A lot of people ask whether you can make money with dropshipping. The truth? You can! However, contrary to popular belief, it is. Although, if you want to be successful i.e. actually make money from it, then you will need to be putting in an astonishing amount of effort. You will also need to plan for a few expenses along the way. Let’s jump in.
What is Dropshipping?
The best way to kickstart this guide is to talk a little bit about what dropshipping is.
When you are a dropshipper, you will be running an eCommerce store. You will be selling real, physical products. The difference to a standard eCommerce store? You won’t actually be keeping these products in stock. Instead, when an order is placed, you will be contacting the supplier. You will the pay the supplier, and they will ship the product out for you. Essentially, you are going to be acting as a middleman in the transaction.
The fact that you do not have to pay for stock when dropshipping means that you have already cut out one of the biggest expenses with running an online eCommerce store. In theory, everything that you sell on your site will translate to profit in your pocket. Obviously, you will need to factor in a few expenses but, for the most part, it is difficult to lose money as a dropshipper, since you will not have any dead stock sitting around. This makes it a little bit easier for you to make money.
Dropshipping on Shopify
Your very first expense as a dropshipper will be on Shopify. This is the online store that you will be using to sell your products. I know that there are other solutions out there, but Shopify is a very popular platform. It is jam-packed with features that make selling product a whole lot easier, and a lot more profitable. In addition to this, the cost is reasonable for what you get.
If you use Shopify, then you do not need to go through the rigmarole of paying somebody to set up a store for you. Shopify makes it easy for even those with little to no technical know-how to get a website up and running.
Low & High Ticket Dropshipping
When you are dropshipping, you will likely hear two terms; low ticket dropshipping and high ticket dropshipping. How do you decide which one is right for you? Well, luckily for you, we’ve put together a handy list of pros and cons for each of them.
Let’s start with low ticket dropshipping. Here, you would be selling products for a few dollars a piece, often under $100 in value, although most products will be far lower than this. In many cases, the products will be shipped from China, although there are low ticket companies that will ship from within the United States too.
- Easier to convince people to buy cheaper products
- Hundreds of thousands of products to choose from in many niches
- Little impact on your bottom line if you have a chargeback made against you.
- Lots of competition
- Products are sometimes of a low quality, which can harm your brand
- You would need to sell hundreds, if not thousands, of products per month to make a decent income.
So, what is high ticket dropshipping? Well, it is the opposite of low ticket. The product you will be selling are high value products. They are typically hundreds, and sometimes thousands, of dollars. A lot of the will be sourced from the United States, just because shipping is a lot cheaper. Let’s take a look at the pros and cons of this:
- Less competition in the market place
- Selling one high-ticket item will generate more profit than selling dozens of smaller items.
- Your business will appear to be more professional, because you are selling high-value items, as opposed to cheaper products imported from China. This is great for your brand.
- Huge amounts of profit on a sale.
There are a couple of downsides to high ticket dropshipping:
- It is harder to find suppliers that you can trust.
- Chargebacks will hit you harder
- It can be tougher to make sales. After all, it is harder to convince people to buy high value items, particularly if the person knows they are dropshipped.
- Advertising is more expensive
In my opinion, if you are new, it is much better to start a low-ticket ecom store because the risk is lower. Once you find that first winning product, your store can really take off.
Expenses Associated with Dropshipping
As I said before; you are not going to be paying for your product until it is actually sold. This means that you are going to be saving a lot of money there. However, this does not mean that there are not other expenses that you need to think about. These expenses include:
- Paid advertising: this includes Facebook and Google advertising
- Influencer marketing
- Email marketing
- Search Engine Optimization (if you opt not to do it yourself)
There are free traffic sources available. However, these, just like SEO, can often take months to really get going. If you want to make serious cash with your dropshipping store, then you need to be paying for your advertising. This can easily cost $1000s a month. Although, if you do it properly, this will be an investment in your company as opposed to a loss-maker.
This is where many people trip up. If you do not plan your marketing in the right way, then you could incur a loss. I think that most of the people who fail in dropshipping either do not market their company (they expect people to just find them), or they do it incorrectly. If you have never dabbled in online marketing before, then I do suggest that you look at reviews of the best dropshipping courses by clicking here and choose one that works for you. This way, you will learn how to do everything properly. Your chances of failing will plummet.
Will You Make Money When Dropshipping?
I cannot promise that you will make money dropshipping. This is because this is still a business, and as with every business, you will get out of it what you put in. As much as many people would like to believe that dropshipping is a passive way of making money, you still need to take control of your business and put work into getting it all set up properly.
What I can tell you, however, is that dropshipping is a legitimate business model. There are people making thousands of dollars per month from it. People are not lying when they say that you can make a lot of cash from dropshipping, but there is so much more to it than just throwing a few products up on a website and hoping for the best.