Is Dropshipping Worth It in 2021? - 10 Pros & Cons Of Dropshipping For Dummies Everyone Should Know

Dropshipping Statistic

• E-commerce Market Worth $24.3 Trillion by 2025

• Dropshipping Market Size Worth $557.9 Billion by 2025

With these figures and predictions, someone who's skeptical might ask: is dropshipping worth it?

1. Or is dropshipping dead?

2. Or is dropshipping legal?

3. Or is dropshipping profitable as projected?

Corey Ferreira defined dropshipping on shopify.com as a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product using the dropshipping model, it purchases the item from a third party and has it shipped directly to the customer. As a result, the seller doesn’t have to handle the product directly.

Simple.

As a dropshipper, you find a pool of markets where customers are willing and able to buy certain products. Then you order the products from the suppliers, and within days, the customer gets the product without you seeing it.

You're paid. The manufacturer is paid. The customer is happy and business continues.

Looking at the doubts and criticisms that exist about the legitimacy of dropshipping business, I'll explain using the statistics given at the beginning of this post why dropshipping is a good business model:

You need to know that these third-party sellers are mostly dropshippers. They don't own or manufacture the products but have access to the products and the consumers using a platform on Shopify or AliExpress to reach out to suppliers and consumers.

It's required to remember that Amazon is the no 1 online market on earth. And if 45% of sales carried out there is by third-party sellers, it must be a legal and lucrative kind of business, now and for the nearest future.

This is direct.

Out of the over 7biilion people on earth, more than 2billion people buy online today with China and the US leading in online sales at $672 billion and $343.15 billion respectively.

And according to statista.com, retail e-commerce sales worldwide amounted to $4.206 trillion in 2020. If 23% of that figure, which represents the ratio for dropshipping, is over $900 billion, do you think it's an industry worthy of attention?

I guess you know that eBay is one of the largest online stores in the world. Achieving. 146% increase for a kind of business model is great. That's a sign of high profitability.

Some more about eBay from Salefreak says this:

The top 10% of eBay dropshippers make on average $7,731/month profit.

The average dropshipper makes $807 profit/month, which is a modest $9,684/year.

Just three more:

A quarter of eBay dropshippers are making more than $1,000 profit/month.

The average eBay dropshipper processes 969 orders/month, whereas the top 10% are handling 4,759! That’s 159 orders EVERY DAY or 7 every hour.

More buyers needing more sellers making more profit. Population growth, penetration of the Internet, and globalization are making this happen real fast. And dropshipping is a large part of the e-commerce industry.

The same industry valuation was at 102.2 billion in 2018. But the exponential growth will push it further in four years.

Lastly, close to 27% of online retailers have adopted the dropshipping model.

From Walmart in the US to Alibaba in China to Jumia in Nigeria, the dropshipping model of selling has become a common tool for satisfying the needs of consumers.

It's no news seeing on the websites of these companies options for merchants to sign-up and own a business in less than 4hrs.

And with a good PC or a smartphone, citizens become dropshippers selling products in and outside their home nation.

With these, I believe you'll have the right answer for anyone asking, Is dropshipping dead?

If it's not working, how can people like Marc Chapon make $178,492 in three months by dropshipping US and European products?

If this business works, how can someone who knows nothing about dropshipping business start one?

Here's a quick way to do that:

"The niche you select needs to be laser-focused," says Jonathan Long, "and something you are genuinely interested in. A product range that isn’t focused will be difficult to market."

Why should it be something you have an interest in?

"If you aren’t passionate about the niche you select," the founder of Uber brands opines, "you will be more apt to becoming discouraged because it takes a lot of work to successfully scale a dropshipping business."

So how do you pick your dropshipping niche?

Seek higher-priced products. And here's why? It's the same energy you use to market cheap products that will be for higher-priced ones. If you advertise a $14 product with $100 you can do the same for a $1,000 product. Do you see the game?

Get low shipping cost products. Why buy a $30 product that'll be shipped at $100 or more. Except you have a bunch of customers ready to buy, then this is a bad strategy as a dropshipper. You can achieve this by sampling different suppliers and their shipping costs.

Be sure that your products will attract impulse buyers who want to buy NOW. That's why you need to carry out good market research before you decide.

Use Google keyword search and trends, confirm that people are searching for that product. This is a support to the previous point. If this is not done, your dropshipping business might not float.

