Is it possible to sell products and have them delivered without investing a dime in inventory? Yes, with dropshipping, it is!
Dropshipping is a viable ecommerce business model.
Large ecommerce brands such as Wayfair started with the dropshipping model.
How about Amazon?
You can argue, Amazon is engaged in dropshipping to some degree.
We’ve all purchased items on Amazon, and they were delivered by a third-party.
Therefore you can make a valid argument that Amazon sells products and has them delivered without investing in inventory.
When it comes to starting and running an ecommerce business, dropshipping can punch above its weight.
Of course, if done correctly!
If you’re an ecommerce business owner, manager, or operator, dealing with inventory is challenging.
Not only is inventory challenging from a capital perspective, but you’re also looking at challenges with handling and storage.
Today’s online business world is very competitive, and any little edge you (as an ecommerce operator) can get is worth taking.
In this guide, you’ll learn about everything there is no know about dropshipping.
This article is a long-format guide with depth across the different aspects of dropshipping and how you can start and manage a profitable dropshipping business.
Without wasting much time, let’s dive into details.
What Is Dropshipping?
The first thing to know is that dropshipping allows you to sell products without buying inventory upfront.
Sound good? You bet it does.
So say bye-bye to the need to set up a warehouse (or storage room) to store inventory.
Also, say bye-bye to the need to raise financial capital to buy product inventory to sell.
And say hello to focusing on operational tasks that matter most to running your ecommerce business.
When you start a dropshipping ecommerce business, you work with suppliers willing to sell (to you) and ship (to your customers) unit-wise items on demand.
Did you get that?
If you did, then say bye-bye to minimum order quantities (MOQs).
Oh, before I forgot – most suppliers will white-label the packaging, and some will package the shipment with your branding.
Now, say hello to yourself – the future ecommerce mogul.
This simplicity in the process makes dropshipping an attractive ecommerce business model to pursue.
Think about it for a second.
Dropshipping allows anyone (or business) to try out new product lines or ideas without heavy upfront investments.
So you see why dropshipping is increasingly becoming popular in the ecommerce space?
If you’re risk-averse, say hello to dropshipping!
With a $162 billion market value in 2019, dropshipping as an ecommerce business model will surpass $590 billion by 2027.
That’s a CAGR of 18.3% that any serious ecommerce owner, manager, or operator cannot ignore.
Most people will tell you that dropshipping is excellent because it’s less demanding.
Well, that’s true.
But for me, dropshipping is excellent because it provides opportunities.
Opportunities for everyone – small, big; newbie, experienced; startup, established, etc.
If you’re big and established, you can leverage the dropshipping model to test out new product offerings.
And if you’re new, small, and a startup, you can leverage dropshipping to get your foot into the marketplace.
So, let’s say a big hello to opportunity.
How Does Dropshipping Work?
You run an online store that sells baking pieces of equipment and accessories.
One of your customers by the name of Jenny visits your website and purchases a dough kneading machine.
As stated under your online store’s shipping policy, Jenny receives her items neatly packaged in a few days.
Jenny is happy with the dough kneading machine and leaves a positive review for your business on Google.
Of course, this is from Jenny’s perspective.
Now, let’s look at things from your side as an ecommerce operator using the dropshipping model.
You’ve built a great looking online and partnered with product suppliers who fulfill your customers’ orders.
Your suppliers can be wholesalers, distributors, or manufacturers – it doesn’t matter.
If your wondering – yes, the dropshipper can be the product manufacturer.
Whenever your customers place orders on your ecommerce website, you’ll process and send them to your suppliers for fulfillment.
Subsequently, your suppliers will package the orders (under your name) and ship them to your customers.
With dropshipping, the customer pays you first, and then you pay the supplier for the products and shipment.
As you can see, dropshipping eliminates one of the most expensive aspects of selling products online – buying and stocking inventory.
Without dropshipping as an option, you’ll have to buy and stock an inventory of dough kneading machines (as well as all other baking pieces of equipment and accessories).
Then you’ll have to wait for your customers to place orders while your inventory ties up your initial capital outlay.
With the right partnerships and supplier synergies, dropshipping is a no-brainer.
The dropshipping business model requires three vital factors for operational success: the supplier (i.e., dropshipper), your online store, and paying customers.
Finding a reliable dropshipping supplier is a critical step in starting and running an ecommerce business on the dropshipping model.
The supplier is the owner of the products you’re selling, and they are the ones holding the physical inventory.
Also, your supplier is the one that picks, packs, and ships all orders customers place on your website.
While many dropshipping suppliers are in China, you’ll be surprised to learn that several suppliers in the USA will work with you on a dropshipping arrangement.
So you’re starting (or currently have) an ecommerce business and considering dropshipping as an option.
After which, you should spend some time researching available suppliers who will work with you on a dropshipping basis.
2. Online Store
Your online store is the gateway for taking and receiving orders from your customers.
As your ecommerce headquarters, your online store is another vital component in the drop shipping mix.
Your online store is an ecommerce website that contains your product catalog, pricing, pictures, and descriptions.
Also, a shopping cart functionality is available to allow customers to add items to their cart as they browse through the online store.
Likewise, there’s an integration with a payment gateway (and processor) that enables your customers to pay with their credit or debit card ins real-time.
While all this might sound complicated, don’t fret, there are all-in-one ecommerce platforms that provide everything you need to run an online store.
Currently, the two most popular ecommerce platforms that work very well are WooCommerce and Shopify.
3. Paying Customers
I can’t imagine any successful business without paying customers.
Since dropshipping (as an ecommerce model) takes care of the inventory, storage, order picking, and shipping, your biggest worry is to find paying customers.
So you’ve set up potentially profitable partnerships for your products with reliable drop shippers.
And you’ve set up a high converting, search engine optimized, and mobile-friendly ecommerce website for your online store.
Next, you need to execute your marketing strategy to draw prospects and customers into your sales funnel.
You must continually find and convert your target audience into paying customers to ensure the sustainability of your ecommerce business.
