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What Is Dropshipping? (2022 Guide)

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What is Dropshipping? #1

What is dropshipping? In 2022, there are a variety of methods to make a quick buck online. Whether it’s through selling your own products, providing freelance services for businesses, or taking up remote jobs which allow you to work from anywhere, you’ve likely come across many opportunities which allow you to grow a nifty side hustle. Yet, more often than not, it is actually easier said than done to land a lucrative remote working gig. In the event that you lack the necessary skills, or don’t have the resources required to get started in any of the above-mentioned avenues, what can you do?

What if you’re looking for something more sustainable and scalable? Is there a solution that frees you up from needing your own inventory and lets you sell as many products as you can?

Hear us out: Dropshipping is one of the best ways to make money online. Yes, even today, dropshipping is a viable side hustle, or for some, even a full-time job! Dropshipping, according to Shopify, is a “retail fulfillment method where a store doesn’t keep the products it sells in stock”. Dropshipping store owners instead buy the products they’ve sold through third-party sellers on marketplaces like AliExpress and other Shopify stores to fulfill orders, and the best part is that they don’t even have to be involved with shipping processes. And that’s the beauty and convenience of dropshipping as a business model – dropshipping business owners never have to hold onto product stocks or ship them off to customers themselves. That makes dropshipping scalable and sustainable, as you won’t be limited by physical space for inventory and don’t have to worry about bearing the shipping costs.

One of the ways in which you can start your own dropshipping journey is to set up your own Shopify store. There are over a million Shopify stores worldwide – yes, a million – and even though it sounds like there will be stiff competition in the dropshipping space, it’s still not too late to get started!

This article will provide you with all the information you need to know about dropshipping – what dropshipping is, misconceptions about dropshipping, why you should get into dropshipping, and how you can get started dropshipping.

 

What is Dropshipping? #1

 

What is Dropshipping?

You may have heard of dropshipping before, or even know of friends who’ve tried it out and succeeded – but what exactly is dropshipping all about?

Dropshipping is an online business model where sellers do not have to have warehousing inventory. Rather, dropshipping store owners will instead work with third-party suppliers, like sellers on AliExpress, to ship products directly to customers. Dropshipping is thus a perfect way for many aspiring online entrepreneurs to get into the e-commerce landscape because it doesn’t require high starting capital and does not incur high operational costs. You need not hire any employees to get started, either. Even with just one person, starting a dropshipping store is simple and promising, providing lots of opportunities for you to make money.

 

What is Dropshipping? #2

 

What is dropshipping? – Pros and Cons

Pros:

  • Low Overhead Costs

No need to worry about storage space, rental, hiring employees, or shipping fees! These are just some of the key benefits of dropshipping on platforms like Shopify and AliExpress – you incur lower overhead costs than traditional businesses.

  • Low Barriers to Entry

Not sure you want to fully commit to dropshipping, or simply lack the capital you need to start a conventional brick-and-mortar business? That’s not a problem. With dropshipping on Shopify, starting costs are low, making it suitable for those on a tight budget and who seek trialability with their business ventures. Try it out for a low cost, and see if it works for you before you fully commit to it.

 

  • Ability to Sell on Many Channels and Platforms

Dropshipping businesses don’t have to confine themselves to one website or platform – you can expand your digital presence on platforms like Shopify, Amazon, and AliExpress among others.

 

  • It’s Scalable

You can work with multiple suppliers, rev up your digital marketing and ad campaigns, and sell as much as you want when you are dropshipping on Shopify. When you don’t have to handle product inventory and delivery on your own, this opens up a world of possibilities for scaling, and you could find yourself becoming the owner of a huge e-commerce brand.

 

What is Dropshipping? #3

 

Cons:

  • High Competition

Because it’s such a lucrative side hustle option with low starting costs, you would have expected this by now, but dropshipping on Shopify is highly competitive. Don’t let this deter you from starting out, though – dropshipping is still a great way to succeed as an online entrepreneur and it just means you have to put the work in to achieve the results you want to see.

  • Less control over product quality and delivery time

With dropshipping, you’re leaving product quality and delivery time to the hands of suppliers you trust. This means you have less control over both factors. Even if customers find fault with the products and it’s the fault of the supplier, you’ll still have to take responsibility as the brand that sold the product to them, so be prepared to manage customers’ expectations and support them through their needs even after receiving their products.

  • Lack of differentiation

If you want to start a unique business, you’re not likely to find that as a dropshipping store owner on Shopify or AliExpress. Many products sold by dropshipping stores on Shopify are very alike in nature and it can be difficult to differentiate your brand and sell a unique offer.

 

What is Dropshipping? #4

 

Debunking Misconceptions About Dropshipping

 

  • Dropshipping is easy

While dropshipping is a business model that just makes sense for so many Shopify or AliExpress sellers around the world, that doesn’t necessarily mean it’s an easy pursuit in any way. It takes time and effort to succeed with this business model, but as long as you’re willing to put the work in and remain patient, you’ll likely see results over the long term.

