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meaning of dropshipping

Published on: January 2 2023 by pipiads

How Shopify Dropshipping Works

There's a trendy e-commerce fad behind those obscure eye-catching products that fill our feeds on Facebook, Instagram, TikTok, and YouTube.,It's called dropshipping.,It's definitely an industry that is growing.,You're seeing companies going public now just based on this premise of dropshipping.,The model relies on targeted ads designed to stop consumers from scrolling long enough to make an impulse purchase, usually from a Shopify store set,up solely for that product.,Many of those same younger consumers, they are also looking for creative ways to make money.,And this really is the rise of the young merchant.,It's like salesmen. Salesmen are like the old school version of marketing.,If you're a good salesman, you can sell anything to anybody.,At age 21, Ka mil Sattar's dropshipping sales topped 1.7 million dollars in 2020.,You basically only buy the product when you get the payment.,And then you get the product from a supplier in the U.S.,or China. Then they send the product directly to the consumer and you never see it or never touch it.,Some sellers say dropshipping is a get-rich-quick scheme to make easy millions without ever leaving your couch.,Others call it a serious business that takes major hustle to pull off properly.,There are more nefarious actors in this industry and there are legitimate ones.,We toked to some big name dropshippers about how they made millions with viral products and asked e-commerce experts how copycats and cutting,corners could tarnish the industry for everyone.,Dropshipping in its simplest form is when the seller acts as a middleman without ever touching the merchandise.,Nick Peroni does dropshipping full-time, sourcing sites like AliExpress for low-cost products available directly from suppliers, usually in China.,If you have a supplier you can trust, you can do the quality control with the supplier.,They can send me pictures of it, 3D video of it so that I can see exactly how it looks.,After a customer places an order on Peroni's Shopify store, he purchases the product from the supplier and has it shipped directly to the customer,,which can take some time.,If you find products that are unique enough, then people are generally willing to wait.,Take this laptop sleeve that I ordered on June 30th last year.,It shipped directly from China and took two months to get to California.,Products where it takes 30 days, 60 days, even 90 days to even get to you.,Now, that is what I call poor dropshipping.,Where people really tend to get annoyed with dropshipping is if they waited for two weeks and then they get their product and it sucks anyway.,I ordered these boots on October 28th last year and they arrived December 7th.,I never got a shipping or a tracking notification.,And when they did finally get here, they came in this ripped bag from China Post and they were stuffed loosely inside.,They smelled pretty awful and they were the wrong size.,I thought about returning them, but returns with dropshipped items from overseas can be pretty complicated.,I looked for a customer service number on the store where I bought these and I couldn't find one and I opted not to return them because I would have,had to pay for my own return p ostage.,False advertising is definitely a big problem in the dropshipping world.,The product is aligned with you, aligned with your interests, and you want to buy it.,So you buy it. And it does not match up at all to the product you're getting.,Dropshipping is also what's responsible if you order something from Amazon, but it arrives in a box from Walmart or any other major retailer.,The customer is confused, they're like I ordered something from Amazon, t his is not my product.,I got so many messages like, why did you send me this?,Bradley Sutton provides software for Amazon sellers and he test ed out dropshipping in the 2020 holiday season.,He sold things like RC cars on his Amazon page, dropshipped from cheaper listings on Walmart and elsewhere.,Part of Amazon's dropshipping policy is that you do not deliver with packaging t hat is from another retailer.,But my account didn't get shut down, I grossed over $500,000 dollars, but I've kind of stopped that test because it's just not a sustainable model,for me. Amazon has a long-standing policy against dropshipping from other retailers.,And a spokesperson told CNBC, "If a seller violates our policy, we will no longer allow them to directly fulfill customer orders.",So you have Shopify, you have BigC ommerce, you have WooCommerce, you have Amazon, you have eBay.,And if you get banned on one platform, you can move up to the next one.,The dropshipping that fills social media feeds isn't happening on Amazon.,It thrives on Shopify.,They made this one-stop shop for you to set up a store.,It's just super easy for you to start selling online.,And a lot of these dropshippers know it.,On Shopify's Help Center, there's an entire section devoted to tips and strategies for dropshi pping.,The main advantage of dropshipping is that you don't have to worry about storing, packaging, or shipping your products.,In an analysis of more than 120,000 Shopify stores, online consumer protection company Fakespot found more than 25,000 that engaged in,some form of fraudulent activity like counterfeits, privacy leaks, and buying fake reviews.,Of those, almost 72 percent showed evidence of dropshipping tactiks being used in their business.,Fakespot has a Chrome plugin that alerts shoppers if a seller on Amazon, Walmart, eBay, Best Buy or Sephora can't be trusted.,It recently added capabilities to detect untrustworthy stores on Shopify too.,Fakespot says most of the fraudulent stores appear to be China-based merchants posing as U.S.,small businesses. You want to support the local mom and pop store, but these s ellers are not from the United States.,They're from around the world and they're just utilizing this to make a buck.,Still, Shopify is home to the online stores of major brands like Heinz, Staples, Jenny Craig, and Gymshark.,With more sellers than ever before signing up for a Shopify storefront in Q3 last year, Shopify shares more than doubled in 2020, and its market cap,recently surpassed 150 billion.,Thirty five percent of young Americans started a side hustle during the pandemic.,Most of them are doing it on Shopify, which is why you saw more signups in Q3 than ever before.,But the way they're doing it is totally different.,They're using avenues like TikTok.,In a survey of more than 10,000 consumers, Shopify found that 54 percent of shoppers age 18 to 35 discover brands on social media and 28,percent made a purchase there.,These young consumers are going to be the shopkeepers of 2021, and the way they buy is going to be the way they're going to sell.,We're going for impulse buys with people that are not necessarily intending to buy something when they log onto Facebook or Instagram.,Marketing is probably 60 percent of the game.,Sattar sells 80 to 90 percent of his products through Facebook ads and the rest largely through ads on YouTube.,T ikTok ads can now play directly within Shopify stores, following a TikTok-Shopify partnership announced in October.,We have a video editor on our team.,And so when we have a product, we can put together a 30 to 40 second video that tells a story of what the product does, why it's valuable.,Choosing the right product takes a lot of legwork.,I always say to people, you're going to test around about five to ten products until you find something that actually does something.,This pineapple slicer and these dog grooming gloves are examples of products that flopped for Sattar.,It's all about finding things that people haven't tried before.,We have softwares that we use where they do AI tiknology and they tell us what are the best products at the moment, what's trending.,Sattar's breakthrough product was this iPhone privacy screen protector.,Soon after, another one of his items did a million dollars of sales in one quarter.,Many dropshippers find pr

