There are several online business models (affiliate marketing, domaining, Kindle publishing, etc.) but one of the fastest growing online business methods is dropshipping.
There are countless courses, trainings, videos and ebooks telling you how to go about it. Very often, the hype will have you believing that dropshipping is a hands-off process that will net you six figures a year easily. Please remember, to be successful at dropshipping, you must build a reliable brand. You’re building a business and that takes time, patience and hard work.
Unfortunately, it’s the ridiculous hype from marketers trying to cash in on your desire to dropship that so many beginners plunge into dropshipping without knowing the potential downsides. Oftentimes they end up derailed, depressed and deeply in debt.
Before deciding if dropshipping is suitable for you, you need an unvarnished view of the facts.
You Do Need Capital
While you don’t need a lot of it, about 3k-5k will get you started. If you don’t have the funds, you’re better off working a day job and saving up first.
Do NOT expect to get into dropshipping with $500 and think you can bootstrap and scale up the business to 6-figures. In reality, you might blow the $500 on ads within a few weeks and be at a loss.
You need time to find a winning product and discover which ads will work. Since time is money – you need money.
You Do Need Skills
The good news is that the skills required for being a successful dropshipper can be easily learned. Unlike Kindle publishing that requires you to be a good writer, with dropshipping, you only need to get a few things right.
- Being able to spot a winning product
- Being able to write decent sales copy
- Being good with paid advertising
- Being able to analyze the numbers and track your profits
If you master these, you’ll be a successful dropshipper in a matter of time. But no matter what, you’ll need to spend time learning and doing. Do you have what it takes to surf the learning curve? That’s something to think about. This process is not a walk in the park.
It’s Not As Easy As It’s Made Out To Be
While dropshipping has all the trademarks of an easy business, that’s just a marketing illusion. Yes, you do not need to create your own products. You don’t need to actively recruit affiliates. You don’t need to ship the products out.
From that perspective, it seems super simple. Everything seems done-for-you. The system seems so ‘easy’.
In fact, one could even consider the simplicity of this business model as the siren song which has led many a hopeful newbie to disappointment and debt.
The model is only simple if you can get it right. And getting it right takes time, money, patience and lots of trial and error.
You must be logical rather than emotional. Inevitably, you’ll lose money during the testing phase when you’re trying out new products and ads. If you panic the moment you lose money, and throw in the towel, you’ll never succeed with this business model (or any other to be honest).
You Must Know Your Numbers
Being able to calculate your profit margin and knowing exactly how much you’re making and if your ads have a positive ROI is crucial to running a successful dropshipping business. Actually, it’s critical to run anything successfully.
Some people fear the numbers and feel like it’s too complicated. If you feel this way, either you get used to analyzing the numbers or you’re better off with another online business model.
A Few Other Things
You’ll also need to know…
- How to do your taxes.
- How to set up a store and with what ecommerce platform.
- How to minimize disruptions in your business because you don’t really control the supply chain.
- How to handle returns.
- How to manage and run your customer service operations and outreach.
There’s much to learn and do. If you’re ready to roll up your sleeves, do the hard work and get dirty, you can become a profitable dropshipper in six months.
This is a very lucrative business model for those willing to do whatever it takes to master it. But once mastered, you can multiply the effect and go from one successful niche online store to a dozen.
