Back in 2017, I found out about a business model called "Dropshipping". I was still employed at the time working as a employee who wore multiple hats, and some of the tasks involved some internet marketing since it was a ecommerce business. One day, during my spare time at home after work, I saw a video on YouTube about dropshipping.
So, the normal response for me to do was to try and start a dropshipping business and hopefully be successful at it. Sadly, I wasn't successful in making a successful dropshipping business. After trying 3 times, I finally threw in the towel and called it quits as it was draining my pocket very quickly, and I had student loans to pay off still.
Despite having failed to start a successful dropshipping business, here are a few things I learned from trying to start a successful dropshipping business.
What Is Dropshipping?
Dropshipping is a business model where you list and sell products on your own website at a higher price without having to carry the actual item in your inventory. When someone purchases an item from your website, you use the money you received to buy the item from the main source with your personal billing information, but with your customer's shipping address as the destination. Whatever the difference in price was from your store subtracted by the cost from the main source, that is your profit margin. That is basically the concept of a dropshipping business.
Dropshipping Is Easy To Start
Surprisingly, the barrier to entry for dropshipping is easy. Well, as someone who has designed, developed, and deployed his own websites several times in the past, it was ridiculously easy. However, you don't need to know anything about web development to get started. In fact, all you need is experience buying stuff online, money, and some common sense on navigating the internet, you should be able to figure it all out fairly quickly.
Dropshipping Is Competitive, Very Competitive
At first glance, you might think dropshipping is easy, but it is not. In fact, if you were to look at dropshipping from a different perspective, at the end of the day, dropshipping is ecommerce.
What does that mean?
It means that you are competing with other people and businesses who are in the ecommerce space, especially those who are in your niche with the same or similar product(s).
Not only that, because dropshipping is so easy to get started, with the low barrier to entry, there are a lot of dropshippers out there, and I mean A LOT. That means there will be a ton of competition. Last time I checked, the Earth's human population is still on the rise!
Dropshipping Is Not Easy
Other than competition, dropshipping in its more finer details is not easy. Anyone can just find a product from sites like Aliexpress, list it on their site with a marked up price, and hope for the best after running a few ads or so.
There is much more to dropshipping. Keep in mind that it is a website that we're dealing with here and it's ecommerce too. Lots of things go into this business that can determine its success or failure.
You Need To Focus On A Niche
This is something I knew already, and that when it comes to any business, the best way to success is to focus on a niche. By focusing on a niche versus trying to target everyone, it helps everyone in the business have a common goal and focus.
Not only that, by narrowing down the target market, you'll have an easier time when it comes to marketing your brand message out there. It will help reduce your overall marketing cost, and it will lead to a higher conversion rate since most of your efforts are being condensed into a powerful blow. It's all in the quality, not the quantity of the traffic.
You Need To Test And Find The Right Product
Once you have a niche selected, you need to start testing products. Products that you normally think of right off the bat will usually perform very poorly because it's commonplace.
You need to choose a product that will trigger the target audience in some way to have an impulse to buy the product. That means the product can't be generic. It has to be very relevant towards your niche's target audience. To them, whatever that product is you are trying to sell, it can't be just perceived as "just another __" or an ordinary product.
Also, it's ideal to choose a product where the buyer is the end user. If you are targeting products that are meant for young children to use, but their parents are the buyers, you'll have to be very creative towards your marketing strategy. In this case, trust is an absolute must.
You Need A Big Ad Budget
From the previous topic, this leads me to the fact that you will need a big ad budget.
The reason being is that most people when they start dropshipping, there's a high chance that they don't have a huge following, and generating traffic to your dropshipping website will be important. To do so, the easiest way is to do it through ads on sites like Facebook.
You'll also need ads to test products too. Not only that, you'll also need the money to market the products and make necessary changes and test which type of ads work. This is an entire separate topic on its own - ad optimization.
You Need A Good Internet Marketing Strategy
Other than having a good product and a big ad budget, having a strong knowledge and strategies in internet marketing will be the ultimate deciding factor towards whether you will make it or break it in dropshipping or any ecommerce ventures.
I cannot emphasize how important it is to have a good internet marketing strategy.
Now, I normally wouldn't cuss online, but having a good internet marketing strategy is fkn important! My friends know that if I cuss, it must be deadly serious.
Do I Recommend Other People To Try Out Dropshipping?
If you are someone who is just trying to make a quick buck, then I absolutely DO NOT RECOMMEND you to do dropshipping. Dropshipping is NOT a get rich quick scheme or a get rich quick strategy towards becoming a millionaire. Dropshipping, like any ecommerce business models, is a long term game. If you aren't willing to put in the time, patience, and effort, you will fail very quickly. You're better off saving your money at that point.
I do recommend dropshipping if you are willing to do this long term, learn, adapt, and put in the effort needed to succeed. Not only that, if you have a big enough ad budget, go for it. Just remember that you probably won't get any sale in the first month or few months. There's no guarantee, and that any opportunity has some sort of risk attached to it.
So after having tried 3 times at trying to start a successful dropshipping business, and after learning all the things I've learned so far from it, will I try dropshipping again in the future? The answer to that is maybe.
The reason for that is depending on my financial circumstances and how things are playing out for me in my life, if I have a decent income and have no student loans or debts to worry about, I will most likely give dropshipping another shot. However, by then, there would probably be a lot of competition in a saturated market that it becomes very risky to the point that I may as well be throwing money away, or better yet just spend that money on lottery tickets and hopefully get a buck or two in return at the very least. I don't recommend you waste your money on lottery tickets by the way (I think statistically speaking, you only have less than a percent chance of getting the grand prize.)