Is Dropshipping Worth It? The Truth Revealed by the Pros

Martin

Before you start a dropshipping business, you must first determine if it is a profitable business model and what are your chances of success.

So, it is quite normal that you ask yourself something like, “Is dropshipping worth it?” or “Is dropshipping profitable?”

You may have some reservations about this business model and wonder how much you can make while dropshipping.

Again, it is completely normal to have such feelings and thoughts, particularly if you are new to e-commerce and/or dropshipping. But do not worry. You are not alone.

Myth-busters: Is dropshipping worth it?

In this article, you will learn why people decide to start dropshipping, why dropshipping is important, and if you should start a dropshipping business in 2022.

Of course, we will also answer the question, “Is dropshipping worth it?”

And a whole lot more!

We have a lot of things to discuss in this dropshipping guide. So, let’s get started.  

The main reasons why people start dropshipping

There are different reasons why people decide to start dropshipping. Here are some of the most common ones:

1. It is easy to get started

When all the pros and cons of dropshipping are taken into consideration, it is safe to say that the greatest advantage of this business model is the low barrier to entry.

One of the main reasons why people decide to enter the dropshipping market is that is easy to get started. Yeah, anyone with a laptop and Wi-Fi connection can potentially become a dropshipper.

Namely, getting a dropshipping business up and running is an easy process.

Many e-commerce platforms are available today that simplify the entire process of setting up a dropshipping store. For example, Shopify is one of the most popular platforms for dropshipping.

There are also many dropshipping automation tools out there that help dropshippers save time and streamline their business processes.

For instance, tools like Sell The Trend provide them with a list of “best-selling products” so they can sell what has proven to be popular.

2. It is a low-risk business model

Another reason why people make a decision to start dropshipping is that it is a low-risk business model.

Brick-and-mortar stores need a huge start-up capital before opening their doors. They need to buy inventory, rent or purchase a space where they are going to do business, etc.

Nevertheless, dropshipping store owners do not have to invest thousands of dollars in inventory in advance.

One could literally set up an online business without investing a huge amount of money and still be a success.

And dropshipping store owners will never get stuck with an unsold surplus. This is very attractive to dropshippers.

3. It offers flexibility (9-5 office hours are a thing of the past)

Some people speak fondly of the 9-to-5 shift. But others want some kind of flexibility when it comes to their work schedules.

And some of them love the flexibility the dropshipping business model offers. They think it is simply something they “should” be doing.

But, oftentimes, they lose steam when they do not see immediate results. They think dropshipping is an easy way to make money quickly.

However, it is one of the most common dropshipping mistakes a dropshipper could make. But more about that later.

Is dropshipping dead in 2022? What is the future of this business model?

By 2026, dropshipping sales are forecasted to grow to US$476 billion worldwide. Now, let’s compare the size of the global dropshipping market to the size of the global e-commerce market as a whole.

By 2025, the global e-commerce market is predicted to grow to US$3,315.3 billion. Evidently, the size of the global dropshipping market is much smaller in comparison with the size of the global e-commerce market as a whole.

This means enough room for dropshipping industry growth. And this is also an indicator that dropshipping is NOT dead, at all.

Long story short, although the dropshipping market is saturated, there is still a lot of potential and it is not even close to dying. Here we share what the future holds for us – the dropshippers.

Is dropshipping profitable?

Is dropshipping profitable? Is it still profitable in 2022? If you are thinking about starting a dropshipping business, these are probably some of the questions that have crossed your mind.

The answer is – yes, it is. And here is why:

1. Dropshipping is here to stay

Not only is dropshipping profitable, but it is also thriving. In 2020, dropshipping sales surpassed US$128 billion worldwide. And, as mentioned above, they are forecasted to grow to US$476 billion by 2026.

These figures suggest that dropshipping is here to stay. Now, you may think that a few e-commerce giants are the companies with the largest market share. Yes, this is true.

But you can become a dropshipper with a huge chance of success. All you need is a little guidance.

So, in this article, we will also explain how you can compete with some big, already established e-commerce businesses with simple, actionable tips. Just read on!

2. Higher number of internet users and online buyers

It is no secret that many people around the world use the internet. It has become the key enabler in building seamless connectivity that drives economic growth.

Or more specifically, in January 2021, there were 4.66 billion active internet users globally – or nearly 60% of the global population.

But all internet users are not interested in online shopping. So, let’s see how many internet users worldwide buy products online. In 2021, more than 2 billion people across the globe are expected to make online purchases.

Furthermore, the number of internet users will likely increase over the coming years. The more people use the internet, the more online buyers. And this is great for dropshipping store owners.

3. The evolution of mobile commerce worldwide  

About 90% of the active internet users worldwide use a mobile device to go online. And a large percentage of e-commerce sales will be generated via mobile devices.

In a nutshell, the evolution of mobile commerce on a global scale also opens up new opportunities for you as a new dropshipper.

Is dropshipping worth it?

