What is dropshipping and why it is so popular?

Dropshipping

Dropshipping is an order fulfillment method that does not require a business to keep products in stock. Instead, the store sells the product, and passes on the sales order to a third-party supplier, who then ships the order to the customer. An example of dropshipping you can see on this site (click here for the (dropshipping) shop). To view an dropship product of my shop, click here.

Dropshipping Explained
Dropshipping Explained

What’s bad about dropshipping?

Dropshipping is not perfect. You lose quality control. The product, which is presented, never went through your inspection. The products will go directly to your customers without ever touching your hands. It’s convenient, but not good for personal quality control, what you can have in a real shop. But on the other side, all those products are in boxes, and you’ll not be able to touch those products anyway.

What’s good about dropshipping?

Dropshipping is thriving! Ecommerce and dropshipping profits have reached over $4 billion, which is a 7 percent year on year increase for the last 10 years. That’s the economical part of that.

Personally, dropshipping means for you, with the dropshipping shop, a work-from-home job.


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For the customer this might be very good, because of several reasons:

  1. You don’t know this shop. Is the shop reliable? Is it a scam? Are they running away with the money and never deliver the goods? With dropshipping, that chance is not there. For example this site is using only big companies to do the actual work of storage, payments, shipping, payment guarantee, refunds, etc. AliExpress, Amazon are only a few examples of this shop. The owner (me of course) gets a commission after you buy the product.
  2. AliExpress and Amazon shop websites are rather confusing when you want to buy a product. For example I spent at least fifty minutes to buy my ACER laptop. Those sites are so unbelievable big – they sell hundreds of thousands of products – that you really need to focus on finding ways … to search. When you ask for “ACER laptop”, I get women underwear for some reason (because it’s for sale or it’s Christmas). A site like this with its dropshipping shop, you (well, I) decide how the shop is being organized.
    Those large shops rely on search words. This site relies on categories and searching.

You want to start your dropshipping ‘business’?

You can do that of course in several ways. The hard way, the normal way and the easy way.

The easy way explained in a paragraph. You contact a large supplier, like AliExpress or Amazon and look what they have to offer. For payment (from $89 and up), they create a subdomain from their site, where they install commerce software, which you can fill with (their) products of your choice. You decide what categories you want. You can customize your shop or you let them do the work (against payment). It cost you about $90 and up (per month).
Oh, by the way, with your own custom domain name your customers don’t see the direct connection with the supplier.

The hard way is programming a website, where it’s possible to get products from AliExpress and/or Amazon for dropshipping. This is a very difficult process, filling in many forms for the private, public and secret keys and you need to demonstrate to them that you’ve already bought products from them as reseller or dropshipper.  It cost you thousands of dollars.

The normal way is that you create a website (Wix or WordPress), use a commerce plugin (which will be your shop), buy a dropshipping plugin, and voila, you’re ready to build your own shop. The cost of wooCommerce plugin is free, the price of WordPress hosting is about $300 (per year) and the plugin for dropshipping Amazon is about $60, about $80 for AliExpress. With others like Shopify similar prices.

To start a dropshipping shop, you need to consider the following:

  1. Your hosting company. I use WordPress itself to host the WordPress website. Who is better in hosting WordPress websites then WordPress itself. It’s also cheaper and their service is excellent.
  2. Your website and shop. You add the plugins for your shop into your website. You buy the dropshipping plugins for the large suppliers (like Shopify, Amazon, AliExpress, etc.)
  3. You look for a niche. What do you want to sell in your shop.
  4. You start to import the products you find into your website
  5. After you finished your website, your shop and it’s filled with the products, you need to think about finding customers, and that means marketing.

Who were successful with dropshipping?

  • Top Dropshipper #1: Irwin Dominguez. From zero to $1M+ in less than 12 months.
  • Top Dropshipper # 2: Kate. $32,000+ monthly revenue from her dropshipping business.
  • Top Dropshipper # 3: Aloysius Chay and Galvin Bay.

(source)

Irwin Dominguez

  1. He learned about e-commerce using Google
  2. He opened a Shopify account
  3. He started using Oberlo which is a platform which helps you import dropshipped products into your ecommerce store and ship them directly to your customer

Kate

Kate decided to create a dropshipping store using anime (roughly: Japanese comics) theme based on research she did which told her that there was a lot of interest in this niche. Her logic says that many dropshippers can make money by pooling different items from a variety of dropshippers based on a common theme and thus create a dedicated shopping base. She used the social media successful in combination with the products from her shop.

Aloysius Chay

Chay and Galvin don’t really have a niche – they sell products that seem to be in demand or try selling products that are new on the market (you may remember the post we wrote about what to sell on eBay, these guys are implementing some of the best practices).

These guys swear by Facebook ads and say that this was hands down the best marketing tool at their disposal. They say that it is super user friendly and any information or skills they lacked were easily enough found in online tutorials.

The pair also recommends networking and sitting down with friends and family who are involved in e-commerce in order to exchange and improve ideas (you’re welcome to read some of our eBay selling advice and how to boost eBay sales to get ideas for your eBay business).

What products should you never dropship?

  1. Tight jeans. If you’ve ever had to return clothes because of the sizing or fit, this first product won’t surprise you. The rise of online shopping has also meant the rise of clothes that don’t fit once they arrive. For your business, that means more potential returns and refunds.
  2. Trademarked sneakers. If you don’t have a reseller license then you cannot legally sell trademarked sneakers
  3. Furniture. You should never dropship a product you can’t ship with ePacket shipping!
  4. Facemasks. Well, if you read Facebook’s  Advertising Policy closely, you’ll see that you’re not allowed to advertise products that make health claims.

What are the best products for dropshipping?

  1. Power tools
  2. Tech supplies
  3. Lifestyle niche products
  4. Health and Beauty
  5. Drones and their accessories

How and where to find the best dropshipping products?

There are many available online such as:

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