THE PROS AND CONS OF SHOPIFY DROPSHIPPING

Dropshipping is a particular type of e-commerce business model, one that puts you as an entrepreneur right in the middle between someone else's product and your customer.  Essentially, you select an online collection of some kind of interesting product on a website with prices and descriptions, etc.  When someone orders, you tell the supplier where to send it.  You profit from the amount the product is marked up from your supplier (the price you bought it for vs the sale price), and you never have to see, store, or ship the product.

It's a great way to get into business for people with limited resources.  Most of us don't have the time, experience, or inclination to develop our own products.  Besides, there are already a lot of them out there!  You are the middleman between the customer and the supplier. 

Dropshipping is also a great way to increase the variety of products you sell in your online store. 

Sounds great right?  Not so fast.  While dropshipping is an excellent business model to get into due to the low cost of entry, it may not be for everyone.  Below are some pros and cons worth considering before you enter into dropshipping.

Dropshipping pros:

  • It's easy to set up, and with just a little attention each week can work on its own.
  • Low-risk business (your main expense will be advertising - either influencer ads, Facebook Ads, or Google Ads).  If your ads are not profitable, you can pause your campaign at any time.  This is not as risky as Amazon FBA where you have to order thousands of dollars of inventory that may or may not sell.  If it does not sell you will have to liquidate your inventory.
  • Excellent as a side thrust.
  • Great way to test a product or market.
  • Low start-up costs - there are dozens of Youtube videos of teenagers who have had success with dropshipping.

Dropshipping cons:

  • Relatively low returns because much of the cost of the product goes to the producer and shipper.
  • The quality of products you import into your store can be low if you're utilizing a supplier in China like AliExpress.
  • If you're shipping inventory from China, it may take two weeks for your product to be shipped to customers.  
  • Your main competition is Amazon.  Amazon Prime ships in less than 48 hours and has a wide selection and massive credibility.  The only way you will be able to stay competitive is by building a brand that customers can trust.  This requires that you be an excellent marketer.  If you do not know paid ads, SEO, CRO, and email marketing, it will be difficult to stay profitable. 

SHOULD I DROPSHIP?

It might be a good idea to start a dropshipping business if you don't have more than a few hours a week; don't have an idea of a product; don't have storage; want to feel the business, don't live in a place that's easy to transport; want to try a market that you're thinking of interrupting; want to make some money; are good at marketing; have found a niche; move around a lot and need a job you can do from anywhere; someone with a store but only one or two products.

It may not be the best idea to start a business like this if you can't bother to keep up with orders; you don't know how to deal with customers, suppliers and shippers when a problem arises; you have no idea what online marketing is.

HOW DO I GET STARTED?

Start with creating a Shopify account.  This is the e-commerce platform that will allow you to take orders, set up a store, accept payments and collect data and perform analysis from the data you collect.  It also has a lot of useful add-ons made just for dropshippers.

Want an extra challenge?  Try getting the free 14-day trial and using your DropShop to get what you would pay for a membership.  Then get an idea.  Grab a notebook, a web magnifying glass and a hat to think about and find a place where you can be a curator.

Need inspiration?  Next, you'll want to set up your store and start placing your products.  Find out details such as how long it takes for your products to get from door to door.  Search the Internet to find a good price for what you're selling, and see what price is reasonable to sell.  You are starting an e-commerce business, so the most important thing is marketing.

SOME USEFUL TIPS

There are tons of companies already designed to make your life easier.  You must find a way to organize your communication with the best suppliers.  You can start with the Asian giants, AliExpress and Alibaba.  One thing to seriously consider before releasing it completely is to try a couple of their products.  If you have the cash, ask for some for delivery yourself to check that the supplier delivers high-quality products.  This will prevent you from having to deal with returns and customer service issues down the road.

Are you currently running a Shopify dropshipping business?  Comment below and let us know what advice you have for those looking to enter into dropshipping!

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