Are you wondering how to make that extra income? Do you fear the costs of setting up a business to supplement your income? Well, dropshipping is the solution you have been looking for. With a quick setup, you can ship products directly from the supplier to the customer and pay only for what you sell.
All You Need to Know About Dropshipping
With drop shipping, you can forget about inventory, storage, and other hassles. This article will tell you in simple steps how it works, the types of dropshipping, and the advantages you stand to gain.
The Process of Dropshipping
Four steps are all it takes to complete a successful dropshipping transaction. Here is a breakdown of the process.
- Step 1: Order Placement
The customer begins by placing an order from your online store to initiate the transaction.
- Step 2: Sending the Order to a Supplier
Your store’s automated system sends the customer’s order to the supplier.
- Step 3: Order Preparation
The dropshipping supplier prepares the customer’s order after receiving it.
- Step 4: Delivery
Once the order is ready, the dropshipping supplier will ship the order directly to your customer.
How Much Can One Make From Dropshipping?
Dropshipping is a profitable side hustle with lucrative returns. Some engage in it as a full-time career. That is how attractive the benefits are. On average, drop shippers earn between 20% and 30% profit from the sale. Depending on the operation size, revenue translates to around $100,000 annually or $1,000 to $5,000 monthly. Notably, drop shippers only spend on purchasing products, website hosting, marketing, and platform fees. What are you waiting for? You can raise your capital with this attractive app for passive income generation and smile to the bank.
The 3 Primary Types of Dropshipping
There are several ways of sourcing and selling products in the dropshipping business. The following are the common types of dropshipping.
1. Wholesale Dropshipping Model
This model involves partnerships with retailers to sell their products at a higher price. You earn your profits from the pricing differences. Your role is mainly marketing and selling the product while the wholesaler handles shipping and inventory. It is an excellent choice if you have an extensive network of local businesses.
2. Product Reselling Model
Product reselling is the most common type of dropshipping. It is the most popular with practitioners. It is the least competitive model with the fewest obstacles to start. You should try product reselling if you are starting up as a drop shipper due to its minimal startup costs. Furthermore, it has other subcategories beyond traditional dropshipping, such as branding products and creating niche stores for target customers.
3. Customized Dropshipping Model
Customized dropshipping is also known as Print On Demand (POD) dropshipping. It specializes in customizing products for clients with your designs or those of the customers. The suppliers will print the designs on the ordered items before shipping them to your eager clients. It is the most popular model among creative entrepreneurs who want to monetize their skills. With POD, drop shippers avoid inventory and shipping expenses, but they must be creative to wow the consumer to succeed.
Pros of Making Money Through Dropshipping
Dropshipping is one of the best e-commerce models for making good money in 2023 and beyond. It is a noble main or side hustle. You can do it remotely while realizing your dream as an entrepreneur. Here are the benefits of dropshipping.
1. Low Startup Costs
Traditional e-commerce stores require a costly investment to set up. You will spend on hiring employees, stocking the business, and setting up the shipping infrastructure. Dropshipping saves you from those costs since you need neither an inventory nor a warehouse to run the business. As a result, you only require a minimal initial investment to start. You can set up a store for around $300. If this is what you have been looking for, start now.
2. No Inventory Management
Inventory management takes valuable time, expertise, and money. Dropshipping saves you agony since the supplier handles shipping and inventory management. You can spend time on more pressing tasks like marketing, customer service, and branding. In return, you expand the business. Furthermore, the supplier handles the shipping and handling costs, saving you money in return.
3. Access to a Wide Selection of Products
Dropshipping allows you to test, launch, and scrap new products without paying for inventory. The flexibility enables you to experiment with multiple trends without financial risks. You can try various niches to find what serves you best without losing customers or money.
Conclusion
Dropshipping is a flexible business model that can make you good money with low investment. It is highly flexible, meaning you can adapt to market trends without making losses as you scale your business. You can grow your business without worrying about storage or staff handling operations. The only limitation is the number of products your supplier can produce once you set the ball rolling.
