The ultimate guide to dropshipping: what is it and is it worth it?

If the thought of a massive warehouse stocked up with items that aren’t being ordered terrifies you, dropshipping is here to keep that nightmare from ever becoming reality. As a fast-growing ecommerce business model, dropshipping lets you ship items directly to customers once an order is placed, with the logistics handled by your chosen dropshipping supplier, rather than having to keep stock in your warehouse.

Dropshipping is therefore adding extra flexibility to ecommerce, lowering the barriers of entry for newcomers. However, the world of dropshipping can be daunting if it’s your first time seriously thinking about getting into it.

We give you a helping hand with this thorough guide into dropshipping. From understanding the benefits to how the process work, to identifying the best dropshipping suppliers, you should feel more confident about becoming a dropshipper by the time you reach the bottom of this page.

What is dropshipping?

Dropshipping is a method of retail fulfilment for ecommerce businesses that is ever-growing in popularity, where a third-party manages the logistics of manufacturing, warehousing, and shipping.

This order fulfilment option allows the business to outsource the whole ecommerce process, from start to finish. For example, when a seller receives an order from a customer, they send it to another company who will then ship it to them. This allows people to start a business and sell products without the need to rent warehouse space or manage inventory. Many simply need a TikTok account to start dropshipping.

How does dropshipping work?

As mentioned above, dropshipping is almost a “done-for-you” product shipping service from you to your new potential customers. The process is quite simple and goes as follows:

1. You create an online storefront with products you wish to sell
2. When you receive an order, the supplier is contacted (by you or automation software)
3. The supplier packs and ships the products directly to your customer.
4. You profit the difference.

You Need to Create an Online Store to Start Dropshipping

Shopify is our #1 pick of online store builder if you want to start a dropshipping business

Visit Shopify Dropshipping Get started for free

Ecommerce platforms for dropshipping

Before committing to one of the dropshipping services above, it’s important you first choose which ecommerce platform you’ll use to build your dropshipping store. This way, you can ensure your platform is compatible with the dropshipping app you choose – for example, DSers would be the best choice if you’re using Shopify. There are also plenty of other factors to add to the equation, such as budget constraints and how much experience you have with web-building products.

Based on our in-depth research and user testing, the three clear winners on the best ecommerce platforms for dropshipping podium are:

1. Shopify – best for dropshipping beginners who want a simple and easy user experience, with expansive sales features
2. WooCommerce – the best choice for users wanting a free and easy-to-install plugin that will get them operating as quickly as possible
3. Wix – best for users that want an ecommerce platform offering high-level dropshipping product customisation and automatic inventory synchronisation

You can also use social media platforms, like TikTok or Instagram for dropshipping. This will give you access to an instant, ready-made audience to sell your products and is a powerful channel to sell through when used in conjunction with your website.

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BEST ALL ROUND
Shopify	WooCommerce	Wix	Adobe Commerce	BigCommerce	OpenCart
Best for Dropshipping beginners who want a simple and easy user experience, with expansive sales features	Best for Users wanting a free and easy-to-install ecommerce platform that will get them operating as quickly as possible	Best for Users that want an ecommerce platform offering high-level dropshipping product customisation and automatic inventory synchronisation	Best for Advanced users who already have experience using an ecommerce platform to run a dropshipping business	Best for Using multiple channels to promote the products in your dropshipping store	Best for Dropshipping business owners with experience in website building, who want to get going with minimal outgoing and support costs
Price from £19 per month £1 for first month	Price from $6.59 per month (£5.33)	Price from £14 per month £13.50-£24.30 with code “TAKE10”	Price from Contact sales for a quote	Price from $29 (around £23) per month	Price from Free

Shopify is our top choice for dropshipping, and you can try it risk-free Try Shopify for Dropshipping

Dropshipping apps and services

Dropshipping is used in a variety of ways and with a variety of different products. You can start a store for almost anything you can think of these days, from phone cases to partyware – there are suppliers for everything. Once you’ve decided on what you want to sell, you can start shopping around for dropshipping suppliers. We’ve collected a few here, with some recommended based on the specific website platform you’re using.

