Drop Shipping Services 2022

Interested in making money with drop shipping? If you are looking to find a side gig, or even make the switch to remote work, then consider drop shipping. Use this quick guide to get started today! 

If you are looking to find a side gig, or even make the switch to remote work, then consider drop shipping. This sales model allows you to sell a great volume of products without having to warehouse or ship the items yourself. It is easy to get started and does not take a large amount of money to get started. If you have a computer and as little as $1,000, starting up is easy. Here’s how.

What is Drop shipping?

Drop shipping is an online retail model where a store sells products to consumers but does not keep merchandise in stock. Instead, it transfers the sale details to a third party, who then ships the goods directly to the customer. This model eliminates the cost of having a physical store and warehouse, as well as all the associated costs such as stock insurance, shipping, quality control or inventory management.

What Types of Products are Sold Using Drop Shipping?

The most popular and successful approaches to drop shipping are specializing in a niche, following trends or a combination of both.  A trending product sells very quickly for a short period of time, so constant market research is a must to ensure you are offering the right product. A niche allows you time to know your market, identify trends within the market and create a name for yourself among your target audience.

Some of the niches to explore are:

  • Fitness

  • Beauty

  • Baby care

  • Lifestyle

  • Home decoration

  • Pet care and accessories

When choosing the products you may wish to sell, ask yourself the following:

  • Cost: Cheap products are cute or useful – or both! For example, jewelry, novelty socks, tote bags.

  • Rarity or hard to find items: Products hard to find online or in big ecommerce shops, such as Amazon.

  • Utility: Customers are happy to pay extra money for products to make life easier. When selling useful products, explain their purpose clearly – for example produce videos demonstrating their practicality.

How Does Drop Shipping Work (Business Model)?

Drop shipping works when you sell third party products at a profit. It is as simple, and as complicated, as that. To succeed, two key areas must be considered:

  • Marketing: Why are customers buying from you and not your distributor? You must excel at marketing to drive sales. Social media is an immensely powerful tool for drop shipping and allows closer interaction with your target audience. As mentioned above, you showcase the utility of a product you are selling, run a Q&A session or share stylized pictures of the product without having to display its price. Prepare a marketing plan, invest in ads and promotions. The more money you put in marketing – well thought and planned marketing – the bigger profit.

  • Distributor: Since you do not have to manufacture, store or ship anything yourself, your partnership with your distributor is paramount to your success. Your customers have an expectation of a level of service from your distributor equal to the one you provide. Find a good distributor and build close rapport. Once you decide on the products you want to offer, buy the products to get an idea of the order process, how long delivery takes, packaging, consider how much you charge for them. Take the opportunity to show the products to your friends and family and get their feedback. What about the quality? Use these samples to take pictures and videos, so you do not have to rely on your distributors’ media. 

How to Make Money with a Drop Shipping Business

Ultimately, your profit is the difference between the cost at which you buy from your distributor, your running costs, and the price at which you sell the product.

A drop shipping business has incredibly low running costs, but the costs are never zero. If you are planning on starting your drop shipping business, consider the following:

  • Office space

  • Lighting, heating, internet connection, phone charges

  • Website domain

  • Taxes

  • Samples

  • Marketing

When looking at the above list you probably realize some of those you already have. The great perk of drop shipping is  you get to  run it from home, so you are already paying rent, heating, etc. However, since your home is now your workplace, it is possible your electricity bills will go up, or you may have to move to a bigger place with a dedicated office. Your computer and internet connection cannot fail, and you must prepare for such eventualities as your computer breaking down.

A domain for your website is cheap, but it  adds  to your monthly bills. You want to spend a bit more money and have someone set it up for you to make it user friendly and visually appealing. Never hesitate to rely on experts if you want your business to succeed, and it is strongly advised you find a good accountant.

Drop Shipping Trends

The future of drop shipping looks bright, and your business too, if you remain relevant. Drop shipping relies heavily on trends, so here are some to watch out for this year:

  • Post-pandemic shift: Attitudes towards online shopping have shifted during the global pandemic. People now expect being able to buy everything online, not just mass-produced generic products. Consider local products, handmade, perishables.

  • Eco-conscious consumerism: Eco-friendly products are gaining momentum, from bamboo socks to plastic-free beauty products. Eco-swaps are a strong trend and are easily promoted with pictures or videos, as opposed to trying to show a products’ quality – for example, a pile of empty plastic bottles versus one reusable bottle, still pristine.

  • Subscription services: Selling subscription boxes adapted to your niche becomes more logistically complicated for your business but a trend not to miss out on, at the beginning you have to put the boxes together yourself. Once you have enough subscribers you have the ability to  transfer the assembling to a fulfillment warehouse. Fulfillment warehouses  are a great service to offer as the warehouses generate a steady, predictable revenue.

  • Healthier lifestyle: Consumers are more conscious of their health and is expected to be available online: vitamins, plant-based snacks, fitness and activity trackers, products for better sleep – like masks, weighted blankets or sleep beverages.