Benefits of Dropshipping
With an estimated compound annual growth rate (CAGR) of 18.3%, there are reasons (and benefits) for ecommerce entrepreneurs, owners, managers, and operators to find dropshipping attractive.
We are talking of an industry that will surpass a $590 billion market by 2027.
This market value is larger than so many countries’ gross domestic product (GDP).
We’re talking about an industry that requires no initial investment in storage facilities, product inventory, and inventory handling personnel.
Do you still need a further argument for the benefits of dropshipping?
How about an industry with no barrier to entry?
Seriously, all you need is a computer, Internet connection, and some level of business savvy.
But let me indulge you with some itemized benefits of dropshipping ecommerce business model:
1. Easy to Setup
When compared to other forms of business, dropshipping ecommerce business is relatively easy to setup.
By supplier, I’m not talking about any supplier.
I’m talking about a supplier that offers dropshipping as a service.
Next is setting up your online store and executing your digital marketing strategy to attract paying customers.
As you can see, it’s a relatively simple process to start a dropshipping ecommerce business.
However, that doesn’t mean dropshipping doesn’t require hard work. By no means is dropshipping a get-rich-quick scheme.
2. Low Startup Costs
Dropshipping doesn’t require large startup capital since you’re not buying inventory upfront.
Likewise, you don’t need to worry about getting a warehouse or storage location.
I’ll argue that your crucial focus with dropshipping is building effective sales and marketing funnels.
And this is where you should spend the majority of your capital – whatever is the amount.
Fortunately, you don’t have to spend so much building an online store, as was the case 10 to 15 years ago.
With so many ecommerce platforms available on the software as a services (SaaS) subscription, you can have your online store up and running quickly and affordably.
3. Significantly Lower Risk
Dropshipping offers a low-risk method to enter any given market for new and existing businesses.
If you’re an existing business, you can take advantage of dropshipping to prototype your product concept for market acceptance.
And if you’re a startup, dropshipping gives you the benefit of testing the marketing with minimum order quantity (MOQ) commitments to distributors and manufacturers.
In both cases, if the product doesn’t perform well, you can always withdraw or change strategies with limited losses.
One good thing I like about dropshipping is that you’re using other people’s money to make money.
Think about that for a second.
You only buy the product after you’ve collected payment from the customer.
Now, we all can agree that’s low-risk!
4. No Overhead Costs
Business overhead costs are among the primary operational expenses that eat into a business’ profits.
And smart and strategic business persons are those that come up with ways to keep these costs at bay.
With drop shipping, you’re not buying and holding inventory. Likewise, you’re picking, packaging, handling, and shipping customer orders.
As such, you’ve achieved cost avoidance across storage, personnel, logistics, utilities, and miscellaneous expenses.
These are pretty streamlined operational savings in my book.
5. Damaged or Lost Goods Mitigation
With dropshipping, you mitigate your ecommerce business’s damaged or lost goods since you’re not storing and handling the goods.
Your dropshipper (i.e., your product supplier) is the one saddled with this risk.
In the traditional business model, you place an order and pay the supplier to deliver the goods to you.
Upon receipt of the goods, you sort and store them in your storage facility.
When you receive customer orders, you pick, package, and ship the goods out to the customers.
As you can see, there several touchpoints for loss and damages.
With dropshipping, you don’t touch the goods, and your supplier ships the goods to the customer.
6. Build and Run From Anywhere
With a dropshipping ecommerce business, you can say hello to freedom.
You can build, run and manage a dropshipping business from any location on planet earth.
This singular benefit of freedom and flexibility makes dropshipping an attractive ecommerce business model.
Do you have a laptop and Internet connection? With dropshipping – the world is yours!
7. Focus on What Matters
Dropshipping gives you more time to focus on what matters – i.e., developing and scaling your business.
Since supply chain and logistics issues are not bogging you down, you have more time to build operational excellence.
By operational excellence, I’m talking about your marketing, sales, and customer service engines.
Hence you get to have meaningful conversations with your customers, deliver value to them and excel in your sales and marketing engagements.
8. Product Assortment Availability
One often overlooked benefit of dropshipping is the wide assortment of products available for any niche.
So with the added benefit of not having to buy inventory up front, you can offer a wide range of products to your customers.
If your ecommerce business focuses on growth, this is a handy option to scale your revenue rapidly.
9. New Product Prototyping
Another great thing I love about dropshipping is prototyping.
You can test a wide range of products with your target audience without having to invest considerable sums in product development or inventory.
Prototyping allows you to collect feedback from your audience before making a significant commitment.
Such feedback is a valuable market intelligence you need to gauge the market potential of the product concept.
Disadvantages of Dropshipping
While dropshipping has several benefits, as indicated above, there are a few drawbacks to the model.
So let’s look at some of the downsides and disadvantages of dropshipping as an ecommerce business model:
1. Lower Profit Margins
The profit margins from dropshipping are lower than when buying the products outright from the wholesale, distributor, or manufacturer.
And this is understandable.
In a dropshipping arrangement, the supplier tends to charge more for the products, given the additional overhead on their end.
Since the supplier is responsible for picking, packing, handling, and shipping the individual orders on your behalf, they have a higher operational cost.
This higher operational cost will not the case if they just sold the products to you upfront and in bulk.
Thus, the higher prices charged will undoubtedly reduce your profit margins.
Maybe you’ve come across complaints on Internet forums where a drop shipper’s price is higher than listings of similar products on eBay or Amazon.
In most cases, such eBay or Amazon’s listing’s vendor purchases the products upfront and not under a dropshipping arrangement with the supplier.
2. You Bear Full Responsibility If Something Goes Wrong
Remember, your customers don’t know you’re under a dropshipping arrangement.
So if something goes wrong, it’s you and only you they will hold responsible.
For example, if your dropshipper is in China and it takes a long time for your customer to receive their order, it’s you that they will give a negative review.
Not the dropshipper.
The same scenario applies if your customer receives their order in lousy condition or incomplete.
