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How To Make Money From Dropshipping in 2023 – A Step by Step Guide

The dropshipping niche has recently experienced an enormous rise, mainly amongst the younger generation. Its popularity is primarily due to the little investment needed to get started as a drop shipper. 

Unlike standard retail businesses, one won’t have to worry about the cost of inventory, warehousing, and even setting up a physical storefront.

Many people are venturing into the business of dropshipping. Still, many do not know how to make money from dropshipping because they treat it as a get-rich-quick scheme without realizing that it’s an actual business. 

In this article, you’ll learn what dropshipping is, its pros and cons, how to start your dropshipping business, How To Make Money From Dropshipping & tips on how to become a successful drop shipper.

What is Dropshipping?

Dropshipping is a retail business where the seller does not stock their products but purchases their goods from a supplier, usually a supplier. The drop shipper is a middleman because he acts as an intermediary between the supplier and the buyer. This business model has become a full-time job for many people worldwide because of its low barrier to entry. 

Pros of dropshipping

  •  Small Capital Required: Very little money is required to start as a drop shipper, unlike other more traditional business models like wholesalers, where a lot of capital is needed to purchase products to sell. 
  • Easy To Get Started: It is really easy to start dropshipping because one won’t need a huge capital to get started or even pay for a warehouse where goods will be stored.
  •   Very Convenient: Dropshipping, compared to other more traditional methods, can be very convenient, especially for those who are currently employed or are students.
  •   Not Limited to Any Location: There is no location barrier regarding dropshipping because no physical storefront is required. You can do everything from the comfort of your home.
  •   Easier to Expand The Business: This is possible because less money is being spent on the business. Unlike a more traditional business like wholesale, where one has to spend a considerable amount of money on warehousing, inventory, and even workers. But it’s not so in dropshipping, where relatively less investment is needed.

Cons of dropshipping

  • Little Control: A drop shipper has little to zero control over product quality, which could affect the customer’s satisfaction. 
  • Stiff Competition: It is relatively cheaper to start a dropshipping business due to the low capital required. Low capital and rise in popularity are reasons why high competition in dropshipping makes it harder to stand out. 
  • Low-Profit Margin: Another consequence of high competition in the dropshipping niche is the low-profit margins. Everyone is trying to outperform the other drop shipper by offering low prices on their products, making it a race to the bottom. 
  • Standing Out As A Brand Can Be Challenging: Building a brand from a dropshipping business can be difficult. Because the drop shipper has little control over the entire process, a drop shipper is more of a middleman than a brand.

Is Dropshipping Still Profitable?

The disadvantages mentioned above can be pretty discouraging but remember that the dropshipping industry is still growing.

Research made by Grand View Research states that the dropshipping industry was valued at $102.2 billion in 2018 and is expected to hit a $557.9 billion valuation in 2025.

The graph below shows how popular dropshipping has been based for the past five years on Google; you can observe that it has been on a steady rise.

Facts don’t lie and based on facts, I can confidently say that dropshipping is still profitable in 2022 and beyond. 

How to make money from dropshipping

1: Pick A Dropshipping Niche: The first step to starting a dropshipping business is to choose a niche. Ensure that you choose a niche your target customers are very familiar with and willing to make purchases. Picking a niche should not be based on passion alone but also backed by data from research.

Some good online tools can do the job: 

  • Google Trends: Google Trends is a free tool created by Google. It can show you how popular a niche has been in different regions over days, months, and years but doesn’t show you the search volume. 
  • SEM Rush: SEMRush is another excellent tool that you can use to get more in-depth data about any product that you wish to sell. 

2: Find A Dropshipping Supplier:

 Finding a good supplier can be complicated and confusing because many fake suppliers out there claim to be legitimate. Here are some ways to find a good supplier: 

Reach out to the manufacturer: You can start by reaching out to the product manufacturer to know the suppliers they are working with. 

  • AliExpress: AliExpress is one of the largest platforms worldwide where drop shippers can contact suppliers. They also make it very easy to integrate your store into their website. They have a WordPress plugin that enables you to import products you wish to sell into your store easily. The same can be done on Shopify through Oberlo. 

Other suppliers include:

  • TopTenWholesale
  • Salehoo
  • Spocket etc. 

Printful & Printify: These two are your best options if you want to create custom designs on merchandise like T-shirts, mugs, phone cases, hoodies, etc. Then you should look in the direction of Printful or Printify. When an order is made in your store, Printful/Printify receives it and ships it to your customer. 

3: Create Your Dropshipping Store: Firstly, you’ll have to buy a domain name and web hosting for your dropshipping store. I would recommend buying a cheap domain name and web hosting on Namecheap. 

If you’re still confused about which domain name to choose, you should consider using the Namecheap Domain Name Generator. 

After purchasing a domain name, you will have to either design your dropshipping store on your own with this course on creating an ecommerce store with Shopify or hire a professional ecommerce store designer to do the job for you. 

WordPress and Shopify are the most popular platforms for creating a dropshipping store. 

4: Optimize Online Store For SEO: Search engine optimization is the best way to drive potential customers to your website because they are actively searching for things in your niche. 

SEO helps your dropshipping store to appear on search engines like Google, Bing, etc. 

The best way of optimizing your website for SEO is by creating a blog on your website. SEO is a skill, and if you want to become good at it, then check out this course or hire an SEO blogger. 

5: Engage Customers on Social Media: Social media is another way of reaching potential customers. You can do this preferably by creating engaging and informative content rather than trying to always sell products to your audience.

Sometimes it can be stressful to keep up with activities on different social media platforms, so I recommend Tailwind or Canva Content Planner to plan and schedule social media posts. 

6: Have a Good Customer Care Service: A way through which customers can contact you as the seller helps improve customer experience and builds trust in the business.

Remember that people that are trying to contact you are interested in what you are selling.

Suppose you are too busy and will only have time to answer calls during the day. In that case, you can consider hiring a virtual assistant who is going to manage the customer support aspect of your dropshipping business professionally. 

5 Tips on How to Make Money From Dropshipping 

1. Make Your Website Neat And Appealing: Your online store’s interface should appear modern and presentable to potential customers. 

Take inspiration from the online stores in your niche and try to make yours attractive. 

2. Get Sample Products: It is advisable always to order samples of the product you wish to sell in your store.

This will help you get a better knowledge of the product you plan on selling and give you a first-hand experience of what a typical customer will experience. 

3. Spy on Your Competition: Spying on your competition helps you to see the activities of your dropshipping rivals and also helps you to improve your business. 

Ways of spying on your competition include following and liking their pages on social media, signing up for their email newsletters, checking their Facebook ads activities through Facebook Ads Library, etc. 

4. Never Underprice: Underpricing products is a common practice amongst some drop shippers; it may seem like a good option, but it always backfires.

It’s a race to the bottom, and you’ll never win because there will always be someone who sells cheaper than you. Just focus more on improving the customer experience in your store. 

5. Add Different Payment Options: Adding multiple payment options to your online store will definitely increase your conversion rate because customers have different preferences and always choose the most convenient option.

Different payment options/ gateways to integrate with your dropshipping store include Stripe, PayPal, Paystack, Flutterwave, Razorpay, Apple pay, Amazon pay, etc.

FAQ ( Frequently asked questions)

1: Can i start dropshipping from my house?

The short answer is Yes, you can dropship from anywhere as long as you are connected to the internet.

2: how much can you make dropshipping?

There is really no limit to how much you can make from dropshipping. it all just depends on your strategy, your consnistency, and the types of products you sell, but rest assured, you will make some profit if you dropship properly.

Yes, dropshipping is legal.

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