What Is Dropshipping & How Does It Work

by | Oct 27, 2022

If you’ve ever dreamed of starting your own business, dropshipping may be a great option for you. The common challenge people have with dropshipping is that they don’t understand how it works.

People often think that they need to have a lot of money to get started. So it’s no wonder that they are hesitant to take the plunge. Dropshipping is one of the lowest-risk businesses you can start. You don’t need to quit your job or have a lot of money. In fact, you can start a dropshipping business with VERY little up-front investment.

Be sure to read till the end to find out how you can get a course worth $97 for FREE (it’s a little-known method for starting a lucrative dropshipping business that no one is talking about – and hundreds of people are seeing instant success with it).

How Dropshipping Works?

So what is dropshipping? In short, it’s a way to build an ecommerce business WITHOUT having to carry any inventory. When a customer makes a purchase from your store, you simply order the product from your supplier, who will then ship it directly to the customer’s door, while you pocket the difference.

This all happens without you ever having to see, touch, or ship the product!

Dropshipping is the perfect business model for new entrepreneurs because it’s simple to set up and manage, and can be done from anywhere in the world.

Why You Should Start A Dropshipping Business

That that you understand how this business model works, there are several benefits of dropshipping that make it the perfect business model to get started with:

1. It doesn’t require a large up-front investment

With dropshipping, you can start an online store without having to spend thousands of dollars on inventory. This is probably the biggest benefit. Traditionally, a store with physical locations has to spend a lot of money on inventory.

With the dropshipping model, you don’t have to buy a product until you’ve already sold it to your customer and gotten paid for it. You can start dropshipping and make money with very little investment if you don’t have to buy a lot of inventory at once.

2. Simple to set up and easy to manage

When you don’t have to deal with physical products, it’s much easier to run an ecommerce business. With dropshipping, you won’t have to worry about:

  • Taking care of a warehouse or paying for it
  • Shipping all your orders out on time
  • Keeping track of stock for accounting purposes
  • Dealing with customer returns or exchanges

In fact, many successful dropshipping stores are run from home and don’t need much more than a laptop and a few recurring costs.

3. Easier to scale your business

Another benefit of dropshipping is that you can test products without investing in inventory. This means you can try out different products to see what sells well.

When it comes to scaling in a traditional retail business, if you get 3x as many orders, you’ll usually have to do 3x as much work. However, by using dropshipping suppliers, most of the work to process new orders will be handled by them. This will help your business grow faster with less work.

The Disadvantages of Dropshipping That Causes Most People To Fail

With all the benefits we’ve talked about, dropshipping is a very appealing business model for anyone who wants to start a business online. But like any method, dropshipping also has some problems:

1. You have less control over the shipping process

One downside of dropshipping is that you have less control over the shipping process. This is because you are reliant on the supplier to ship the products to the customer. If the supplier is unreliable, it can cause problems for your business, such as slow shipment times and poor-quality products. Problems like this can tarnish your brand’s reputation and result in a loss of repeat buyers.

2. You have to work on tight profit margins

Because dropshipping involves sending part of the order-fulfillment process to a third-party supplier, it cuts into your profit margins significantly, and that’s not including advertising costs. So in order to make a profit, you’ll have to sell a lot more volume to see anywhere near the profit levels of a traditional retailer that buys inventory.

3. Customer service can be a nightmare

When something goes wrong with an order, it’s harder to deal with since you don’t have control over your inventory to help the customer fix the problem. If the customer has a question about the product, says it was broken, or says they never got it, you’ll need to work with the third-party seller to solve the problem. This adds more work and management than if the order fulfillment process didn’t involve a supplier.

4. There’s a high level of competition

Because dropshipping is easy to get into and the barrier to entry is low, you are likely to have a lot of competition. Unless your business has an exclusive deal with a supplier to dropship certain products, there is nothing stopping competitors from selling the exact same products as you using the same traffic sources.

This means that you’ll have a harder time standing out from the crowd because you won’t be able to offer products or services that are unique to your brands. You’ll have to compete in other ways, like by giving customers a great experience or by providing a shopping experience that’s memorable.

5. You may need to invest in testing products with paid advertising

The biggest downside of dropshipping is that you may need to invest in paid ads. This is because you will need to drive traffic to your store in order to get customers. Without traffic, your store will struggle to generate sales. Although there are free methods for getting traffic to your store, you’ll often find that they can take a lot of time to start seeing results.