As such, the ultimate liability for anything gone wrong with dropshipping lies at your feet.
When using the dropshipping model, you’re putting your brand at risk if your dropshipper is not reliable and competent.
3. Complicated Shipping Dynamics
Imagine a scenario whereby you use three different dropshippers to fulfill your orders.
These dropshippers handle different product SKUs – stock-keeping units.
Supplier A sells and supplies Product A, Supplier B sells and delivers Product B, and Supplier C sells and suppliers Product C.
If your customers buy Product A, B, and C in order, they will be getting three different shipments.
But it doesn’t end there.
The shipments are coming from three different suppliers at different locations with varying shipping processes.
So your customers will not only get three different packages but may end up getting them at different times.
4. Highly Competitive
The low barriers to entry make the dropshipping ecommerce business model very popular and desirable.
As such, thousands (if not tens of thousands) of entrepreneurs are flooding the dropshipping niche.
Almost every ecommerce niche is full of dropshippers trying to get their piece of the pie.
And as you can imagine, so much competition leads to smaller profit margins.
So it would be best if you found a product niche with little or no competition to build a sustainable and profitable ecommerce business on the dropshipping model.
Perhaps, the high-level of competition prevalent in dropshipping is why most people will argue that dropshipping is dead.
However, you can say the same about any industry.
Just remember that companies like Wayfair are doing dropshipping on their terms.
5. Inventory Management Is A Pain
When running a dropshipping ecommerce business, you’re running on discrete inventory systems.
Discrete systems change state quite often with little or no warning.
With different suppliers and no convergence of inventory availability data, you run the risk of selling what the supplier doesn’t have in stock.
Imagine a customer places an order, and you forward the order to your supplier for fulfillment.
Upon receiving the order, the supplier informs you that they do not have the particular product variant in stock.
The above scenario is a nightmare situation for anyone looking to build a sustainable ecommerce brand.
Such event usually results in order cancellations, making it challenging to retain customers and build a business.
While software platforms are available nowadays to prevent such occurrences, they do not come cheap and can increase your fixed and overhead costs.
When there is miscommunication between you and your supplier, your business will feel the impact.
And your customers might be forced to go to the competition.
6. Less Product Control
You don’t own the product with dropshipping. And you have no control over product branding and customization.
When running your ecommerce business under the dropshipping model, you’re selling a third-party’s products.
The product owner is in charge and in full control of all brand communications.
And this runs across product design, copy, packaging, printing, etc.
However, you may find a few suppliers that can accommodate minor product changes for some commitment on your part.
Nonetheless, if you want to control all aspects of the products entirely, you need to consider alternatives other than drop shipping as your ecommerce business model.
Is Dropshipping Worth It?
So is dropshipping worth it?
I get this question a lot, and if you’re wondering the same, you’re not alone.
There are two ways to approach dropshipping – as a serious long-term sustainable business or as a side hustle.
If you’re looking for a side hustle, yes, you can dabble into dropshipping and make a few dollars here and there.
Many people worldwide are using drop shipping as a side hustle for extra money to supplement their current income.
However, I’m a long-term kind of guy and like to engage in activities that build value over-time.
And from that perspective, I can tell you that dropshipping can be a sustainable and profitable venture that can create value for customers and entrepreneurs.
Again, take a look at Wayfair. I keep circling back to that company for a reason.
They started as a dropshipping company.
Yes, dropshipping is worth it. But it’s no walk in the park.
To start, run and grow a profitable and sustainable dropshipping business for the long-term, you need to get your business acumen firing on all cylinders.
First, you need to be in the right niche, and you need to solve a pressing problem.
Then you need to forge profitable and beneficial partnerships with suppliers that will key into your vision.
And finally, you need to achieve operational excellence in all aspects of your business.
To run a dropshipping ecommerce business at this level is no get-rich-quick scheme.
How to Start A Dropshipping Ecommerce Business
To start and run a dropshipping business successfully, you need to study and learn from the competition.
You need to growth-hack your way to success.
Yes, I know dropshipping is easy to start. But don’t let your guard down and not pay attention to details.
If you’re focused, here are some straightforward steps you can take to start a dropshipping business:
1. 101% Commitment
Get ready to give 101% commitment to your new dropshipping ecommerce venture.
Your level of commitment determines how long you will last in the dropshipping landscape.
Every business requires investment in time, effort, and resources. And dropshipping is no exception.
When you set realistic expectations, you’ll better position your new venture to withstand the ups and downs in business.
Don’t expect to make six-digits from dropshipping within weeks or few months.
If you do, you’re setting yourself up for disappointment.
Time is one of the most important things you need to invest in your dropshipping business.
You need time to learn, understand and adapt your business.
Likewise, your business needs time to target, attract, nurture and acquire customers from its sales and marketing funnels.
Furthermore, investing time allows you to learn the business, understand the landscape and competition.
Every ecommerce niche has its intrigues.
And hyper-focusing your time on learning allows you to understand your niche’s intrigues.
You also need time to build and forge the relationships you’ll need to propel your new business.
The same goes for personal development and business skills acquisition – you need time.
Without full commitment, it will be hard to put in the required amount of time needed to build your new business.
2. Find and Discover Your Niche
You don’t go into dropshipping and do what the person next to you is doing.
You must find and discover your dropshipping niche to be successful.
And it has to be a profitable niche with a large target audience willing and able to afford the prices of your product.
Don’t make a mistake most people make by assuming that dropshipping is easy and you can sell anything.
Commit time to research and find a problem faced by a unique audience that you can find a product solution.
Then ensure that you can sell the product solution profitably and few competitors are offering the same product.
Finding the right, profitable niche is the first step to building a successful dropshipping business.
And the right niche is a less saturated one that offers high enough margins to generate sustainable revenue and profits.
3. Know Your Competitors
There’s no business void of competition unless you’re running a monopoly.
So it’s safe to assume that you will have some form of competition in your choose ecommerce niche.
