Is Dropshipping Right For You?

Go onto any forum about online business opportunities and you will see a large amount of posts and questions about dropshipping. Its so hard to make money with this business model that Tai Lopez hasn’t even made a course on it LOL!

What is Dropshipping?

In case your not familiar with dropshipping, here is how it works:

  1. Set up a reseller account with a manufacture, wholesaler or distributor
  2. Sell their products on your website retail and collect money
  3. Place order with the supplier at wholesale cost
  4. Supplier ships product to your customer

Thats Easy!

So why wouldn’t you want to consider an online business dropshipping products? It can’t get much simpler than that!

You would have no inventory to stock, no packing of products to ship, no running to the post office or UPS center. It seems like the perfect online business to start.

Here’s The Problem

First off everyone is looking for the magical products with large profit margins. They want to dropship camping gear,sports gear, TV’s, cell phones, tools and many other popular categories of merchandise.

Most of these types of products don’t have a lot of profit to start with! Look how competative some of these categories of merchandise are. For example many of the larger retail chains selling sporting and camping gear have filed for bankruptcy or gone out of business. Electronics are sold by the big guys like Best Buy and Walmart.

So ask yourself, how can I compete against these giant retailers dropshipping? The answer is you can’t.  There just isn’t enough money in these products to dropship and re-invest back into your business. You will only make a little for your efforts.

Many Suppliers Don’t Actually Sell Wholesale!

Need proof? Choose some products that you would like to dropship online from a supplier and then visit Ebay or Amazon to see what they are being sold at on those sites. Chances are that you as a dropshipper won’t be able to compete on price.

This is because these sellers move large volumes of merchandise and have buying power. You as a dropshipper do not have this leverage with your supplier.

Too Much Competition

Not only are you competing against all the large retail chains you are also competing with 1000’s of other dropshippers selling the same products. Do a search online for a product that your interested in buying and look how many companies are selling that product.

Look For Niche Products

Your best option is to look for niche products that the big retailers don’t carry or push aggressively. You might look into dropshipping mailboxes, safes, and other niche products. Contact some small manufacturers of niche products and see if they would be willing to set up a dropshipping account with your company.

Better yet forget about the headaches of returns, customer service, supplier screw ups and check out the best way to make money online with my #1 pick!

Feel free to leave me a comment below!

4 thoughts on “Is Dropshipping Right For You?”

  1. Hi,

    I first heard about drop shipping from Adrian Morrison who works closely with Tai Lopez. He heavily prompts drop shipping through Facebook advertising. Honestly, when i heard about this it was all positive but i was reluctant to what the down sides maybe.

    Luckily, i cam across your article and realised exactly the amount of competition you will have with wholesalers and big companies like Walmart or Amazon.

    Like you have said if you niche out your products then you will have a better chance but there are other better alternatives then drop shipping such as affiliate marketing.

    Thank you for the great read, all the best.

    Vinnie

    Reply
    • Hey Vinnie,

      I had a dropshipping business back between 2004 to 2008. Fortunately I made money, but not enough to put back into the business and grow it.

      When you think about it, if it is successful you will need to higher people, you will have to do more advertising etc. and you can’t do it making 8% to 15% margin on sales.

      Thanks for stopping!

      Reply
  2. i use to hearing from a friend of mine about dropshipping and he once told me that he use to get much from the product he use to be selling but i hardly believe he was telling the truth

    thanks for sharing this vital information and for making me believe
    yours

    Jose

    Reply
    • Its too easy to get set up and sell by way of dropshipping. Plus depending on your niche, you might also be competing against your supplier as well.

      In my opinion there are better ways to make money online than dropshipping.

      Reply

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