Day 12: Is Dropshipping on Shopify Worth It in 2021?
FREE 30 Day Course
In this post, we will go over what drop shipping really is, how it works, and if it's worth it in 2021. If you're new to my 30 day YouTube course, be sure to start at day one and I’ll meet you back here later! If you're all caught up, let's roll!
I think dropshipping gets a bad rap. This is in part because of the slimy people out there who mislead their customers online. You've probably heard stories dropshipping nightmares like…
People will sell the most poorly made and falsely advertised items out there. While I can’t blame you for associating the images above with all dropshippers, I challenge you to get rid of that mentality. Instead, look at the amazing opportunities dropshipping could bring you! And please, if you're going to do this side hustle, don't be like the guys above! Do it with some ethics and morals. I promise it’ll make you way more money in the long run this way.
Before dropshipping was a mainstream internet side hustle, it was hard to sell stuff online. 10 years ago, at the age of 21, I was starting my first e-commerce store. Although dropshipping existed back then, it wasn't as popular and there weren't as many resources on how to do it as there are today. So, since I wanted to create an online clothing shop, here is what my steps looked like…
- Create designs
- Purchase bulk inventory for each design
- Sell the product
- Store the product for the next 10 years because I bought too much (oops)
As you can see in step number 4, I actually ended up selling almost no product. My wife can attest to this because most of it sat in her closet for years. When we moved to Europe, I ended up donating the extra inventory at my local Goodwill. That was $2,500 of my hard earned money down the drain! It sucked!
Lucky for you, dropshipping is much more commonly practiced these days and can save you from going through the same struggles I did.
How It Works
Like I said, dropshipping is great because you don't need to house any inventory. Alternatively, you find a retailer that sells something you believe you could market well to an audience of your choosing. Next, you connect with that retailer and make a deal with them to sell their product to you, for dropshipping purposes, at a lower-than-retail price. You list the product on your own website (we will talk about how to build one of these later on) at retail price for your customers to view. When a customer makes a purchase from your website,
Suppose you team up with a mom and pop shop that sells a $40 good. They are willing to offer you a lower-than-retail price of $10. This is the real cost of the product that you list for $40. Running ads to get the customer to your website is another $10. Shipping costs you $5.
So, it ends up costing you $25 to sell the product. You sold the product for $40, leaving you with a $15 profit.
Profit = Retail Price - Price of Product - Cost in Ads - Shipping Costs
Furthermore, instead of the mom and pop shop sending you the product and then you sending it to the customer, the shop will send it directly to the customer for you. No housing inventory!
Dropshipping allows anybody with the ability to sell online the opportunity to create a store without investing a large amount of capital. I remember in my early days in college we learned how to write a business plan. Guess what… I’ve never written one! Making money online is really just that easy!
The Purpose of Dropshipping
As counterintuitive as it sounds, you actually don't want to build a large dropshipping store. Dropshipping is awesome for testing a niche. If you start to sell 100 or more units a month, you know you have a good idea. The next step is to put your dropshipping store on pause and private label the product with your brand's name.
Private labeling is where you put your brands name, logo, website, etc. on an existing product. It makes your products look professional and authentic. That being said, private labeling is expensive. You should only take this step if you have evidence that there is a high demand for whatever you are selling. Like I mentioned above, dropshipping is a great way to test this out.
How to Find a Product
At this point, you should already have a niche picked out. If you don't, be sure to revisit the “Picking A Niche” section in Day 1 of my 30 Day Course here.
Once you have a niche chosen, hop on the internet and brainstorm all possible products that you could sell relating to your niche. Use the backside of Worksheet 9 (download below) to jot down your ideas.
Next, you need to source your product. One very common site dropshippers use is AliExpress. This website has some really, really, really horrible products on it that you would never want to sell to someone. It also has some amazing finds.
I challenge you to look around the room you are in right now and see where at least 5 of the items next to you are made. If you are outside somewhere, look at the tags on your clothing. Almost everything in the US is made overseas and/or in China! China-produced products often are deemed as “cheap” and “crappy”, if you will, but this isn’t really the case! I’m sure the 5 items you picked up are all great (why would you have them otherwise?) and I’m guessing at least one was made in China!
You can find quality products from China by being a smart researcher. Let's look at a real-life example using AliExpress…
If you've never used AliExpress, prepare to be amazed; you can find literally anything on this site! The only difference between Aliexpress and Amazon is that manufacturers actually directly list their products to AliExpress. This means you can purchase bulk quantities at wholesale prices!
To get to the photo above, I typed in “mens fitness clothing”. Tons of great results popped up. I decided to go with this mens sweat set because it was unbranded and looked pretty nice. The product photos are solid and the price is decent. If I were to buy a top like this at Lululemon, it would be in the hundreds of dollars range. I'll take $16.39 all day long.
