Dropshipping For Profit
You may have heard the term dropshipping and wondered what it means. Or maybe you have an idea but are not sure how to go about starting a dropshipping business. This article will guide you and point you in the right direction.
No doubt you’ve heard of e-commerce sites like Amazon and eBay and you’ve seen that some people are making a lot of money from selling goods on these platforms. But what are they selling and how do they make their profits? Surely they have to purchase loads of stock and store it somewhere?
I Don’t Have Anywhere To Store Things
If you’re anything like me, I pictured boxes and boxes of ‘stuff’ behind the sofa, in the garage and in the cupboard under the stairs, sitting around until someone buys what’s inside. Obviously, this is not ideal as you have to shell out a few hundred – or even a few thousand – pounds to buy the stock before you see any return on your investment. What if you’ve spent all that money and you only sell ten or twelve units? No way would you make your money back with such poor sales. But fortunately, there is another way.
How To Make A Profit Without Spending Any Money
At the start of this article I mentioned dropshipping. So what is it exactly? Dropshipping is when you make use of a third party supplier (wholesaler) who stocks the items that you want to sell online. You can then list as many products as you like without buying any stock. When someone goes to your website (or amazon, eBay etc) and makes a purchase you simply email the order over to your supplier then they pack and ship the item to your buyer. Your profit is the difference between the wholesale price of the item and what you are selling it for online.
The advantages of dropshipping are clear; you don’t need to store any inventory, you don’t need to spend any money in advance, you don’t have to handle and ship the goods to the buyer and if you find a really good wholesaler your profit margins can be more than reasonable. Imagine if you are selling pet grooming products for example. You have a set consisting of shampoo, grooming brush and nail clippers selling on eBay for £25.99. But you can buy this set from the wholesaler for £7.95. Even with shipping and eBay fees you will still make a profit. Now imagine if you sold ten or twenty of these sets every day – pet products are very popular so this is not impossible. That’s when the money starts to really add up. And best of all, it’s taken no time at all to do this. You haven’t had to wrap anything or stagger down to the post office with several bags of parcels. A few clicks on your keyboard to place the order and the supplier does the rest.
Are There Any Disadvantages To Dropshipping?
Of course, it’s not all plain sailing. There are a few downsides to this business model, as with anything else in life. First of all, it’s not easy to find a genuine, reliable dropshipping wholesaler. Some of them are really just middle men and you won’t make much of a profit with them. Then there is the risk of stock shortages or even one of your items being discontinued. Prices can go up without notice, reducing your profit margins. And there could be lots of competition out there, depending on how popular the item is that you’re selling, which means you will be competing with sellers offering the same thing but at rock-bottom prices.
So Is This Still A Good Way To Make Money?
Compared to having to buy, store and ship products yourself this is still a good business model. It does require work, as with everything else, but if you find some good wholesalers and choose a niche that doesn’t have lots of competition it can save a lot of hassle. The best thing about this method is it costs you nothing to get started and you son’t need to build an extension on your house to store your inventory!
I hope you enjoyed this article. Next time we will discuss matched betting.