It seems that everyone is buying everything online these days, which is why dropshipping is becoming a popular way for some people to make money. You’ve probably already seen the adverts targeting you on social media and YouTube claiming you can make life-changing amounts of money, fast.
You probably won’t become a millionaire from dropshipping, but it can work as a viable business if you put the time and effort into making it work, just as you would any other venture.
So let’s find out what dropshipping actually is and how it could work for you in your life.
What is dropshipping?
Dropship business is a retailer that sells products online, but does not directly purchase or store the stock themselves. The products are distributed directly from the manufacturer or third party distribution centre. When buying inventory yourself, you’ll need to negotiate distribution agreements with suppliers in order to protect your interests.
Profits are made on the margins between the cost price and the selling price. Dropshippers can sell their items on an e-commerce website, social media or an online marketplace such as Amazon or eBay.
Advantages of dropshipping
There are many factors that make dropshipping a popular choice for many people who are looking for a new career, including:
Low start-up costs
In contrast to starting up a brick and mortar or e-commerce store, the costs to start dropshipping are much lower. You’ll need to spend money establishing your brand, either through a website, social channels etc, but you won’t need to spend money on stock, storage, shipping or the personnel to do this.
It’s a flexible career
If you’re looking to ditch the 9-5 or get a better work-life balance, dropshipping could work for you. As your store is online, working while you’re not there, you can choose when and where to spend time updating and promoting it. As you become more sophisticated, you’ll be able to automate the majority of your work, so you can gain even more flexibility.
You can switch products quickly
Because you’re not buying or holding stock, then you can respond to trends and market changes really quickly. If you spot a gap in the market, you can fill it quickly.
You can scale as fast as you need to
Ordinarily, in order to scale a business quickly, you need to invest a lot of time and money into it. That’s not the case with dropshipping. As long as you can find companies to supply your goods, then you can sell as many as you want.
How to find products to sell
The success of your business will depend on your selecting the right products at the right time. Choose something too freely available and mundane and you aren’t going to make a dent in the market.
Think about what you know
Think about which products appeal to you and why. Which things would make your work life, social life and family life better? Are you a parent who can spot the next amazing baby gadget? While you don’t just have to find products that appeal to your demographic, it’s sometimes a safer place to start for many.
Find trend information
There are many places where you can find out what people are searching for online. Look at the popular online marketplaces such as Wish, eBay and Amazon. You can use their search data to discover what’s popular right now.
Google is also a great place to look. Try using Google Trends and the ‘also searched for’ data to narrow down your product list.
As discussed earlier, being too broad in your approach might not yield results. Instead, choose a specific niche to target with products aimed at that niche. Building up a following in one area takes time, but works better than a scattergun approach.
Is dropshipping for you?
If you’re thinking of starting a dropshipping business as a career or a side hustle, then you have to be realistic. Yes, it can be a financially and socially rewarding career, but you still need to put in the work. There are a lot of scam products out there that promise to help you get rich quickly (for a price), but the truth is, to be successful in this type of business, you have to work at it.
If you’re prepared to do the research, and the work and be patient, then dropshipping can be a good option for you to pursue to make money.