Feeling as though you have missed the boat? Perhaps the main reason for this is that you believe that the market is saturated to the point where there is no more money to be made with any product.

Yes, the dropshipping market is saturated. The above-mentioned low barrier to entry makes this business model attractive, thus creating heavy competition.

Many online stores are selling similar products or even the same products sourced from the same dropshipping suppliers. And this is one of the risks of dropshipping.

However, new markets continue to appear. Check our previous article that includes the top 10 places to find products for dropshipping in 2022.

The reality is, dropshipping is open to more competition. And you cannot change that. What you can change is your approach to it.

We will talk about this later in this article. Now, let’s give an example. You can develop an effective marketing campaign because it can help you distinguish yourself as a good market player.

So, the answer to your questions, “Is dropshipping worth it?” or “Can I make money as a dropshipper?” is yes.

But it depends on you and the way you approach your business. Again, we will discuss how to become a successful dropshipper in the next paragraph.  

5 actionable tips on how to succeed in the dropshipping industry

As we have already said, many other dropshippers are likely to sell products that are similar to yours.

However, you should make your online store stand without only competing on price. You should give your prospective customers a reason to choose you over your competitors.

But how can you accomplish that? Well, you need to establish a unique brand, focus on marketing, offer superior customer service, and more.

Never lose sight of the fact that branding, marketing, and customer service are absolutely critical to the success of your dropshipping business.

Sure, there is a lot more that you can do to succeed in the dropshipping industry. Just read on.

1. Take your business seriously

As previously mentioned, many dropshipping store owners see this business model as easy money.

Some even try to set up their online stores as soon as possible, running five-dollar ads in hopes of making millions of dollars.

But if you want to succeed in the dropshipping industry, you must take your business seriously. After all, it is a business, not a hobby.

So, you must approach it exactly like it is – a business. Here are a few simple tips on how to do so:

  • Create a dropshipping business plan. We know that it sounds cliché. But it can help you get in the right mindset and create a clear guide for what you are going to do.
  • Choose the best dropshipping niche for your business in 2022 and do product research effectively. What you sell online is very important. Why? Because every product category might be exploding in competition. So, you must make a smart choice. You want to find profitable products that will “fly off the shelves”. Just kidding, you will not keep any inventory. But you will have to find products that sell like crazy.
  • Find a reputable dropshipping supplier. Selecting the right dropshipping supplier for your online business involves much more than comparing a few price lists. You must make a choice, depending on a few key factors, including reliability, quality, value for money, customer service, etc.
  • Work hard. No business will succeed without effort. And you will not succeed if you do not work hard! Just because you are going to run a digital storefront doesn’t mean that you should think of it as something less important. So, make sure you put as much time and effort as you would into a physical store.

2. Build a strong, recognizable brand

Building brand awareness among your dropshipping target audience plays a crucial role in branding your dropshipping store and setting you apart from your competitors.

You need to build a strong, recognizable brand to allow your potential customers to recognize and remember your business. Here is what you need to do:

  • Get a memorable name and logo. Do not stress over your business name. Just ensure it is unique & memorable and makes it fairly obvious what you are selling. When it comes to your logo, it is what represents the mission and vision of your dropshipping business. Luckily, you can use a free logo maker to create a stunning logo in no time. Some free options you may want to take into account include Hatchful, Zyro, and Canva.
  • Build a user-friendly, professional website. The power of a well-designed, user-friendly website is immense. You can create such a website by using clear and engaging design; incorporating storytelling (to tell your target audience who you are); writing informative product descriptions; including customer testimonials to build trust; creating an easy, secure, and convenient checkout process; etc.
  • Showcase your brand identity and product quality through your packaging. Sure, this is great. But how to do it when dropshipping? When choosing a dropshipping supplier, contact them to see what is possible with custom packaging.

3. Focus on marketing

Focusing on your dropshipping marketing strategy is one of the keys to success. Although you can promote your dropshipping store for free, it is best to use a combination of paid and organic (free) dropshipping marketing tactics to reach more customers. Here is the best combination of paid and organic tactics to use:

  • Improve your site’s ranking (SEO). Search Engine Optimization (SEO) for dropshipping is all about doing keyword research; publishing relevant content that includes specific keyword phrases and relevant internal and external links; describing your image and video media using alt tags; writing unique, informative, and keyword-rich product descriptions that highlight the key features and benefits of your products, etc.
  • Create and publish informative, relevant, & consistent content. Content marketing is a strategic marketing technique to engage with a clearly-defined audience – and, eventually, to motivate that audience to make a purchase. For example, add a blog to your website.
  • Invest in Google Ads. Google Ads is a paid online advertising platform. Depending on your goals and budget, you can display PPC ads at the top of Google search results to reach a wider audience.
  • Use e-mail marketing within your marketing efforts. E-mails are an old form of digital marketing. Still, they are not outdated. Therefore, do not forget to educate your audience on what you are offering via e-mail.
  • Strengthen your social media marketing strategy through Facebook and Instagram marketing. Your online business needs a social media presence. So, it is recommended to use social media sites like Facebook and Instagram to market your business and, of course, your products.
  • Use e-commerce marketing tools for dropshipping. There are many fantastic marketing automation tools available online that can help you add traffic to your dropshipping store.

