In this post, I’ll explain dropshipping and how you can make money online with Oberlo.
You may be reading this piece because you want to make money online. Trust me, the feeling is mutual because I also had to come to grasp what dropshipping meant.
There’s a reason why what I’ll say following makes for a red herring. Usually, I’m very reserved in my commentary, but today I’ll go ballistic.
When you look up dropshipping on the internet, you’ll find a lot of manifest nonsense about it.
I’m going bare-knuckle with you today. I will tell you what drop shipping is and why it’s great, but I will also be upfront about its challenges.
Many people launch stores and fail. You can set yourself up for success by getting a realistic definition of drop shipping. With the intro, we’ve got some definitions to get to.
Table of Contents
How To Make Money Online With Oberlo : What Is Dropshipping?
Dropshipping is a business model. It’s not a trendy product nor an end in itself.
To understand the dropshipping business model, you must know how online businesses, which we regard as e-commerce businesses, work.
In a classic online business scenario, the entrepreneur, assuming it’s you, either produces themselves or buys from someone else a product that they then sell to their customers.
If you create the products yourself, you’ll have as many as you can produce to sell to your customers.
However, what if you’re buying products from someone else and then selling those products to your customers?
Typically, in such a case, you’ll have to obtain a minimum quantity of products from your supplier before selling them to customers.
For instance, say you’re going to sell purses online.
With the traditional eCommerce business model, you would go to a supplier and buy a thousand purses before you have any customers because you’d need to put those purses in a warehouse. Then, when a customer finally orders from your store, you’re responsible for packaging those purchases and sending them to your customer.
Now, there’s nothing off with this business model. Tons of successful businesses do just that.
But if you’re a new entrepreneur and you don’t have a lot of experience finding customers or marketing, and you don’t have, in the first place, a war chest to spend on buying a thousand purses or whatever.
As such, starting with this conventional eCommerce business model can be challenging.
Dropshipping to the rescue. Dropshipping works by allowing you to buy a minimum quantity from a supplier instead of working with specific suppliers who are okay with selling you a product at a time.
As part of showing you how to make money online with Oberlo, let’s first see the advantages.
Benefits of Dropshipping
The dropshipping business model comes with lots of benefits.
Below are some of the benefits.
Product Listing
The business model allows you to list a product in your online store. That is, you’ll have a product page that says purse for sale, describes it and has the price.
But you don’t have storage anywhere and haven’t bought that purse from the supplier. Yes, in essence, it’s virtual.
The customer will come to your store and then decide to place an order for that purse.
When they do, you get your customer’s money; then, you must head to your supplier and instruct them to send one of the purses to your customers’ addresses.
If the supplier accepts that you buy that purse from them at that time, they will ship the purse to your customers, and voila, the transaction is complete.
You make money
This business model has several outstanding aspects. Chief among those is that you can make money, Mulla, dough.
Let’s put some dollar signs on that transaction. Suppose you find the supplier. You engage, and then the supplier sells the purse for $10.
As an entrepreneur, you can then list that purse on your online store for, say, $20-$25.
Then, when the customer comes to your store and orders that purse for $25, you keep the $25, save for the fact that you have to pay your supplier $10 for them to ship the purse to your customer.
In this instance, you’ve earned $15 in profit. You’ll probably spend some of that money on marketing or overhead costs, such as shipping.
However, the bottom line is that a $15 profit per transaction is a tidy sum for starting to make profits.
Scaling up
Are you still here? Awesome! We’ll highlight a couple of other advantages and then move to the nuts & bolts of dropshipping. And given the nature of dropshipping, you can scale this stuff fast.
I’ve already alluded to it. You won’t need to spend on inventory upfront. This is crucial because it saves you a lot of money you might spend on products you’re not sure you’ll sell yet.
Low-risk business model
Dropshipping is low-risk because it offers a way to test your business ideas.
This is another advantage of this model because there is no heat to deciding today what your business will sell for the next six months.
List several products in your store instead, and see which ones sell better.
Then, focus on investing more in marketing those products.
In case you don’t have any business ideas yet, dropshipping presents a remarkable way to start testing a lot of different business ideas at once without spending a lot of money,
Logistics
The dropshipping business also offers logistical ease because you won’t have to deal with storing products in a warehouse, appropriately packaging and shipping them to customers’ addresses, etc. Your supplier takes care of all of that for you, freeing up your time.
Challenges of Dropshipping
While dropshipping offers several privileges, such as convenience, zero inventory, logistical ease, scale-up opportunity, and lower risk, the business also comes with challenges.
Jack of all trades
Just because your suppliers handle all the logistics, thus freeing your time, you shouldn’t misconstrue that to mean you’ll have a lot of free time.
Referring to our previous definition, this is a business model, and as such, it requires a lot of effort to grow quickly.
