Dropshipping is easily one of the most trendy business opportunities on the web over the last decade.

Many entrepreneurs have been in this industry since the 1950s, when mail order companies were born. These businesses consisted of mailing catalogs to every corner of the country and receiving orders and payments by mail.Then these orders, in many cases, would be outsourced to a warehousing and distribution company, who would pick, pack and ship the goods. This part of the value chain was known as the drop shipper. Many door to door salesmen also used drop shipping manufacturers and distributors to fulfill customer orders.

Fast forwarding a few decades later, Amazon became one of first to drop ship on the web, using Seattle based book distributors to send orders directly to online shoppers. Amazon used drop shipping so successfully that it grew into the world’s largest retailer. Today Amazon has its own warehousing facilities, but still utilizes drop shipping for some of its products.

So, with 2020 arriving, it’s time to ask, is dropshipping worth it this year and this decade? 

Before we answer the question, let’s define what dropshipping is and how it works. 

Dropshipping defined

What is dropshipping?

In this type of ecommerce business model, three separate parties are involved: the buyer (of the product), the drop shipper (the seller of the product), and the supplier (the manufacturer or third-party in possession of the product). The dropshipper markets and sells directly to the buyer, and then sends the order details to the dropshipping supplier. The supplier accepts the order and then drop ships the product directly to the buyer.

In essence, the seller of the product doesn’t need to warehouse or fulfill the product direct the product to sell it to the buyer. The drop shipper merely connects the buyer and manufacturer, oftentimes without the buyer knowing that the seller and manufacturer are not the same party. 

This is the big difference between drop shipping and other means of retailing since the seller does not stock any products but depends wholly on the third party to fulfill its retailing needs.

How dropshipping works

The typical first step in starting a dropshipping business would be to set up an online store. Fortunately, creating a store has never been easier, as many vendors, including Shopify and Wix, offer support on starting one. 

Once the store is set up, you can either seek suppliers in a specific area or use applications to connect the store with suppliers based on your dropshipping business ideas. The store is now well equipped to take orders from clients. After receiving orders and confirming that all details are correct, the next step is to deliver the order to the supplier. The supplier then ships the product to the client directly. 

Another different approach is buying dropshipping products on an online store, for example, Amazon, and dropshipping them on another site, like eBay. Dropshipping on eBay, of course, has a lot of restrictions depending on the online platform used. It is, therefore, essential to be familiar with how to dropship on eBay before pursuing this fulfillment strategy. 

What brings in the money?

As previously established, the drop shipper doesn’t have direct contact with the products. By merely sending the order to the supplier and shipping information to the buyer, how would you make money? Let us see what costs are incurred first, then what brings in the profit. 

Since this is an online store, the only apparent cost is maintaining a website. Some of the website costs are creating an online store, getting a domain name, and sourcing products connected to your sites such via Modalyst, Oberlo and Dropified. 

Just like any other business, another cost is marketing. The most common means of marketing online are social media ads, display ads, and search engine marketing (SEM). In the long run, other marketing methods like search engine optimization and content marketing would be added to the mix. 

The business will also have to incur customer support costs whenever issues with the product or delivery occur. You will also have to pay the supplier the price indicated for their product.

Dropshipping websites earn money on the difference between the amount the client pays and the supplier’s price. The product must be priced a bit higher than the suppliers’ bid to make a profit. As a general rule, the margin must be high enough to cover the other recurring costs while not being too expensive.

Is dropshipping legal?

Good news: dropshipping online is perfectly legal! 

There are no existing laws barring anyone from running a drop shipping company. Depending on the country, however, some regulations govern how such activities are run. For people who drop ship between online platforms, there are also a few additional regulations for each website. 

It’s crucial to know these restrictions beforehand and to use them to your benefit (within legal means, of course!)

Has dropshipping died in the last decade, or is it still going strong?

This is a question every drop shipping website has to answer very often on surveys and social media and is a hot topic on question-answer websites such as reddit. As most of the tech sector does, new methods emerge ever so frequently and always lead to the death of the old.

Is dropshipping on its way to the grave then?

Absolutely not! Learning how to start a dropship business is still going as strong as ever. In fact, the industry has been on a steady increase despite taking a slight dip in 2018, according to Google Trends data. The business is doing well both in the US and all over the world. The graph, focused on the last five years alone, shows that many people still view dropshipping favorably and even has a bright future ahead.

