Is dropshipping difficult and competitive to get into?
August 12, 2019 8:37 AM   Subscribe

I have been learning about drop shipping and small business start-ups. Is it difficult to get into nowadays?

Would it depend on the niche? How difficult is it with so many drop-shippers and corporate online businesses? A cousin's friend got into drop-shipping and made over 80k in one year. Would it be worth to pursue a small drop shipping business for environmental sustainability products, books, or video games? I can imagine that it is already competitive -- so the niche might be oversaturated. Does anyone have any tips or advice? Should I forget about drop-shipping and focus on another small business idea? Should I take the plunge? Look for a better niche? This would just be a side gig -- not a career.
posted by RearWindow to Work & Money (10 answers total) 5 users marked this as a favorite
I'm confused. Are you looking to set up a business where you are selling products from other companies and having them drop ship directly to your customers, or are you looking to set up a business where you stock products from other companies and drop ship them directly to their customers?
posted by jonathanhughes at 8:47 AM on August 12 [1 favorite]

@jonathanhughes - Apologies, I meant where I sell products from other companies and have them drop ship directly to my customers.
posted by RearWindow at 8:52 AM on August 12 [1 favorite]

It's worth asking, "what can I do that's better than Amazon?" There might be a compelling answer, but it's going to be very specific to an industry or neighborhood.

Assuming that honest and successful salespeople don't make their income by convincing others to pay to join their business is usually sound. I'd ask your cousin's friend if they get paid for signing you up. If they do, run away.
posted by eotvos at 9:26 AM on August 12 [6 favorites]

A cousin's friend got into drop-shipping and made over 80k in one year.

Imagine you saw this sentence in a comment to a blog post, or in a Facebook ad. What would your reaction be?
posted by praemunire at 9:33 AM on August 12 [10 favorites]

About a year ago my ladyfriend and I got super excited about the idea of drop shipping as a side gig and after doing a bunch of research I can reply to the question Is dropshipping difficult and competitive to get into? with yes! Yes, it seems way too difficult and competitive to get into without investing a lot of time and money and being okay with losing the money you've invested to try something else. I value stability above all else and I don't like spending money to make money, you might be the opposite but for someone like me it didn't appeal.

This is the Hacker News thread that got me thinking about it, if you haven't seen it, it might be really interesting to you and help you decide if you're up for it! Keep in mind it's from 2013, this more current thread was also very helpful for me.

Here's another article that talked me out of it.
posted by the thorn bushes have roses at 9:48 AM on August 12 [5 favorites]

I recommend listening to this Reply All episode about drop shipping and then reconsidering whether you believe that your friend's cousin makes 80k/year at this.
posted by juliapangolin at 9:48 AM on August 12 [9 favorites]

The whole point of drop shipping is that it's really cheap to start up. For a few hundred dollars you can get a shopify page an a batch of instagram ads and see what happens. Some people start for free by just listing stuff from amazon on ebay.

The point of having a "niche" in this type of thing is a way to get around the competitiveness - for example, maybe you have backyard chickens so you know what things go good together in bundles, or maybe there are products in that niche that you know people are having trouble tracking down. The most common way your knowledge of your niche helps is you can quickly produce content related to it, for example reviewing various types of chicken coops or doing a list of top 10 chicken coops of 2019 and including links to your store. (note that there are disclosure requirements here).
posted by hermanubis at 9:50 AM on August 12 [2 favorites]

You will enjoy this article from The Outline titled How I made $100 Starting a Sketchy Online Store and You Can Too. "And if this sounds too good to be true, let me assure you that I myself made more than $100 dropshipping in just three months, and you can too."

Do you understand SEO? Are you good at it so your store can be well trafficked? No? Pass. (I would pass regardless, personally.)
posted by OnTheLastCastle at 12:23 PM on August 12 [5 favorites]

My friend sold on amazon and did it all by drop shipping. He said that the most important thing is in researching drop shippers. Which was 80% of his time in the business.
He was always having to shuffle drop shippers and find new ones. He found the most success in having a shop that sold many items.
At one point, he had about ~25,000 items in his shop that he sold. His most successful year was $75,000 but he was online non stop from getting up in the morning to going to bed. He stopped a few years ago but has since started again with a much smaller way to supplement his income. He would never tell me how he researched his drop shippers :-)
posted by gregjunior at 1:47 PM on August 12 [1 favorite]

Oh yeah - he said Amazon took a big cut so the key was to beg his drop shippers to add his own ad directing his customers to his own online shop where Amazon didnt take a cut, but I imagine they have found a way to correct this by now.
posted by gregjunior at 1:49 PM on August 12 [2 favorites]

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