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Posted 10 November 2020
There’s no doubt dropshipping is an excellent way to make money. Yes, you can make a lot of money. In this case study by Spocket, you will see how a young guy made $178,492 in three months.
There are many products you can sell online or offline. Many products we receive or buy from people are drop-shipped to the sellers, and then the sellers sell them to us.
When you walk into a store and place an order, they will buy it from another location, and then they’ll tell them to send the product directly to your house or to their store for you to pick up. Most times, before they go ahead and order this product for you, you have to pay in full. It’s with the money you paid they’ll use to buy your product.
A lot of people in the game are dropshipping from Chinese retailers. To some, dropshipping from Chinese suppliers can be profitable. However, some people’s Shopify accounts and Facebook ad accounts get terminated due to a lack of delivering products and not complying with terms and conditions.
There are certain items these platforms won’t allow you to sell or promote. The owners have taken the necessary measures to ensure that some of these “Harmful products” aren’t sold. Some of these products aren’t illegal, but they need licenses and permits before they get sold legally.
You can indeed make a lot of money with dropshipping, but some don’t make that much. Yes, they could have huge revenues, but their profit margins are very slim.
Some factors determine high portability in dropshipping:
1. Choosing the right products
If you want to profit in dropshipping, then you need to find winning products. You can’t know Winning products from the get-go, but some people who have built a following, sometimes would have people try out these products, and when they see how it’s selling or the feedback they get, they will spend so much on ads.
It’s possible to have hundreds of products with only one winner. These winning products could most often be responsible for %50 - %90 percent of the money you make. Scaling this winning product is necessary, but you shouldn’t just have only one winner. It’s risky and might be highly saturated.
Fellow drop shippers often monitor winning products and immediately copy them. When you start scaling, your ads will be all over the place, and they will assume that you are making money because you are advertising for long. Tools like Adspy is what these copy cats use to find your ads. And this is why you need to scale faster.
However, they may not know how you are profiting. Maybe you are selling on the back end, but these drop shippers will try to do the same thing you are doing. You will begin to see similar products everywhere, and this can actually make people stop buying, and the cost of advertising will go up.
2. Funds make money
It’s unfortunate, but it’s the truth. When you dropship, you need to have funds to test many products to help make you profit. You can start with a few dollars per day to see if you will make consistent sales. Although all ad sets are not the same and can perform differently, that’s why you need to have funds to test as many as possible.
In the beginning, you may lose money, but you are hoping for one killer product that can put you in the green. You can read this article by CrazyLister to learn how two young guys made over $4.5 million in their dropshipping business.
3. Brand your products
Gone are the days where you just set up a campaign and run to see if you will make money. Don’t get me wrong, you can make money, but will you profit? You can be generating income, but not profits. What makes most businesses survive for decades is their brand. They have built a brand that people love and cherish.
Having a brand builds trust. You have to brand your products so that when people see it, they know it’s yours. A good example is the iPhone and Samsung. Although the iPhone has taken the market by storm. Samsung is still relevant and is trying to survive. Its brand has been around for many years, and that’s what makes people buy their products. Yes, they are selling phones, but they are also selling their brands.
When you have what I call “Brand power,” you can still survive even if your products get copied. But the only problem you may encounter is if your work was copied by a more prominent brand (Company) in the game. But even if this happens, you can still come afloat because of the love people have for your products.
When you have built a brand people love, you will get repeat buyers. These buyers will help double or even triple your profit for many years. Look at hosting companies; they pay a ridiculous cost per click, but they know that they’ll double or triple their earnings if they get that one customer.