Now that it’s clear that dropshipping is still an in-thing in 2020 and probably the decade, here are a few reasons why the prime time to jump on the train is now:

Benefits of dropshipping

1. Close to zero initial capital required

Aside from the costs incurred in setting up a website and a little on marketing, there are no upfront costs needed, such as getting office space and equipment.

2. Online marketing is getting easier to do

Even if you have zero experience doing online marketing, there is a lot of content online created to help you. If you’re the adventurous type, online courses and coaches are in oversupply on the internet. For a more hands-off approach, plenty of marketing managers and full-service companies are there to help at a price you can afford.

3. Manufacturers and shippers are embracing dropshipping

Although most of these companies seemed skeptical at first, more and more are getting on board. Why? Dropshipping opens up a market that they wouldn’t have accessed on their own. If it helps to sell, why not add it to the options available?

4. Online payments are more effective

As internet technologies are getting better, so are online payment technologies. These payment options are becoming more accessible, more reliable, and more secure, gaining the trust of the clients and online drop shippers alike. These methods are also available in most countries across the globe, reducing the limitations and opening up the market.

5. Ecommerce is wildly growing

More and more people are getting connected to the internet and are getting addicted to their devices. As the internet time every day is getting more, so is ecommerce. Many people prefer ordering items online and getting them delivered to the doorstep. If you can provide such a service, then you are on the winning side.

Advantages of running a dropshipping business

Without a doubt, dropshipping is a very valid business model for 2020. But what are the benefits of running such an enterprise? Here are some of them:

Minimal capital is required to run

This is probably the most significant drop shipping benefit. It is now almost effortless to launch an online store and run a dropshipping business without investing a lot of capital into it. This is because, unlike traditional companies, there is no need to acquire inventory, and there are virtually no overhead costs to take care of. The dropshipping model allows you to get started immediately, shipping products whenever they are needed. It is also less risky since you have no inventory to worry about from threats like theft and spoilage. 

Easy to get off the ground

Dropshipping takes the stress out of running an e-commerce store. Since the dropshipper has no contact with the products, there is no need to fret about packaging, tracking, and the delivery of the products to the client. There is even no thought of stocking and restocking and managing a warehouse. Seems easy enough already!

Low overhead costs

Many dropshipping businesses are run from homes and coffee shops with little more than a functioning laptop and a working internet connection. Overhead costs typical to a traditional store such as purchasing stock and maintaining a warehouse are unheard of. Apart from a few recurrent expenses, the cost of running a dropshipping business is relatively low. Even if the company upscales, the rise in expenditure still leaves more profit on the plate compared to traditional storefronts. 

High level of flexibility

A dropshipping business can be run anywhere in the world with access to a computer/ mobile device and an internet connection. As long as customer orders are taken smoothly and products delivered with smooth communication, the business is good to go from anywhere comfortable.

Many niches available to choose from

You can sell anything you want on the internet, period! Since there is no pre-ordering of stock, you can choose to offer a wide range of products on your site to choose from as long as the supplier has them in stock. Some drop shippers prefer to specialize in a specific niche without much competition, but that is entirely up to you. New products are also launched almost daily, so the list of opportunities to choose from is never short. 

Testing new products is easier

Unlike traditional stores that stock up on their items before selling them, drop shipping test products is significantly more comfortable. A whole line of products or even single ones can be tested in the market without stocking on them, reducing the potential danger of buying an item rejected by the market. Since there is no commitment to purchase stock, if the product does not work in the market, no enormous losses are incurred. If the market also accepts the products, they are ordered on request- the minimal risk involved. 

Easier to upscale

More orders usually mean more work for traditional retailers as they have to put in more work to get the additional requests done. This is not the case for dropshipping companies. Apart from the need to get additional customer support staff and a few other sales requirements, drop shippers generally have an easier time upscaling their businesses. The further orders are handled by the manufacturer or supplier of the product, allowing the business to grow with minimal effort and investment. 

Is Dropshipping profitable?

An honest answer is both a yes and a no.

Why yes? The dropshipping business model is highly rewarding for those who have the dedication to make it work for them. And it will definitely not be so for those looking at it as a quick cash-making mechanism because it simply isn’t. 

