Dropshipping Facts: Is Dropshipping Suitable For Beginners?
There are several online business models such as affiliate marketing, domaining, Kindle publishing, and so on. One of the most popular methods of making money online is dropshipping.
There are countless courses, training, videos, and ebooks telling you how to go about it. Very often, the hype will have you believing that dropshipping is a hands-off process that will net you six figures a year easily.
This is why so many beginners plunge into dropshipping without knowing the potential downsides that can derail their business and even put them in debt.
Before deciding if dropshipping is suitable for you, you need an unvarnished view of the facts…
- You need capital
While you don’t need a lot of it, about 2k-5k is a good amount to have before even starting. If you don’t have the funds, you’re better off working a day job and saving up first.
Do NOT expect to get into dropshipping with $500 and think you can bootstrap and scale up the business to 6-figures. In reality, you might blow the $500 on ads within a few weeks and be at a loss.
You need time to find a winning product and discover which ads will work. Since time is money – you need money.
- You need skills
The good news is that the skills required for being a successful dropshipper can be easily learned. Unlike Kindle publishing which requires you to be a good writer and so on, with dropshipping, you only need to get a few things right.
- Being able to spot a winning product
- Being able to write decent sales copy
- Being good with paid advertising
- Being able to analyze the numbers and track your profits
If you master these, you’ll be a successful dropshipper in a matter of time. But no matter what, you’ll need to spend time learning and doing. Do you have what it takes to surf the learning curve?
That’s something to think about. This process is not a walk in the park.
- It’s not as easy as it seems
While dropshipping has all the trademarks of an easy business, this is merely an illusion.
Yes, you do not need to create your own products. You don’t need to actively recruit affiliates. You don’t need to ship the products out.
Everything seems done for you. The system seems so ‘easy’.
In fact, one could even consider the simplicity of this business model as the siren song which has led many a hopeful newbie to disappointment and debt.
The model is only simple if you can get it right… and getting it right will require time, money, patience, and lots of trial and error.
You must be logical rather than emotional. It’s inevitable to lose money during the testing phase when you’re trying out new products and ads. If you panic the moment you lose money… and throw in the towel, you’ll never succeed with this business model.
- You must know your numbers
Being able to calculate your profit margin and knowing exactly how much you’re making and if your ads have a positive ROI is crucial to running a successful dropshipping business.
Some people fear the numbers and feel like it’s too complicated. If you feel this way, either you get used to analyzing the numbers or you’re better off with another online business model.
- Other than that…
You’ll also need to know how to do your taxes, how to set up a store, how to minimize disruptions in your business because you don’t really control the supply chain and so on.
There’s much to learn and do. If you’re ready to roll up your sleeves, do the hard work and get dirty, you can become a profitable dropshipper in a couple of months. This is a very lucrative business model for those who can go through the hard yards and master it.