apps to connect you with suppliers. It is also very easy to set up your own website.
Check out other e-commerce platforms that do the trick for dropshipping.
An app for Dropshipping
Shopify, BigCommerce, Volusion, WordPress and many other platforms have app stores.
Various apps are available to pair you with suppliers, choose products and synchronize product details with your store. You still want to take your own photos of the product and rewrite the descriptions, but it’s a great place to start and cut some of the work.
In addition, dropshipping apps notify suppliers when you make a sale, allowing them to send shipments to customers.
Here are some of the most popular dropshipping apps:
- Oberlo
- Printful
- Spocket
- Modalyst
- Importify
Hundreds of them exist. We recommend looking at app stores and testing them to find out the following:
- Do they provide the products you want to sell?
- Are shipping times reasonable?
- Are the suppliers in or near your country?
- Are the margins reasonable?
- Do they provide images and product descriptions?
- Is there a cost to participate?
- Do you receive criticism about suppliers and possible sales data?
A word of warning: Many of these apps simply link you to a service called AliExpress. It is owned by Alibaba, a Chinese online market, similar to Amazon.
AliExpress definitely has a place on the market if you are selling extremely exclusive items or if you are shipping to countries close to China. Otherwise, many products are so inexpensive that you are only preparing for a customer service nightmare. In addition, your customers do not want to wait three to four weeks to obtain the item in China.
Finally, I read many user experiences about how customers are really confused when they see Chinese or Vietnamese letters on their packaging. Remember that your customers think they are buying from your store. They are used to buying from Amazon, Nike or Patagonia. None of these companies send Chinese shippers and Chinese letters on the packaging.
Fortunately, many of the app developers are realizing this trick of China’s dropshipping. Spocket and Oberlo have offers for local suppliers to top
An advertising account
Dropshippers, especially new ones, have no brand recognition. Therefore, you need to attract customers with social and search engine advertising.
Start a Facebook Ads account and learn about the best ways to sell on Google. All social ad and SEO platforms have their best practices. For example, many people think that it is better to have an ad running on Facebook for a product. Research shows that a product can sell much better if you show ten slightly different ads, targeting separate groups of people.
Overall, segmentation is key, along with the smart use of your money.
Marketing apps and customer support: how to make money from dropshipping
In addition to ensuring that your hot-headed CEO is not talking to customers, it is important to have a customer support system to respond to customer complaints and questions.
A good start is with the following types of applications:
- A live chat app to answer quick questions about your products.
- An email support system that offers customers a way to send more detailed questions.
- A solid return policy so that your customers are not frustrated by a tedious process.
- A knowledge base with frequently asked questions and information about how your company operates.
How to make money from dropshipping by finding the right suppliers
This question used to be more relevant when there were no dropshipping apps.
We now have dropshipping apps and directories to find the best dropshippers in your region.
And that is the key when finding your suppliers: Location is everything.
Dropshippers in the USA should never be shipped from China. The same can be said for virtually all retailers in a country far from China. Shipping takes a long time and you have no control over the product. Plus, the margins are so low that you won’t have any extra money to spend on customer support when angry customers wonder why their product came from China and not from your company.
So find an application that has suppliers in your country or in a country nearby. It is ideal to find suppliers who at least speak your language and print in the same language on the packaging.
How to Make Money Dropshipping: Choosing the Best Suppliers
- Start by researching dropshipping apps in the app store on your e-commerce platform. Google works for that too.
- Install the app or start a free trial. Check for suppliers with fast delivery times for your country.
- Are you willing to sell the types of products from that supplier?
- How are the margins? Can you quickly access Google to find similar and cheaper products from other companies?
- Does the supplier have good reviews? Is there a way to contact them?
Remember that going through an app is not the only way to find a decent local dropshipping provider. This is especially true when you are interested in finding a local supplier for a unique product.
It is when you activate online directories.
Try these supplier directories to search by product and location. Feel free to search for ratings and contact suppliers to find out if they offer dropshipping. Sometimes, directories have information about supplier dropshipping policies:
- SaleHoo
- ThomasNet
- WorldWideBrands
If these directories don’t help with your search, go to Google and type in your desired product keyword. Just add “dropshipping” or “supplier” to the end of your search. It can also help to include your location.
Do you have any questions about making money with Dropshipping?
Dropshipping is still an interesting area of e-commerce. Much of the dropshipping process has been improved and people are beginning to identify and avoid the disadvantages.
For example, it is becoming much less common for entrepreneurs to start dropshipping directly from China. Finding a supplier in China makes sense if you are storing your own items (super low costs and you still have control), but it is a nightmare when doing dropshipping.
It is also becoming easier to recognize the false stories and classes that promise wealth with dropshipping. Instead, you can rest easy knowing that dropshipping is a system you can use to start an online store without the overhead. It is an arena of practice for testing products and potentially expanding into something bigger.
If you have any questions about making money from dropshipping, let us know in the comments below.