As such, it’s prudent to know your competition, their strengths, and weaknesses.
It’s important to pay close attention to the successful ones as they are the ones who will teach you successful strategies and tactics.
Likewise, do not ignore those competitors that are not doing very well. They are the ones that will teach you what you shouldn’t be doing.
In any case, pick out five to six competitors and do thorough competitor research on them.
Don’t ignore competitors selling on marketplaces such as Amazon, eBay, or Walmart – you can learn a thing or two from them as well.
When doing your research on the competition, here are some tips to help with the process:
A. Explore Social Media
Spend some time and study the competition’s footprint across social media platforms.
I call this spying on your competitors.
How are they communicating with their audience, and what are their engagement levels?
Furthermore, are they running paid ads? If so, what type of copy are they using in their marketing communications?
Which platform do they have the most audience, and which one are they performing poorly?
If you can find or extrapolate answers to these questions, they will help you map out a winning marketing strategy for your ecommerce business.
B. Use Search Engines
Take advantage of the billions of search engine queries data available at your fingertips to understand the competition.
First, start with searching to find the top brands in our niche.
You can further explore their paid ads to understand the keywords they are bidding on, their ad copies, and ad position ranking.
C. Competitor Research Tools
Another great way to spy on the competition to understand their strengths and weaknesses is to use competitor research tools.
With tools such as Alexa, SimilarWeb, Ahrefs, and SEMRush, you can find and keep track of your competitors’ online activities.
The tools will also provide you with vital information about your competitors, such as the sources of their traffic, social media handles, traffic to their website, and more.
4. Choose the Right Dropshipping Suppliers
After settling on a niche and studying your competitors, the next thing you need to do is find a reliable dropshipping supplier.
Unfortunately, one of the most challenging aspects of the dropshipping business model is finding a reliable supplier.
Your suppliers play a critical role in your business’s operational matrix.
Specifically, they handle product stocking, picking, handling, packaging, and shipping to your customers.
If they incompetent in any of these operational activities, then your business’s reputation is at stake.
Remember, your customers don’t know your suppliers. They only know you.
So if they initiate a chargeback through their card issuers, it’s on your bank account.
If they leave negative feedback on the different platforms, it’s on your profile.
And if they file lawsuits or complaints with regulatory authorities, it’s in your name.
Mainly, it would help if you had a dropshipping supplier who always has quality products in stock.
Your chosen supplier should excel in the operational areas of picking, packaging, and shipping.
You cannot afford customers to receive the wrong or defective products for their orders.
Another vital thing to consider when choosing the right supplier is their operational fees.
These fees can quickly eat into your margins if not adequately negotiated and monitored.
While it’s understandable that the suppliers will charge certain fees for the services they provide, those fees should be reasonable and favorable to both parties.
5. Build Your Online Store
In ecommerce, your online store is akin to your physical retail storefront.
It’s your operational headquarters that will house your product listings, description, images, pricing, etc.
Your online store is also where your customers visit to buy your products and pay in real-time with their credit or debit cards.
Likewise, your online store will contain all landing pages that support your paid, owned, and earned media communications.
Several ecommerce platforms allow you to create and launch your online store with ease quickly.
Ecommerce platforms such as WooCommerce and Shopify are the market leaders in this space.
However, other ecommerce platforms such as Volusion, BigCommerce, and Wix eCommerce can provide the features you need.
Another option is to run your dropshipping ecommerce business on Amazon, eBay, Walmart, Etsy, etc., marketplaces.
It is effortless to set up your store on marketplaces – you can do it with just a few clicks.
The positive thing about these marketplaces is that they allow you to start selling right away.
However, if you have your own independent online store, you will have more control over your dropshipping business.
But be mindful of their several fees and commissions charged for running on their platforms.
Whether you decide to run a standalone online store or sell on one of the marketplaces, both approaches have their advantages and disadvantages.
Nonetheless, the option you choose will depend on several factors such as the size and business type, your technical skills, as well as capital availability.
If you have a clear vision, choosing a platform that suits your business needs shouldn’t be an issue.
6. Regulatory Compliance
Don’t make the mistake of ignoring complying with government regulations when starting your ecommerce dropshipping business.
Always ensure you comply with relevant local government regulations.
If you’re in the USA, each state and locality has its rules and regulations for business.
And these rules apply when it comes to ecommerce businesses, and you should learn and comply with them.
The same situation applies no matter the country in which you’re operating your business.
For example, in the USA, you need to have a Federal Tax Identification Number in the form of an EIN (Employee Identification Number).
And the state level, you need to get a Sales Tax Identification Number as well.
Hence, you should check your local government’s rules and regulations and comply with them where necessary.
You should also make sure you fulfill all the statutory formalities before you finally launch your dropshipping business.
7. Marketing, Marketing, Marketing
When running a dropshipping ecommerce business, there are three things you need to do every single day.
The first one is marketing.
The second one is marketing.
And the third one is marketing.
Marketing is one of the single most important parts of your dropshipping ecommerce business.
It is difficult or almost impossible for a dropshipping ecommerce business to thrive without constant marketing.
After finding a reliable niche, product, supplier, and setting up your online store, the next thing to do is promote the business.
You need to aggressively promote your new dropshipping ecommerce business to attract potential customers into your sales and marketing funnels.
Remember, dropshipping has a low barrier to entry.
As such, there are always new market entrants, and competition is aggressive and cutthroat.
If you lack an effective sales and marketing strategy, you’re setting yourself up for failure.
So commit to studying the different digital marketing strategies and tactics.
Take advantage of paid and organic marketing options.
Continually setup marketing funnels and nurture your target audiences.
Stay on top of your game and continuously out-work the competition.
8. Achieve Process Excellence
Once your business is up and running, you need to continuously analyze your processes and improve them for a better customer experience.
Your processes run across all operational centers – sales and marketing, customer service, order processing, and fulfillment.
While your dropshipping supplier handles the order processing and fulfillment, you need to engage with them to improve their processes continually.
