It’s time to finally ask the big question: is dropshipping worth it in 2023?
I got my start with dropshipping in 2019, and I’m here to tell you – if done right, it absolutely can be!
From streamlining the filtering process to figuring out peak times for orders and sales, my years of experience have given me the skills and confidence needed to turn this side hustle into a profitable business endeavor. But is it right for you?
In this article, we’ll look at the pros and cons and provide the insights you need to decide if the dropship business model is right for you.
What is Dropshipping?
Dropshipping is a retail business model in which sellers list other people’s products on their websites.
When a customer places an order, the seller will use the funds to purchase the item from a third-party supplier who will ship it directly to the customer.
With drop shipping, you act as the middleman between the customer and the product seller.
You are responsible for:
- marketing and showcasing your vendor’s products
- providing customers with customer service, such as answering questions or managing returns
The appeal of dropshipping is that you don’t have to take care of expenses such as:
- Website hosting
- Having a physical store
Drop shipping is an attractive option for many entrepreneurs who want to get started in the retail business without the costs associated with maintaining a physical storefront.
Drop Shipping Pros
With drop shipping, it is possible for even small businesses with limited budgets to be successful. But is dropshipping worth it?
Drop shipping provides a host of advantages for those looking for an easy way to launch their dream business.
Let’s take a look at the benefits of dropshipping.
Pro 1: Ease of Getting Started
One of the main advantages of dropshipping is that it is effortless to start.
Some of the main factors of dropshipping that make it so easy are:
- Minimal startup costs: You don’t need physical inventory or warehouse space, so you don’t need to invest much money in the beginning
- Easy to learn: Dropshipping doesn’t require extensive knowledge or experience in the retail industry. Anyone can enter the dropshipping market with ease
- Flexible: Dropshippers have far more flexibility than traditional retailers; you can offer a wide range of products without worrying about stocking or shipping them
All in all, with its low cost and accessible entry requirements, there’s no question that dropshipping has excellent pros that make it worth considering as an eCommerce model.
Pro 2: Lean Startup Methodology
Dropshipping offers one significant advantage compared to traditional brick-and-mortar businesses: cost savings.
Dropshippers don’t have to worry about physical products or spending money on a large warehouse or physical store space, meaning they can start their business with a laptop and the comfort of their home.
- Thanks to a lean startup methodology, dropshippers have the potential to get off the ground quicker and with less money than is typically associated with traditional brick-and-mortar stores.
- In other words, with dropshipping, you can reach your break-even point faster as costs associated with overhead are significantly reduced or eliminated.
Dropshipping is an attractive choice, allowing business owners to focus more time and energy on marketing their products and services.
Pro 3: Scalability
One of the most attractive benefits of dropshipping is its scalability.
- Expanding the business takes a lot of effort for typical retailers, with challenges including hiring more personnel and seeking new storage space
- But expanding requires fewer resources with dropshipping. All you need to do is add more products to your store
- Moreover, dropshipping allows you to expand globally without worrying about inventory or shipping logistics
- You can quickly test out new markets and find what works best for your business without investing many resources
Enduring more workload is inevitable, but the increase in work is trivial compared to other options.
Drop shipping’s scalability feature makes it easier for companies to reach out to different markets and generate higher profits with minimum cost – an excellent option for today’s savvy entrepreneurs.
Pro 4: Diversification
It is no secret that diversification is key to a successful business model.
When business owners invest in the conventional startup model, diversifying product lines can be a challenge due to the stresses of inventory management.
- With drop shipping, however, entrepreneurs can present customers with a wide array of products from the very start to gauge demand
- This not only aids in finding current market trends but also helps save costs associated with unsold stock
Undoubtedly, diversification is one of the biggest pros of dropshipping!
Dropshipping has many attractive benefits, such as getting stock without investing in inventory and accessing many suppliers and products.
But these significant advantages come with a cost – particularly for those business owners on a tight budget.
Is dropshipping worth it? That depends on the individual – but by considering all potential challenges, you can make a more informed decision for your business.
Con 1: Competition
A major con of dropshipping is the overwhelming competition that arises when too many people try to do an online business.
- With people competing for a share of the same niche, it can be challenging to differentiate yourself from the competition
- New merchants must put in extra effort and research to find their unique place in the market or risk getting lost among all the other players
- While it is easy to start an online business with dropshipping, the rapid growth of interest in this field makes that wealth of options a double-edged sword
Therefore, anyone considering starting a dropshipping business should be prepared for strong competition and have the plan to overcome it if they’re hoping for success.