The right approach to drop shipping would be to check up on the ideal profit margins you want to make and whether you’re willing to put in the work (a lot of work, mind you) to make it a reality. 

A few challenges to note before embarking on a dropship lifestyle.

We’re sorry if we’ve made setting up a dropshipping site look so glamorous! Drop-shipping, too, has a downside. Here’s what to expect:

Profit margins are low

Since dropshipping doesn’t require a lot to start, the barrier to entry for competition is very low. Competing stores go for the lowest prices in the market just to stay afloat. This means that the stores are willing to sacrifice profits in the race for customers, and hence to make a decent profit, they need to sell a lot of items. 

Most stores operate on the bare minimum- low-quality service, less customer service, and sometimes even lower quality products. This doesn’t mean that prices won’t be compared – in fact, they usually are.

A good rule of thumb when setting up a site is choosing a niche with lower competition (in volume) and higher ticket sizes to carve out a decent unit profit.

Inventory complexities

If you were running your own store, it would be easy to know when an item was out of stock or no longer in production. Real-time management of stock is a pain in the neck for retailers, especially when dealing with multiple warehouses and on items that quickly go out of stock.

In the recent past, however, developments in the industry have alleviated the problem by syncing drop shippers and suppliers. These apps allow the dropshipper to check the amount of stock the supplier has in real-time. Some like Oberlo even make automated decisions on your behalf. This includes taking the product off the site or marking it as out of stock on your store. 

Shipping can be problematic

Transportation is one of the biggest nightmares for the dropshipping industry. As much as you may want to provide the best services for your clients, the shipping process is in the hands of the supplier. If you work with multiple suppliers, shipping products from different suppliers to the same client becomes a bit complex and comes with added costs. 

Suppliers can make mistakes

Everybody makes mistakes, and suppliers have their fair share of errors. From low-quality items and bad packaging to missing or damaged items, suppliers can make blunders that may ruin your store’s reputation. Most of the time, you may have to personally take the blame and apologize for supplier errors, which, in most cases, you had no part in!

Customization and branding options are limited

As already stressed enough, drop shippers have no contact with actual products. This implies that there are few options to custom-make items and deliver them to the client as these are often done by the supplier. 

Making changes to products also requires a significant number of items to be economically valuable, which your orders may not reach. Sometimes, the supplier may accommodate these changes, but these decisions are entirely at the supplier’s hands. 

Final thoughts

All the facts have been laid plain on the table. All the benefits, the downsides, and the processes have (hopefully!) been greatly simplified. All this dropshipping business may seem overwhelming at first. Still, once you get the hang of it, you’re well on your way to making a few extra bucks to supplement or even become your primary income source. 

Another good thing is that business experience is not a must. However, individuals with business knowledge obviously have a better chance of making it. Numerous resources are available on the internet for a competitive price or even for free. Not everything will be covered in these lessons though, and the rest will come later with a bit of experience. 

With this in mind, dropshipping is undoubtedly not for everyone. It is not a business strategy to make millions overnight. For many entrepreneurs, the reality that a successful dropshipping business takes lots of time and effort can be frustrating. Some employers also have a strict policy on side-jobs. If your company is one of these, you might want to stay on the right side of the law unless you’re absolutely sure you want to dive in at the risk of your job. 

The best dropshipping websites invest prioritize their business. If time isn’t a currency you’re swimming in, think twice before starting a store. If you are multitasking drop shipment with your job, the business may negatively impact your career. If this is a risk you are not willing to take, steer clear of the industry. 

That said, drop-shipping is still alive and well, and anyone with the limited resources needed, some time in their hands, and a dedication for business can do well. If you’re looking to start your own store, it’s never been an easier time to take the leap!

When it comes to starting a dropshipping business, the first step is usually the hardest. However, if you know how to use Google Trends, you can will be able to be decisive about a plan and ultimately put your worries and fears to rest.

So you run an eCommerce store, and you’ve been hunting for ways to keep your operating costs down.

You have considered dropshipping, a business model that lets you order products from manufacturers and have them delivered to your consumer without having to stock them up in a warehouse. Some say it’s a brilliant cost-cutting measure and even a brilliant way to raise revenue streams. Others think the profit margins are so small that it’s just not worth trying out.

Maybe you’re not sure whether to give this drop shipping thing a go or steer clear from potentially wasting your precious time with it.

