If you’re considering starting a dropshipping business or are looking for alternatives, this post is going to explain what you need to know beforehand including:
- How dropshipping works
- If they’re a scam or not
- The pros and cons
- Alternatives to dropshipping that may be more suitable for you
I’m someone who has been running a full time online business for over 17 years. In that time I’ve experimented and tried various forms of online business and knows the pros, cons and requirements to succeed in them.
Dropshipping explained:
Dropshipping is all about you creating an online store where you sell products you don’t actually own. When someone visits your site and buys the product, you order it from a wholeseller and they send it out to the buyer. Here’s a good chart illustrating this:
In terms of how you make money doing this, you basically charge more for the product/s in your store than the wholeseller so for example:
- You charge $500 for a GPS device for boats.
- Someone visits your site and buys it.
- You order the same exact GPS device for $400 from a wholeseller and they send it out to the buyer.
- You earn $100 on the sale.
- Rinsing and repeating this formula with more products and more orders, you can potentially earn a part-full time income from this type of online business.
Getting started with dropshipping (requirements):
There are a few necessary things required to start a dropshipping business and here are the basics:
- A website ($10/month and up)
- An eCommerce plugin (like Shopify, Woocommerce) that helps set up your store and track orders (Free-$100s/month).
- Paid ads to promote your website to potential customers ($100s/$1000s a month).
On top of this, it is also important to learn how to use these things to correctly promote whatever it is you’re looking to sell to customers effectively. A lot of people think that just setting up a store and getting traffic to is enough (it often isn’t).
Pros:
- Cheap to Start: You don’t need a lot of money to get started since you’re not buying any stock up front.
- Easy to Start: Setting up a dropshipping store is pretty simple and doesn’t need much technical know-how.
- Work from Anywhere: All you need is a laptop and an internet connection to run your store.
- Lots to Sell: You can offer tons of different products without buying them first.
- Grows with You: As your store gets more orders, you don’t have to worry about handling more products.
- Less Work: With no inventory to track or manage, there’s less work to do.
- Set to Auto: A lot of the process can be automated, giving you more time to focus on making sales.
- Learn as You Go: It’s a good way to learn about selling online without too much risk.
Cons:
- High advertising costs: Expect to spend most of your money on marketing your eStore.
- Out-of-Stock Risk: Sometimes suppliers run out of items, and you won’t know until a customer orders.
- Complex Shipping: If you buy from different places, shipping can get complicated and pricey.
- Slow Delivery: You can’t promise fast shipping because suppliers are in charge of sending products.
- Quality Issues: If the supplier sends a bad product, your customers might blame you.
- Tough Customer Service: Dealing with returns and complaints is harder when you have to go through suppliers.
- Reliant on Suppliers: If your supplier has a problem, so does your store.
- Can’t use dropshipping on major networks: Amazon is complicated and eBay doesn’t allow it.
- High Competition: It’s easy for others to start selling the same things, making the market crowded.
- Requires a lot of money to start: I wouldn’t recommend this business unless you have a few $1,000 to invest.
Is dropshipping for you? Things to consider (and alternatives):
In my opinion dropshipping can be a legitimate and potentially profitable business, but for MOST people there is going to be a huge learning curve and potentially a lot of spending required before you really start to make it work. There are good programs out there that teach the dropshipping business but they are often in the $1,000s.
Another thing to note is that paid ads and high competition in this business are 2 additional obstacles to understand. If you can overcome that and steadily grow your experience, you can succeed in this business overtime, but if this type of business doesn’t vibe with you or you are tight on money to start, the dropshipping business is not one I’d recommend going with. Fortunately there are other alternatives if that’s the case!
Alternatives to dropshipping (why affiliate marketing is better for beginners in my opinion):
Since 2007 I have been running an affiliate marketing business, first part time and then full time (till today in 2023). Here’s some of my stats in this business:
What exactly is affiliate marketing?
Its the process of promoting other people’s products (kind of like dropshipping) but it’s different and more convenient because:
- There’s No Products to Buy: You don’t have to buy or store any products yourself.
- Less Risk: You don’t spend money to stock up on items, so there’s less risk of losing money.
- Sell Anything: You can promote many different products without being stuck with one type.
- No Dealing with Customers: The company you’re promoting handles all the customer service.
- Earn Money Easily: Once you set up your affiliate links, you can earn money with little extra effort.
- Don’t Worry About Shipping: You never deal with shipping products to customers; the company does that.
- Cheap to start: You can literally create an affiliate business for less than $100.
- More marketing avenues available: With affiliate marketing you have blogging, YouTube, paid ads, social media, etc… whereas with dropshipping you are mainly confined to using paid ads.
Affiliate marketing does have it’s drawbacks too such as a learning curve and taking time to grow your business, but in my opinion it is way more flexible/convenient for beginners and people tight on money than dropshipping.
How to succeed at affiliate marketing:
Succeeding in affiliate marketing (and in online business in general) in my experience requires 3 things:
- Beginner friendly training
- Tools
- Expert help
I know very few programs which offer all 3 of these elements and my top choice is easily the Wealthy Affiliate program. This is the program that showed me how to become a successful affiliate marketer:
Their main specialty is helping people create a profitable websites on any passions you have in life. For example:
If you love mountain biking for example, they’ll show you how to create a profitable website on mountain bikes (promoting them as an affiliate and other methods). Any passion you have in life can be turned into a thriving online business and this is exactly what they show you how to do. They teach this through the following 4 steps:
Success stories (there are many in Wealthy Affiliate):
Why I recommend Wealthy Affiliate if you’re looking to do affiliate marketing (or online business in general):
- It’s free to join (no CC required)
- Beginner friendly
- It teaches multiple ways to create an online business (on top of affiliate marketing)
- They have many success stories
- Very high Trustpilot rating (4.9 out of 5 stars)
- Excellent support/expert coaching
- And tmuch more
Bottom line: You don’t have to invest crazy money with Wealthy Affiliate or in general to succeed online. It’s free to try and only $49/month (or for the best membership, $99/month) if you decide to stick around. The upgraded memberships provide you with more tools, resources and expert guidance on further expanding/building your online business.
Here’s how to get started with Wealthy Affiliate:
The value of the Wealthy Affiliate (WA) speaks for itself and if you have any doubts (which is totally normal), test drive them risk free.
Here’s what you get when you try the program today (all included):
- Access to the Starter Membership of Wealthy Affiliate.
- 5 lesson getting started course.
- Access to the WA community (help/support).
- 7 days coaching from me, Vitaliy (one of WA’s top experts).
- And much more (join WA today and see it all for yourself).
The program does have an optional upgrade called Premium after the Starter Membership that I do highly recommend, but more than that, I recommend you first:
- Try it for free.
- Immerse yourself in the program so you get the most out of it.
- Use my 7 day coaching! You can contact me directly inside WA.
Wealthy Affiliate works, but it is also not a get rich quick scheme. It will teach you how to build a REAL online business of your dreams and if you apply the training they have and work hard, you will become one of it’s MANY success stories.
And frankly speaking, I want to see you do just that. As your coach, one of my goals is to see just that and I’ll help you along your journey there too).