Can You Still Make Money By Dropshipping?

If you’ve been looking to make some extra money online, you’ve probably come across the term Dropshipping.

It’s a business model that has existed for years, and has grown in correlation to the growth of e-Commerce.

But, like any other business model, it does have it’s flaws.

So, could Dropshipping be for you?

Or is it just another passing fad?

Let’s dive in.

What is Dropshipping?

Dropshipping is a retail fulfilment method in which a store doesn’t hold the products it sells.

Instead, you sell a product, and you purchase the item from a third party as & when needed.

You then have it shipped directly to the customer, from a wholesaler or manufacturer.

As a result, you never have to handle, or even see the product that you are selling.

There’s no need to hold stock, or pay huge bills for storage space.

Once you have an order, fulfil it with your supplier, and bank a small profit for being the “middle man”.

Once you understand the basic steps to this business model, things become a lot clearer:

1. Find a winning product.

2. Find a wholesaler/manufacturer that sells said product for a competitive price.

3. Create a landing page (store) for said product.

4. Advertise product to its target audience.

5. Receive orders through your store, and place the order through your supplier.

6. You bank a profit, as your stores price is greater than the price you pay to the supplier.

7. Follow up on orders to improve customer satisfaction & increase chance of repeat purchases.

In simple terms, Dropshipping is about creating value as a “middle man”.

This is by connecting shoppers, to product manufacturers or wholesalers, through your business.

How It Works

There are five fundamental steps to building a successful dropshipping brand:

1. Choose a product to sell.

2. Identify a supplier who will “dropship” this product for you.

3. Create a store for your product, or range of products.

4. Market & advertise the product(s) to generate sales.

5. Fulfil orders through your supplier, once received through your store.

Dropshipping becomes much clearer once you visualise the process, before taking action.

It’s important to remember & prioritise these 4 main components, in this order:

• Product.

• Supply chain.

• Landing page (store).

• Marketing.

Ensure that you’re keeping the process in this order too…

What’s the use of building a store for a product that you have later found out isn’t going to sell well…?

Let’s break all of these down, to help you get a better understanding of the core process.

Product

Finding a good product is the key to a successful dropshipping business.

There are several factors to consider when choosing a product, like:

• Demand

• Trends

• Competition amongst other dropshippers

Ensure that there is a strong demand for the product you want to sell.

You might not like a product yourself, but if it is popular amongst customers, that’s what matters.

Trending products & seasons (Christmas, Easter etc.) can also provide great opportunities.

But crucially, you have the competition.

Ensure that a product’s in demand, but not too saturated so you’re able to make sales.

Supply Chain

You want a supplier that is cooperative and has short delivery times. This is so your customer satisfaction remains high.

Cooperation is key if you plan on branding your products with labelling etc.

A good relationship between you and your supplier will be beneficial.

Another thing to consider when picking your supplier is your margins.

The cost of the product, vs how much you’ll be able to sell the product for on your own store.

Will you be able to make a good profit when you sell a certain product?

This is also important when reviewing competition.

The higher the competition, the lower the margins will be with a specific product.

Landing Page (Store)

Creating your own store may seem tricky or daunting, but it’s very easy.

Web hosting services, like Shopify, will be valuable in helping you build your store. This is even if you have zero prior experience.

They have their own modern website templates, and built in payment processing systems.

This is to save you heaps of time, and enables you to focus on other areas of your business.

Even as a beginner, you could probably have a fully functioning website up & running within an hour.

It doesn’t need to be complex. A lot of stores will have:

• A one page design showing your product

• A checkout system, already integrated via web hosting (like Shopify)

That’s it! Nice and simple.

You can use established e-commerce platforms, such as Amazon or eBay to sell your products

But, for long term success, the best way is to create your own brand which customers can recognise.

Advertising

Marketing is essential, because you need people to know/hear about your product.

Marketing your product correctly is crucial for large scale success in dropshipping.

There are many different ways that you can advertise your product.

Some important things need to be considered, such as:

• Where to advertise.

• Target demographic (age, gender etc.).

• Type of marketing.

• Creating an advert.

The most straightforward methods include:

• Social media — Free or paid.

• Blogging — Free.