Whatever your thoughts are about dropshipping as a means of eliminating inventory storage costs or making extra bucks, it’s not as simple as many claim.

If you’re not selling products that are in high demand, any cumulative gains you realize may not be worth your while.

For one thing, it’s a very competitive niche. There are lots of people jostling for ever-shrinking bits of the eCommerce market. As players in this space continue to search for an advantage over their rivals, they continue to drop their prices to new levels of low. The manufacturers aren’t doing any favors with their prices either. They are in business to make money, just like every dropshipping outfit.

Let’s put this plainly: there are opportunities with this business model, but they aren’t lying around for the average Joe. It’s up to you to find them wherever they might be hidden.

Google Trends to the Rescue

Thankfully, there is at least one easy way to uncover these opportunities. It’s Google Trends, a tool which lets you know what people in your locality or around the world are looking for with its search engines.

It displays the most popular search queries of the moment, as well as over different periods from the past. A lot of this information is depicted in charts that are easy to understand.

Here’s why this concerns you: when a lot of people are looking for particular products, their searches will turn up in Google Trends. And if you use it, you’ll be able to tell the most-searched-for merchandise within any given period.

If you know anything about SEO, you’ll probably realize straight away the potential gold mine this resource could be for you or for any other dropshipping venture, eCommerce store, or businesses in general.

Source: Google Trends

But if this isn’t clicking for you yet, here’s a rundown of some of the reasons why Google Trends could be the sweetener for your dropshipping business.

Some trends chart the use of specific search terms over long periods. With this, you’re able to tell how the levels of interest in certain products have increased or reduced in any given length of time.

You can view these products (or whatever trends you’re investigating) in categories, and find out the level of interest in various products and services segmented by industries.

You can see how queries for different sorts of things spike or drop off in particular seasons. In many cases, this helps you stay on top of seasonal demands.

In certain cases, you may be able to see how frequently your competition gets searched by potential customers. Other insights, such as locations in which your rivals may be doing better than you are, can be gotten as well.

In summary, we’re not just talking about Google Trends finding products that are in demand. It’s also about collecting vital insights about where your markets are, who your closest competitors are, and what the prospects might be for selling certain kinds of merchandise.

Before we get into how Google Trends can help you make more money via dropshipping, let’s take a look at its most important features and how they work. 

How Google Trends Works

The Google Trends app has options for viewing search terms by interest over time, interest by region, interest by related topics, and related queries. It also charts the most-searched-for (or top) topics in real-time.

Interest over time

Interest by region / subregion

Related Queries & breakout topics

Also worth mentioning are the breakout topics. These are topics garnering serious attention and pulling a lot of search traffic. If there’s a product within your reach that’s a breakout, you might want to look into it quickly before it tapers off.

But this sort of ‘hit’ rarely happens. If you are only just getting serious about dropshipping or working to change the range of products you sell via this method, you’re much better off comparing longer-term trends of viable products and finding out which ones have performed best over time.   

When you compare, watch for items that show slow and steady growth. They typically have trend lines that aren’t very steep but tilting upwards on the average. Also look out for growth that’s steep and sudden, like in a chart where the trend line has shot up and forward closer to the present. It’s usually a sign that something has spiked demand for that product or interest in that brand.

You should also have an eye on the regional trends displayed by the app. This feature could give you clues about what sort of products are in high demand in various regions. Such information can help you tailor your shipping offerings to meet the unique needs of people living in these locations.

Practical Ways to Grow Your Drop shipping Business with Google Trends 

1. Sell Products That People Actually Want

With Google Trends, dropshipping becomes about delivering stuff that people are looking for. When there is a large audience looking for a product via Google search, it’s a good indication that the product has a sizeable pool of potential customers you can market to.

Ready to start: build a dropshipping website today

2. Make Relevant Content Marketing and Ad Campaigns

You already know that the demand for any given product varies over different regions.

What Google Trends does is to give you a glimpse into what those differences are. For instance, if you’re going to reach potential customers in two locales with ads, you’ll want to know how to allocate ad spend for the different campaigns.

While Google Trends won’t help you with exact sharing formulas, it will let you know the difference between the levels of interest in both towns for the product you intend to offer. This will, in turn, inform your decision on how effort you should expend in reaching target audiences in each locale.

