How To Make Money Dropshipping – So in 2017, I jumped into dropshipping to explore another craze, and today I’m going to spill the beans on everything I’ve learned. Is this a legitimate side job? Yes. Is this for me? no it’s for you Learn how I dropped $3,630 worth of products on Aliexpress and Shopify, then make up your own mind.
If you don’t know what dropshipping is, it basically refers to a method of retailing where the storefront does not keep inventory in stock. Instead, when someone buys from a dropshipping store, that owner goes to the manufacturer, buys the product, and the manufacturer ships it to the consumer on behalf of the store.
How To Make Money Dropshipping
I’m sure you can see some of the benefits of dropshipping right away. No inventory costs, zero inventory costs, positive cash flow (you only buy products when you shop on your website). However, there were some fixed costs. For example, a basic Shopify subscription costs $29 per month plus transaction fees. Since my business was a new business, I also used paid traffic to drive traffic to my website.
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Shopify is a platform that makes it easy to create an online store, add products to your store, and sell worldwide! Whether it’s physical goods, digital products, or services, Shopify is your showcase to the world.
The basic premise of dropshipping is the arbitrage game of buying things on Aliexpress at low prices and reselling them in your store when new orders come in, providing a positive cash flow for your store.
Anyway, back to the setup. I used Shopify as a storefront and aliexpress as a source of products for sale. Oberlo is an app within Shopify that enables seamless integration and ordering between Shopify and Aliexpress.
Based on a lot of reading on forums and chats, the way to go for many carriers was to try a whole bunch of different products and find a product that sold like hotcakes and get rid of that hot product. Legend has it that the sale of one hot product will make up for the loss of another product you tried.
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As shown below, I pulled out many items for testing. These items include watches, bitcoin and crypto memorabilia, pillowcases and cell phone accessories.
It was a watch (yes, that one) and phone cases. Others had the occasional occasional sale, but proved too expensive.
In the 5 months I tried dropshipping, I made more than $3000 in sales, but my advertising and product costs were higher than what I made.
Here you can see a big swing in activity, followed by a few slowdowns in consolidation, product searches and continuations. When the promotional activities stopped, the site had almost no traffic.
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If dropshipping is to work in the long run, a content strategy must be in place in addition to buying paid traffic.
Below are some of the best products sold during this period, almost all of which included a watch (which I called “In Time”) and a custom phone case I called “Bling It.”
In the end, it all comes down to math. Can you find a very cheap but highly rated product? The difference between the cost and the accepted value will be your margin.
Can you then attract customers and optimize your conversion rate to a level good enough to generate revenue at that margin?
What Is Dropshipping & How Does It Work?
In the end, dropshipping was a disappointment for me. But it works as a concept. And I hope it works for you if you decide to explore this side hustle.
Will I try again? Never say never when I find a super tempting product at a great price and can think of some great treats! Most experts and entrepreneurs agree that dropshipping is a profitable business model, but how profitable is it? Can you make enough money to live off dropshipping? Most importantly, what should be done to earn a decent income?
In this guide, we will look at these important questions and discuss some useful tips for making money with dropshipping.
Before we go any further, let’s address the elephant in the room. Yes, dropshipping is a profitable business.
How Does Dropshipping Work And How Do You Make Money From It?
Admittedly, competition can be fierce and not all products offer huge profit margins. However, if you know how to navigate the industry, you can earn a decent income. You can also see many ways to further develop your business.
Unfortunately, there is no standard answer to this question. The amount of money you earn as a dropshipper is determined by several factors. These include (but are not limited to):
However, it is important to note that this does not only apply to dropshipping. It would be equally difficult to estimate how much each baker or hairdresser would earn. Every entrepreneurial journey is unique and your decisions will have a significant impact.
Dropshipping success does not come overnight. It may take several months before you start making regular income. However, consistent and effective marketing across multiple platforms can bring more traffic to your site and help you break even faster.
Can I Make Money From Dropshipping?
With these relevant questions out of the way, let’s take a turn and focus on how to make money with dropshipping. Here are some tips to ensure your business generates a healthy profit.
A product niche refers to a specific group of products preferred by a specific consumer segment. For example, home appliances form a product niche because they are related products that are typically purchased by homeowners.
Choosing the right product niche is very important when dropshipping because it determines how much money you make. This is because:
So, it can be said that a good product niche should have a decent depressed profit margin and high demand.
Can I Really Make Money With Dropshipping?
Also, aim for a product space that isn’t overrun by other carriers selling the same products. Too much competition can drive down prices in the market and you will have to work hard to attract customers to your store.
It is best to rely on product research data to identify profitable niches in the dropshipping market. However, leading product niches include:
To illustrate the role of suppliers in your dropshipping income, let’s recap how dropshipping actually works.
The difference between the price listed in your online store and the wholesale price you pay the supplier is your profit.
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Therefore, it is important to find a supplier that offers you a cheap wholesale price. This allows you to offer the products in your store at a fair price that is convenient for customers, but still makes a good profit.
On the other hand, if your supplier offers you high prices, your profit margin may be small. Adding high value to a high price will turn off customers.
If possible, try to work directly with product manufacturers or dropshipping wholesalers. They often offer much better prices. Also, compare multiple vendor options and try to negotiate a fair price and shipping costs before committing.
In any business, your profit is the amount left over after you pay all your operating expenses. Such costs when dropshipping include:
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One way to keep your spending in check is to carefully review your subscriptions. Keep in mind that they require regular payments and multiple subscriptions can add up to high costs.
Most e-commerce platforms and dropshipping apps offer different membership plans. It can be tempting to upgrade to the Pro plan, which often has more features.
However, a better approach would be to compare plans and choose the one that gives you the best value for your money. As your business grows and develops more complex needs, you can always upgrade to higher subscription plans.
Also, it is recommended not to sign up for too many dropshipping tools. After all, there are only so many things you can use at once. It is better to try to choose an effective tool for each automation task.
How To Make Money Dropshipping?
If customers feel that your dropshipping store offers them better value for their money, they may be inclined to pay higher prices.
Think of high tea at a high-end restaurant like buying a cup of tea at Starbucks. At the end of the day, it’s just tea, but you’ll pay more at a fine dining restaurant for the experience it provides.
The same goes for a dropshipping store; More value helps increase your profit by charging a higher price. You can add value:
Product offers are a proven tool to increase sales and improve sales. The point is how you adapt such suggestions for different situations.
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For example, you may have an introductory sale with slightly reduced prices while promoting your business. Later, when you’re more established, you can move on to creating product bundles.
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