Is Dropshipping Really Worth It? Things You Must Know

People are now asking, ' Is Dropshipping Really Worth It??' with the introduction of new ways to make money online. Dropshipping, one of the largest eCommerce business models with the potential to generate millions of dollars in home-based earnings for people worldwide, cannot simply die.

Dropshipping is not extinct. Regardless of what others say, it is critical to understand that dropshipping requires careful planning and skill. And, yes, you can earn money from it in 2022. This is how.

Is Dropshipping Really Worth It?

Obviously, yes! Dropshipping is still worth the investment in 2022 if you're looking for a low-cost business idea. In just a few years, the number of people searching for the keyword dropshipping has increased exponentially. The key to success is selecting the right products, maintaining profit margins, incorporating with proven marketing strategies, and selecting suitable suppliers.

Why is Dropshipping Still Worth It?

Dropshipping

Dropshipping is a popular way for new entrepreneurs to begin making money online. Because the dropshipping business model provides that:

Flexibility. Through your store, you can sell as many (or as few) dropshipping products as you want. It's a scalable eCommerce business model that allows you to work when and where you want.

The entry barrier is low. The inventory does not require a significant investment from new entrepreneurs. The dropshipping supplier handles order fulfillment and shipping after you sell a product.

Simple testing. Because other tasks, such as order fulfillment and shipping, have been delegated to you, your primary focus is determining which products sell the best. This is why some business owners consider dropshipping a crash course in eCommerce marketing.

This is how I make my money online.

Is Dropshipping Still Lucrative?

Indeed, as more and more people abandon platforms like AliExpress, dropshipping has grown in popularity. It's an excellent choice for those looking to enter the eCommerce market.

It is not only profitable but also flourishing! Profits from eCommerce and dropshipping have surpassed $4 billion, representing a 7% year-on-year increase over the last decade.

Furthermore, small retailers are seeing a nearly 30% increase in smartphone conversion rates.

Assume you want to learn how to start a dropshipping store to earn $100,000 per year. How many items should you sell?

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How Do You Find Suitable Dropshipping Suppliers?

You can have the world's best marketing campaigns. However, your dropshipping business will fail if customers do not like the products they receive or do not receive them at all.

Thousands of suppliers are available for dropshipping store owners to connect with on websites such as Alibaba, AliExpress, and DSers. Thoroughly vet any dropshipping suppliers with whom you decide to work, paying particular attention to:

Shipping costs estimate. Online shoppers expect quick and free shipping. Determine whether you can provide this by obtaining shipping times and costs from various suppliers.

Ratings and reviews. To improve quality control, look at reviews from other businesses that use the same dropshipping provider. Is the product of high quality? Is there anything wrong with it? Is their order fulfillment process fast enough to meet customer delivery promises? Is it possible for them to accept refunds on your behalf?

Customer service. The most crucial dropshipping tip is to accept responsibility for your supplier's mistakes. That doesn't mean you can't hold suppliers responsible for errors on their end. Look for suppliers who welcome feedback and provide prompt customer service.

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Which Is More Profitable: Dropshipping vs. Affiliate Marketing?

affiliate marketing benefits

In this section, we will contrast dropshipping with affiliate marketing because both are highly profitable and effective business models.

Because the affiliate marketing model is based on commissions on each product sold, we'll assume the commission percentage is 5%, and our goal is $50,000.

Based on the calculations above, you'll need to earn $500 per month or $170 per day, with a $5 commission on every $50 sale. To reach the same amount as dropshipping, your customers must purchase $3500 in products per day if you want to make $170 per day.

These calculations clearly show that dropshipping outperforms affiliate marketing. With that, the profitability of affiliate marketing vs. dropshipping is still being debated.

However, there are several other factors to consider, one of which is that dropshipping requires significantly more setup and preparation than earning as an affiliate. Furthermore, it is critical to understand that higher earnings come with higher risks.

Is It Legal To Dropship?

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Dropshipping is a retail business model in which you take a product from the merchant and sell it directly to the customer without actually handling it. Dropshippers, in a nutshell, act as middlemen.

When it comes to the legal factors of dropshipping, there are no laws prohibiting the establishment of an online store for the purpose of dropshipping. Although business laws differ from country to country, no law prohibits explicitly dropshipping businesses.

However, there are some general guidelines to follow when starting a dropshipping business:

Your Product Must Be Dependable. It is unethical and illegal to deceive customers by showing them one thing and selling them something completely different. In most countries, this is a punishable offense, and you will be held accountable if a customer files a complaint against you.

Understanding of Home Country Laws. Before you begin your dropshipping adventure, ensure you are fully aware of all the laws governing your business dealings within that country. Doing your homework is critical because you should be mindful of all the legalities governing the industry in which you work.

Dropshipping Alternatives

For some merchants, partial dropshipping and outsourcing fulfillment can be very effective. Here's how it's done:

Dropshipping as an add-on

Dropshipping works well when combined with traditional selling methods.

For example, suppose you sell high-quality pet treats online in your warehouse, garage, etc., and want to expand into selling pet toys. You can easily add these additional products to your store using a dropshipping model.

Having a few drop-shipped products prevents your site from becoming utterly reliant on your supplier. You can still benefit from the model's simplicity without relying on it for your store's profits.

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Sell traditionally with outsourced shipping.

Evergreen products

This is a fantastic option for merchants who can no longer store merchandise in their garages and don't have the time (or personnel) to pick and pack all of their orders.

When you outsource your eCommerce order fulfillment to fulfillment providers such as Shipwire and Fulfillrite, you have the same freedom as dropshipping but at a lower risk level.

You enter into a contract with a fulfillment partner, and they are responsible for shipping items on time while you remain confident in the quality of your products.

You can do your fulfillment if your online store is built on the Shopify platform. Learn more about Shopify Fulfillment and how it works to see how this fulfillment option can help your business.

The only disadvantage? Fees. The cost of fulfillment services can be pretty high. You'll need to crunch the numbers to see if your company's convenience (and reduced staff size) is worth it.

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Do it all by yourself.

Perhaps your online business is still in its early stages, and you don't yet have enough sales or products to justify a warehouse. There's nothing wrong with fulfilling orders yourself in that case! It's less expensive, and you can ensure that everything is done exactly how you want it. Once you've established a customer base, you can consider drop shipping to expand your offerings — and profits.

If you go the traditional route, you can still use shipping tools to make order fulfillment easier. Shipping software, for example, can be used to calculate shipping rates, print shipping labels, and packing slips, and even access discounted shipping rates to save money.

Learn about the best shipping software for integrating with your eCommerce platform, and then devise a streamlined product delivery strategy.

Final Thoughts

So, if someone asks you, "Is dropshipping dead?" You can assure them that it is not the case. With such a high global reliance on online shopping and the eCommerce industry, the chances of the drop shipping industry failing are slim to none.

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