Also, the tips gotten from this tool can be used to drive more targeted digital marketing initiatives. You can mine trending keywords from Google Trends and plug them into your online content. When combined with other SEO strategies, this could help your content get more clicks and score higher search result rankings.     

3. Come Up with Deals and Promotions for Specific Locations

Google Trends deliver accurate insights that are integral to the success of your region-specific marketing campaigns.

Deals are usually designed to get more people interested in the things you’re selling from manufacturers, and ultimately, raise sales and revenues. But unless you’re offering deals for things that people in the areas you’re targeting actually want, you may not achieve the result you hope for.

Leveraging Google Trends can help bring you closer to your goal.

4. Gain Valuable insights Into Viable Markets and Target Audiences

The trend lines you see are not just summaries of droll statistics. They represent the stories of real people: their problems, hopes and dreams, expectations, their search for a solution, and their painstaking review of answers they think are viable.

These lines and charts deliver real-time insights into the major concerns and pain points of your target audience, as well as tidbits into the viability of a product and inside scoops about their preferences that you could exploit in your brand messaging to draw them to your products and services.

Wrapping Up

With Google Trends, finding products and niches for dropshipping is much easier. One really nice thing about this tool is that it’s free to use. That’s a whole wealth box of analytics available to you at no cost whatsoever.

Now that you’ve been introduced to the joys of this app, go on and deploy it to devastating effect. But don’t just build your eCommerce venture on its trends. If you can, compare them with data from actual research, and talk to the people on the ground as much as possible.

Our entire world has turned digital, so it’s no surprise that we’re all looking for how to make money online without paying anything.

There are myriad ways to make money online. Whether you are looking for a side hustle or extra income, there are several options out there.

Some of the most compelling options require you to invest capital upfront in order to get started.

In many cases, these are the opportunities that involve building a small business and ultimately give you the potential for a high income.

The amount of money that you’ll have to invest varies quite a bit.

You can start a blog for under $10/month. But even writing several blog posts each month can be costly in terms of the time you spend. Creating a private label brand to sell products on Amazon is also an aspiration for many, but you will need a few thousand dollars for your initial inventory.

However, if you’re looking to start making money online and you have nothing to invest, don’t worry. There are some options to earn money online without paying anything, and in this article, we’ll look at many of the best possibilities.

These are the most commonly suggested ways to make money online without paying anything:

Common Ways to Earn Money Online for Free

Affiliate Marketing

Affiliate marketing is where you get to promote and sell products and then earn a commission in exchange. The only catch here is that as an affiliate marketer you promote these products online, mostly on a blog using a special referral link. You get your commission whenever someone uses your referral link to make a purchase.

Blogging

Blogs are now the go-to sources of information. As a blogger, this is one of the most popular ways to make money online.

You can literally write about anything. This makes it relatively simple for anyone to start blogging.

While it demands your time, it usually requires only a small upfront investment. You can choose to blog on a free platform like Blogger or Tumblr.

However, if you want to make meaningful extra income (i.e., a few thousand dollars per month), it can be very time intensive and promoting the blog can get very expensive.

Freelance Writing

Thinking of how to make money online without investment? Start a service-based freelance writing business online.

Freelancing is providing your skill as a service to customers who have a need for the skill. You promote your skill to as many customers as you can manage and charge them on a per project basis.

You can become a freelance writer pretty easily. All you need is an interest in writing and the capability to write prolifically and tirelessly.

Freelance Graphic Design

If you have a knack for drawing and design, graphic design might be a practical option. There is a good deal of work available for freelance graphic designers.

The type of work varies. It can include creating websites, logos, and marketing materials. Increasingly, designing blog templates and social media images are growing in demand.

Create Online Courses

Do you have a skill that you are proficient at? How about teaching that skill to others?

Teaching online is not only fulfilling but also a way to make extra money without having to spend much, other than time, to do it.

This will, however, take up your time. If you don’t have the time to teach one-on-one classes, you could create online courses and sell them on your website.

Fill Out Surveys

Filling out surveys is easy and will not take more than 15 minutes to complete. Short surveys could take as few as 2 minutes. The survey sites will offer you money or amazon gift cards, and all sorts of other cool stuff in return.

At times it feels like a data entry job, but you can make quick cash without having to invest much money.

