Dropshipping Bandwagon. Who makes money?

Thanks Walter for bringing this to light.

It is an issue because many readers want "Instant Profits"

My business that is 26 years young has dropshipped and continues to dropship but it is not a drop shipping business.

Drop shipping is only a small part of a bigger operation.

I'm fortunate that I have good relationships with multiple suppliers and have buying power because of the volume we move through our brick and mortar business so it only makes sense when I'm approached to supply a specific product that I don't have in stock to drop ship directly.

I wouldn't recommend it as a business model to someone who *thinks* it will be a profitable business in it's own right particularly if they have no other business management skills or experience.

We have negotiated pricing in place and multiple stock-holding in partner warehouses that facilitate a seamless supply chain but these things have taken many years and serious negotiation to put into place.

The relationships are what make things work and I'm not talking about just being a rank and file affiliate of a larger business but having the ability to work both with multiple suppliers and multiple purchasers and keep it all together because the systems have been established that ensure reliable supply chains and processes so everything functions.

One area drop shipping newbies fail to realise is the marketing costs involved in attracting clients.

We are fortunate enough to have good organic positioning and we back that up with paid advertising and other lead generation techniques but competitors who enter our space find it difficult to generate positive ROI on advertising and even more difficult to generate organic traffic.

I've read and studied your Proven China Sourcing publication and I can see where a person who is a starting out maybe considering drop shipping as a business model would be far better off looking at sourcing their own products and getting educated on how to sell products on Amazon or elsewhere as a better route to higher profits than becoming a lackey for some drop-ship company.

Although I'm not a student of Jim Cockrum's PAC I can see how combining your understanding of product sourcing with what Jim offers for people wanting to get started on Amazon is far closer to a high profitable model than one based around drop shipping.

I'm generally not one to recommend IM products one way or another because there is plenty of rubbish out there but from what I've seen you've always answered the product sourcing questions on the forum with authoritative advice that benefits the person asking the question in a direct, no BS manner and for people considering any ecommerce business that involves selling stuff I'd say they should read your posts and if they can afford it, they should study your importing guide..

Best regards,

Ozi

Yes, I have owned a dropship store for over three years. It has take a lot of work, time and dedication. But it's been worth it, it has been a game changer for my family.

We are certainly not "newbies", but we did put up more than 50 new eCommerce websites in the last year. Of the 50, we dumped two and are re-evaluating whether to keep another handful. The rest all are making decent money, several of which make more than $5,000 profit per month, which really isn't bad for being less than a year old. We're expecting really big things in year two.

You can definitely make money dropshipping if you have the right suppliers. Every niche will not be a goldmine, but you never real know until you try.

Thanks for this discussion...I am the new member of this conference, so give me a chance to present my view regarding this topic and also some other business ideas in shipping and the import-export business.

I am just starting with this business model online and i believe the hardest thing is to find the right supplier in our niche and than maintaining a healthy relationship with them as our business is some what relying on them supplying us the goods.

I think dropshipping has a lot of potential. But there is no overnight riches. It takes a lot of work and a lot of research. But if done rightly all the work will payoff. If you ask whether dropshipping is here to stay i think it will not last much longer as many people starting to realize its potential and aliexpress is becoming popular among the end users and they are ordering directly from ali express and saving money on that as well.

I think the drop shipping has lots of benefits because in this the positive cash cycling flow has occurred because the seller pays amount during the purchase. There are numerous modes of transportation like airways land ways and also ocean ways, all are helpful for easy shipment.
I know one of the real freight forwarders, Thunderbolt they have success business in shipping.

WE have been doing this for many, many years and have generated well over $50 million in sales, primarily in dropship. But we're finding it harder and harder to succeed and have started moving more to wholesale and private label, with our % of dropshipping orders going down slightly.

1. Have you succeeded in your new dropshipping business?
I have only recently started, but so far so good. over $3k sales in 2 months with minimal promotion via facebook and google ads
2. What profit margins are you making?
anywhere from 25%-115% depending on the type of product sold and which dropshippers i am using to supply the product
3. Are you selling fakes?
nope, everything i have in my shop is 100% authentic
4. Do you have problems with shipping times?
everyone once in a while a package arrives a day or two late, this is mainly due to weather which we do explain to the customer
5. Are your suppliers reliable?
so far so good, have even dealt with a couple returns without issue.
6. Are returns a problem for you?
see above
7. Do you dropship from China?
absolutely not. I refuse to offer my customers cheapo goods and from my experience, chinese suppliers are horrid when it comes to providing quality goods, managing returns and general communication. my suppliers are US based and 90% of them manufacturer the goods here in the USA.
8. Have you considered carrying inventory instead of dropshipping?
Yes! several items from my suppliers are almost guaranteed to sell and i make more when i buy them in bulk vs one at a time