It must be right with you that you’ll wear different hats. It’s a hack to dropshipping. With a model, you’re more than an entrepreneur.
You’ll do marketing, accounting, customer service support, and other tasks in this trade.
If you’re the type of person who doesn’t mind learning a lot of different skill sets, dropshipping is a perfect business model for you to try.
However, if you prefer to specialize in one thing, you should find yourself a business partner before taking on dropshipping.
Are you learning how to Make Money Online With Oberlo? I hope so. Let’s check some facts about expenses.
Expense
Also, we indeed talked about money and the fact that with dropshipping, you don’t need to spend a lot in the minimum order quantities upfront, but you still need money to start dropshipping.
There’s an article about how much money you need to get started: Realistic Dropshipping Startup Budget. Trust me; you’ll find the piece resourceful since we review it constantly, and those numbers prove accurate.
We suggest setting aside $300-$500 to launch a dropshipping store.
This budget range gives you the best chance of success; however, people have successfully started dropshipping stores with less than that.
If you can create a successful store from scratch with less than that, prepare to invest a lot of time in it.
You’ll have to invest in either of these two currencies, time or money, to get this business off the ground, and $300 represents a happy medium of both.
With $300, you won’t have to stay up all night building this business, and you will still be able to see it grow.
Shipment Complexities
Shipping is another challenge, especially for newbies. I know I’ve just mentioned that dropshipping shipping is more accessible because your supplier would take care of all of that, and that’s true.
But what I mean by shipping complexities is managing your and customers’ expectations around shipping.
We live in a world where we expect next-day shipping delivery from Amazon.
However, many of your dropshipping suppliers are based in China, and your Chinese suppliers can ship to customers worldwide within two to three weeks, give or take.
I’m writing this piece amid a COVID-19 pandemic when shipping takes longer; we’re equipping you with all the data.
You need to understand the reality of your shipping times.
So, if you have more concerns about this, ensure that you check out our other shipping resources, but before you do, let me say this:
All new dropshippers think no customer will buy from their store because of shipping times.
I want to reiterate so that I can hammer this point home. I don’t want you to call it quits for the same reason: If this were true, I wouldn’t be here, or Dropshippingit.com wouldn’t be here. The entire business model wouldn’t be sustainable.
Customers are willing to wait for products, but this hinges on your ability to test products. Customers will wait for commodity items, such as bath towels or bedsheets, that they already need.
Customers will wait for new products that arrest their attention, which they never knew they needed until they saw the ad.
And folks, this is the key. You’ve got to get the product-market fit right to get over the shipping concern.
Fortunately, we have many resources to help you through this, including Oberlo 101.
It’s a complete guide to launching a store in the industry. It’s comprehensive in the sense that it delves deep into product research. So, if you’re interested, you can check that out here.
Oberlo
I know you probably wondered how Oberlo fits into all of this setup. Well, Oberlo is the app that lets you find products to sell from suppliers and then sell them in your online store.
Oberlo works exclusively with Shopify, an eCommerce platform that allows you to create your online store.
Are you still here? Fantastic! Let’s talk about one more thing. So many entrepreneurs toy with the idea of owning brands.
They visualize a product riding into the customer’s mailbox with their logo and logo on the packaging.
If you want to Make Money Online With Oberlo in 2020 with your shopify store, this guide will help you big deal.
And that comes from a place of pride in being an entrepreneur.
That kind of customization isn’t feasible when just starting with dropshipping because you’re working with the supplier selling products they’ve already made.
However, many entrepreneurs run seven-figure businesses selling completely branded products, and they started with dropshipping.
Once you prove to the supplier that you can sell products, the supplier will likely be more willing to work with you on customization.
Just because you want to sell your custom products doesn’t mean that dropshipping isn’t an excellent way to start.
Furthermore, if you lack digital marketing skills, it can be dicey to invest in a branded product, launch your store, and then discover that you have no idea what you’re doing with Facebook ads.
Initially, you might save money on branding products and instead spend it on learning Facebook ads with a product already proven to sell.
Then, you can scale into custom products and have your swimsuit line of branded products.
And now you know what dropshipping is, what Oberlo is, why dropshipping is a fresh business model. Equally, you know why dropshipping is still a bit of a challenging business model.
I have great news if you feel you’re up for this challenge. I’m here for you. Dropshippingit.com is here because we always share suggestions on selling products, help with your questions on Facebook ads, and more.
Apart from how to Make Money Online With Oberlo, one can use other dropshipping apps.
As you continue reading, you will learn more about this blog.
Also, check out our other resources, including our blog, which is chock full of info on launching your dropshipping business model. This post could be the first step you take towards something great.
I hope it is. And I hope you’ll share your success with us along the way.
If you have a question or comment about how to Make Money Online With Oberlo, please post it in the comment section below.
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