The Best Way to Make Extra Income Online 

While there are lots of options to earn money online without paying anything, the best way is to start a dropshipping website.

There aren’t many types of online businesses that you can start with literally zero investment. It’s even harder to find an opportunity that allows you to be either full time or part time and still generate side income.  Dropshipping is one of those rare opportunities and we’ll explain why.

Let’s start with the basics.

What Is Dropshipping?

If you’re wondering how to make money online fast, look no further than dropshipping.

Dropshipping is an online retail method in which you effectively serve as an intermediary between the end buyer and the suppliers. 

You don’t have to worry about producing or shipping items. 

All you have to do is set up an online storefront and start selling.

With drop shipping, you don’t handle any stock. 

Instead, when you sell an item, that’s when you order it from suppliers, who then ship the item directly to the person who bought it from you.

If you don’t want to, you don’t even have to see the products you sell. All you have to do is promote your store and sell the products.

It’s a win-win.

How Do You Earn Money Drop Shipping?

If you run a dropshipping store, you earn money by taking your cut.

Let’s say you would buy a product from the supplier for $2. 

All you have to do to earn money in that case is set your margin. 

For example, you could sell the item for $3.

When someone orders your item and pays for it, you then pay $2 to the supplier who ships and sends the item, and you pocket $1.

Rinse and repeat.

Talking Numbers

The question of how to make money online comes with a simple answer where dropshipping is concerned:

• On average, the top 10% of eBay dropshippers earn $7,731 month (Source)
• Dropshipping transactions grew by 146% between 2016 and 2018 (Source)
• Around 33% percent of online stores use dropshipping as their fulfillment method (Source) 

There’s no way around it: dropshipping is profitable.

If you run a dropshipping business, you don’t have to deal with: 

• Hefty overhead costs (Storage space, utilities, production, etc.)
• Billing and scheduling (You just process orders)
• Upfront capital (You can start dropshipping even if you don’t have thousands of dollars to pump into your business)
• Risk (You don’t buy products before your customers pay for them)

All of this makes dropshipping one of the best ways to make money online. It’s low risk, too. You’re not giving money to suppliers unless you’ve already received money from your customers.

There’s no way you’re getting that option with any other kind of business. 

But let’s talk specifics.

Pros and Cons of Dropshipping

As an entrepreneur, you have to choose a method of making money online that works best for you. 

So here are all the pros and cons of making money with dropshipping:

Pro: You’ll be significantly reducing your overhead costs if you start dropshipping.

For example, let’s say you want to open a brick and mortar store selling mugs. 

Even before you’ve opened the door, you have to pay the rent and order your products. Then, you’ll also have to pay the utilities, subscription for all the software you need to keep track of your inventory, marketing materials, shipping, and your own salary. After all, someone will have to run that store.

But maybe you don’t want to sell mugs in your town. 

Maybe you want to take them online.

In that case, you’re saving money on rent, but you’re still dealing with the fact that you have to order a certain quantity of products in order to sell them. There’s no guarantee you’ll sell them, but you’ve already paid for them.

In contrast, the main costs associated with dropshipping are IT costs. 

Pro: You can sell anything (and anywhere).

When you dropship products, not even the sky is the limit. You can sell absolutely anything. 

Ever wanted to sell smartphones? 

Now you can.

Did you want to start a fashion label and take the New York Fashion Week by storm?

Possible with dropshipping.

You can sell anything, as long as there’s a market for it. 

And when it comes to dropshipping, the more niche you can go the better.

This also means that you don’t have to restrict yourself to your immediate area. 

You can ship to wherever your suppliers agreed they would ship. One moment it’s New York, the other it’s Singapore. 

Growing a business is so easy when you don’t have to worry about constraints. 

Pro: You don’t have to reinvent the wheel.

The number one question entrepreneurs struggle with is: “How am I going to make money?”

Startup founders come up with cool apps. They create products that would impress Tesla. The world wants to see them. 

But at the end of the day, they find themselves asking:

“Is this business idea going to be profitable?”

They have to create their business models from scratch. And not to mention that they have to become economists in one night to create a viable business plan. Otherwise, they don’t stand a chance at getting funding.

With dropshipping, you don’t have to reinvent the wheel.

You just have to follow the steps and learn from best practices (some of which we’re covering in this guide). Your business will be profitable in no time.