Likewise, you need always to analyze all your marketing communications to ensure they are achieving target objectives.
And when you see opportunities for improvement, adapt, make the needed changes and execute.
Pay close attention to your social media channels to learn what you’re doing well and where you’re lacking.
Understand which products are your profit maximizers and see how to grow your average order value (AOV) with product bundles.
Similarly, you should also know your best customers. Are they shopping more from their mobile devices or on a desktop?
So you need to be on top of your ecommerce metrics to understand how you’re doing and identify opportunities.
Take advantage of Google Analytics tools to gain insight into your customers, ecommerce metrics, and search engine footprint.
Top Dropshipping Niches for Ecommerce
Let’s take a look at some of the top and best dropshipping niches for ecommerce.
By no means is this an exhaustive list. It should only serve as guidance to give you ideas of the options available.
1. Beauty and Health
The beauty industry is growing at a swift pace, and no wonder beauty and health are among the top dropshipping niches out there.
In 2020, the US beauty and personal care market size surpassed $90 billion.
Many dropshipping suppliers are products in this niche.
Some of the top-selling products in this niche are air purifiers, wigs, face slimmers, neck pillows, skincare, and more.
Specifically, air purifiers’ demand is rising as people are increasingly becoming aware of air pollution dangers.
Frankly, people have taken the business of looking good very seriously.
Demand for beauty and health products and accessories is at an all-time high.
There is a significant increase in the demand for jewelry, thus making it another excellent dropshipping niche.
Jewelry has an intrinsic value that makes them more than just a fashion accessory but also an investment.
Currently, sitting pretty about $230 billion, the global market value of jewelry will surpass $290 billion by 2025.
Some of the top-selling products in this niche are hoop earrings, initial necklaces, chain necklaces, and bead bracelets.
Every month, the global searches for these products hover around 52,000, 17,000, 11,000, and 2,100, respectively.
People love jewelry, and new models, designs, and brands are emerging every day.
So if you’re considering this niche, think outside the box and bring something new to the market.
3. Women’s Clothing & Apparel
Women’s clothing (and apparel) is another highly profitable dropshipping niche.
In the US alone, the market is currently worth around $165 billion in 2021 and will exceed $495 billion in 2025.
One of the sub-niches of women’s clothing and apparel growing at a swift pace is sportswear.
Some of the fastest selling products in this dropshipping niche are women’s joggers (sweatpants) with global searches of about 11,000 monthly and seamless underwear with global searches of 10,000 monthly.
Others are padded headbands with global searches of 2,500 monthly and women’s bucket hats with global searches of 3,500 monthly.
3. Men’s Clothing & Apparel
Not to be outdone, the men’s clothing and apparel space is another popular fast-selling dropshipping niche.
The men’s apparel industry’s global market size will surpass $550 billion in 2021 with a 7.3% CAGR.
With global searches of about 25,000 monthly, product category such as men’s joggers is popular in this niche.
Also, the same applies to men’s sneakers (with over 9,700 monthly searches), men’s streetwear (over 5,300 monthly searches), and men’s graphic t-shirts (over 4,500 monthly searches).
4. Garden and Homes
People are spending more time at home as a result of the COVID-19 pandemic.
And this has resulted in a surge in need for home and garden appliances, tools, and decorations.
So right now, gardening and home are among the top dropshipping niches.
Some of the top-selling products in this niche are pet beds with dog beds having the highest searches, artificial plants to improve the home and garden space, inflatable swimming pools, and home organizers.
5. Babies and Mothers
Mothers don’t joke with their babies and do anything to ensure their babies’ well-being and appearance.
For this reason, products around babies and mothers are a hot dropshipping niche.
And this strong desire of moms has helped to make this niche a highly profitable one.
Available data shows that this niche will grow at a 6.2 CAGR from 2019 to 2027.
Some of the top-selling products in this niche are baby clothes, baby bouncer, maternity leggings, baby spoons, and baby toys.
6. Entertainment and Sports
Governments’ global lockdown has prompted many people to start new workout routines, hobbies, or active lifestyles to keep busy and in shape.
As such, there’s been an increase in demand for sporting gear and accessories.
After the initial declines, analysts believe that the global sports goods market will grow annually at 8% (starting in 2021) and exceed $550 billion in 2023.
There’s a lot of demand for running shoes (over 185,000 monthly searches), yoga mats (over 130,000 monthly searches), fishing lines (over 24,000 monthly searches), and cycling glasses (over 8,000 monthly searches).
The demand for consumer electronics and gadgets is also on the rise.
By the end of 2021, the number of smart mobile phone users will grow to about 3.8 billion, according to Statista.
This increase in smartphone users’ number makes the mobile phone niche an attractive option for your ecommerce business.
Although many dropshippers participate in this niche, there is still room given the market’s large size.
For example, mobile phone accessories are in high demand, as many people use them to attend online classes and make online courses.
Some of the top-selling products in this niche include phone tripods, clear phone cases, mobile game controllers, as well as phone screen magnifiers.
The toy industry has changed significantly over the past years, with manufacturers now make more interesting, fun, and educative toys.
The toy niche is a fast-growing one, and it is also highly profitable.
However, this niche might be challenging to break into, as top brands and high-tech companies dominate it with great offerings.
However, if you focus on providing a unique set of toys or finding the right audience, you can carve out your piece of the pie.
Some toys with high demands are Montessori toys, outdoor toys, bonsai care, and painting kits for hobbyists.
9. Drinks and Food
You might not consider drinks and food as a potential dropshipping niche since they appear challenging to dropship.
However, it is still one of the top dropshipping niches, as some entrepreneurs have found a way to penetrate the market.
Some of the high-demand products in this niche include coffee beans, plastic food containers, spice jars, pancake molds, and more.
10. Drone Accessories
The last on our list is the drones and accessories niche.
Industry analysts are expecting over 2.4 million units shipment of drops globally.
Indeed, this increase in demand and shipment of drones presents an opening of a new market niche for drone accessories and devices.