You’ll also need to test every single product that you add to your store since not every product will sell. So be prepared to run paid ads when testing products and when scaling your store.

This can all sound intimidating to someone just getting started with dropshipping, but don’t worry, there are ways you can minimize or even eliminate these hassles completely, and that’s what we’ll be covering in the next section.

How to Eliminate These Disadvantages

You’ll notice I listed more downsides listed than benefits when it comes to dropshipping. This isn’t to say that it’s not a viable option for most people, but the traditional model is getting harder to succeed with every year as more and more people get into dropshipping.

But there’s a way you can eliminate all of these disadvantages to ensure that you have the easiest path to success possible. Instead of dropshipping products, you can dropship services instead.

This model is referred to as Drop Servicing or eService Dropshipping. And it works in the exact same way as dropshipping, but this time – your third-party suppliers will be freelancers who complete the service on your behalf, and you can deliver that service to your end customer and act as the middleman, just as you would in a traditional dropshipping business.

So how does dropshipping services eliminate all of the disadvantages mentioned in the previous section?

1. You can have full control over the shipping process

Because you’re not dealing with physical products, you’ll be able to offer delivery that’s not affected by supply chain issues. And since you’ll get to pick who you work with to fulfill your services, you can ensure you’ll always deliver the highest quality services for your customers.

2. You will always have high-profit margins

You can say goodbye to tiny profit margins that barely cover your costs because when you dropship services, you can mark them up by as much as 5x – 10x, without ever having to worry about competition entering your market and stealing market share from you or force you to slash your prices just to compete.

3. You can handle customer service with ease

Since you’re working with talented freelancers who will fulfill the service for your customers, you’ll only deliver high-quality work that your customers will love, and should they ever have a question about anything, your freelancer will be available around the clock to answer them quickly so that you can provide exceptional customer service.

4. You don’t have to invest in paid advertising to get results

The best thing about dropshipping services is that you don’t have to invest in paid advertising to start seeing results. There are a ton of cost-free methods you can use to start getting sales on your store right away, and you won’t need to start investing in paid advertising until you’re already making money with your store.

5. You don’t have to waste money testing products

You don’t have to worry about products dying out due to saturation or competition. When you’re dropshipping services, you can sell the same service for years to come, and the best part is that you’ll have a stream of repeat customers coming back to your store and buying your services every single month.

Shortcutting Your Way to Success

As you can see, dropshipping services is really the way to go when it comes to this business. It’s actually even easier to start dropshipping services than physical products. The research process is shorter, the store setup is simpler, the fulfillment is better, and getting results is even easier.

Dropshipping services isn’t a new idea. In fact, it’s a billion-dollar underground industry that very few people know about, let alone are using in their business. And the competition level is much lower compared to traditional dropshipping!

I want to make the whole process even easier for you since I’m tired of seeing people get screwed over by suppliers and expensive ads when starting their dropshipping business. So I created The Drop Servicing Revolution, which is the perfect solution for anyone just getting started with dropshipping.

It’s a step-by-step solution that goes over the exact steps I took to start and scale my drop servicing business to over 6-figures in my first year. Here’s what you’ll discover:

  • My 3 go-to proven niches that you can use to kickstart your drop servicing business to hit the ground running immediately
  • A rainmaker platform I use that gives me insane profit margins that you’ll never experience with dropshipping
  • How to build your automated drop servicing machine that converts your visitors into buyers with a single click
  • Untapped traffic sources that bring me a stream of high-paying customers to pay me every month
  • A free tool most people neglect that has more than 10X my revenue on autopilot
  • How I turn every single customer into recurring revenue for my business
  • And much more!

I normally charge $97 for this information, but I’d like to offer it to you at no cost. That’s right, for a limited time only – you can get both the ebook and audiobook versions for free.

I’m on a mission to help as many people finally see success in their dropshipping businesses, and I invite you to join the hundreds of people who are benefiting from this information already (You’ll see a few of our student testimonials on this page).

So if want to skip to the front of the line and launch a successful business dropshipping services right now, then I encourage you to get yourself a copy of The Drop Servicing Revolution while you still can!

I’ll see you on the next page!