As the internet has brought people together, become the new encyclopedia of the world and spurred the creation of jobs – the knock-on effect and sub-industries it spawned are growing each day.
One such industry created and transformed through the power of the internet over time has been e-commerce and the sub-industries stemming from it.
Now if e-commerce were a person, meet its niece, dropshipping.
Buying and selling have been the fundamental basis of retail in general. Still, the internet has turned those who might never have normally ventured into the industry into entrepreneurs and internet millionaires – sometimes overnight.
This is where dropshipping comes in.
What is dropshipping?
In short, dropshipping is a form of e-commerce where sellers market and retail stock or products on the internet without holding it on premises or in a warehouse of their own.
Generally, dropshipping can occur through a website where the seller retails products to customers by buying them from a larger chain or wholesaler. Often these are international online retailers such as AliExpress, which often encourage dropshipping.
In many cases, successful dropshippers sell just one product with the intention of going viral and selling scores of the same product by marketing them smartly.
Meanwhile, YouTube is littered with testimonials and self-help guides by (self-proclaimed) successful dropshippers offering the step-by-step process of starting a dropshipping store.
How does Dropshipping work?
While there are many methods and means to begin dropshipping, the essence of the trade remains the same. Dropshippers create their own page or website and market products they find to the audience they intend on reaching.
The website acts as an e-commerce store, oftentimes without indicating that it is a dropshipping platform.
After choosing a product or conducting research through a platform like Google Trends, dropshippers tend to aggressively market their products through targeted advertising often on Facebook or Instagram, in efforts to showcase their product to a niche audience.
Example: It’s January, with Valentines’ Day approaching I find a glass encased rose on AliExpress for $0.50.
AliExpress has a warehouse in another country, where I am able to buy targeted Facebook adverts to an audience with an interest in “Valentine’s Day”.
I create a website where I can sell the glass encased rose for $10, and buy scores of Facebook adverts which lead to my website.
Through the website, orders I receive can be fulfilled through AliExpress in the given location, while I facilitate the purchase of the product with delivery to my customer.
While one of the main attractions behind dropshipping is being able to sell products without needing to keep stock, the added benefit is that anyone can begin dropshipping while serving a customer base anywhere in the world.
Can anyone start Dropshipping, and how much does it cost?
Hundreds of YouTube vloggers claim to have made millions from dropshipping.
While taking these claims with a pinch of salt is recommended, many entrepreneurs have become successful by dropshipping just one product – making it attractive for anyone in the world to start dropshipping anywhere in the world.
Many dropshipping websites showcase a product which is then strongly marketed on social networks and other places on the web.
Many guides exist online on how to start marketing through these channels and enhancing aspects of the dropshipping website like Search Engine Optimisation (SEO) to generate more traffic and thus sell products.
Most dropshipping is done through recognised e-commerce stores like Shopify, allowing users to retail anywhere in the world from whichever country they live in.
However, despite the ability of anyone being able to start, dropshipping successfully is very rare. In effect, a product or store which ends up generating millions has a likeness to winning the lotto.
Another aspect making the industry more attractive is that it is relatively affordable to begin dropshipping.
Taking into account just the cost of a website domain, e-commerce store subscription and cheap social network advertising, dropshipping can start from even less than R1 000.
Many dropshippers are hesitant to share their secret to success. However, evidence suggests the real possibility of dropshipping websites that earned creators large profits.
Malaysian entrepreneur Tze Hing Chan generated $19 000 in profit over two months through a Shopify dropshipping store offering bubble tea plush toys and other merchandise.
Meanwhile, in just a year, 18-year-old Cole Turner made over $2 million in sales between March 2019 and May 2020 from a piece of jewellery – this after testing a variety of products on a series of dropshipping stores.