Do you know that the online retail market is a $220 billion industry? You’ve probably heard of the success stories of various e-commerce businesses all around the internet, and how they made it big.

The concept of setting up your very own virtual store became an exciting prospect. However, with it, comes the challenges of starting up an online business. You would need to find a place to operate and store your products, the shipping materials, and the employees who will do the inventory.

Luckily, there is a low-cost solution that allows you to run your business from anywhere in the world ‒ drop shipping.

What is Dropshipping?

It is a process in which you sell products that are packaged, supplied and shipped by an entirely different business. You set a storefront online, and collect the money you earn just like a regular store. However, during the packing and the shipment of the item, you place the order with a distributor. Check this Ultimate Guide to Dropshipping from Shopify to learn more about the dropshipping basics.

How Does Dropshipping Works?

While you do all the marketing, promotion and advertising to various customers to make a sale. When a purchase happens and it’s time to send out the product, it will be the drop shipper that takes over. Instead of packing and shipping the products by yourself, they will handle the inventory in their warehouse.

Meaning, the service allows you to work with a wholesaler or a distributor. You just send them the orders that come in, and they’ll be responsible for putting it together and shipping it to your customer. Easy enough.

These companies charge a fee for this service depending on the product. Usually, though, a handling fee of  $2 to $5 is charged on top of the wholesale price and shipping.

It may seem like a lot, but despite that, you can still run a profitable business. You can always raise your prices as long as your market can afford, sell more volume or negotiate with the shipper with lower fees.

Why Should You Start Dropshipping Today?

Here are a few reasons why you should start a drop shipping business today.

  1. Crazy price markup – Perhaps, one of the most significant benefits of drop shipping is that there are high-profit margins. For some products, you’ll be making as high as 10x to 20x profits on each product that you sell in the market.
  2. Easy to Get Started – What’s great about it is that anyone with the right amount of resources can start their online store.
  3. No inventory required – In drop shipping, you don’t have to think about stocking inventory, or worrying about the shipment and handling of your products as it is already done for you. As a result, you can focus more on your marketing and advertising efforts.
  4. Mobility – This particular business model allows business owners and entrepreneurs to operate from anywhere in the world. Setting up your store can be as fast as starting your own Amazon store or own website with shopping cart and e-commerce functions.
  5. Minimizes risk – Usually, there is minimal risk involved. Your business is less susceptible to loss of revenue because, in the drop shipping business, there’s no such thing as excess inventory.
  6. Keep customers engaged – As you consistently add new and extensive range product selections, it keeps customers engaged. They’ll be coming back every time to see the items you have acquired.
  7. Expansion to new markets – Getting your products across international borders can be challenging at the same time, costly. However, partnering with strategically located suppliers allows you to ship your products quickly, and you can even access similar product offerings. Thus, it will be easier for you to test your target market and find out if a particular product is really worth importing or not.

Making Money through Dropshipping

So, can you make money through drop shipping?

There are many variables to consider to have a successful drop shipping business. While many businesses flourish with it, some are barely bringing in the profits.

The real key to success here is doing a lot of research. See what products are doing exceptionally well and making a lot of conversions. As much as you can, see the quality of the product ‒ will you be proud to offer it to your customers?

Test the product for yourself and study it. Use it. Thoroughly check if the reviews you see online and your own experience add up. Knowing your product well enough will help you sell it. Moreover, you’ll be more effective in marketing it to potential customers.

To Wrap Things Up

A dropship business model is one of the easiest, low-risk, and convenient ways to make money online. Since your products are shipped directly from the manufacturer or wholesaler to the customer, it removes the constant hassle of preparing as these are all taken cared of. By choosing carefully the right market and products to sell, you’re on your way to making a profitable venture in the long run.


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