Is drop shipping worthwhile?

by BoJon
24 replies
As for right now I'm setting up a site for selling products that only costs a few dollars. But now I get second thoughts, because I was thinking:

"Is drop shipping really worthwhile for cheaper product that cost from 1 to 6 dollars? "

This Drop Shipper also has an affiliate option, so I was thinking of turning my site into an affiliate site.

Talking about passive income, I guess it's hard to find something that is totally passive, but working as an affiliate I think has the advantages of having a site that practically runs itself. The most work lies in getting traffic to the site, but with drop shipping I have to both get traffic and also place orders.

My opinion now is that only products that costs 100$ or more is worthwhile selling trough drop shipping.

What's your opinion about this? Any advice is strictly welcome !!!
#drop #shipping #worthwhile
  • Profile picture of the author AFI
    Your commissions will go way down as an affiliate rather than having the items dropshipped. If you are making good money working with a dropshipping relationship there is no way I would recommend anyone going down to affiliate money. Your profits will be way less.
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  • Profile picture of the author Anne1985
    Make sure you check everything before officially starting it. Might find it won't be worth it after all
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    • Profile picture of the author AFI
      Originally Posted by Anne1985 View Post

      Make sure you check everything before officially starting it. Might find it won't be worth it after all
      Why are you making these generalized posts in all of the threads yet you have no signature. Are you a bot or not?
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      • Profile picture of the author Dario James
        Originally Posted by AFI View Post

        Why are you making these generalized posts in all of the threads yet you have no signature. Are you a bot or not?
        Yea just read Mr. Bots other posts lol. Obviously not human
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  • Profile picture of the author fated82
    From a marketer POV, not worthwhile, here is why. You will be responsible for marketing - And marketing cost $$. You will have to invest in PPC, article writing, backlink building, adswaps, JVs and Social Media and everything in between.

    That's not all, you will be responsible for CS (customer service), loading pics, pricing, payment mode etc.

    The most importantly, your margin can only go 10 - 20%, 30% max. There will also be costs involve should you outsource someone to replace you...The only way you could make alot of money is to sell in volume, otherwise, not worth it.

    Better alternative? Create your own product and get affiliates.
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    • Profile picture of the author BoJon
      So do you mean drop shipping isn't worthwhile for ANY product or do you mean it's not worthwhile when selling cheaper products?

      Originally Posted by fated82 View Post

      From a marketer POV, not worthwhile, here is why. You will be responsible for marketing - And marketing cost $$. You will have to invest in PPC, article writing, backlink building, adswaps, JVs and Social Media and everything in between.

      That's not all, you will be responsible for CS (customer service), loading pics, pricing, payment mode etc.

      The most importantly, your margin can only go 10 - 20%, 30% max. There will also be costs involve should you outsource someone to replace you...The only way you could make alot of money is to sell in volume, otherwise, not worth it.

      Better alternative? Create your own product and get affiliates.
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      • Profile picture of the author fated82
        Originally Posted by BoJon View Post

        So do you mean drop shipping isn't worthwhile for ANY product or do you mean it's not worthwhile when selling cheaper products?
        It is worthwhile if your margin is high or if you can ensure that you sell in huge volume...
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        • Profile picture of the author aminur
          Originally Posted by fated82 View Post

          It is worthwhile if your margin is high or if you can ensure that you sell in huge volume...
          well said. that's what i am working on at the moment. as i am also involved with ebay marketing. just moving in to high ticket items. i always do my maths first. if you are looking to sell on ebay i would always check the figure for example MARKET PRICE > YOUR SELLING PRICE > BUYING PRICE > EBAY FEES > PAYPAL FEES = PROFIT. This way you know what to sell and also on what sort of volume.
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    • Profile picture of the author Ken Durham
      Originally Posted by fated82 View Post

      From a marketer POV, not worthwhile, here is why. You will be responsible for marketing - And marketing cost $$. You will have to invest in PPC, article writing, backlink building, adswaps, JVs and Social Media and everything in between.

      That's not all, you will be responsible for CS (customer service), loading pics, pricing, payment mode etc.

      The most importantly, your margin can only go 10 - 20%, 30% max. There will also be costs involve should you outsource someone to replace you...The only way you could make alot of money is to sell in volume, otherwise, not worth it.

      Better alternative? Create your own product and get affiliates.
      Mostly true and I agree. But there are some things that you do learn such as the importance of customer service, PPC, article writing, backlink building, adswaps, JVs, Social Media, and everything in between.

      And you're forgetting the most important thing, building your list.
      If you have a site that you can build a list with, do it. There is nothing better than a captive audience.

      Drop shipping can be a way to learn some things very quickly. Processing the orders is the easy and pleasurable part. As far as Credit Card fraud goes, it is a daily battle and you will get taken at least once. But you learn how to watch for that also. You will start matching IPs to physical locations, looking up phone numbers, calling customers to verify their identity, etc... Plus, don't forget that having a merchant account costs you a monthly fee whether you sell anything or not.

      No, you might not make very much money, at least not at first, but you will learn lessons that will last a lifetime. This will better prepare you to understand customers and lead you to the next step up.

      Do the math and see if things are worth while. If you can make at least 20% free and clear, that will be better than what affiliates will pay for the same types of products. You may find you like it and start looking for wholesalers so you can increase your earnings. That's when things start getting exciting.

      No, you most likely won't get rich, but you will learn hands on what it takes to get people to buy and how to keep them coming back.