AliExpress for product range

AliExpress is the best all-rounder platform when it comes to dropshipping because of their extremely vast product range, good prices and overall ease of use.

DSers for Shopify users

DSers is a platform that integrates with Shopify and has a range of over 20,000 products. (Wondering whether Oberlo would be a better choice? Note that it was announced that Oberlo will be shutting down and will no longer be available on app stores from 2022).

Modalyst for Wix users

Modalyst is a great platform for Wix users. You can also run your dropshipping business on Amazon and Ebay, as long as you follow the specific rules on each platform on how to do it properly so as not to violate any of their community guidelines.

Do dropshippers make money?

There’s no doubt that dropshippers globally are making money. Whether or not the average Joe is one of them however, is a different matter.

Dropshipping can be incredibly lucrative and successful, but it is a highly competitive market and only the best seem to reap any real benefits. According to Shopify, top dropshippers from around the web estimate that only between 10% and 20% of dropshipping businesses actually succeed.

A lot of your success will depend on scale and time.

Scaling takes a keen eye to know what products will be profitable and potentially push them further with advertising, as well as making sure your supplier can actually deal with larger demands and orders in the case of a particularly popular product.

Time is involved to potentially build a brand around what you sell in order to build trust and familiarity, and to ensure that customers have loyalty to your store in particular instead of the thousands of other dropshipping stores out there.

A lot of people go into dropshipping thinking it will be a ‘get rich quick’ scheme, when that is definitely not the case, so they don’t put enough effort into these two crucial aspects. The industry is certainly not without its fair share of failures.

What kind of profit can you make?

The average dropshipper in the UK in 2022 made around £2000 a month, but there is no limit to how much you can earn. People like Irwin Dominguez from San Diego for example, is a fast growing and high-earning dropshipper who made $1,000,000 in profit within 8 months.

The niche you choose has an impact, as some are much more profitable than others. The most crowded and profitable niches are in the Gadgets, Devices, and Accessories Niche according to Alidropship, with 18.5% of all dropshippers catering to the high demand for new trending technology.

A higher price point too would decrease the amount you’d have to sell, and that would also have an impact in gaining more profit.

As an example of the type of profit you could make: if you sold 25 phone cases a month at £80 and deducted the supplier’s wholesale price of £20, that would put you in the market of the average dropshipper’s profit range – a potential earning of £18,000 in a year.

You can make a rough estimate based on a 20% margin and 2% conversion rate but you need to factor into your profit calculation that your discount from wholesalers might be less than 20%, with other expenses and competitors undercutting you at this profit margin.

It’s important to show discernment when researching stats online before you compare yourself against anyone in the dropshipping industry however, or get too starstruck by the larger numbers.

Smaller dropshippers and people wanting to sell online courses will often embellish and promise huge numbers as their sales strategy with no viable evidence that they can provide this for you – while the larger dropshippers are actually generally more private about their exact earnings since they don’t feel the need to boast – so the figures are vast and hard to get a truly accurate read globally.

Can you lose money?

If you haven’t prepared with as much knowledge as you can, especially in the beginning, then yes there is the potential to almost certainly lose money. As mentioned above, a common mistake most new dropshippers make is failing to choose a good niche.

Other ways you might lose money include needing to purchase your own products at least once to test quality, see how fast they are delivered, and that your supplier is reliable. You may need to verify your business with your online banking providers before any influxes of huge profits lead to your account being flagged for suspicious activity. These are two examples illustrating the multiple, most common setbacks that can occur rapidly for newer dropshippers.

Can you succeed at dropshipping?

Yes, you can succeed at dropshipping.

With the right drive, mindset and tools at your disposal, you can potentially succeed with any new business.

However, you will need to consider if you are truly passionate about the time and effort it will take to build, and how much you desire to see your store in the estimated top 10-20% of all dropshipping businesses around the world. Currently, that’s the kind of drive it takes for real life-changing success.