  • Dropshipping is outdated, you’re not likely to make much money from it in 2022

This is simply not true! Even in 2022, dropshipping on Shopify or AliExpress is a very lucrative and profitable business model that is likely to stick around for as long as customers are seeking out products, and for as long as marketplaces like AliExpress provide sellers with reliable fulfillment services. As a new e-commerce business owner looking to get started on Shopify, it is one of the most foolproof, low-cost, and efficient ways to start.

  • Dropshipping is a get rich quick scheme

Like most things in life, there’s no real way to get rich quick, so count dropshipping out if you’re looking to get rich in record time. Much like all other online business ventures, dropshipping will also take time to show results. Don’t expect immediate profits just because you’ve got your store all set up! Patience is a virtue, and if you want to see results, you’ll need to promote your store extensively to get the word out on your products in order to start selling.

Plus, with so many dropshipping stores in the market, it’s important to set yourself apart to be able to succeed in the long run. The e-commerce business landscape is starting to get saturated, so you’ll want to put the work in to make sure it all works out great for you in the end. After all, no business owner wants their Shopify store to be a flash in the pan – aim for your business to be profitable for as long as it can be!

  • Dropshipping only works within your own city or country

Absolutely not! One of the things we love most about dropshipping is that you can sell your products and reach customers absolutely anywhere in the world, at any time. For example, if you’re a seller in Spain, you can reach customers in any corner of the globe – even in places which may be far away from you, like countries in Asia and Australia. There are simply no limits to who you can sell to, as long as the third-party seller you are engaging is trustworthy and able to ship products to those specific areas. Don’t limit yourself to just your own region; think big and global with dropshipping.

  • Dropshipping is a fraudulent business model

Many people who are looking for a profitable side hustle are reluctant to get into dropshipping because they perceive it as a fraudulent business model, and they think of it is being a less valid or legitimate way of conducting business online. This could not be further from the truth! Dropshipping is 100% legitimate and around 27% of online businesses operate as dropshipping stores. Isn’t that shocking?

The high percentage of dropshipping businesses which remain successful and profitable also means that you have most likely bought from a dropshipping store before, whether or not you had known it at that point in time. Like it or not, dropshipping is here to stay, so if you’re interested in getting started, there really is no better time than now.

 

What is Dropshipping? #5

 

Why Should You Get into Dropshipping?

 

  • Ease of Entry: Low Cost, High Reward

Traditional businesses, including brick-and-mortar brands, have typically required large amounts of capital to kick start. This has prevented passionate, budding entrepreneurs from starting their own passion projects and venturing out on their own, owing to high starting costs which not everyone may have access to.

However, dropshipping changes everything we know about business. Dropshipping now makes it possible for aspiring entrepreneurs to get one foot into the business world, at a low cost (at least in the beginning stages). It’s a relatively inexpensive and fuss-free process and there are lots of online resources available to get you started – just like this handy guide – that will take you through each and every necessary step. You may also want to check out our guides on How to Start Dropshipping in 2022, How to Build a D2C Business Using Shopify, and our 3-Step Guide to Turn Your Normal Dropshipping Store into a Brand. These will provide concrete steps for you to kick start your dropshipping journey in 2022.

In most cases, once you have a working laptop and internet connection, the world is your oyster: You can instantly pick from a range of suppliers on places like AliExpress, set up a website with tools like Shopify, and execute digital marketing campaigns to increase sales. It really is that simple, and it’s easy to see why dropshipping has proven to be an enduring business model that is, more likely than not, here to stay.

  • Adapt to Change Swiftly

In the past, business owners had few options for when products were not selling well. They often had loads of inventory left to collect dust in warehouses, taking up space and incurring huge losses for unprofitable businesses. Dropshipping completely reverses this – there is much greater flexibility for dropshipping store owners who can adapt to changes readily and easily. If a product fails to sell, you can quickly pivot to selling a different one and test out how the market responds to the new product. You can repeat this process as many times as you want, without ever incurring high costs, unlike in the past. This also allows you to be more creative and have fun with the process, letting you try out new strategies and products to see what works and what sticks.

 

What is Dropshipping? #6

 

  • Work Anywhere, at Anytime

Tired of your desk-bound job, working round the clock from 9 to 6, only to receive a meager wage at the end of every month? Especially in light of the COVID-19 pandemic where many of us have had to stay home to work, people have expressed great interest in being able to work from home. Fun fact: 44% of companies still don’t allow remote work, even in 2022!

If you crave a life of greater flexibility, where you can work in your pajamas and not have to take an hour-long commute to be confined within a cubicle, consider making dropshipping a full-time pursuit. With a dropshipping business, you can scale your online sales and turn a side hustle into a full-time income.

