If you’re seeking a new business venture online, chances are you’ve come across the term dropshipping. However, you are probably wondering what it really is and what it entails. That's where I'm here to help. In this blog, I will cover: what dropshipping is, the pros and cons of the business model, if it's really for you, if it can be profitable and the two different ways those who realise their entrepreneurial dream go with this business model.

What is Dropshipping?

Dropshipping is a type of retail fulfilment method, where instead of a store stocking products, it purchases the products from a third-party supplier. The products are then shipped directly to the consumer. This way, the seller doesn’t have to handle the product directly. With eCommerce growing by around 17% every year, it's ignited the popularity of dropshipping. 33 percent of online stores have chosen to use dropshipping as their business model due to the shear convenience and benefits.

Dropshipping is great for entrepreneurs because it doesn’t demand as much as the traditional retail model. You don’t have to open a brick-and-mortar store, pay overhead or even stock products. Instead, you open an online storefront and buy wholesale from the suppliers. The merchant (you) is mainly responsible for gaining customers and processing orders in dropshipping, meaning you’ll be a middleman of the operation.

Millions of entrepreneurs flock to dropshipping because it requires little money and even less hassle to get started. And that’s probably why you’re interested! And the best news of all? With dropshipping, you can build a business that’s sustainable in the long term right from the comfort of your own home. Of course, there are advantages and disadvantages to this way of business, and it’s important that we look at them before you start your very own dropshipping eCommerce business.

Advantages of Dropshipping

• Dropshipping is easy to start - You don’t need to be a business guru, in fact, you don’t need any prior business experience at all. Dropshipping is so easy because it requires very little from you. You don’t need storage space for the products or a team to help you out. You don’t have to worry about stocking or shipping either. You don’t even have to spend a certain amount of time every day on your store. It’s surprisingly hands-off, especially once you get going. All of this basically means that you can start your business today and get everything up and running within a matter of hours.

• Dropshipping is easy to grow - as you scale up, your business model doesn’t have to change very much at all. You’ll have to put more work into sales and marketing as you grow, but your day-to-day will pretty much stay the same. Don't worry, the costs don’t skyrocket when you scale. Because of this, it’s easy to keep growing at a pretty fast rate.

• Dropshipping is flexible - you get to be your very own boss. It’s by far one of the most flexible careers that anyone can pursue.You can work from home with little more than a laptop, and you can work at the times that are most convenient for you. This is ideal for entrepreneurs who want a business that works for them. Dropshipping is also flexible in that it gives you a lot of room to make decisions that work for you. You can easily list new products whenever you want, and you can adjust your strategies on the fly. If you’re going on holiday, you can automate everything to run while you’re away.

• Dropshipping doesn’t demand a lot of capital - you can start a dropshipping business with minimal funds. You can build an entire business right from your laptop, and you don’t need to make any high-level investments or one off purchases. Even as your business grows, your costs will remain fairly low – especially when compared to the "traditional business expenses".

Disadvantages of Dropshipping

• Dropshipping doesn’t give you a lot of control - one of the disadvantages of dropshipping is that you don’t have much control over certain aspects of the dropshipping process such as stocking products, order fulfilment, and shipping. You have to rely on the suppliers to do everything right and work seamlessly. This lack of control can be off-putting to some entrepreneurs, but it usually isn’t a problem.

• Dropshipping has slim margins - you should expect low margins when staring your dropshipping business. That’s not to say it can’t be profitable, but you should be aware that the product margin in some niches might be small.This issue is especially problematic when you’re dropshipping in a super-competitive niche. When you’re fighting for customers’ attention, you can’t afford to make the kind of profits you want to. If you choose the right niche, you’ll see larger margins straight away. So take note, you’ll have better margins in niches with lower competition.

• Dropshipping can make order processing difficult -  if you’re sourcing products from multiple different suppliers, you might run into some problems. For example, each of your suppliers might use a different shipping solution, which presents a problem for both you and your customers. The costs can get high, and shipping multiple products can be problematic all round. Also different suppliers will have different structures in place for the processing and billing of product. Since you have to manage the interaction with all of your suppliers, this can get tricky.