As a dropshipper, you want to markup your product at least 3 times. 3 is the bare minimum so don't be afraid to go higher if need be. To find your selling price, use this formula:
product price markup amount = selling price
If you think it's scammy to charge people 3, 4, or 5 times the price of a product, think again. This is how all big retail stores like Target make their money. They buy a bunch of product at wholesale price, mark it up almost 10 times, slap a Target tag on it, and make profit. Dropshipping is the same exact thing, just on the internet.
Next, check if shipping is included in the price of the product or if it needs to be paid in addition. Also take a look at the estimated arrival date. Chances are that it is about a month out; this is normal for dropshippers using AliExpress. It’s not like Amazon where there is two day shipping. As long as you communicate this with your customer, a further out than normal shipping date should be okay.
Along with checking actual customer reviews, sending the product to yourself is the best way to find out if it is legit! Unless there is a huge trend that you are marketing off of right now and everyday is valuable, ship the product to yourself. You never want to sell someone a scammy item. This will ruin your integrity and reputation as a seller.
Before you buy the product to test for yourself or if you're in the position where you can't, go to the customer reviews section. What are buyers saying about the product? How many stars does it have? Are the reviews quality and well written? What flaws does the product have? If the product is poorly rated, why is that so? Always value written reviews over stars because they can give insight into both problem areas and positive attributes of a product.
As I mentioned before, product images matter. Often the quality of the image reflects the quality of the product. They should look real and not photoshopped. Furthermore, you want the images to look good so that you can reuse them on your dropshipping store and in your ads.
I always try to find out as much about the manufacturer and their facility before I buy from them. If they're legit, they’ll usually have information listed about where they are located so that you can look them up on Google. I also do this to make sure that I’m buying from an ethical manufacturer. I would never want to support companies that practice child labor or who put their workers in crowded or unsnaitary facilites. If you can’t find their information on the AliExpress site, be sure to send the manufacturer a message. I've even done FaceTime calls with company reps to verify the integrity of a manufacturer.
The Final Rundown
To sum up what you just read, here's a rundown of my specific dropshipping strategy:
First, find the Mom and Pop shop, craftswomen, and craftsmen people of the world who are dedicated to creating high end products.
Second, make a relationship with said creators and help them market their product via your dropshipping store. If you can't contact them in person, email them stating that you love their brand and are wondering if they will sell their product at a dropship price. Some people will say no and some will be all in. If you pitch your idea to the creator in a low to no risk fashion, it's a guaranteed win-win situation!
My Dropshipping Tips
1. Test, Test, Test! If you find a successful product that you can sell, run with it! Most dropshippers end up testing tons of different products before they find one that actually sells. Because of this, many dropshippers also give up early on. The reason I’m where I am today is because I did the exact opposite. I tested hundreds of items until I found a winning few.
I don't mean to scare you away; I’m simply trying to make this side hustle realistic. You're going to have to do some research. You're going to have to put in a little time to build a website. You're going to have to fail. Failing is essential to learning!
2. Always order products for yourself first. You are the best determinate when it comes to grading a product on quality. This helps hold the integrity of your brand to the highest of standards and will establish trust between you and your customer.
3. Don't worry about making a profit on your first sale. Instead it is about nurturing your customer and making sure they come back so you can make money off of their second, third, and latter sales.
4. If you find a specific product that you really like on AliExpress, check out the brands page. Chances are they if they have one quality product, they probably have a few others that you might be interested in as well.
One of the first courses I ever created was on dropshipping. If you feel that dropshipping is for you and you want to do a deep dive into this side hustle, check out my advanced course called Search Engine Conquest. I will warn you that it is pretty intense but it is jam packed with value, winning dropshipping strategies, and tips and tricks that will help you out along the way. It ties dropshipping in with search engine optimization to help you build a successful dropshipping store. Once again, if you'd like to check it out, go to adrianbrambila.com/dropshipping.
Dropshipping is a demanding side hustle. Unlike some of the other side hustles I've talked about in this course, this is not one that you can set on autopilot. That being said, comment below if you think dropshipping is right for you! I’d love to hear about which niche you are going to pursue!
I’ll catch you in the next one.
Peace and God bless.
For the complimentary worksheets and resources, go to adrianbrambila.com/30days.
I make new content every single week, so be sure to subscribe to my Youtube and follow my Instagram @brambilabong and TikTok at @AdrianBrambila. I also have tons of resources and courses on my website that you won’t want to miss. Head over to www.adrianbrambila.com to learn more about what I do and how I live a financially free life.
Leave a comment