How Much Profit Can Dropshipping Make?

Dropshipping can be very profitable, but more than 80% of dropshipping sites don’t make it past their first year. However, if you’re good at it, and willing to stick with it, then it is possible to make more than £100,000 per year.

What is dropshipping?

Dropshipping is a way of fulfilling orders, usually for websites. It’s quite popular, mostly because of the low starting costs, low overhead costs and the fact that no storage for products is required during any point in the chain.

Here’s how it works:

As you can see, you never have to engage with the product at all, because it’s all up to the supplier. You can think of it a bit as if you are doing their marketing for them, while they handle the rest.

Also, many dropshippers can make much higher profit margins on their items, sometimes as high as 200-300%. That usually happens when customers overestimate its value and would feel as if it were a scam, or just really low quality, if they paid less.

There are other versions of dropshipping as well, such as POD (Print On Demand).

How difficult is it?

Dropshipping isn’t easy. Here’s what you have to do:

1. Find a good product. And that’s not as easy as you think.
2. Create a good website focusing on that niche.
3. Marketing. This is the hard part. This will probably take hundreds of hours of promotion for you to get some decent(ish) sales.
4. Customer support. But only if you can do the previous three well.

When I put the entirety of dropshipping as a total of four steps, it might seem easy, but all those four steps can be broken down much further. And to top it all off, you have to do all of them to a high standard.

I’d also say that all of these are mandatory, unless you want to pay someone to do some of them. Marketing especially, is really time-consuming and can sometimes go on for months at a time with no results.

But if you get one viral video or photo, it’s likely you will get hundreds, or even thousands, of sales. (But it isn’t easy to get a viral video either!)

The short answer is no. Dropshipping, at least compared to almost any other type of business, is extremely cheap.

Here’s the list of your expenses:

• Your website. This could be as low as £40/year – at least for the first year – if you use WordPress with a cheap host – that’s what I use for this site (though I may get a slightly better host) – or you could opt for Wix or Squarespace, costing closer to £100-150 a year, depending on which plan you use. Either way, websites are pretty cheap. I absolutely do not recommend paying someone else to make your website, as it is really easy to overpay, they’re usually extortionate and you can easily make a better result by making it yourself – after all, you know what you want and how to get there.
• Possibly some of your products so that you can do quality control, make better advertisements and also for photos. This is not required, but it is a good idea to do this, as you will probably have better results in the long term.
• Ads. These can cost however much you want them to cost, but the more you pay, the more visitors your site will get. This is likely one of two main ways – the other being social media marketing – that you will use to get sales.

That’s probably it. At the very minimum – you’re looking at around £40 per year, but ads could ramp that number up a lot.

Is it sustainable?

When I say sustainable here, I’m not talking about for the environment – although dropshipping is slightly better for the environment than other fulfilment models (because the package only needs to go on one journey rather than two.

The sustainable I’m talking about here is, “Is dropshipping a way to make consistent money?”, as opposed to making a lot of money at once and then having it drop off, or just being really inconsistent.

And the answer is, yes. For the most part, dropshipping can be quite a consistent form of income. It depends on the store a little bit, and you will see ups and downs, but it is not super inconsistent.

There are also strategies you can use to make it more consistent, and these can make your site fairly consistent with its visitors.

I’ll keep it short, but essentially it boils down to this:

1. Create a good website. It needs to be clean, have good SEO – so people can find it easily – and be fast (speed matters because visitors don’t like waiting).
2. Find a good product. It needs to interesting, useful and solve a problem.
3. Create good ads. They need to keep people watching long enough to click onto your website, as otherwise you could quite easily lose money.
4. Do social media marketing. Create a YouTube channel, get onto Instagram, Twitter, create a TikTok account, everything you can. If you get one viral video, there’s a good chance at £1000s.

Are there any alternatives to dropshipping?

Yes, one of the main ways of doing e-commerce apart from dropshipping is Print on Demand (POD). The market for it is becoming oversaturated now, but it is still a viable way of making money online.

I have some other blog posts comparing dropshipping and POD, if you want information on that then you can visit here.

Essentially, POD consists of creating designs that will be printed on products such as clothing, tote bags and mugs, and selling these on a website. POD is actually a form of dropshipping, so they are quite similar, but they do have a few key differences, including:

1. POD cannot be copied exactly by your competitors, due to copyrighting, so you can theoretically charge whatever you like for your products. However, they can get pretty close, so don’t go crazy with your pricing.
2. POD usually has a lot more products. While dropshipping typically focusses around a few products, successful POD stores have hundreds, or even thousands of designs. This is quite time-consuming.

Thank you for reading this, if you want more on dropshipping, then visit here.