Drone accessories such as batteries, propellers, helipad, carry case, backpacks, propeller guard, etc., will be in demand during this increasing demand period.
How to Choose the Best Dropshipping Companies
Let’s take a look at some of the variables worth considering to choose the best dropshipping company.
1. Supplier Location
Your chosen dropshipper location is vital to ensure timely delivery of customer orders.
So at the onset, have a candid conversation with the dropshipper to learn precisely the location from which they will ship the products.
The supplier’s location will also determine if the supplier can deliver to the countries or states you intend to sell the products.
You want to make sure the supplier’s coverage extends to the geographical area of your target customers.
2. Shipping Options
You also want to consider the shipping options of the supplier.
It would be best to find out how long it will take the supplier to deliver customer orders.
In this business model, time is of the essence. If you fail to deliver your customers’ orders quickly, you will lose them.
The competition in dropshipping is very high, and you need a company that can deliver very fast.
3. Product Types
You don’t only choose a dropshipping company because they offer high-quality service or better pricing options.
The type of products in the supplier’s catalog is another crucial factor you need to consider when deciding.
You want to make sure the company drop ships the types of products you are offering your customers.
Some products are fragile, and some dropshipping suppliers are running away from such products.
Hence, you need to find out the type of products they dropship before you sign up with one.
4. Do They Match Your Level of Experience?
When choosing the best dropshipping company for your ecommerce business, you want to make sure their services align with your level of experience in the industry.
Is their service suited for novice or professional dropshippers?
If you are new in the business, you want to choose a dropshipping company that caters to beginners.
Therefore, your chosen dropshipping supplier’s services should suit your level of expertise in the dropshipping business.
Remember, choosing a dropshipping supplier is akin to forming a mutually beneficial partnership.
5. Experienced Company
Look for a dropshipping company with years of experience and a proven track record of success.
Your chosen dropshipping company should know the drawbacks of this business model and how to take care of them efficiently.
Most importantly, the company should know the industry’s in and out and provide high-quality services.
So don’t discard any negative reviews. Bring them to their attention and consider their explanation and what they are doing to improve.
6. Superb Customer Service
Spend some time testing out the dropshipping supplier’s customer service processes.
Frankly, you want a dropshipping company that offers superb customer service, especially pre-sales and after-sales support.
Look for a dropshipping supplier who investments time and resources into provided exceptional customer services.
The level of customer service you receive from the dropshipping supplier will determine your customers’ experience.
7. Technology Oriented
Evaluate the dropshipping company’s use of technology in service delivery.
Your ideal dropshipping supplier should be up to date with the latest technologies available for the industry.
For example, a dropshipping supplier that provides white-labeled real-time shipment tracking is preferable over one that doesn’t.
Hence, it would be best to work with a dropshipping company to keep up with industry demands and innovations.
8. On-time Delivery & Efficiency
These are two vital things that can contribute to the success of your ecommerce business.
If customers’ orders are not delivered efficiently and one-time, you might not have many returning customers.
To get happy and returning customers, you should go for a drop shipping vendor that is punctual and efficient.
Once again, the dropshipping industry is highly competitive. So you want to make sure you have a reliable supplier to fulfill your customers’ orders fast.
9. Cost Implications
After considering all the parameters listed above, you need to look at the cost of working with the dropshipping supplier.
The last thing you want is to work with a company that will reduce your profit margin significantly.
Hence, you should consider the total cost of doing business with that dropshipping supplier.
For one thing, you want to make sure their pricing and associated costs are favorable for you.
Dropshipping is competitive, and many sellers are selling with low-profit margins.
To ensure you run a profitable ecommerce business, you need to keep a close eye on the dropshipping supplier’s service delivery cost.
One of the easiest ways to find the best dropshipping company is to ask those that have been in the business for some time.
If you have any family, friends, or colleagues in this business, you can ask them to recommend a reliable company.
Also, take advantage of online communities on platforms such as Facebook and Reddit to ask for recommendations.
However, you would still need to research and screen any company recommended ensuring they align with your business.
Top 10 Leading Dropshipping Suppliers
Every dropshipping supplier has its pros and cons.
They all render a wide range of services, and you can pick one based on your specific needs.
Here are some of the leading dropshipping suppliers out there:
Spocket is one of the top dropshipping platforms in the world. You can start and scale your ecommerce dropshipping business with Spocket.
This dropshipping marketplace will connect you to many suppliers, and most of the suppliers are in the EU and United States.
There is a variety of subscription plans on this platform; there is also a free dropshipping subscription.
AliExpress is both a dropshipping supplier and a wholesale platform.
This platform can connect you to thousands of suppliers and products in China.
With millions of products on its platform from different suppliers, AliExpress can support different ecommerce niches.
You can also sign-up free of charge with AliExpress.
Another platform that does a great job of connecting dropshippers to suppliers is SaleHoo.
On SaleHoo, you’ll find different suppliers from different niches that supply various parts of the world, including the UK, US, and Australia.
SaleHoo is a paid dropshipping platform.
The sign-up fee is $27.00 monthly for the Basic plan and $97.00 monthly for the Premium plan.
Suppliersdata is another highly reliable platform that connects retailers to suppliers based in the United States.
The platform also allows users to add suppliers to their watch list and contact them later.
To use this platform, you have to pay a token of $29.95 for unlimited access.
Modalyst gives you access to millions of dropship products to sell online.
The platform has a plugin for Shopify, BigCommerce, and Wix ecommerce platforms.
If you want to automate your dropshipping business quickly, you can create your online store on any of the above platforms and then connect them with the Modalyst plugin.
Modalyst makes it easy for you to find and sell different products from different drop ship companies.
The platform also allows for free registration with a limitation of 25 products.
However, you can subscribe to the paid plans at $35.00 monthly for the StartUp plan and $90.00 monthly for the Pro plan.
If you have a store on Shopify, Oberlo is one of the best dropshipping suppliers’ platforms you should consider.
Oberlo is a plugin on Shopify, and it provides you with a variety of suppliers and product options.
