What Is Dropshipping, Is it Worth it? (Free Beginners Guide)

One of the great things about being in dropshipping is that it puts the power of ecommerce — an industry now approaching $6.9 trillion globally — in the palm of nearly anyone’s hands. You don’t have to be a retailer with a million-dollar budget to be successful with dropshipping. But you will need time, patience, and above all, ambition.

What Is Dropshipping?

Dropshipping is essentially a business model where a seller acts as a virtual retail storefront, selling products on behalf of suppliers who physically own, stock, and ship the product themselves. Your dropship supplier is your vital partner in your ecommerce business.

Any legitimate dropship supplier will have at least one warehouse. If they don’t have a warehouse to ship from, they are technically not a dropship supplier — they’re a middleman.

Dropshipping is where you only sell the product online without maintaining inventory or fulfilling the shipment of orders yourself. Every aspect of the backend — production, packaging, and shipping — is handled by the dropship supplier.

Your role as the online retailer is more complex than it might seem. You’re not just processing orders and establishing supplier relationships. You also need to set up your storefront, provide customer support, field questions and complaints, and learn how to market products successfully.

The Pros and Cons of Dropshipping

Who Shouldn’t Build a Dropshipping Business

Most people are drawn to dropshipping because it seems like an easy, no-obligation way to turn a profit overnight.

It isn’t.

Some people get lured in by YouTube talking-heads promising the secrets to instant dropshipping success that will make you earn six figures in six weeks or less. Don’t be one of them.

Dropshipping is a business — and like any other business, it requires hard work. It’s not for the unmotivated. It’s not for the lazy. And it’s not for you if you’re assuming there’s a shortcut to profitability. It takes time, foresight, planning, understanding, and persistence.

The honest truth is that most people reading this are not going to be able to quit their day job with dropshipping alone — at least not in the way they’ve come to associate with it, and certainly not overnight.

To keep up with the pace of ecommerce, you need to consider all models: warehousing, third-party fulfillment (like Amazon FBA), affiliate programs, wholesaling, and private label — in addition to dropshipping.

In short: “passive income” may be a slightly misleading term when it comes to dropshipping, at least if you want to be successful at it. It may not require a huge financial investment, but it requires something arguably more valuable — your time and hard work.

How Profitable Can Dropshipping Be?

For the most part, the profitability of dropshipping depends on three factors:

• Your niche
• Your competition
• Your audience

It’s not unheard of for a dropship retailer Trent mentors to earn $500 to $2,000 profit on each high-ticket sale. They didn’t turn that profit overnight — they built a steady reputation, sometimes slowly, sometimes quickly. Let’s look at those three factors in more depth.

Your Niche

This isn’t just a question of saturation — it’s a question of viability. It might seem like a given that a more specialized niche means less competition. But a lack of competition might simply reflect a lack of interest or demand. Suppliers exist for virtually every product imaginable — but that doesn’t mean there’s a widespread market for every product imaginable.

Your Competition

The more popular your niche, the more you have to worry about competition. You may be tempted at first to compete by offering cheaply made products at rock-bottom prices — that’s not a good long-term strategy. It’s not even a good short-term strategy. Customers know the difference between a bargain and a bootleg, and they’re more likely to pay for the former.

Your Audience

Research is an absolutely critical component of your dropshipping business. It’s not enough just to choose your niche. You need to understand who your audience is and what else they’re buying.

Trends don’t just change year to year — they shift month to month, and sometimes week to week. Speak with your suppliers regularly to confirm the best daily-selling products, and stay close to what’s moving in your category.

What Is a Dropship Aggregator?

The surge in dropshipping’s popularity has given rise to an entirely new type of supplier. In the past, dropship suppliers were generally wholesalers or general suppliers with a waiting period for approval that could stretch months. As a result, dropship retail aggregators like AliExpress, Doba, and Spocket now allow dropshippers a centralized portal to choose from multiple suppliers without waiting for approval — because the aggregator already did that work on your behalf.

In theory, it’s a great idea. It’s certainly more convenient than reviewing an endless parade of individual suppliers. But there are real drawbacks.

For one, a dropship aggregator is essentially a middleman — which means your profit margin will be significantly lower than if you dealt directly with a traditional dropship supplier. Sometimes by as much as 20% or more.

Competition on aggregators is also intense — not just high, but flooded. When thousands of retailers are purchasing the same item from the same supplier, inventory shortages get amplified. And you have no way to know who your supplier really is — their history, their service quality, or the reliability of their merchandise.

Aggregators are a great way to get your feet wet in dropshipping. But if you’re in it for the long haul, contacting suppliers directly is a far more sustainable solution — for both your profits and your reputation.

Is Dropshipping Right for Me?

Whether dropshipping is the best solution for you as an entrepreneur depends on how committed you’re going to be. As noted at the top of this guide, you’re not going to get rich overnight. You may not get rich at all. It’s not just a question of time and effort — it’s a question of profitability and fit.

Dropshipping has a smaller profit margin than other forms of retail ecommerce. That doesn’t mean you can’t build it into a full-time business — but at some point, you may want to review additional income models to increase profitability. Other ways to make money online include wholesaling, private labeling, or building an online business based on affiliate marketing, membership sites, or professional services.

On the other hand, dropshipping is a low-risk venture. Virtually no overhead, no inventory obligation. It might be perfect as supplementary income — or it might become your primary income, as it has for many of the advanced students Trent mentors. Or you may find it’s simply not suited to your personality or situation. Like any business venture, there’s no crystal ball, and success is never guaranteed.

Though just like any other business venture, dropshipping comes with its own reward that can’t always be measured in profitability. The person you become through the process — the skills you build, the problems you solve — that might be the greatest motivation of all.

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