Dropshipping is one of the most popular side hustle or business that people are starting today.
If you have ever heard people talk about their “Shopify store”, they are talking about their dropshipping business.
What is dropshipping?
In the simplest way, dropshipping is where someone sells a product that is manufactured or created by someone else and is shipped by someone else.
Now that might sound kind of confusing so let me give you an example.
Let’s say you want to sell a phone charging station. You create a listing on Amazon, eBay, or wherever online that you would like to sell. Now every time someone buys your product (remember you don’t own the product and it’s not just sitting in your garage) it places in an order with the company that makes the phone charging station and it is shipped out to your customer. Without you ever touching, seeing, or holding the product.
Dropshipping kind of follows the principle of flipping but in this case you find a company that already makes this product for a low cost and then you act as a middle man and list the product online for sale at a higher cost and take in the profits. This is dropshipping.
Remember, you are not just selling one item (following the above example, you are not just selling one phone charging station). You are selling 10, 100, 300, or more of the same product. We will talk about this later in the article.
How to start Dropshipping?
Starting dropshipping can be really easy if you follow these steps.
Find a product
One of the hardest things to do when it comes to dropshipping is finding the right product.
Not all products will sell. Just because you like this type of hair tie doesn’t mean everyone else will like this type of hair tie too.
If you do not find the right product to sell, this can make your side hustle fail.
What we recommend you do is go on Amazon, eBay, etc. and find the hottest product for that week or month. You know this product is selling well.
Another good place to find a product is social media. Look at social media influencers accounts, what are they promoting? Are they all promoting the same thing? Also, look at ads you get for a product on your social media. If someone is running an ad to sell you a product, that means the product is selling well and making them money.
This is probably the step that you will spend the most time on. You need to make sure your research is good so that way you have a higher chance of succeeding in this side hustle.
Finding a supplier or vendor
If you want a successful dropshipping business, choosing a good supplier or vendor is an important step.
Now if you have done your research on your product, you will know exactly how much you can sell your product at. You need to find a supplier that will find that price range so you can make the most profits. But remember you don’t want to cut too many corners to have the supplier charging too low cause if they do that, it might mean your product is bad, shipping is slow, or anything else that might stop a customer from ordering from you again or worst, asking for a refund.
The best place to find suppliers is from AliExpress. This website sells products that you see on Amazon for fraction of the cost. It’s based in China and every single product is sold by a supplier that creates the product.
Remember one thing when choosing a supplier. You need to find a supplier or product on AliExpress that has fast shipping. All these suppliers and products are in China so shipping will usually take a month or longer. But with the dropshipping growing popularity, many suppliers now ship for much fast for just a few extra dollars that you can factor into your sales price.
Build Your Store
If you want to just list your product for sale on Amazon then you really don’t need a full store. (Even though Amazon allows you to create your own store with multiple products) Another great thing about Amazon is, you can ship your supplies (if you order a product in bulk) to their warehouse and they will store and ship it there for a small percentage of your profits. But remember if you do buy in bulk and use this option, if the product does not sell then you lost your money.
If you don’t want to take the Amazon route then you will need a store and by a store, we mean a website where you will send traffic, sell products, and process payments.
There are many ways to do this for free. One of them is a WordPress website. WordPress has many plugins that help create a full online store and make taking payments very easy. The only downside of WordPress is that it may require you to have some website design knowledge. If you want to create a free WordPress website as your store, there are plenty of videos on YouTube that will teach you how to do that.
The most popular option is to create a Shopify store. Shopify makes it very simple to create a website or store without having much knowledge of knowing how to do so. The most successful dropshipping businesses use Shopify to create their online store. The only downside to Shopify is that there is a monthly fee to use it.
These are the 3 steps that you need in order to get started. It’s pretty simple. You just need to spend your time and effort in the research of finding a winning product.
Please keep in mind that since this is a business, it is best to seek legal help with it come to establishing the business. We don’t want to get too deep into the boring stuff but you need to find out about taxes in your country and state as well as finding out if you need to establish a business structure or entity such as an LLC or a C cooperation or etc.
7 Reasons You Should Start A Dropshipping Business
Reason #1 – Low Cost
Most businesses will need a lot of money to get them started. Even after spending lots of cash on a business idea, it might still fail. With dropshipping, it cost pretty much nothing to get started. And even if you do need to spend some money to get it going, it’s going to be much less than any other side hustle or business idea.
Reason #2 – No Storage
Other than software businesses, all businesses need storage. With dropshipping you do not. You don’t have to store the product in your garage until it someone buys it. You are just the middle man so once someone purchases it from you, you purchase it from the supplier, and then the product is shipped out to your cusomter.
Reason #3 – Work Alone
You don’t need anyone to start this side hustle. You just need your brain and a computer with internet access. This means no dealing with bosses, co-workers, or other employees.
Reason #4 – Grow Fast
In a fancier term, dropshipping has scalability. This means you can grow this business fast. If things are going well with the products you are selling it doesn’t take long to add another product. With a click of a button, you can keep adding to your store and keep growing this business to new heights.
Reason #5 – Don’t have to handle shipping
Since a supplier or vendor is going to be shipping your products to your customers, you don’t have to handle shipping at all. Shipping products can be a hassle and so many things can go wrong. But with this, you don’t have the headache of shipping.
Reason #6 – No experience needed
You don’t need an MBA or need to attend an IVY Leauge school to learn and start a dropshipping business.
Reason #7 – Good margins
Because of low startup costs and not needed employees, all the profits made by selling products are yours. In all other businesses, there are expenses like storage, office space, payroll, etc. but with this, you have no other expense other than the initial cost of purchasing the product from the supplier.
Conclusion
All in all, dropshipping is a great side hustle to start. It has low cost and fewer headaches compared to any other business idea. You will be spending minimal time getting this business running and keeping it successful. Find new ideas and doing your research will take up most of your time when it comes to managing this business. Setting up a store and business structure is a one-time thing that will last forever as long as the business lasts.
Frequently Asked Questions
Is dropshipping profitable?
Yes, it is! If you find a winning product, you can make lots of money with dropshipping.
What are the benefits of dropshipping?
Some of the benefits of dropshipping include low cost, flexibility, and low risk.
Do I need to register a business entity to start dropshipping?
Yes, you will need to check with your state and country laws on exactly what type of entity you need to establish or register before starting.
What websites allow dropshipping?
Mostly all websites that sell products allow dropshipping. Some of the popular websites include Amazon and eBay.
What are some good product to sell?
Some good products that are always good to sell are cool coffee mugs, t-shirts, watches, jewelry, and any other merchandise that does not go out of fashion.
Is it too late to start dropshipping business?
No, it’s never too late! Dropshipping is the future of how we are going to sell and buy products online. So no matter the year, it’s not too late to start.