It also helps you to keep track of your sales, page views, stock, and star-rankings.
Wholesale2B is a supplier integration system that grants you have access to over one million products from different suppliers.
You sell these on top e-commerce marketplaces such as Amazon, eBay, Walmart, and Etsy.
Similarly, you can also sell these products on your online stores build on Shopify, WooCommerce, BigCommerce, Volusion, etc., and custom websites.
8. Worldwide Brands
Worldwide Brands is a directory of bulk distributors and dropshippers.
There are many suppliers on Worldwide Brands, and you can source a variety of products from them.
Regardless of your ecommerce niche, this platform has got you covered.
However, it’s not free, and you have to cough up a $299.00 one-time access fee.
Dropified is a Shopify app you can use to populate your store with products from AliExpress.
The plugin also allows you to automate your orders on AliExpress.
Dropified offers a private label subscription option that can connect you with private label manufacturers if you’re looking to sell products under your brand name.
DHgate has over one million suppliers from whom you can source products for your ecommerce dropshipping business.
The platform offers escrow protection on all orders, worldwide delivery, products from certified sellers and free to join.
Best Dropshipping Products to Sell
Let’s take a look at some of the best dropshipping products across different product categories.
Heath and Protective Gears
1. Face Masks
Facemasks are one of the fastest-selling dropshipping products due to the COVID-19 outbreak.
Many schools, hospitals, grocery stores, and supermarkets do not allow access without a facemask.
2. Electric Toothbrushes
Electric toothbrushes have been around for a very long time, but the demand for them has surged significantly higher recently.
3. Sleep Eye Masks
More people are beginning to discover this product’s effectiveness, which has ramped up its demand recently.
4. Yoga Mats
As mentioned earlier, yoga mats are one of the most profitable and popular dropshipping products.
Many consumers find them useful for home-use
5. Sleep Gummies
Sleep gummies is another fast-selling product that helps people with problems sleeping and staying asleep.
Kitchen Utensils and Appliances
1. Air Fryers:
The recent lockdown has made many discover cooking as a new hobby.
Air fryers are one of the highest-selling kitchen appliances over the past year.
2. Electric Kettles
The demand for electric kettles has also ramped up recently, as it is convenient, portable, and effortless to use.
3. Portable Blenders
Because of their compact and small design, portable blenders are increasingly becoming popular. They are easy to use, store, and transport.
4. Wine Fridges
These temperature-controlled refrigerators come in handy in storing wine and beverages. They are very portable and easy to move around.
5. Rice Cooker
Rice cookers are increasingly becoming popular in the cooking appliances category. They make cooking very easy and fast.
Clothing and Accessories
1. Mom Jeans
Mom jeans are women’s jeans with a very high waist.
People started calling them “mom jeans” back in 2003, and their demand has been on the rise since then.
People wear leggings a lot for fitness and working out.
Many people prefer leggings to yoga pants, as they are more durable, thick, and flexible.
This two-piece outfit has become a trend over the past few years.
People wear them for sporting events and as casual wear.
This winter headgear is also fast selling, as they are available in different styles and colors.
With the reopening of schools, the demand for backpacks has surged significantly higher.
Homes and Décor
1. Air Purifiers
Air purifiers and humidifiers are trending in the market today. These devices help to give homes a new, better smell.
Doormats are mostly the first thing people see when they come to your home.
These household items are now available in different designs, shapes, colors, and sizes to give your visitors a warm greeting when they come to your home.
Warm, soft blankets are also selling fast, as people use them to keep warm in the winter.
4. Orthopedic Pillows
These ergonomically designed pillows help with proper sleeping posture. They promote good sleep and prevent neck, back pains.
5. Bedside and Reading Lamp
There is also a high demand for bedside and reading lamps. These lamps enhance the aesthetic of the bedroom.
1. Mechanical Pencils
The replaceability and durability of mechanical pencils have made them very popular. Many offices and schools now use them.
2. Blue Light Glasses
People now spend a lot of time on their phone and laptop screens, exposing themselves to blue light dangers.
These glasses help to reduce the amount of blue light that enters the eyes.
3. Microphones for Podcasts
The searches for podcast microphones have surged higher over the past few years.
Indeed, microphones come in handy in making podcasts and creating courses (both audios and videos).
1. Smart Lights
Smart lights are becoming more popular, as they help enhance the look and feel of a home.
You can connect and control these LED lights with your smartphone.
2. Smart Locks
These locks provide maximum security for homes. They also allow you to lock and unlock your home remotely.
3. Automatic Soap Dispensers
With the current need for frequent washing of hands, this device has become very useful and essential.
1. Phone Holders
Phone holders or tripods have become very common, as people use them to hold their phones while watching or making videos.
2. Ring Lights
Ring lights come in handy when making videos in low lighting conditions and for applying makeup.
3. Phone Casings
These casings are now available in different colors, designs, styles, and textures. They enhance the look and feel of a phone.
1. Baby Clothes
Moms have always make sure their baby looks and feels good. The demand for baby clothing is on the rise.
Baby toys are also fast selling and have huge market demand.
3. Baby Spoons
Baby spoons are also very common, especially those with fancy and attractive designs.
1. Gaming Pads
There is a high demand for gaming pads, especially for mobile phones and smart TVs.
2. Gaming Monitors
PC gamers are increasingly looking for better and more fascinating ways to up their gaming experience.
3. Gaming Headset
Gaming headsets with built-in microphones are also in high demand, giving gamers a better gaming experience.
Accessories for Cars
1. Socket Wrenches
These tools come in handy in tightening hard-to-reach bolts and nuts.
2. Ceramic Coating
People use this chemical solution to protect the exterior of the car from external pain damage and rusting.
Things to Consider When Choosing the Best Dropshipping Products
To have a successful dropshipping ecommerce business, you need to source the best dropshipping products.
Here are some critical criteria to help you choose the best dropshipping products:
1. Retail Price
The wholesale and retail prices of a product are critical when it comes to dropshipping.