Dropshipping is perfect for those who have fallen in love with remote work: you need not work in a fixed location or even at fixed timings. If you operate better at night, that’s fine; if you prefer to get work done in the morning hours, that works out, too. Once your dropshipping store has taken off and gained momentum, it’s likely to generate a (more than) liveable income that will allow you to bid farewell to your day job. Take back control of your own career and life, one dropshipping sale at a time.

 

What Do You Need to Start Dropshipping?

So, we’ve covered what dropshipping is, debunked some of the common misconceptions, and addressed some of the reasons why you’ll want to get into dropshipping, even when it seems like a saturated market in 2022. If you’re now convinced it’s the right move for you, what then do you need in order to start dropshipping?

Luckily, dropshipping really doesn’t require much. You don’t have to take out a loan at the bank or quit your day job to start. All you really need is a solid plan, settle some legal matters, find a trustworthy supplier, embark on marketing efforts and integrate a useful Shopify inspector tool into your dropshipping journey, and you’re good to go.

  • Your Dropshipping Business Plan

What are you going to sell? How much are you going to sell it for? Who is the target demographic you are trying to attract?

These are just a few of the many questions you’ll be asking yourself as you step into the world of dropshipping, and it’s wise to start with researching the market, your Shopify competitors, and seeing what product niche would be wise to start investing in. Spare no time and effort when you’re at this stage. With a good understanding of the market and your product niche, you’ll be better set up to succeed, as you’ll know how to position your business online.

Make no mistake – the product you choose to sell does indeed have an impact on how successful your store will be, and it’s crucial to identify a product that’s not only profitable but will stand the test of time and generate sustained interest levels. Moreover, you don’t just want to build a dropshipping store – you want to make your business a memorable brand that customers know, love, and come to trust.

Start planning for your new dropshipping business if you want to achieve success and establish a clear roadmap, with actionable goals and measurable outcomes to make it all happen.

 

What is Dropshipping? #7

 

  • A Supplier You Can Trust

There are millions of suppliers on marketplaces like AliExpress you can work with, or you can go on Oberlo to find a good supplier and pick the one that best fits your needs. The supplier you work with can make or break your dropshipping success, especially since they are the ones shipping products out to your prospective customers. Start by contacting a few suppliers you have an interest in working with, then narrow your choices down to a few and start placing sample orders to determine the quality levels.

Factors like shipping times, destinations that their products are being shipped to and ease of communication is worth considering. Even though dropshipping does not require business owners to be in direct contact or handling of their products, the onus is still on you to ensure customers get their products on time and in good condition.

 

What is Dropshipping? #8

 

  • A Reliable Shopify Inspector Tool: Koala Inspector

Find yourself wondering why some of your Shopify dropshipping competitors are thriving and succeeding, while you’re left to decode why your own dropshipping store is not making money?

Get all the answers you need instantly and make your dropshipping journey a little easier, especially at the beginning, by integrating a reliable Shopify inspector tool into your toolkit of handy resources. With an inspector tool, you will have real-time visibility into Shopify competitors’ stores, their marketing strategy and ad campaigns, product additions and find out what Shopify apps they use to streamline their workflow.

Ideally, the Shopify Inspector Tool you opt for should also come installed with a Shopify theme detector that will instantly reveal what themes your Shopify competitors are using so that you can save time and effort on finding the perfect theme for your store. As a rule of thumb, it would also be best to opt for more minimal themes that are less clunky to reduce dropshipping shop loading time, so that your visitors can access product pages quickly and instantaneously.

The Koala Inspector is the perfect tool for all dropshipping stores as it comes with the aforementioned functionality, also including functions like compiling Product Lists and the ability to export these lists as CSV files. The Koala Inspector is also free for lifetime use, making it a wallet-friendly Google Chrome extension for dropshipping that you simply won’t want to miss out on. Furthermore, even stacked against competitors like Wappalyzer and BuiltWith, the Koala Inspector has proven itself to be a high-performing tool with all the features a dropshipping store would ever need. Try it out for yourself now!

 

What is Dropshipping? #9

 

Conclusion – What is dropshipping?

There are so many dropshipping success stories – with some dropshipping sellers reportedly earning $10,000 in just 2 months – that makes it an enticing business opportunity for many. If you have thought of trying dropshipping out but have never ventured into it fully, or previously had doubts about dropshipping, we encourage you to just give it a shot and try it out. After all, with low overhead and starting costs, dropshipping is a beginner-friendly business model that offers you a great way to learn more about the e-commerce world.

And while you’re at, don’t forget to check out Koala Inspector – the ultimate Shopify e-commerce inspector tool and companion to help you succeed along the way. Reveal Shopify competitors’ secrets, take action, and emerge champion in your dropshipping journey today!

 

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