• Email marketing — Free.

• Videos — Free or paid.

• Online ads (Google, Facebook etc.) — Paid.

• Networking with other dropshippers — Free or paid.

• Creating an affiliate program — Paid.

• Word of mouth — Free.

A big part of this decision is whether you have money that you’re willing to invest into advertising, or your time.

Some Dropshippers do well by building their own online brand via content creation.

If you’d rather invest your time instead of your money, this is the best route.

Benefits of Dropshipping

Don’t Hold Stock

The biggest difference between dropshipping and conventional retail:

You don’t hold stock or own inventory.

Instead, you buy inventory when needed to fulfil orders as and when they’re received on your store.

Like I said above, you’re the “middle man”. Connect customers to a wholesaler or manufacturer, and banking a profit.

Sounds great, right? You don’t need a storefront or storage space.

Instead, arrange with your suppliers who handle most of the work, like fulfilling the orders.

You can save huge amounts of money on:

• Rent

• Storage

• Wasted stock

Can Start With Little Money

You don’t even need to use your own money to buy the product from the supplier.

You can use the money that you received from your customer, to then buy on demand, banking the margin.

There’s no need to buy, or hold stock upfront.

Dropshipping is an efficient way of making money, either as a short term business, or a long term venture.

Your only major upfront cost is marketing/advertising, and you can even do this at little cost.

Scalable

Scaling your dropshipping business is also straight forward.

There’s no major workload increase, as the same tasks will need to be done regardless of size, sales or earnings.

If you begin selling 10x the amount of product as the month before, you don’t need to increase the workload by 10x. All the necessary parts of your business are already in place.

You need to trust your suppliers to handle the increased amount of orders. They’re shipping the products.

Drawbacks of Dropshipping

Lower Margins Than Expected

Dropshipping is an increasingly competitive way of doing business. As a result, you may have lower margins than expected.

You may struggle to generate the profits that you were once able to, when less people were doing it.

Competition may run high depending on the products you’re selling.

As a result, competitors may be selling products at prices that other dropshippers can’t make a profit on.

This depends on other part of the business, like suppliers, supply chain etc.

Increasing Competition

It takes an online shopper seconds to compare the prices of competitors.

Even if you have…

• a great looking website

• great reviews

…your prices could cost you customers, if someone else sells the same product for less.

So, price is essential.

Reliant on Suppliers

You have to rely on third party suppliers to produce & ship the products you’re trying to sell.

This can present you with some problems.

Someone might buy something, only for you to realise that you can’t fulfil the order as your supplier is out of stock.

Some suppliers aren’t advanced enough to provide you with real-time tracking.

This makes it a risk to work with them, as you may not be able to provide the goods that your site says are currently in stock.

This could lead to shoppers requesting refunds & poor reviews from customers.

As well as inventory issues on the part of your suppliers, there are other problems that can also arise…

Your supplier is in charge of… supplying.

There’s a chance of miscounting, damaging or poorly packaging goods.

Although this wouldn’t be your fault, the blame would be with you.

To the customer, you’re responsible for the supply of the product.

Still Worth Starting?

The short answer for me, is yes, and here’s why.

When people talk about Dropshipping in 2025, you always hear things like:

• Dropshipping is oversaturated!

• Dropshipping is dead!

• You can’t make money with Dropshipping anymore!

And none of these make any sense. Ask yourself this…

In simple terms, what is Dropshipping?

It’s e-Commerce. Online shopping.

Has online shopping become oversaturated? No.

In fact, e-Commerce will only continue to rise in popularity, for it’s convenience.

So, does this mean it’s impossible to make money by Dropshipping?

Of course not. It’s simply evolved.

The simple fact is this:

As long as e-Commerce exists (and continues to grow) you can make money with Dropshipping.

Sure, it may be:

• Harder to find profitable products.

• Harder to find your ideal customers.

• Harder to advertise.

But, to say that you can’t dropship in 2025 is untrue. If you think this, you don’t really know what it means because it’s much simpler than you think. Once you realise what Dropshipping is, you’ll know that there’s a lot of money to be made.

Thanks for reading! Be sure to subscribe (it’s free!) for more financial wisdom every week.