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Drop-Shipping Profits in 2020: Is Drop-Shipping Dead or Still Profitable?

is dropshipping dead

Drop-shipping has taken the world by storm, there’s no denying it. This raises some important questions though. Is the market already over-saturated? Can drop-shipping be profitable anymore? Well, we’ve taken a closer look at if you can still make drop-shipping profits in 2020, and what you’ll need to make sure your drop-shipping business is profitable.

How can you make drop-shipping profits?

The big one here is that you need to make sure that you are giving your customers a reason to shop with you, rather than your competition. Find your niche, own it. Research into it and really look hard at it. What do your competitors offer? What do you offer that they don’t? That’s your key. Drop-shipping can be profitable, like any business, you can make money, but, you need to be doing it right. Knowing what your strengths (and weaknesses) are is a great place to start. Once you have those, all you need to do is work out how to use them to your advantage.

test new things

Embrace the freedom to test the waters

One of the biggest benefits of drop-shipping is that it is low risk. Use this to your advantage. You can try new products, new designs and new approaches with very little risk. This is a great way to see what works for you and what doesn’t. If you have exclusively a t-shirt business, why not add a couple of sweatshirts? Guage your response. If it proves to be a popular move then maybe you can look at extending your range, if not, then it’s super-simple to change your mind.

Obviously, don’t go nuts. If your range is changing every day, then it might confuse or frustrate your customers – unless of course your niche is super-exclusive-limited-edition and ‘your thing’ is a few select products that change frequently. (Yes, these niches are out there and they’re pretty successful, however, they are marketed that way).

quality over everything

Never forget quality

To make your drop-shipping website profitable, you need to deliver what you promise. It goes without saying that your products need to be fit for purpose, but never strive for average. If you provide high-quality products then people will want more of them. If your customer knows that your goods will last, then they’re likely to keep you in mind for next time.

Quality, however, doesn’t just apply to your products. It applies to your service too. If someone has a negative experience buying from you, whether that be the product, the aftercare, the delivery or anything else related, then they are going to remember that, and your drop-shipping profits will plummet. Especially when people are more likely to voice their opinions when they’re negative.

Find a supplier with good drop-shipping profits

This one seems simple, and it mostly is, yet it often gets overlooked. You need to make sure that you’re making money from the effort that you’re putting in. Most suppliers will let you set your markup, which definitely helps – however, there are multiple different factors to take into consideration.

Check out what your drop-ship supplier is offering, a lot of companies will have information about this in their help center, and many even provide examples. If your storefront will be posted on the supplier’s marketplace it is also worth checking what the averages are, as you will be in direct competition with everyone on there.

is drop-shipping dead - the costs

Take note of other costs

One of the big ones is fees. Some drop-shipping suppliers will charge you fees either to have a drop-shipping ‘membership’, as a one-off charge or per sale that you make.

Another is hidden costs. These are charges which might not seem apparent at first, and you only notice them once you’ve started making sales and aren’t getting paid what you were expecting.

The last thing to take into consideration is shipping. Lots of businesses offer free shipping, but it’s likely that your drop-ship supplier won’t. If you want to offer your customers free shipping then you need to allow for absorbing that cost somewhere, which often involves upping your prices. This, in turn, may lower your competitiveness. It can sometimes be tricky to balance all of these factors, so it is worth making sure that your supplier is up-front with what you will be charged, rather than your shipping becoming one of those dreaded hidden costs.

Can dropshipping be a full-time job?

It certainly can. Potentially not straight off the bat. Drop-shipping is very much a business model where you get pout what you put in. Once you have something that works for you, by all means, you can leave it ticking over in the background, make the relevant updates when needed and leave the rest to work for you. You will likely make something. But, it’s not going to support you.

The more you put in the more you will see come into fruition. Perhaps the trickiest part of drop-shipping is getting your name out there. You need to be able to market your products, which takes us back to the first point of knowing your strengths, using them to your advantage and owning your niche.

shopify drop-shipping with contrado

Why Contrado?

Contrado has opened our doors to the drop-shipping world. Welcoming Shopify store owners to create a drop-shipping account and create their own custom-printed, made-on-demand products to sell to their customers. But with so many options available to you for your drop-shipping supplier, why choose Contrado?

  • Range – We’ve over 450 different products, from fashion to homeware, stationery to (yes, really) fabrics, that you can design and sell. No matter what your niche is, the chances are we have something to suit it
  • Design Flexibility – Contrado is a custom print-on-demand supplier, giving you the opportunity to really be different, to stand out. Don’t just offer that jacket in three colors, offer it with a stunning HD-quality print of the oil painting you did last week
  • Expert Handmade Quality – Every product is handmade to order. No last-one-on-the-roll. No it-was-left-in-the-warehouse-and-is-now-a-little-dusty. Our trained experts make everything to your exact specifications
  • Worldwide reach – We ship worldwide, with websites in thirteen different territories, translated into eight different languages. We accept multiple currencies
  • No Set-Up Fees or Hidden Costs – Our drop-shippers pay no joining fees. No set-up fees. There are no subscription costs. We don’t even charge for the app. Our shipping costs are on each product page so you can see clearly what you’ll be paying
  • Variable Drop-Shipping Profits – You set your own retail price. As standard, you’ll receive an average of 20%, but you can increase that up to a massive 70%. Each product you design has a slider and you can choose exactly how much you receive per sale

Ready to start? Sign up for dropshipping today!

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