Con 2: Product Quality
One of the cons of dropshipping is product quality. Since you do not own stock or handle your products, it can be difficult to guarantee their quality.
- Shops are held to the products sourced from third parties, so even if you want higher quality goods, there’s no guarantee you’ll get them
- Moreover, customers won’t be able to physically evaluate items before they purchase them, which means there’s a chance they won’t be happy with their purchases
- Even though most third-party suppliers offer generous return policies, poor-quality products can still harm your brand reputation and customer relationships
To counter this risk, be sure to do your due diligence when selecting suppliers to ensure they only ship high-quality items.
Con 3: Product Control
One of the cons is that dropshipping greatly restricts you from having control over your products.
- The products you offer are designed and manufactured by the suppliers, which means you can’t modify the products
- Moreover, since you don’t have any physical control over the product, ensuring quality and providing unique selling points can be difficult
In essence, not having control over your product makes it difficult for your business to improve or compete with other businesses in terms of quality and unique selling points.
Con 4: Supply Chain Issues
When it comes to dropshipping, supply chain issues are something all business owners need to consider.
- When one opts for dropshipping, they are likely sourcing several suppliers at different price points to find the best product-quality balance
- This method can create coordination issues, and buyers may have to check each of these third-party providers for availability and wait times, leading to customer uncertainty
- In addition, if one supplier runs out of a particular item and does not have adequate stock levels, customers may have to wait longer for their purchases
Is dropshipping worth it if you’re at risk of lengthening customers’ waiting times due to managing numerous suppliers and inventory sources?
The answer depends on how well you manage your suppliers. Building a reliable plan to manage inventory sources and numerous suppliers is critical to ensure that you can deliver the product within the expected delivery period.
Dropshipping can be a lucrative business model if done correctly, so it is essential to manage the process effectively to avoid damaging customer relationships with longer waiting times than expected.
How Much Money Can You Make Dropshipping?
Is dropshipping worth it? Is the potential money worth the effort?
With a projected market size of $476.1 billion by 2026, the answer is a resounding yes!
According to research, this lucrative business model has enjoyed an impressive annual growth rate of 23.7 percent and is expected to continue booming into the near future.
While the exact amount one can make dropshipping depends on various factors such as:
- Overhead costs
- Market demand
- Quality of their services
It is possible to make upwards of six figures a year.
Data shows that those getting in on this trend have experienced great financial success.
Dropshipping could be an ideal option if you’re looking for a way to increase your income without spending too much time or money setting things up.
How to Get Started Dropshipping in 9 Steps
So you’ve learned about the potential of dropshipping, and you’re now wondering how to start dropshipping.
In this next section, we’ll explore the 9 steps you can take to get your dropshipping business in the air.
1 Make the Commitment
Starting a successful dropshipping business is no small feat, so it’s important to commit getting started.
You need to set aside time and resources to get your venture off the ground.
- researching suppliers
- setting up payment gateways
- designing marketing plans
- and managing customer service requests
Once these foundational pieces are in place, you can begin building an audience for your eCommerce store and making a profit through sales.
So don’t wait any longer! If you’re ready to start a dropshipping business, make sure you know how to do it the right way before diving in head first.
2 Pick a Niche
Is dropshipping worth it? Yes, but it all starts with picking the right niche.
No matter your product category, determine the types of customers likely to purchase from you and then tailor your offering, so it speaks to their needs or interests.
Here are some tips for picking the right niche for you:
- Focus on something that has room for growth but isn’t too competitive.
- Select a product or theme that you have existing knowledge of to begin with an advantage over competitors in the same space.
- Limit yourself to just one product or theme when starting instead of taking on many items at once.
Once you have settled on a niche, look at who is selling similar products and figure out how you can offer something better or different than what is already out there.
Dropshipping can be cost-effective and time-saving once you have set up shop – but starting is key to its success.
As long as you’re selecting a viable niche with potential customers in mind, being a successful dropshipper is an achievable goal.
3 Research the Competition
Dropshipping can be incredibly lucrative and convenient for entrepreneurs looking to launch their businesses.
However, once you’ve decided to start dropshipping, researching your competition should be one of your top priorities to ensure your business stands out from the rest.
Looking into trends and practices among existing businesses will allow you to:
- Determine which products are in demand
- Establish a pricing strategy that is competitive yet profitable
- Identify customer needs
When done properly, this research can provide invaluable insights that open up wheels of opportunity for your business.
