Firstly, what is dropshipping?
It’s a selling technique that many people have started using online. The idea is that you create an online store, list products for sale, and make money. At this point, the concept is identical to that of starting your own eCommerce store. However, things change when you look at the shipping methods. With a traditional eCommerce setup, you will stock the products yourself and handle the shipping. This means you need somewhere to keep and manage your stock. With dropshipping, you never have the stock yourself. Instead, you buy it from other websites, and then sell it for a profit. When a customer places an order, you put their order through on a cheaper website – like Alibaba – inputting their shipping details. It is sent straight from the original supplier to the customer.
Now that you have an understanding of how dropshipping works, is it a good way to make money online?
The upside of dropshipping
One benefit of dropshipping is that you save a lot of money on inventory management. You don’t need to invest in a warehouse and additional employees to keep track of all your stock. It offers a less hands-on approach that can still generate many sales.
Alongside this, it means you can focus more attention and resources on what matters the most: your website. You have extra funds to spend on things like WooCommerce cloud hosting for your WordPress site, letting you take your eCommerce store to the next level. Your site can be faster, more fluid, more secure, and be better at converting customers. Likewise, you have more funds to invest in marketing to drive more traffic to your site.
So, on the one side, you have a business idea that truly lets you work from home on a small budget. At the same time, it can certainly yield some big profits if you manage your business correctly.
The downside of dropshipping
The negative side of dropshipping is that you have to try to find original suppliers that offer low enough prices for you to make a profit. This can be challenging, and it may often mean you’re restricted on what you can sell. Instead of creating a product that you’re passionate about, you sell anything to make money. Some people might not care about this, but it may not be overly rewarding for you.
Similarly, you rely on other websites for your stock. It’s literally out of your control as they could sell out of a product at a moment’s notice. Now, you have to say that the product is sold out on your website, which can mean you stop generating sales until it’s restocked. Having a lack of control over your stock can be frustrating, with many people preferring the traditional method of managing your own stock.
In summary, dropshipping is definitely a good way to make money online, but you need to be prepared for the downsides of it. Do your research before you commit to anything, ensuring you know how to get the most out of dropshipping.