Dropshipping is not a viable career because it isn’t a business you should do for the long term. Dropshipping is a good way to make money online and research the market, however it’s recommended to transition to an e-commerce brand as soon as a dropshipping store starts getting consistent traction.
Is dropshipping a viable career and is it worth it?
Dropshipping is worth it for so many reasons even in 2021 and beyond! Dropshipping is still a good way to make money online, you don’t need a ton of money to start a dropshipping business!
Most dropshippers started with $1000 or less! You don’t need an office space, a warehouse or permanent employees! You don’t need a degree! I have seen teenagers start and scale a successful Dropshipping store!
The low cost of dropshipping, the potential to make money online, the potential to build a passive income stream, work on your own schedule and from anywhere in the world makes dropshipping a good business idea.
Dropshipping is an e-commerce fulfillment model, where a dropshipper digitally markets a product, he neither owns or has inventory, the orders gotten on the dropshipper’s webstore are fulfilled by a third party supplier. You can check out our free dropshipping course.
In 2021, people still make money dropshipping so much so that starting a dropshipping business has become an online trend but is dropshipping a viable career? No! it’s a good way to make money online and research the market but it’s not sustainable in the long run!
Below I’d discuss why dropshipping is bad and isn’t a long term sustainable business model.
Why is dropshipping bad
Dropshipping is bad and not a viable career for the following reasons;
- Little control over shipping times; most dropshippers source products from China and dropship in North America. The shipping times are often slow but there are ways to get fast shipping times. More so, dropshippers can increase shipping speed, if products are sourced from local suppliers. You can check out our verified list of Europe, UK and US based suppliers. Traditional dropshipping using AliExpress lines take 20-30 for delivery in North America and is just not viable!
- Little control over product quality; there is very little control over the quality of a dropshipping product because the dropshipper doesn’t produce the products, doesn’t have inventory of the products, doesn’t verify the product by himself or his agent before shipping it to a customer. In most cases the dropshipper has to rely on the supplier for the product’s quality. The risk of a bad quality product can be mitigated if a dropshipper uses a reliable supplier and vets the product himself by ordering a sample product to checkmate the quality.
- A lack of intellectual property rights in the product; this makes it easy for the competition to overtake a dropshipping business by selling what the dropshipping store is already selling. A dropshipper usually doesn’t have design rights, trademark rights, or patent rights for the product he sells. Anyone can get the product in the market and dropship the same! This makes the competition massive! The downside is a competitor can easily spy on a successful dropshipping store, copy and paste the store’s winning products listing and source the same products for retail on his store and could even out compete the original dropshipping store which did all the work of testing and finding those winning products!
- Little control over branding; traditional dropshipping doesn’t give control for products branding or repackaging! The dropshipper negotiates to have orders fulfilled by a supplier. Most suppliers don’t offer repackaging and branding services especially when the product orders aren’t in bulk! This makes it hard for the dropshipper to uniquely brand the products or offer them in choice packages. This also makes brand awareness, recognition and recollection difficult. Branding in e-commerce is very crucial to having returning and loyal customers. Without branding, is dropshipping a viable career? Of course not!
Droshipping vs ecommerce brand, which is a viable career?
Dropshipping like we’ve discussed above is not viable career on the long term but it’s a good way to start making money online with low financial investment.
However, with little control over customer’s experience, branding and product differentiation, it’s not viable to sustain a dropshipping business in the long term.
Owning an e-commerce brand gives you control over your product differentiation, your product quality, your branding, shipping times and basically customer experience and this makes an e-commerce brand scalable on the long term!
It also makes it difficult for the competitors to outshine you! For this reason most e-commerce entrepreneurs start as dropshipping and transition to an e-commerce brand!
Dropshipping is a good starting point because of its low capital entry and marketing research advantages, however, its recommended to scale quickly to an e-commerce brand once a dropshipping store starts getting traction!
How to transition from dropshipping to an e-commerce brand
A dropshipping store can be transitioned to an e-commerce brand using the following business models;
Private labeling
This is an ecommerce dropshipping business where a product is sold under your unique brand name. It could sometimes be referred to as private label dropshipping. A dropshipper brands the products but still doesn’t keep inventory of the products and he fulfills orders via his supplier or agent.
A dropshipper can easily transition to a private label by;
- Using a private dropshipping agent; This is a great way to scale a dropshipping store because private agents offer repackaging services so they can source your products and repackage it in your brand before delivery! They usually also have a large network of manufacturers so they are able to source products for an affordable price, they could also assist in verifying product quality and most private Chinese agents can ship products faster to your customers using shipping lines like 4px and CNE.
- Using Printify; printify is a website where you can find print on demand services! For example if you wanted to dropship T-shirts, caps or sneakers with a preferred graphics design or logo on it, then printify makes it easy to do so! On printify, you can source products from suppliers who can print your graphics/logo on them before shipping it out to your customers.
Wholesale/inventory using 3PLs
A more advanced way to transition your dropshipping business to an e-commerce brand is to use 3PLs which stands for third party logistics.
A 3PL is basically a company which has a warehouse and offers order fulfillment services.
For example, a dropshipper can buy products in bulk from his Chinese supplier for delivery to a US 3PL, this means that his products will be available in a US warehouse and his customers could have 1-3 days shipping time depending on the service of the 3PL. I personally recommend Shipbob 3PL.
Most 3PLs offer repackaging services, so the dropshipping business is easily transitioned into a brand with a fast delivery service.
Moreso, using a 3PL means that the droshipper orders products in bulk from his supplier to the 3PL. The dropshipper when ordering these bulk products will usually get it at a discount and shipping in bulk makes the logistics cost cheaper and the profit margin higher.
Product differentiation is another huge benefit! Buying products in bulk from a supplier, puts a dropshipper in a good position to negotiate product differentiation service.
For example he could negotiate with the supplier to produce an existing product with improved features just for his store, the dropshipper could even go the extra mile, to register that new design and have exclusive legal rights to it which makes it harder for any dropshipper to compete with him.
Using a local dripshipping Supplier
This is one of the easiest ways to scale a dropshipping business. This means that you should use a supplier who is resident in your target country. For example; if you are dropshipping in the USA, then use a US based supplier. You’d be able to get fast shipping to the US and can negotiate with the supplier for a private labelling service.
You can check out this list of Dropshipping suppliers in Europe, UK and North America.
In conclusion, dropshipping is not a viable career in the long term but it’s a good way to make money online, start an ecommerce business with a low budget, research the market and scale to owning an e-commerce brand!
Drop Shipping is often the means and an ecommerce brand is the end!
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This article is the last tutorial in our free dropshipping course. You can check our dropshipping course outline here.
