Dropshipping Shopify 2021 Build An $35,000 Per Month E-commerce Business From Home, Passive Income And Financial Freedom

By Robert D Michaels

Imagine a business where you could sell whatever you wanted without having to handle the product physically and being able to charge whatever price you wanted to charge on it. This is essentially what dropshipping amounts to. It is a wonderful business model; you're going to learn all about it inside and out in this chapter. 

There are some disadvantages as well that would be remiss of me not to remind you hof. I'll cover those as well since it is unrealistic for you to assume that everything will always beat hunky-dory. Either way, let's jump in and look at what dropshipping is.

 

Dropshipping is the process where a middleman retails a manufacturer's or wholesaler's product. The middleman, in this case, is you, the store owner. The store owner takes care of all of the marketing aspects and drives traffic to the order pages, and the wholesaler takes care of product fulfillment, such as delivery and packaging.

 

In some cases, you can even have the manufacturer brand the product with your own name and have them ship it to your customers. This business model is of immense help to the manufacturer and wholesaler since they get to focus on investing in what they know best, which is manufacturing the product. 

You get to focus on what you know best, which is to drive traffic and bring in sales. In effect, you're a one-person marketing team for the wholesaler's products. What's not to like? The customer will order the product via your website or sales channel and will pay you money. In turn, you pay the wholesaler at their quoted price, and you pocket the profits.

 

The great thing about this business model is that it reduces inessential costs for all parties involved. Your startup costs are significantly lower than traditional retailers'. This doesn't mean you can start for free. As I'll explain later, it is in your best interest not to do so. However, you get to skip all of those painful inventory and purchasing costs. In essence, you get to run your business on a consignment basis from the wholesaler, which is to say that you pay only when you receive an order from a customer.   

• Language: English
• Publisher: Robert D Michaels
• Release date: Aug 1, 2021
• ISBN: 9798201679705

Book preview

Introduction

Drop shipping is a method by which you, as a retailer, sell products to the public without actually carrying any stock or product. When you sell a product, you send the order directly to your chosen supplier; they ship the product, process the payment, and then send you the difference between the charge they make for the product and the price you charge. You never see the product, you never handle it, and you don’t need to handle or process any payments. While you don’t need to handle the payments, there are some suppliers that will allow you to process your own payments and even some that will allow you to contract your own shipping company. Utilizing these choices, however, defeats the purpose of choosing to run your business using drop shipping.

There are many differences between a normal ecommerce business and a business using the drop shipping model. Some of those differences include the operating margins, operational logistics, operational costs, profit velocity, and barriers to entry. Below we are going to cover each of the differences individually.

Operating Margins: The operating margin is the ratio that measures a company’s pricing strategy and operating efficiency. It is the proportion of the company’s revenue that is left over after paying for variable costs of production. The operating margin for a company that uses drop shipping is always going to be lower than that of a typical ecommerce company because you don’t have the burden of carrying inventory or shipping product.

Operational Logistics: If you are running a business using drop shipping, you don’t need to carry any inventory or ship any products, which give you the freedom to run your store from virtually anywhere in the world. When you are running a typical ecommerce store, you need to consider the logistics of running a warehouse, replenishing your stock, and coordinating shipping.

Operational Costs: If you are running a traditional ecommerce business, you must consider the cost of paying for your warehouse, paying for the staff to run your warehouse, paying for the stock, shipping, and handling customer service. In comparison, the cost of running a business using the drop shipping method is limited to just customer service to take orders and send them on to the wholesaler or manufacturer.

Profit Velocity: While the hands-off nature of drop shipping is incredibly attractive from an operational standpoint, carrying inventory is a much faster way to ramp up profitability. This is because the profit margins are much higher when you have the option of purchasing product in bulk from overseas suppliers and selling them at a higher cost.

Barriers to Entry: Barriers to entry include the existence of high start-up costs and the other obstacles that prevent a new competitor from entering an industry. A company that is using drop shipping is a lot easier to copy and start up than a company that carries and ships its own stock.

So let’s start with everything you need to know and understand and how to go about setting up your dropshipping business with the minimum fuss and bother.

The Benefits of Working in Dropshipping

There are a lot of different business opportunities out there that you can choose to go with. However, none of them provide the same benefits that you can get from starting your own dropshipping business. This kind of business doesn’t require a lot of money to start, can take just a few steps to get it up and running, introduces you to a global market right from the start, and so much more. Let’s take a look at some of the benefits of working with your own dropshipping business and why you should consider starting yours today. 

Little Investment to Start

Starting your own dropshipping business requires very little investment to get going. You don’t have to pay to make the products, you don’t have to keep an inventory for the products, and you do not have to hire a team to help you run the business or even to pay for shipping. In fact, it is possible to get started with drop shipping without paying for anything upfront. 

If you choose to sell the products from your own website (and there are some benefits to that), you will have to pay a bit to get the website up and running. If you decide to go with Amazon or eBay, you can get the item listed and then you will pay once the item actually sells. If you plan to use a bit of advertising to draw more interest to your items, then you will need to pay for that as well. 

As a dropshipper, it is really in your control how much you would like to spend to get started. Some people are able to start this kind of business for nothing, and others like to spend a bit to help set themselves apart from other sellers. The great thing about this business is that you get to be the one who decides all of it and you can keep the costs as low as you need. 

Easy to Get Started

While we will discuss this in a bit more detail later, it is pretty easy to get started with your own dropshipping business. Unlike some other business models, you will find that this business can be started relatively quickly. Keep in mind that you do need to do a bit of research on suppliers and products. It is important that you don’t rush in and pick the first product you see. But comparatively, you can’t find an easier type of business. 

With dropshipping, you simply need to find a niche to work in, find a product and the right supplier of that product to fill that niche, list it in some manner online (such as on Amazon or your own website), and then wait for a customer order. Once the customer orders, you will take what they pay you and place an order directly with the suppliers. The supplier will then send the item out to the customer, and you will end up with a happy customer. 

Of course, there are times when things won’t work out exactly as you had planned, but there are steps you can take to limit issues and keep things going smoothly. Those basic steps above are really all you need to get started with this kind of business model. 

Little to No Overhead Costs

As a dropshipper, you will have limited to no overhead costs. You are not required to keep any of the products on hand or to have an inventory of any kind at all. With this business model, you simply list the products that you want to sell somewhere online such as on Amazon or eBay. Then, when a customer orders,  you will use that money to place an order directly with the supplier. The supplier sends the item directly to the customer, not to you. You don’t have to worry about keeping all of the products on hand for each customer, which means there is very little cost for you. 

There are a few costs that come with dropshipping but you do have some control over them. For example, if you use your own website, you may have to put a bit of money into that. There are usually a few fees associated with listing on eBay and Amazon as well. If you wish to advertise on social media, you will also need to pay a little bit. But as a business owner, you can choose how much you would like to spend on the products. And despite the other expenses, there will never be an overhead cost for running your business. 

Lots of Products to Choose From

When it comes to dropshipping, you will find that there are a ton of products

Reviews for Dropshipping Shopify 2021 Build An $35,000 Per Month E-commerce Business From Home, Passive Income And Financial Freedom

[Ahmed Ibrahim · Rating: 5 out of 5 stars]

It's an excellent book, and it's highly suggested for beginners, so go ahead and read it.