And this is because product pricing plays a vital role in any successful ecommerce business.
If you price the products too high, you scare away potential customers. And if you price too low, you reduce your profit margin.
So you should find a perfect balance that will work for you and your customers.
2. Size, Weight, and Shipment Origin
When looking for the best dropshipping products to sell, you need to consider the product’s size and weight and the shipment origin.
The shipment origin is the location from which your dropshipping supplier will be shipping the product.
These factors are critical, as they significantly impact how poorly or well your business functions across pricing and to-to-delivery dimensions.
To make more money and get products to your customers much faster, you should opt for lightweight and compact products.
Doing this will reduce your shipping cost and increase your profit margin.
3. Expand Your Product Choices Beyond Top Sellers on eBay or Amazon
You should avoid limiting your product choices to only top sellers on eBay or Amazon.
Many new dropshippers often make this mistake, and they expose themselves to unsparing competitions.
If you are looking for an excellent dropshipping product that will yield a lot of profit, you should avoid overly saturated niches.
4. Leverage Social Media
You can also leverage the power of social media when looking for the best dropshipping product.
So take advantage of social media platforms such as Facebook and Instagram to carry out polls and surveys about new products.
Disposable and renewable products are some of the best dropshipping products.
And this is because your customers are more likely to return to your store when they finish using your product, and this will result in more sales.
5 Top Mistakes to Avoid When Dropshipping
Running a dropshipping ecommerce business can be fun and exciting.
However, there are some mistakes people make you must try your best to avoid.
Let’s discuss some of them below:
1. Selecting a Niche Without Proper Research
Not properly planning is akin to planning to fail. Jumping into dropshipping without careful market research is one mistake you shouldn’t make.
So make sure you spend some time researching the niche to make sure it is profitable, sells fast, has a large customer base, and more.
2. Failing to Check the Scalability of the Supplier
First of all, you need to understand that some suppliers do not have enough resources or employees to handle large orders.
Therefore, choosing such suppliers will significantly affect your business – negatively.
To avoid this, you should check the supplier’s scalability and make sure they can handle all the orders coming from your end.
3. Spending Too Much on Ads
Don’t overspend on your advertising as it will reduce your profit margin significantly.
Yes, I get it – advertising is vital in sustaining and growing your business in a highly competitive market.
However, it would be best to look for new, cheaper, better, and more effective ways of promoting your business.
For instance, focus on owned and earned media for the long-term to grow your organic footprint.
4. Not Having Alternative Suppliers
You should avoid relying too much on one supplier. If the supplier raises their prices or runs out of stock, you’re out of luck.
So make sure you have a “Plan B” when such events unfold.
5. Expecting to Make Easy Money
Dropshipping is not a get-rich-quick scheme. It requires a long of hard work, time, and effort.
It will take time for you to see positive results from your effort. So be patient and continue working on your plan even if you see no results.
Understanding Your Target Market and Niche
Knowing your target market and niche is very important in every business, and the dropshipping business model is not an exception.
Here are some steps to help you understand your target niche and market:
The first thing you need to do is to find out the level of demand for your product.
Start with keyword research using Ahrefs and SEMRush to understand the monthly search volumes for the product.
Having this information will give you an insight into the number of searches products get on search engines every month, thus indicating the level of demand for the product.
To better understand your target market and niche, you need to know the impact of seasonality on your customers’ purchase patterns.
Some products sell well in certain seasons while others do well in all seasons.
You can use Google Trends to find out the products that do well in certain seasons.
If you are offering a seasonal product, this will help you to prepare for the spikes or dips before time.
The next step is to study your competitors and understand how they are engaging with the market.
Go through their social media pages, website, and every other place where they have an online presence.
Also, read their reviews, comments, and know what they are doing right and why their customers keep coming back.
Essential Things to Keep in Mind about Your Target Market
Here are some vital things you need to keep in mind about your target market:
In general, women’s shopping and spending patterns are different from that of men.
As such, it is worth considering the gender of your target market across your business processes.
The way you advertise and converse with women is different from that of men.
Hence, your need to consider the target audience’s gender to make your marketing communications effective.
2. Geographical/Physical Location
Your target audience’s geographic location another vital thing you need to keep in mind.
Likewise, your potential customers’ physical/geographical location is crucial, as you need to understand the target audience’s size, preferences, and cultural peculiarities.
3. Age Range
It’s also vital that you understand the purchase and spending patterns of different age groups.
Knowing the age range of your target market will help you to determine whether you can dropship expensive products to them or not.
Understanding Your Competition
As stated before, you need to know what your competition is doing and how they are doing it.
Here are some tips to help you understand your competition:
1. Keep Track of Them with Online Tools
You can use online tools such as Ahrefs and SEMrush to keep track of your competitors.
These tools allow you to check your competitors’ ranking, traffic rate, and traffic origin.
Indeed, having this information will better inform you how to structure your marketing communications.
2. Make a Purchase
You should buy one or two products from your competitors to better understand how they function.
When you do this, you will know why their customers keep coming back and what separates them from others.
3. Study Their Social Media Platforms and Engagement
Many customers return to a particular seller or brand because of the level of engagement across the seller’s social media presence.
So you can scan through your competition’s social media pages to know how they interact and engage with their customers and potential customers.
Doing this will give you a headstart on how to formulate and execute your social media strategy.
In summary, dropshipping allows you to sell products without investing in inventory.
If you’re starting your ecommerce journey with limited capital, this is a game-changer.
On the other hand, if you’re an existing ecommerce business, dropshipping gives you a channel to test out new product offerings.
And you can do this without significant investments in product development and inventory.
Don’t be mislead by the numerous promises of get-rich-quick schemes with dropshipping.
As with any business, dropshipping requires hard work, diligence, and sound business strategy.
All in all, dropshipping presents an excellent opportunity for anyone to build an ecommerce enterprise on their terms.
What stage are you in your ecommerce dropshipping journey? How are you faring?
Let’s talk. Comment below!