4. Deliver great customer service

Top-notch dropshipping customer service is of the utmost importance to the long-term success of your business.

You do not need us to tell you that. So, let’s get to the point. Read on to find out the best practices for outstanding customer service:

  • Create self-service content & a detailed FAQs page on your site. This provides detailed answers to common questions and empowers your prospective customers to make informed purchases.
  • Respond to your customers with helpful and relevant information as quickly as possible. It is as simple as that.In today’s busy world, no one likes to wait, especially not your customers. And one of the most important attributes of good customer service is a fast response time. Need we say more?
  • Meet your customers on channels of their choice. They will expect a personalized approach. So, offer customer support through e-mail, phone, social media, and live chat. This way, you can meet your customers where they are and make them feel special. For instance, you can do so by using a tool like Zendesk.
  • Focus on proactive customer service. Unluckily,almost all online sellers, including dropshippers, deliver reactive customer service. This means that they take action only after a customer has a problem. But for exceptional dropshipping customer service, you need to anticipate customer needs and problems in advance and actively come up with a solution.

5. Adopt a customer-centered approach

Unsurprisingly, one of the biggest shortcomings of online shopping is that a customer cannot see a product before making a purchasing decision.

Sure, with the help of good product images and descriptions, your customer can learn as much as possible about your product before buying it.

But you may want to compensate for this deficiency in other areas of your business. Long story short, you can do so if you focus on your customers.

This means making decisions based on how those decisions affect your customers instead of simply trying to earn as much money as possible.

Though you might find this a bit confusing, there is no need to be worried. We will make it clear.

  • Analyze & assess your content. The content you publish on your site needs to focus on and speak to your customers. Although it needs to describe your business, products, and offerings, it must do so from a customer perspective. Just try to replace any “we” or “our” statements with “you” statements.
  • Focus more on product benefits when writing your product descriptions. Make sure your customers know more than just about what you offer. Include product benefits in your product descriptions so that your customers are familiar with how your product is going to satisfy their needs and desires.
  • Ask your customers to provide you with feedback. If you do so, you will get a clearer image of how your customers behave on your site and what they think of your business in general. Also, you will make them feel important and valued. Gather that valuable information (no matter if it is positive or negative) and work on turning it into a better experience for your customers.

Is dropshipping worth it? FAQs

Now that you have seen all the essential tips & tricks and best practices, read the answers to some of the most frequently asked questions so that you can decide for yourself whether you should start dropshipping.

In brief, keep reading so that you can have an answer to the question “Is dropshipping worth it?”

How does dropshipping work?

Dropshipping is an order fulfillment method. Unlike a physical store, a dropshipping store does not keep the products it sells in stock.

When a customer places an order, the dropshipping store owner orders the product from their dropshipping supplier. Then, the dropshipping supplier sends that product directly to the customer.

The dropshipping store owner does not deal with stocking or shipping. They focus on finding and listing the products they want to sell on their online store, promoting the business, and attracting new customers.

Of course, this does not tell the entire story. We just wanted you to see the bigger picture. To gain a deeper understating of how this business model works, you should consider many other factors.

So, do not hesitate to check out our previous article to learn more about how dropshipping works.

Is dropshipping legal?

Yes, it is. It is a legitimate order fulfillment method used by thousands of online sellers across the globe. There are no laws against opening and running a dropshipping store.

Still, there are a few legal elements that you must consider when setting up and operating your dropshipping business. For more information on the topic “Is dropshipping legal?”, check out our previous article.

What is the minimum start-up capital you need to start dropshipping?

You can set up a dropshipping store with little to no money. This is possible with the right combination of free trials and starter plans.

However, someday, you will have to buy certain tools or upgrade to a paid plan to improve the functionality of your store and grow your business.

Just to give you an idea, here is the minimum budget to start dropshipping with Shopify.

How much can you make dropshipping?

Well, you want to know the answer to this question so badly. We know that.

But how much you can make dropshipping depends on several factors. It largely depends on your dropshipping niche, products, suppliers, profit margin, marketing strategy, to name a few.

Thus, it is not easy for us to talk about the average income of newly established dropshipping stores.

What we can tell you is that it does take time to reach a significant amount of revenue.

That’s why it would be wise to set reasonable expectations, be consistent, and adapt to fluctuating business challenges. And do not give up.

Final thoughts – Is dropshipping worth it?

If your answer to the question “Is dropshipping worth it?” is yes, then using the above-mentioned five tips can send you on your way to a successful online business venture.

Success is not given – it is a goal you need to achieve. So, stay committed to your goal!

It is in your hands to build a successful dropshipping business. And we wish nothing but the best for you. We hope that things go well for you and that you achieve business success.