These sellers use “dropshipping” services so that they never own the stock they are sending to their customer, removing the traditional risk that comes with shifting products. Instead, once an order has been placed, an online seller orders directly from a warehouse, usually in China. It is then sent directly to their customer, and they pocket a chunk of the margin.
The dropshipper’s job is to market the item, sending it to the top of searches and pushing it on social media. It can be done in a few hours a week, as a “side hustle” alongside a day job or else from a beach somewhere – anywhere with an internet connection.
Now thousands of young entrepreneurs are turning to dropshipping to set up businesses fast.
If thousands are doing it then the margins aren’t going to last long, are they?
Even, to a reasonable approximation, by the time a newspaper writes it up the opportunity is gone, or at least going…..
The fact the opportunity is gone is fairly well indicated by the proliferation of “How to dropship” videos on YouTube over the last couple of years.
There is undoubtedly money to be made if you happen to pick that one item that no-one has seen before and everyone wants. Good luck with that. Otherwise, there’s plenty of evidence you’ll spend a normal working week (or longer) managing your portfolio of products, researching the competition, preparing content and updating your social media and search presence.
Amazon directly integrate drop shipping into their platform, neatly automating their own business into the hands of enthusiastic dreamers who do all of the hard work of finding those elusive new products in the hope they’ll strike it rich. If you think there’s any margin left(*) after Amazon has got involved, I have a personalised kitchen chopping board in a range of attractive colours to send you.
(*) Of course there are high margin items, and success stories – but these constantly come and go, and as soon as you try to expand beyond one good selling product, you’ll find everything tends towards the mean.
if this side hustle is so good why bother with the regular job?
The way to get rich with drop shipping is to sell training on how to get rich drop shipping.
“…removing the traditional risk that comes with shifting products”
Well, it doesn’t remove the liability to the customer to actually get the item delivered to them. If it isn’t delivered you still have to fulfil the contract, by shipping a second item, and a third, etc until it gets there, or send the money back.
Who does the packaging, shipping etc, is totally irrelevant to the risk of the item going missing in transit.
Pretty sure i was dropshipped in the early days of Ebay. I made a new purchase, and patted myself on the back for how modern i was. I then had the pleasure of tracking it everyday on a slow boat from china. And then (weeks before it arrived) i had the pleasure of the same product on display in Debenhams for a significantly lower price.
@HB…
Having had the “pleasure” of couple of similar experiences in the past I now limit my Amazon (other online retailers are also available) buying to those offering “Prime” or “next day” deliveries. They might be drop-shipped, but it’s local, not via a banana-boat!
This is an excellent example of the specialisation and division of labour. The Chinese do manufacturing, the westerner does marketing. Problem is, as alluded to above, nobody is much good at shipping. Amazon’s advantage in logistics is incredible.
Loads of eBay products are “Dropshipped” – it’s obvious when the exact same item appears in multiple sellers listings (invariably with the same pictures & dodgy translations). I just pick the cheapest one, although being mindful of the sellers reputation scoring. There is also the option of lower prices, with a delay while it comes on the boat from China, or free 2-3 postage from a UK warehouse. But I bought one thing recently from a UK seller proudly claiming that he was NOT a dropshipper…
Bit of advice: If you see something advertised you fancy on a website, do a “who is” check on the domain name. I’ve found several sites which purport to be businesses operating in the country of buyer that aren’t. Typical were several companies actually in Northern Cyprus (the Turkish bit, isn’t a recognised state) Streetview of the address produced a small office building apparently of a financial services company. My guess, getting any sort of refund for unacceptable/ incorrect/failed to deliver goods would approximate zero, whatever the advertising promises.
Just to add: Since so many of the products originate in China, it’s always worth looking for them on AliExpress. Often you find them cheaper. The AE sellers I suspect maybe dropshippers. But AE works something like Amazon. It’s AE you’re dealing with when things don’t turn out as promised. And they’re pretty good. I’ve spent thousands with them over the past few years. Inevitably a small proportion of orders are received damaged/incorrect/incorrectly described etc. Or failed to deliver. Everything’s been sorted successfully bar a couple. Almost always by refunding the payment. No requirement to return the goods. Since the fault may be easy to rectify/adjust for ( poor stitching on a garment/ wrong size/wrong colour metc) you can even profit by it, in the end.
“No requirement to return the goods”
When I’ve had trouble with eBay items I’ve followed the returns procedure and requested a post paid label, yet none of the sellers wanted the item returned. They either refunded my money, or I had to involve eBay who quickly sorted things out. This tends to confirm my thoughts as to just how cheaply made most “generic” or “unbranded” Chinese stuff really is! As a result (and with a bit of repair work on my part) I’ve ended up with two useful electrical items for free…
“ The way to get rich with drop shipping is to sell training on how to get rich drop shipping.”
No, that was last months side hustle. Now the way to get rich with drop shipping is to sell training on how to sell training to get rich drop shipping. Next month it will be a 3rd iteration.
@DW
That inspired a chuckle. There’s a popular electrical item sells here for between 50-70€. Similar in UK in £’s. I’ve been buying on AliExpress, starting at 8€ now gone up to 11. The listing describes a Euro compatible plug & that’s what I order. What arrives is fitted with a US plug but includes a US/Euro adaptor. But the adaptors fit no known Euro socket. My guess would be India. So I reject & send a photo of the adaptor & a Euro socket. Whereupon AE refunds with no return requirement. I’ve been ordering in batches of 5 for the past 5 years. A plug’s 35 cents & I can sell all I want at 25€ a time. And they still keep falling for it.
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