Online business is getting more popular as it offers low budget options for inexperienced entrepreneurs. Along with new options, new forms of business emerge, and dropshipping is one of them.
What are the features of this relatively new phenomenon? And can you make money with dropshipping? And if yes, then how? Let’s answer these questions one by one.
What is dropshipping?
Dropshipping is a type of ecommerce business featuring direct shipment of goods from a supplier to a customer brokered by a retailer.
In this scheme the owner of a dropshipping web store takes on the role an agent. His or her task is to promote the given products, attract clients and offer customer service.
A client communicates only with the retailer. He or she places orders with the online store, and they are passed on to the supplier who sends the required goods to the client’s address.
This is a very important feature of dropshipping business. The retailer doesn’t have to purchase goods in bulk, so there’s no risk of being unable to sell your stock. The retailer also doesn’t need to rent a warehouse or worry about shipment issues.
How much money can you make with dropshipping?
The answer depends on many factors. In short, you can expect from zero to several thousand dollars a month.
Many people who want to try this or another ecommerce business expect to get rich in a couple of months. It is possible: read this story about Yan who managed to make $1300+ in 52 days of work.
However, one should remember that whenever 10 businesses start operating, 9 more companies close at the same time. Same goes for dropshipping business. Many people try, and only a few succeed.
What can you do to make real money with dropshipping?
So is it pure luck that allows others to succeed, while everyone else fails? Not at all! Although luck does have an impact, it is your actions and choices that play the most important role.
Choosing a niche for your dropshipping store
Simply speaking, a niche is what you’re going to sell or the range of products for your future store.
However, you’re not the only one trying to make money with dropshipping or other types of ecommerce business. So choosing a niche with high competition can result in too few orders and revenues.
On the other hand, a niche with no competitors may indicate that the demand for these products is too low. So despite being a monopolist, you’ll fail to find enough customers.
A good niche is the one featuring:
- High demand
- Few competitors
- Wide range of products
- Products that can survive transportation (better avoid fragile goods)
- Products that evoke feelings (cute stuff, fans merchandise, etc.)
- Products that solve problems (useful stuff for kitchen, for instance)
- High popularity in social media groups
Another important issue is how many payment methods your website supports. Obviously, the more, the better! Customers come from different regions and countries and prefer different payment options. One uses PayPal, another one uses credit cards. So you should set as much payment gateways as you can.
Even if everything is done properly, do not expect clients to suddenly visit your store. You must attract them by promoting your website. How? There are many methods:
- Search engine optimization
- Promoting in social media/YouTube
- Paid search promotion
- Banner advertising
- Email marketing
- Cooperating with bloggers and influencers
In other words, one must develop a good marketing strategy which mostly depends on the chosen niche. Some goods are easy to promote on YouTube and Instagram, while others better work with blogs and emails.
A simple rule to help you: no strategy consists of only one method; it’s always a combination of several channels. The idea here is to use different approaches to see what works and what doesn’t and then combine them in a single and most efficient strategy.