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What Is Dropshipping?

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What Is Dropshipping?

I’m going to talk about dropshipping. I’m going to cover:

  • What is dropshipping?
  • How to get started with with Dropshipping?
  • Who is it dropshipping for?
  • Where do I get items to sell?
  • Why start with dropshipping?
  • Is there any benefits of dropshipping?
  • Is there any drawbacks with dropshipping?
  • Is there any possibility to earn money on dropshipping 2019 and beyond?

All those questions will I help you find the answer to.


Dropshipping is a supply chain management method in which the retailer does not keep goods in stock.

But instead transfers the customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer.

As in retail business, the majority of retailers make their profit on the difference between the wholesale and retail price, but some retailers earn an agreed percentage of the sales in commission, paid by the wholesaler to the retailer.

The concept of dropshipping model is gaining popularity as the seller does not need to keep any items in stock, nor do they have to take the stress of packing and dispatching.

The dropshipper keeps the difference.


Dropshipping Explained

To explain this easy: you (the retailer) have a dropship store. Within eBay or shopify. Or at your own website.

Somebody finds an awesome computer they want to buy from you.

Of course, you don’t have this computer at any storage, store or someplace else. You simply offer this computer for sale. You have priced this product to $1000.

When the customer buys the product from you and payed to your PayPal account, you then simply put in an order for the computer to your supplier/wholesaler. The wholesaler charge you $800.

The wholesaler ships the computer to your customer.

The difference of $200 bucks? That’s your profit. In this example I used a difference of 20 %.

Dropshipping is an easy business model for everyone who want to start with their own business. Either you are a student, a housewife or if you are retired.


Where To Find A Wholeseller?

You need a quality agency who can provide you with different wholesellers. SaleHoo is the most used and trusted agency in the field. You can read the review of SaleHoo Here.

They will provide you with quality and legit resellers.

What Is Dropshipping? This Sign Show You The Road For Any Business Modell


The Beauty And The Ugly

The Benefits Of Dropshipping

Easy to get started. You only need a tablet, your smartphone or a computer. Of course internet connection. That’s your toolbox.

  • You don’t need to managing or paying for a warehouse
  • You don’t need to packing and shipping your orders
  • You don’t need to tracking inventory for accounting reasons
  • You don’t need to handling returns and inbound shipments
  • You don’t need to continually ordering products and managing stock level

Low Overhead. It’s cheap to get started. It’s possible to begin with for free. The only expenses you should worry about its your phone bill, power and internet bill.

Wide selection of products. If your suppliers have an item for sale in stock, you can sell it.

  • Easy to scale. You don’t have to work extra if your scale your business unlike traditional businesses.

Cons

  • Low margins. Because it’s so easy to get started, it’s a hard competition out there. Therefore, it’s hard to get some profit out of it. Price your items correctly. I have made an 20 % profit margin at my example above.
  • Inventory Issues. When you’re sourcing from multiple warehouses, which are also fulfilling orders for other merchants, inventory changes on a daily basis.
  • Shipping complexities Let’s say a customer places an order for three items, all of which are available only from separate suppliers.

You’ll incur three separate shipping charges for sending each item to the customer, but it’s probably not wise to pass this charge along to the customer, as they’ll think you’re grossly overcharging for shipping!

And even if you did want to pass these charges along, automating these calculations can be difficult.

  • Supplier Errors. Even the best dropshipping suppliers make mistakes fulfilling orders – mistakes for which you have to take responsibility and apologize for.

And mediocre and low-quality suppliers will cause endless frustration with missing items, botched shipments and low-quality packing, which can damage your business’s reputation.


What Is Shopify?

If you want to get started with dropshipping, shopify is a platform built for dropshipping. But it costs.

You can get a free website up and running with Wealthy Affiliate and start your dropshipping business today.

This is what you get for FREE! 

What Is Dropshipping? At Wealthy Affiliate You Will Learn How To Run Your Dropshipping Business. Comparison Of Free Services VS Paid Services At Wealthy Affiliate University

Beginners Course At Wealthy Affiliate


What Shopify cost you

  • Lite Plan – $9 per month + a Buy button
  • Basic Shopify Plan – $29 per month + 2.9% and 30¢ per transaction
  • Shopify Plan– $79 per month + 2.6% and 30¢ per transaction
  • Advanced Shopify Plan – $299 per month + 2.4% and 30¢ per transaction
  • Shopify Plus – pricing plans start around $2000 per month + 2.15% per transaction

Is It Worth It?

So the big question, is it worth it to start dropshipping in 2019 and beyond?

  • The world has embraced e-commerce
  • More people are buying online than ever before
  • Merchants understand the concept of dropshipping and are willing to work with them
  • Sending online payments is easy
  • Can help with online paid marketing campaigns
  • The upfront cost is almost zero

You get a product of $15 from AliExpress and you sell it for $30. After cutting the shipping costs and the cost of advertisements, your actual profit over the product is $10.

So, in order to make $100,000 per year you need to sell at least 1000 products per month.

$10 profit x 1000 orders = $10,000 per month

$10,000 per month x 12 = $120,000 per year

So, if your idea of a successful dropshipping store is to earn $100,000 per year, then you need to sell at least 34 orders per day.

In affiliate marketing, we get a commission for products we sell. Let’s say the commission percentage is 5%.

You need to make $10,000 per month or $340 per day based on the above calculations.

To achieve that one customer should buy a product worth $100 so you get $5 commission.

And, to make $340 per day, your customers should buy products worth $7000 per day.

Yes it’s worth it. But you have to do your research of quality and dependable supplier.

Focus on customer support and remember to bake in the shipment cost, fees and taxes into your pricing. Or you will lose money.

Because of this, you should choose a supplier who ship out the product to the customer within 7 days.

List of dropshipping suppliers

  • AliExpress.
  • SaleHoo.
  • Doba.
  • Wholesale2B.
  • Worldwide Brands.
  • Wholesale Central.
  • Dropship Direct.
  • Sunrise Wholesale.
  • MegaGoods.
  • InventorySource.
  • National Dropshippers.
  • Dropshipper.com.

Don’t Be Overwhelmed By Promoting Your Business!

You need to learn how to promote yourself to get buyers . Learn an easy way to make a free website and how to targeted the right kind of buyers to your dropshipping business online.

Let Me Show You!

Have you any experience with dropshipping? Maybe you are in the business and have some advice for any newcomers in the business? Then I  love to hear from you. Please leave me a comment below.


Final Words

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