Is drop shipping profitable? Here’s the answer and the whole truth!
Drop Shipping is a modern, convenient and streamlined model of e-commerce where you don’t have to physically deal with your inventory.
But, as attractive as the concept is, there’s something you should ask yourself before diving into it: Is dropshipping profitable?
The drop shipping industry in the Asia Pacific region alone is expected to reach $200 billion by 2026 Suggesting that not only is it a viable business model, but if you are a seller, there are profits to be made.
But, while this may be the case, to discover if dropshipping is profitable for you, it is important to dig a little deeper.
Here we are going to look at the pros and cons of dropshipping considering whether it is really a profitable venture.
Drop shipping: the pluses
In addition to the obvious benefit of not actually having to deal with, store or buy stocks, there are additional benefits of dropshipping.
1. Low start-up costs
When you consider whether dropshipping is profitable, you need to consider the return on investment (ROI).
One of the biggest plus points of dropshipping is the fact that the startup costs are lower than if you were in the e-commerce business and buying your own inventory or making your own products at home.
By eliminating your budget for warehouse fees and purchasing materials or inventory, you can operate your business at minimal cost. And if you have the right starting budget, you can focus on what really matters: your marketing campaigns, communications, and initiatives.
take the most dropshipping platforms Part of your earnings for their services or charge a (reasonable) monthly fee – which costs much less than maintaining warehouses or buying large batches of inventory.
2. Fast and expandable
Setting up a Drop Shipping company is a fairly quick process. Once you set up your store or website and choose your preferred shipping supplier, you can start selling.
Of course, you’ll have to spend some time developing your brand, building your social media pages, getting to know your audience, and creating value-driven content to grow your empire – but with the ability to set up quickly – you’ll start seeing results sooner rather than later.
Once you start gaining dropshipping momentum, scaling your business will be easier than with traditional e-commerce models. Free from inventory constraints, you can focus on getting more people to your store without worrying about finding space for additional inventory or running into operational issues that could hurt your brand. Profit and peace of mind combined.
3. Skills and experience
Once you’re armed with an ecommerce business where handling shipping and fulfillment isn’t your primary concern, you can spend more time learning how to engage with your audience, improve your operations, and develop your brand.
Doing so will not only propel you forward, but you will also develop a range of new marketing skills and experiences that can open up new, profitable career doors for you in the future.
As a successful dropshipping merchant, you will handle:
- Copywriting and Content Marketing
- Paid Marketing and Performance
- Email Marketing
- Mobile Marketing
- Search Engine Optimization (SEO) and Search Engine Marketing (SEM)
- Video production and photo editing
Digital marketing is a well rewarding sector, so if you decide to start a dropshipping business, this combination of skills will put you in a good position to change your career.
Drop shipping: the downsides
Now to the negatives: the potential pitfalls of embracing or investing in the dropshipping model.
1. A little less control
While dropshipping takes inventory processing and fulfillment out of the equation, when you work with most suppliers, they control aspects that include shipping costs and times, packaging design, or other customizations.
This lack of control affects your ability to add personality to the brand when your customers receive their products from your company – and some consumers may not always find your shipping terms as favorable as in the often slow Ali Express case.
A lack of flexibility in these areas may deter some customers from switching or have a negative impact on loyalty (which could drive people to your competition). But, while that is the case, by focusing on the right areas of your digital marketing strategy, you can counteract this lack of control.
2. It’s not a get-rich-quick scheme.
One of the inherent downsides to dropshipping is the mindset that people adopt when creating their businesses.
The dream of dropshipping has been sold to many people: “Set up your store, do a little work, and make a lot of money.” Led to believe this is true, many people start their businesses expecting immediate results – and failing miserably.
While drop shipping offers the allure of low start-up costs and easy access to entry, it’s always important to remember that you’re paying for the privilege of someone else who handles your fulfillment efforts over time.
Instead of treating dropshipping as a get-rich-quick scheme or easy source of income, remember that it is an e-commerce business – and you should treat it as such. If you don’t, all you will do is throw your time and money into the abyss.
So, is drop shipping profitable?
On average, dropshipping stores have a net profit of between $100 and $50,000 per month. This indicates two things:
- There are a lot of profits that can be made in dropshipping
- To make a decent profit as a dropshipping merchant, you have to work hard and do the right things consistently
To make a profit by operating as a dropshipping store, knowing your audience, working to increase public trust in your brand, and having marketing through channels and touch points is essential.
Your brand messaging and the content you deliver to your audience is essential: focus on these areas and you’ll enjoy a healthy return on investment.
Treat your business with respect and you’ll ensure that the benefits of dropshipping outweigh the negatives. We wish you good luck.