4 Find a Product Supplier
Finding the right product supplier is a critical step in getting started dropshipping.
Here are some things to consider when deciding on your product supplier:
- Read reviews thoroughly to make sure their quality is up to your standards
- Inquire about shipping methods, shipment terms, and policies to ensure quick and reliable delivery
- Research what kind of returns policies they have to see if they will honor returns or refunds for faulty or damaged products
- And finally, consider the cost of the goods and make sure you can profit as a dropshipper Dropshipping can be profitable only if you pick the right product supplier.
Don’t forget to ask questions if there are any aspects of the business relationship that you don’t understand or aren’t sure about – this will help ensure that everything runs smoothly down the line!
5 Order Samples
Once you have researched products to dropship, you must order samples of those items to properly test them before placing an order for the entire stock.
Dropshipping requires high-quality items that can withstand the shipping process, so checking against potential issues like cheap material or inadequate packaging is important.
Ordering a sample is a great way to get a real idea of what you are getting before you commit to buying in bulk.
It also helps to avoid any potential losses due to faulty items and unsatisfied customers – two things that could easily make dropshipping not worth it.
6 Test With Your Target Audience
After creating your dropshipping business, the next step is to test it with your target audience.
You can do this through:
- Online surveys
- Focus groups
- A/B testing for campaigns
By doing this research and using the feedback you gather from customers, you can refine and improve your dropshipping store before launch – helping increase the chances of long-term success.
7 Build an eCom Store
Once you have decided what dropshipping platforms or suppliers you will use, it’s time to design your store.
- Start by creating a website that can showcase your products and include any necessary payment systems and shipping calculators
- Including descriptions of each product helps establish trust and credibility to the site while making it easier for customers to find what they need
- Make sure to include terms and conditions or FAQs
- Finally, leverage social media sites and content marketing tactics by setting up accounts on all relevant platforms
Setting up an eCom store is essential for dropshippers looking to maximize their sales.
8 Register Your Business
If you plan to pursue dropshipping, the next step is registering your business.
This ensures that you are protecting your interests and complying with legal requirements.
- Depending on the type of business structure you select, this process can involve filling out a simple registration form or more involved paperwork
- Be aware that different states may have slightly different regulations, so do your research before making any decisions
Once you’ve registered your dropshipping business and received a verification number, you can continue pursuing dropshipping opportunities.
9 Start Marketing
Creating a comprehensive marketing plan early on helps establish brand recognition and lays the groundwork for steady revenue growth.
Consider activities such as the following:
- SEO optimization to organically drive traffic
- leveraging pay-per-click campaigns for a direct path to product pages
- creating email newsletters
- crafting informative blog posts
- participating in webinars or trade shows
- and joining social media groups to stay on top of industry trends
All of these activities can be powerful elements of any dropshipping business’s success!
Drop Shipping Wrap Up
So is dropshipping worth it? Yes!
The dropshipping industry is rapidly expanding, making it a great opportunity for entrepreneurs looking to sell products.
With the sector projected to keep growing steadily in 2023, dropshipping is still very much worth considering as a potential business choice.
We would love to hear your thoughts; do you believe dropshipping will thrive in 2023? Has dropshipping worked well for you in the past? Share your experiences and feedback with us!
Is Drop Shipping Worth It FAQ
The cost of starting a dropshipping business varies depending on the platform and suppliers you utilize. Generally, entrepreneurs should anticipate spending anywhere from $100 – $1,000 upfront to get started.
Yes, anyone can start a dropshipping business by themselves. You will need to have an eCommerce platform, suppliers, and the knowledge or skills needed to create content for your website. You can launch a successful dropshipping business with the right tools and dedication!
It can be challenging to navigate the dropshipping process at first, but with enough dedication and research, it is possible to start a profitable dropshipping business. With all the available resources online and through eCommerce platforms, starting a dropshipping business doesn’t have to be difficult.
The earnings for dropshippers vary greatly depending on the products sold and the business’s size. Generally, businesses can expect to make anywhere from a few hundred dollars per month to tens of thousands of dollars. It all depends on how much time you are willing to put into it.
Shopify is a great platform for dropshipping businesses. To set up your store, you will need to select the best plan, add any needed products and categories, create content such as collections or blog posts, and start marketing your store. You can find comprehensive setup tutorials online to help guide you through the process.