Source for products that are not easily available locally. That's the power of being "nichy". When there's demand for a foreign product, customers will be more willing to buy if they see a trusted seller.

Build a brand around your product. A brand is not just a logo or pictures A brand is not about logo and colors and shapes. It's deeper than that. The product you want to sell in your dropshipping business needs to connect deeply with you and your target.

You don't want to go into a market that's super saturated with sellers already. Neither do you want a product that's without competitors?

Why?

It either shows there's no demand for it or it's expensive or it has a high shipping cost or it's less profitable.

The balance is to find a product with enough competition and then you can streamline your target.

While researching your competitors, you will need to check their platforms, run an analysis of their e-commerce website, and other steps to prevent dropshipping failure due to lack of competitive analysis.

You can never ask too many questions at this stage. Getting a good niche, doing marketing research yet working with the wrong supplier can ruin your business.

So what do you do?

Ask questions about manufacturers and suppliers. Ask about the product. Ask about their delivery process. Use dropshipping communities to make inquiries on this. Make your first order for yourself and use that to make your business decisions.

Thanks to AliExpress and other platforms making communication easier between suppliers and dropshippers.

Most times, business owners want to go ahead and build websites and they don't have a business in mind yet. That's a waste of time and resources. There are things you need to know before building a dropshipping website.

Building your e-commerce website can be done in a day using Shopify or woocommerce or bigcommerce. As you read down this post, I'll share with you the best platforms you can use to create an efficient website for your dropshipping business.

And you don't have to be techy to do it. Simple templates on Shopify or AliExpress can do it in a few hours or you can outsource it.

The essence of starting any business is to sell. But how do you sell if you have no one buying?

Dropshipping is one business model that thrives on ready-to-buy customers. These customers should be trafficking your website as frequently as possible.

The question is how do you make this happen?

By creating a customer acquisition plan. The plan will include online and offline marketing strategies. If you can't figure this out, you might need to outsource it to a social media marketer on Fiverr or other platforms available.

Each time we hear this, it seems as though it has to be online alone. But there's a need to get feedback about your dropshipping business offline.

Yes, the online space carries more emphasis from Google analytics to Facebook analytics. As you get these data, you should optimize your platforms to get more customers to buy from you.

Don't forget that new tools are being created to make these activities easier. So the dropshipping community will be of great help here.

Per time, new platforms are created to make dropshipping less difficult to operate. And this shows that the tech industry is aware of the potential of the market.

The most popular dropshipping platforms are Shopify and alidropship. But I'll give you a good analysis of seven other platforms you can choose from:

Features: FREE STARTER PLAN, BASIC PLAN OF $35 PER MONTH; PRO PLAN OF $90 PER MONTH with 4.8 OUT OF 5 STARS rating.

Apart from connecting you with suppliers and being centralized, their integration with Wix makes it good. So with just an app, and a few clicks, you can start selling

Features: FREE STARTER PLAN; BASIC PLAN OF $30 PER MONTH; PRO PLAN OF $80 PER MONTH and 4.7 OUT OF 5 STARS rating.

This works well with Shopify stores and its product selection and fulfillment processes give you free time to focus on marketing.

Features: 60 DAY FREE TRIAL; ANNUAL PLAN Of $67 PER YEAR; LIFETIME PLAN OF $127 ONE TIME and 9.6 OUT OF 10 STARS rating.

Dropshippers can enjoy a lifetime plan with just $127. That's a good one for anyone who wants to go long-term selling.

FREE STARTER PLAN; PRO PLAN OF $49 PER MONTH; EMPIRE PLAN OF $99 PER MONTH and 4.7 OUT OF 5 STARS.

Spocket dropshipping platform makes it easier to sell by enabling US and EU items to be found and shipped within your country instead of China. The result? Lesser shipping time, and more happy and satisfied customers.

Features: FREE PLAN; MULTIPLE PLAN OPTIONS OF $29.99 TO $49.99 PER MONTH; DIY PLAN OF $67 PER YEAR

With their Wholesale2B offer, you can sell products on eBay, Amazon, WooCommerce, Shopify, Magento… This means you have more market exposure using Wholesale2B.

Features: 14 DAY FREE TRIAL; BUILDER PLAN OF $47 PER MONTH; PREMIER PLAN OF $127 PER MONTH and 4.8 OUT OF 5 STARS rating.

It's a Shopify app where you can stock your store and automate your orders on AliExpress with shipping addresses.

