If you want to earn a little extra cash in these trying times, consider starting a dropshipping business. Side hustles are always a good way to increase your income but they tend to have certain weaknesses. Working another job can cause stress, cram up your schedule, or even take away your time to rest. All of these are crucial issues to avoid if you want to keep up your productivity. And they’re all tied with one single issue, space.
Working a second job requires you to add another commute to your day, and you need to spend time there working. But if you start a dropshipping business, all of that is cut out. You can do it in the comfort of your home, or while there’s downtime on your job. Dropshipping requires minimal effort with an incredible potential for returns. To get you started here’s a quick SWOT analysis on dropshipping.
One of the biggest strengths of starting a dropshipping site is that it’s fully online. You’re effectively running an online storefront for third-party products and shipping them to customers. This means that you won’t need to worry about keeping stock, renting a warehouse, or having any physical space for that matter. You’re effectively an online intermediary between the customer and the producer.
Dropshipping allows you to leave all the complexities to a third party while you’re handling marketing and taking your cut. All you have to do to start your dropshipping business is choose your products, create a good website, and market the product. Dropshipping profits can range widely from 15% to even 200% of the original market price. This depends on what kind of products you’re dropshipping and how much they saturate your market. For example, tech appliances can have a much higher markup than t-shirts. But a general estimate is that a dropshipping business can earn $1000 to $3000 in just a month.
The main weakness of dropshipping is that it’s extremely competitive. Anyone who can build a website can start dropshipping. This can be a positive for you as it means there’s a low barrier to entry, but on the other hand, that’s a big double-edged sword since even your grandpa can be your competitor. This means that the market can quickly get saturated with generic clothing and jewelry, and turn into the crab effect. With various competitors endlessly pulling each other down.
The best way for you to find opportunities in the dropshipping market is to find a product that has demand but lacks supply. A good example would be items that are popular abroad but there’s no way of getting them across continents. Then all that’s left is to find a cheap alternative and promote it on your local market. And with dropshipping, you can experiment with these products more frequently as you’re not tied to a limited supply. If you don’t feel that fashion is returning new profits, changing to tech or appliances is only a matter of changing the items on your website.
The biggest threat to your dropshipping success is your reputation. It needs to be spotless and constantly on the rise. A few poor reviews can completely upend your business model and get you banned from social media platforms, where you do most of the marketing. And the worst part is that your reputation can suffer from things that are out of your hands, such as late shipping or bad products.
Dropshipping is an extremely lucrative business that has a very low barrier to entry. While there’s a lot of competition, if you set up your business properly you’ll be able to passively rake in profits. Make sure to properly conduct product research before venturing into dropshipping, otherwise, your business might suffer.