Does Dropshipping Really Work?

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Does Dropshipping work?Dropshipping is a way to have your own retail store without actually keeping an inventory of anything, or worrying about shipping and packaging. You basically just list items for sale, and when someone pays you for them, you forward the order on to the warehouse and they handle it from there. It seems like a pretty good setup, but of course there is more to it than that. We explore this business opportunity to see whether or not it is something that is viable and that can make you a reasonable living.

Overview
The big lure of drop shipping is that you don’t have to buy an inventory of products in order to have a business that is ready to make sales. Many times when people have the desire to own their own retail store, they get stymied by the fact that you have to buy a lot of products upfront in order to open shop. A drop shipping company will make its case by reminding people that they can pretty much start the same day, because the warehouse and the order fulfillment department already exists.

The Claim
Dropshipping companies tend to claim that you can make decent money by using their services. The typical pitch is that you can have your own virtual storefront set up in a few hours, and then all you have to do is drive traffic to it, and they take care of the rest. It is a pretty strong case, since a lot of the difficult parts of running your own business would be taken care of. You have someone storing all of your inventory, and handling all of the shipping. You could focus all of your efforts and energies on driving visitors to your store and putting the products in the best light.

The Hype
The hype behind drop shipping is that they underplay just how easy it is to bring visitors to an online retail store. From their perspective, once you have a warehouse full of goods, and a shipping system set up, the hard part is over. What you really need is to find buyers to make a purchasing decision and buy your products. By putting that onus on you, they are outsourcing one of the hardest parts of selling a product: making the actual sale.

The Cost
Many dropshipping services charge you in order to get set up with an account with them. Many of them also have monthly maintenance fees that you have to pay. This is in addition to the wholesale prices that you have to pay them in order to get them to ship the products to the customers. All of this will vary depending on which service you go with, and all of it will make sense or not if you are making sales to justify it. If you are paying all of these monthly fees and set-up fees, but not making any sales, then it just becomes another monthly expense for you. However, if you are doing enough volume, it becomes a business expense that is easily justified by the profits you are making.

The Commitment
The commitment level is going to be entirely up to you. If you throw yourself into this as if your life depended on it, it’s going to consume you and take up all of your time. If you treat it more like a hobby then it’s only going to take maybe an hour or two per day to steadily increase awareness about your store, and get the number of people coming to your website up. Don’t listen to any drop shipping service that tells you it’s going to be a piece of cake to own your own store and make money from it, with little or no daily involvement on your part.

Evaluation
Of course just like with anything there are good dropshipping services and bad ones. Luckily it is getting easier and easier to avoid the lousy ones, due to people registering their complaints and grievances online. Also, the good ones seem to get a lot of attention, and make it really easy to get signed up without a lot of cost and risk to you. The only drawback is that the good ones usually get so popular that everyone is offering the same products on the different sales channels so it makes it harder to make the sales.

Final Dropshipping Review

This is something that you don’t want to get into with a willy-nilly attitude. Drop shipping can provide you with the home-based business that you’ve always wanted, but you have to treat it like a business, and know that it’s not going to be all rainbows and sunshine from day one. You’re going have to try harder than the other guy or gal that is out there trying really hard to feed their family and make a name for themselves. If you treat it like a hobby, it will always be a hobby, and can turn out to be a rather expensive one if you don’t make any sales.

Our Recommendation
If you’re sure that this is the business you want to get into, then go for it! Just be aware that opportunity costs are involved. This means that there could be a better money-making business out there for you that you are passing up because you are devoting so much time and attention to a drop shipping business. Also, make sure that you get started in something that you’re passionate about. Making money is not always the first thing that you should consider, because you have to pick something that can hold your attention for the long-term.

What do you think? Does Dropshipping work or not?

Customer Review on “Does Dropshipping Really Work?

  1. From what I hear it all depends on the dropshipper. With a quality dropshipper you can actually make a living doing this, but they say with a poor one, you’ll be lucky if you make a single sale because the price just isn’t competitive. It is a very attractive business opportunity though and that’s why it may be worth looking for that perfect droshipper, but for the same reason it may be wise to look for other opportunity.

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