Features: FREE TO JOIN; 100+ MILLION PRODUCTS; WORLDWIDE DELIVERY; SELLER FEEDBACK REVIEWS

It's known to be one of the best and most popular dropshipping services worldwide. Thanks to its incredibly low prices on many products.

For starters, this might be your best bet.

Other platforms include DHgate, Sunrise Wholesale Merchandise, Megagoods, and Doba.

You can also learn how Shopify works.

"The journey of a thousand miles begins with a step", a wise man said.

Why not take a sip of water or coffee as we take more steps to know why dropshipping is good and why dropshipping is bad as well.

Funny?

But that's reality.

You don’t need thousands of dollars to create and launch a dropshipping website.

The cost of setting up an e-commerce website is much lower than paying rent for a block and mortar business.

With a laptop, a few dollars, and in a few hours, a good website is on for your business.

That also means you're not location-bound. You can dropship while having a vacation.

As a dropshipper, you are going to resell products made and distributed by other companies. So you don't have any business producing products.

It also means you won’t need to buy products in large quantities and rent a warehouse to stock them, so you will face zero inventory issues.

It can be done part-time.

So you can be a teacher or a health worker and do dropshipping as a side hustle.

It's as flexible as possible.

You set your website up. Run ads. Allow customers to flow in. Receive orders. Contact suppliers. Product shipped to a client. You're paid. Supplier is paid. The cycle repeats.

Access to a large community to learn from

There's always access to a community of dropshippers who can help you start.

This will minimize your mistakes and save time.

If you're in AliExpress and want to explore Shopify, there's a pool of community that you can learn from as a starter.

Personal development

It's risky. Yes. But who grows in their comfort zone?

From digital marketing to negotiation to customer service, dropshipping will teach you lots of hands-on and soft skills as you build.

Even if you decide to quit after a while, the skills and experience you must have garnered cannot be taken from you away from you

Jeff Bezos and Founder of Alibaba have shown that growing a small business into a global brand is possible.

Yours can be a regional brand.

Lots of niches to explore

AliExpress, which gives access to almost the largest number of products, is a source of more money as you have access to sell more and more products.

If after nine months you feel like changing your niche, you can do that without any changes.

If you dropship from AliExpress, you can expect high-profit margins.

The presence of large wholesalers makes it possible to make more profit by reducing production costs for you.

The wholesalers do the work. The dropshippers earn from the work.

Profit from emerging markets

Just imagine the profit Apple makes by entering into a new market in Africa.

The same thing happens and will happen with dropshipping. More and more markets are being discovered year after year and that means more customers, more consumers, and more profit for current and future dropshippers.

Lower margin

Since it's easy to start, lots of people come into the dropshipping business and deliver very cheap products.

What do you do when you see that to make sure you don't go out of business?

One step you can take is to give more value to your customers. Don't just sell products. Educate them. They'll trust you and want to buy more from you because you care.

You can also target high-ticket products.

Sometimes, you don't have access to receive the complaints of your customers. Your supplier might be in charge of that.

How do you solve this so you don't lose your customers?

Connect more without customers via social media. Create FAQs to answer their recurring questions.

Fierce competition

Many dropshippers fail with their dropshipping store because of the competition. Each day, new dropshipping businesses are created.

How do you go around this?

Be better than them! Put in the time and do the work you need to do. Create a unique selling point to differentiate you.

One of the ways to build trust in the dropshipping industry is to provide a refund option.

It shows you care.

Yet, it can be a source of stress and fatigue

How do you take care of this?

Ask if it's cheaper for your customers to keep the product and to just send a new product or would you tell them to send it back to the supplier while your refund?

Be careful not to lose a customer over refunding.

You can also learn how to handle customer refunds.

Less profit

The truth is that when you start, your profit might not be as high as expected. That's also true for most businesses.

How can you overturn this?

Be patient and sell more products.

You can also sell high-ticket products.

Seek products with lesser shipping costs.

Since you don't have control over the stocks, how do you make sure that when customers ask for a particular product, you'll have it?

Get to know more producers or suppliers. You can also get to stock the products if they are selling fast.

Potential quality control issues

There are products that you cannot control by yourself. That's where quality control becomes an issue.

How do you make sure your customer does not complain about such products?

Order a personal product and use it. When you do, you'll know how to handle it.

Looking at these facts, I can say that dropshipping is a profitable business if you want to venture into it.