      Good luck in your venture.
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  • Profile picture of the author Dave Rodman
    Banned
    It's not worthwhile at that price point, unless you're selling something where people buy larger quantities....ask the merchant what the average order size is. Wedding favors are a good example of something that has lower per-price cost, but people order in quantities of 200-300.
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  • Profile picture of the author chrisk824
    One additional cost with drop shipping that you may want to look into is insurance for credit card fraud. My wife and I found that out the hard way when we were drop shipping and had several fraudulent credit card transactions that weren't caught before the product shipped and arrived at it's location. Since then we've quit drop shipping but found out they have insurance for this sort of thing.
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  • Profile picture of the author vitminl
    The suggestion to create your own product is the right idea, thats how you make the real money. Drop shipping only makes the dropshipper rich. Create your own product and sell it.
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  • I looked into drop shipping a while ago, and to be honest I really struggled to actually find someone to do it for me. I've heard you really need to be careful and make sure you find a reputable company before starting this. I'm sure there is money to be made with this, but it's not something I've ever really go into.
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    • Profile picture of the author Baystreet
      Another thing to check out is if your drop shipper charges a handling or drop ship fee in addition to the postage.

      I drop ship a product where they charge $4.50 per order in addition to the UPS shipping price.
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  • Profile picture of the author MikeLiving
    I have always supported affiliate marketing over drop shipping for the simple fact of not having to deal with customer issues (including RETURNS), credit card processing charges, and not having hassles with the dship companies.

    I guess it just depends on your time commitment and your financial goals.
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  • Profile picture of the author Giftys
    I do a lot of product drop-shipping and like anything else, if you do it right, it's very profitable. Here are some tips:

    1. Dropship higher-priced products only.
    2. On higher-dollar orders, get a signature from the client.
    3. Stay away from affiliate programs. You'll send them all your traffic but they don't pay.
    4. Seek out just a handful of proven drop-shippers that give you a fair cut of the sale.
    5. Make sure they ship blind.
    6. Work their drop-ship fee into your mark-up.

    Hope this helps!
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  • Profile picture of the author ArgusTargus
    From money point of view: of course it is not going to be as profitable because you are paying for that service.

    From effort point of view: you have less things to worry about, as many of the sales processes are taken care of.

    I agree, it's a great learning tool at first. Heck, if the volume is high you may even continue and make handsome amount of money.
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  • Profile picture of the author MacS09
    Originally Posted by BoJon View Post

    Talking about passive income, I guess it's hard to find something that is totally passive, but working as an affiliate I think has the advantages of having a site that practically runs itself. The most work lies in getting traffic to the site, but with drop shipping I have to both get traffic and also place orders.

    My opinion now is that only products that costs 100$ or more is worthwhile selling trough drop shipping.

    What's your opinion about this? Any advice is strictly welcome !!!
    IMHO the same argument holds for affiliate marketing as for drop shipping. You have to drive traffic so you might as well drive traffic to high value items unless you can drive masses of traffic.

    Even as an affiliate marketer you have to watch the vendors. I was promoting a site for Xmas and wondered why I didn't have any sales. It turned out the vendor had started raising the price the closer it got to Xmas. They basically killed that one for me.

    We live and learn.
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  • Profile picture of the author captivereef
    yes it is, i used to drop ship in the reef aquarium business to the tune of 40,000 a month but the margins are slim about 10-15%. best bet is to find bigger retailers in the niche and see if they will drop for you and avoid the big dropship superstores. i know a few guys in the airsoft industry that do quite well drop shipping.

    i had a site set up to take and process orders, i would then forward the order to the retaiiler who dropped for me, they would put my name on the box and an invoice of my design in the box for me. customers never knew the difference
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    • Profile picture of the author Giftys
      Originally Posted by captivereef View Post

      yes it is, i used to drop ship in the reef aquarium business to the tune of 40,000 a month but the margins are slim about 10-15%. best bet is to find bigger retailers in the niche...
      Yea, 10-15% is horrible. I would never do that unless they were very high-priced items. There are a lot of good drop-shippers out there but they can be hard to find.
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  • Profile picture of the author Mikee17
    It takes as much work to ship an inexpensive item as an expensive one.

    Plus you usually have a nicer and friendlier client when selling expensive stuff :-)


    ...Mikee17

    Founder: AuctionTNT.com and PlatinumPowerSeller.com
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  • Profile picture of the author Recession_Proof
    Bojon to keep it in perspective, you can still get affiliates (from Clickbank) and the like to promote the products you are dropshipping. Just add it in the CB marketplace, I do it all the time .

    I say this to you bro, like I tell anyone, don't get caught up in the MARGINS. Get caught up in the NET GAIN. Meaning do the math if you get a plus (+) then keep it moving.

    $1 dollar is the same as $100 for me (not saying that I only make a dollar). When I push the "send button" it doesn't matter what is on the sheet, because it is all GAIN. Here are three acronyms you need to know. CSV, EDI, XML. Once you get here with your dropshipping its like clockwork.

    Bottom line is that if you have (and I am assuming you did) automated your system using reverse planning, then processing 100 orders is no different than processing 1.
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  • Profile picture of the author Sam Thompson
    LOL I remember dropshiping one of the first things I did when i started making money online

    I made about $1500 on ebay till my account got banned

    Anyway a lot of troubles you can run into when dropshiping like product not the same as buyer had ordered etc..
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