Pro: Dropshipping Is a Low-Risk Business

The main risk in traditional business is ordering items that you might not sell. But with dropshipping, you don’t buy the inventory that hasn’t already been sold. 

Con: Limited Supplier Options

One of the main cons of dropshipping is the fact that not every manufacturer or supplier is open to dropshipping. 

However, times are changing. 

Even the most hardcore suppliers are changing their minds nowadays, having understood that dropshipping is the fulfillment method of the future. 

Con: Shipping Fees

Shipping comes with a cost, which will cut into your profit margin if you’re not careful. 

Fortunately, you can agree on fixed fees with your supplier and run the numbers, ensuring that you’re still earning plenty from your dropshipping business.

Con: Coordination

Dropshipping relies on the coordination between you and the supplier. 

You have to be careful not to advertise items that went out of stock. Because of this, your systems and your suppliers’ systems have to be integrated.

Similarly, you’ll have to decide on how you want to handle returns.

Coordination isn’t a big problem. 

These days, there’s plenty of automation and inventory management software that ensures your store state perfectly reflects the state of your suppliers’ warehouses.

You can also find multiple suppliers so even if one doesn’t carry your item at the moment, you have a fail-safe supplier to rely on.

How to Start Dropshipping

There are a few surefire ways to start off your dropshipping business and ensure it’s lucrative:

What to Sell Online?

Before we get into the thick of it, you have to choose what you’ll sell online.

As a rule of thumb, niches are most profitable because:

• You get recurring customers 
• You can quickly build up credibility and increase your brand awareness within the niche
• You’ll get more referrals (your customers will refer their like-minded friends)

And of course, if the niche isn’t extremely competitive, you’ll have better chances of earning more money than you’ve ever dreamed of.

After all, if you carry a lot of related products, you’ll soon become your customers’ go-to store for purchasing them.

Conversely, if you sell a bit of everything, you’ll have a harder time of differentiating yourself in the market and building a brand.

Look Into Trending Products

If you need something to jog your inspiration, use Amazon, eBay and Wish to find trending products.

For example, (Rolex) watches are trending on eBay at the moment of writing this guide. 

Now, some of those trending products will be great during the times they’re popular (e.g. Christmas – everyone gets their S.O.s fancy gifts), but others will be veritable cash cow products.

You can easily differentiate between shooting star and cash cow products by searching for the product name on Google Trends.

If we take our example with watches, here’s what we got when we searched for “buy watches online”:

We were focused on the long-term sustainability of dropshipping watches, which is why we chose 5 years as our trend period. 

You can absolutely mix and match, as well as find trends for specific countries. You can even compare different keywords (i.e. product ideas).

Word of advice: integrate words like “buy” or “shopping,” as well as location-based keywords when searching for your target products. You’ll get much more accurate results than if you’d searched for “watch” or “mugs.”

Niche Down

When you decide to shortlist a few products, it’s time to niche down. 

Again, you can be a generalist, but it’s much more profitable to operate in a specific niche. You’ll have less competition, and you’ll establish your brand sooner than if you’d just sold everything.

You can find your niche by looking at your products. Fitbits are in the fitness niche, lightsabers are for Star Wars aficionados, and so on. 

For example, let’s say you’re interested in dropshipping watches, mugs, smart watches, and fitness apparel.

First, define which niche your products fit:

• Is it a niche people are passionate about?
• Is there a community in the niche?
• Do the potential customers like spending money on your niche?

For example, there’s not a specific watches niche. People just buy them. Yes, they can be passionate, but when it comes to luxury watches, you’ll have a lot of (already established) competition.

Conversely, fitness apparel is a great niche because people are passionate about staying fit. 

They form communities (just take a look at Instagram), and they definitely love spending money, even if it’s just on yoga pants and eco-friendly water bottles.

You can find and validate your niche by:

• Visiting social media and message boards
• Assessing the level of interest in the niche (e.g. people in the fitness niche post about it on their profiles constantly – people who buy watches don’t)

Ideally, you’ll find a niche where people aren’t hesitant to spend money (typically when products are priced under $100). 

This way, you won’t need to convince them through marketing too much.

Stake Out the Competition

In order for your dropshipping business to be successful, you have to have something that the competition doesn’t.

Usually, it’s the quality (and variety of your products), or your prices.