You will be met with struggles. The biggest hurdle – as reported by 84% of ecommerce retailers – is finding and securing a good supplier to get their business going.

Once you’ve overcome that, you’ll need to actually launch your brand new online store, your chosen range of products, and ideally have the beginnings of an incredible brand (which will most likely involve a brand story and an action plan for marketing).

The great part about dropshipping is that it’s a pretty sturdy business model during a recession. Because of the low upfront costs, you have enough to keep you afloat as soaring inflation and costs make life hard for other types of businesses.

What products are great for dropshipping?

If you want to increase your chances of succeeding at dropshipping, here are a few ideas for you to take on:

• T-shirts
• Sports clothes
• Bamboo toothbrushers
• Sunscreens
• Razors
• Reusable water bottles
• Nappies
• White noise machines
• Food bowls for pets
• Collars
• Rugs
• Bedding

How much work is all of this going to be?

Depending on the levels of success you want to reach, the level of work, time and expertise will be different.

If you’re looking for your dropshipping venture to be a small side hustle on your lunch breaks or after work most days, it can be a good source of extra income. However, doing it this way has a greater risk of failure due to all businesses needing strong commitment to them, especially in the beginning stages, leaving you with more lost costs than earnings.

“For anyone thinking of starting to dropship as a mode of making passive income, you have to realise this isn’t passive at all.” Fain insists. “ You have to be on it all day, customising ads, finding winning products, maintaining your website, and contacting suppliers. While it might be a popular way to make money, it’s not an efficient one.”

If you want a breakout brand however, that reaches the high numbers everyone has seen around the web and that others only dream of, it is going to take a lot of work. It is not something you should begin lightly. While you don’t have to keep stock and that is a huge advantage, dropshipping still has all the other needs of any other business – and unless you have enough money to hire a team to help you, it will involve you being the driving force behind everything: content, promotion, brand strategy, budgeting, operations and more.

How long might it take to start making money?

According to Shopify, it will realistically take about a year on average to build a business that generates an average full-time income, but for some people it can take as little as a few weeks. This all mostly depends on how much they knew of the industry and the size of any audience they had beforehand.

But no matter what, ensure that you give yourself a grace period before celebrating too hard and spending all your profits – because as with most businesses, there will always be some people who may want to return items for whatever reason, and these requests will often have to be resolved, coming back out of your profits.

Beware of relying too much on your profits if they do well in the future too, because online sales are largely inconsistent and hard to rely on as a sole source of income.

Dropshipping alternatives

Whether it’s because you think the dropshipping market is saturated or you think it’d be too logistically complicated for you to ace, here are a few dropshipping alternatives to try:

• Print on Demand (POD): this is a fulfilment model that lets sellers design graphics for products. Once you receive an order, all you have to do is tell the manufacturer what to print on the product (t-shirts, mugs, tote bags, you get the idea) to then ship it to the customer.  This is easier to set up than traditional dropshipping and there’s few upkeep costs, mostly because the products you print on can be pretty cheap.
• White labelling: this models allows you to sell products markers with your company’s brand. This can be done by putting your company’s logo on the product and packaging. White label products are generic products manufactured by a supplier that are rebranded for multiple brands. In this case, the competition will be less of a worry since no one will sell the exact same product.
• Drop servicing: this is an online business model that involves selling a service to a client and then hiring someone else to do it for cheaper so that you can make a profit. This can be anything from designing logos to doing an SEO analysis of someone’s ecommerce store.

Conclusion: is dropshipping worth it?

There are many positives to starting a career in dropshipping – as well as a few negatives. The most prevalent positive being that there is really no upper limit to the potential new profit you can make, and the most prevalent negative being that it takes more work and effort than most people imagine especially when first starting out.

Throughout this article we discussed how dropshipping works, the best platforms for dropshipping, the type of money you could stand to lose or gain, and whether or not all of it is worth it.

Overall, by having a strong awareness of what you’re about to get into, understanding the strengths and weaknesses of the business model, and knowing that it is not a ‘get rich quick’ scheme and there will be real work involved, you could achieve a very viable dropshipping business.