Is Dropshipping Still Worth It?

Reading time5 minutes
Ethan Tang
Ethan Tang
Senior Digital Content Creator at Shoplazza

The question in this article's title gets asked every year, and the answer is still a resounding “Yes!”. 

Despite the stigma attached to dropshipping, consumers are increasingly willing to purchase products online, from trending gadgets to fashion accessories and household items, due to their innovative designs, consistently improving quality, faster shipping times, and irresistible prices. The growing popularity of social commerce is also making online purchases easier than ever, by putting products from around the world at our fingertips.  

At the same time, veteran and budding entrepreneurs continue to use dropshipping to test product ideas, build online brands with minimal startup capital, and cash in on trending products. Wholesalers worldwide are eager to open up their inventory and production lines to dropshippers as a means to diversify their sales channels and build relationships. It shouldn’t surprise you, then, to learn that the global dropshipping market is expected to reach $557.9 billion by 2025.    

What is Dropshipping?

Dropshipping is selling products online without keeping inventory. 

You’re responsible for finding products and pricing them in your online store. Customers will place orders in your store, which are synced to your dropshipping supplier(s), who will then package and ship orders directly to your customers. You would, of course, be ordering listed products from your suppliers for your customers (once they’ve placed their orders) at a lower rate than the prices in your store. 

There are essentially four steps to dropshipping: 

  1. Find products and list them in your online store.
  2. Customers place orders in your store.
  3. Orders are synced to your dropshipping suppliers.
  4. Your suppliers prepare and ship orders per order instructions.

The best part? You're not responsible for logistics and only pay for what you sell.

Why Dropship? 

Dropshipping is the most accessible form of eCommerce. You can get started while working a full-time job, going to school, traveling to exotic destinations, or lounging at home! 

The abundance of free online resources and dedicated dropshipping communities offering support lowers the barriers to entry even further. Dropshipping hubs like Sell the Trend, Niche Scraper, and GoodGoods can even help you “spy” on other online stores to find guaranteed winning products by pulling sales data and supplier info.

You also enjoy the flexibility to list and test an unlimited number of trending products to see which ones will deliver consistent sales. And unlike traditional retail businesses, you don’t need to suffer growing pains as you scale up your business since most of the work to process additional orders will be handled by your suppliers.

The better question, then, is why not dropship?      

Dropshipping Risks  

The image shows the word "Ris", the final letters are "K and E", which forms the words "Risk" or "Rise".

You can expect fierce competition given the ease of building an online store to start a dropshipping business. And while you get peace of mind from the simplicity of hands-off fulfillment, your suppliers will take a cut from your revenue. 

Additionally, your control over product quality and shipping time is limited. To make it more frustrating, you'll take the blame if your customers are unsatisfied with the quality of the products they receive or the wait time to receive them. 

Therefore, aside from doing market and product research, it’s crucial to communicate with your suppliers, so you know what to expect. 

It can also be a pain to deal with returns and customer inquiries.

Luckily, JivoChat can help you enhance customer experience by installing a live chat in your online store to improve communication between your business and your store visitors. 

While outsourcing customer service by hiring employees or using automated messages may sound like a good idea, unless you can provide sufficient incentive to ensure quality customer service, it may be best to deal with inquiries by yourself when you’re starting, as they can give you valuable feedback about your business and help you grow.

What should I sell?

Entire books have been written on this topic, but you can start dropshipping by following these three rules: 

  1. Pick products that will justify long shipping times (and survive the journey)

Shipping can take two or more weeks since your products are likely sent by overseas suppliers. Whatever you're selling should make the wait worthwhile for your customers and be tough enough to arrive in good condition. In other words, make sure your product line can’t be found at the local Walmart!    

  1. Find niche products likely to result in repeat sales

Look for quality products in a space that you're familiar with. Specialized products tend to have dedicated followings that can turn into repeat customers. The best part is you won't have as much competition from established brands. 

  1. Price your item with your profit margin in mind

Think about your product and shipping cost. Would it still make sense to sell whatever it is you're planning on selling? You may find that selling a few expensive items per month is more profitable than selling hundreds of keychains.

This is a formula to help you figure out how much your products should be marked up: markup percentage = [ (sale price - total cost) / (total cost) ] x 100.

How do I start dropshipping?

You can start dropshipping with Shoplazza by signing up for a 7-day free trial and completing these four steps:

  1. Find products to sell and import them to your store using dropshipping tools like Skuowner.
  2. Set up your shipping options, or confirm the default shipping profile.
  3. Link your payment card to order from your suppliers.
  4. Set up payment options for your customers to get paid!

Once you’ve completed these steps, you can book a demo with a product specialist for help with any questions or concerns you may have.  

The image shows a woman using a smartphone and holding a cup, behind her there are several boxes. In the image is also written "Who doesn't shop online? Build your online store with Shoplazza now!"

Still Need Help? 

If you still need help getting started, join the Shoplazza Whatsapp Business Group for product picks & insights from our product specialists! You can also join our Discord for community discussions with other dropshippers!

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