When you’ve shortlisted the products you’re interested in dropshipping, conduct competitor research. You can do it on major platforms, or just by Google searching. 

Write down the prices you come across and try to understand where your competitors source their products.

Get in Touch with Suppliers

A great product is significantly less so if you can’t source it at a price that would generate profit.

You can find individual suppliers and get in touch with them directly, or use a variety of supplier platforms such as:

• AliExpress
• SaleHoo
• Doba

You could even find niche supplier sites, so don’t be afraid to Google around. 

Questions for Suppliers

Before you start selling, get in touch with the suppliers to learn more about their policies. 

Your business depends on them holding up their end of the bargain, so you should make sure you do business with reputable suppliers. 

Ask about:

• Minimum order quantity
• Pricing and quantity discounts
• Shipping and handling policies
• Additional costs like taxes and duties
• Their openness to eCommerce and dropshipping
• Tools they use for inventory management, and automation with your store

You should always vet multiple suppliers.

It’s always good to have multiple suppliers on your roster, just in case one goes out of stock. 

This way, you won’t go out of stock even if your main supplier does.

Keep in Mind

The location of your supplier matters.

If you sell products in the US and you source them from China, it’ll likely take them a while to reach your customers. 

You should also be aware of any additional costs (e.g. shipping fees, duties and taxes), and either notify your customers of the possibility, or agree with the supplier on how you will include them in the price of the product.

Extra Services

Some suppliers offer extra services like white labeling (producing the products with your brand name on them).

If this is something vital to your drop shipping business, make sure you’re working with the supplier who can provide it.

Similarly, you’ll rely on automation to run your business. 

Your supplier has to have the ability of integrating their inventory management systems with yours, so the product levels on your site are always accurate.

Choose a Dropshipping Solution

Shopify Dropshipping

Shopify is one of the most popular eCommerce solutions for both regular eCommerce and dropshipping alike.

Pros of dropshipping with Shopify:

• Easy set up
• Over 1,500 apps and integrations
• Built-in marketing and SEO features

Cons of dropshipping with Shopify:

• Payment processor – you’ll pay an additional fee if you’re not using Shopify’s payment processor
• Scaling and exporting your store to a different platform later on is tricky

Pricing: Shopify plans start at $29/month, with a 14-day free trial

Verdict: Shopify is great if you want to dropship a few products, and you don’t have a lot of experience with other content management systems. 

Wix Dropshipping

Dropshipping with Wix is a great solution if you want to build a brand and ensure your customers have a great user experience.

Previously, Wix was tricky for dropshipping, but now it has a fully integrated sourcing solution: Modalyst. 

Pros of dropshipping with Wix:

• Ease of use – it’s very easy to start running your business and build a beautiful dropshipping storefront with Wix
• No transaction fees
• Access to thousands of high-quality suppliers through Modalyst

Cons of dropshipping with Wix:

• Not originally an eCommerce platform
• Fewer templates

Pricing: eCommerce plans start at $35/month

Verdict: Wix is a great dropshipping platform for small and mid-sized business alike. The fact that they don’t charge commissions is great for your bottom line!

Amazon Dropshipping

There are two kinds of Amazon dropshipping: Fulfillment by Amazon (Amazon FBA), where you store your products in Amazon’s warehouses (but you have to buy and ship them to the warehouses first), and traditional dropshipping.  We’ll focus on the latter. 

Pros of dropshipping with Amazon:

• Access to hundreds of millions of potential customers

Cons of dropshipping with Amazon:

• 10-15% fee on every item
• Potential problems if Amazon realizes you’re dropshipping

Pricing: 10-15% on every item you sell.

Verdict: Great if you’re starting your business and you want to reach a huge audience from the get-go, but not great for scaling.

eBay Dropshipping

Similarly to Amazon, eBay gives you access to a huge audience. However, it doesn’t allow the kind of low-risk dropshipping that will help you generate revenue.

Pros of dropshipping with eBay:

• Access to a huge audience

Cons of dropshipping with eBay:

• You’re not allowed to sell products you haven’t already bought
• Huge audience? Huge competition

Pricing: 10% fee per sold product.

Verdict: eBay dropshipping is great if you want to make money fast. 

But if you want to build a sustainable business, you’re better off starting your store on Wix, sourcing high-quality products through Modalyst, and promoting them through eBay and Amazon.