• Dropshipping makes customer service more challenging - because you don’t have a lot of control, it can be difficult to sort out orders and ensure the level of customer support you want. One of the most unfortunate disadvantages of dropshipping is that you have to take the blame when your customers complain. The frustrating aspect of this business model is you could be doing everything right and still run into problems if your suppliers have issues. The kind of problems you have no control over but you're the "face of the problem", for better words, so you'll be complained to.
  

Is Dropshipping for You?

So you've read both the pros and cons of dropshipping and you've probably gathered it isn’t for everyone. This is especially true for people who are looking for a get-rich-quick scheme. Even if this isn’t your approach, you still might have one of these fears:

• “I don’t know if I have enough time to start a business.”
• “I don’t want to work so hard on dropshipping that I underperform at my 9-to-5.”

That said, nearly anyone can build a dropshipping business because you can put as much or as little into dropshipping as you want.

Is Dropshipping Profitable?

There are many ways to start and grow a dropshipping business. Some start a dropshipping business as a side hustle to make a few extra hundred pound a month, while others start a full-time eCommerce business earning them millions of pounds a year. Whether you are looking to start dropshipping as a stepping point into eCommerce or a business model to last forever, it is important to understand how dropshipping can be profitable to you. Please find below information on dropshipping as a side hustle and as a full time business.

Dropshipping as a Side Hustle

Dropshipping is flexible and doesn’t demand much, making it the ideal side job. Many entrepreneurs choose to do dropshipping on the side while they have a main job that provides a steady income. In other words, you don’t have to sacrifice your day job to pursue your dreams of becoming an entrepreneur. NOTE: you’ll want to make sure you’re in the clear by asking about your company’s policy on side businesses and review any contracts/ agreements you’ve signed. You definitely want to make sure there’s no conflict of interest.

You don’t need to dedicate too much time and energy to dropshipping, meaning you’ll likely be able to take it on without a hitch. You can spend only a couple hours on your business every day and succeed. However, it’s important to know your limits and not overwork yourself. If you regularly work overtime at your day job and struggle to find time for your daily responsibilities, you might not be able to give a dropshipping business the attention it needs. Even though dropshipping doesn’t require a lot, you do need to carve out time in your day for it. In most cases, it just takes a little bit of time management, scheduling and planning. You don’t need to sleep three hours a night or skip meals to make it work. Want to have a successful dropshipping business as a side hustle? You’ll need to figure out a schedule that works for you and stick to it.

Dropshipping as a Full-Time Ecommerce Business

One of the benefits of dropshipping is the flexibility and you can make your business as big or as small as you want it to be. Many dropshippers choose to do it on the side, but it’s also a viable career path for many entrepreneurs. If you want to be a full-time dropshipping retailer, you can be. It’s easy to scale up your business with dropshipping, meaning you can grow your business pretty quickly while keeping costs low. Once you’ve reached customers and gotten enough sales, you can move from dropshipping part-time to full-time. Best of all, you can make this happen at whatever pace you want.

Obviously, this is going to take some work and dedication, but the payoff is well worth it. Once you figure out how to dropship effectively, you won’t have to worry about unsteady revenue. A well-established dropshipping eCommerce business operates like clockwork, and it can even feel like you’re generating passive income. And since it doesn’t take up a lot of time, you could even take on a side hustle while still being a full-time dropshipping retailer! The sky is honestly the limit with these businesses.

In Conclusion

Now I have provided you with the key information around dropshipping as an online business opportunity, you've hopefully come to realise if it's really for you or not.

If it's right up your street and it's something you want to pursue, you'll need to learn how to dropship, and once you've done that it’s a smooth process. You, the dropshipping merchant, can do everything remotely and never even touch a product you sell. Remember you don’t need business experience to open a dropshipping store. Many promising entrepreneurs don’t ever chase their dreams because they believe they need years’ worth of experience. This is not the case!

The great thing about dropshipping is that you can learn how to dropship as you go. And better yet, there are numerous resources that make dropshipping easier than ever before. You can have absolutely zero business experience and still easily make a profit. Yes you’ll need to learn the ways of dropshipping, and it will be challenging at times, but it’ll be more than worth it.