What Is Dropshipping? Shopify and AliExpress Explained

hey what's up guys it's online money,24/7 and today we're gonna be toking,about what is a drop shipping so the,basics the drop shipping model so here I,have a little diagram and a customer,places an order for $200 as a retail,price and your store keeps $50 profit,you forward the order to your supplier,and pay wholesale so that would cost you,$150 this is just a very high example,just to make it simple so you know they,give you $200 you keep $50 and it costs,you one hundred and fifty dollars for,the supplier that you you forward the,order to your supplier and pay the,wholesale price or whatever they're,selling it for and you know for you it'd,be Aliexpress as a supplier but we'll,get into that a little bit later and,then the supplier shifts the product,directly to your customer so they pay,you you keep a percent of as profit and,you're spending that money to then order,from your supplier they take it directly,to your customer so you don't ever even,touch the product you're basically the,middleman as you could see the stores in,the middle customer to the supplier and,so we're gonna go over a little bit how,that exactly works and why it works so,moving into the next step of the drop,shipping model is you're finding a,product from Aliexpress so this is the,product that your supplier is offering,as you can see there on the right that,little box the supplier box these are,the products from Aliexpress for example,this toothpaste I actually used to sell,this toothpaste on one of my stores and,it's a solid example because as you can,see the price is only two dollars and 96,cents so I would buy this product from,Aliexpress this is where that screenshot,is from the supplier would sell to me,for 296 and it was a little bit of,change in shipping I think it came out,to about $4 after shipping and so I buy,this product from my supplier and I,would sell it to my customers and I,would keep a large percent as profits so,in a minute we're gonna go into exactly,how much I would charge the customer and,then what I would keep as the middleman,from the supplier so moving along like I,said product from Aliexpress,this is a product and then I would,resell it for a profit so instead of 296,on my store I would sell it for 1995 so,I would receive 1995 this I would charge,the customer free shipping so I would,charge the 1995 and then I would keep,that 1995 there's a little bit of a,processing fee for debit cards or PayPal,transactions on your website so I would,keep a majority of that and it would,only cost me $4 from the supplier from,the supplier right here it only cost me,$4 from them and I never even touched,the product and I keep about 15 dollars,from that roughly $15 estimate is what I,would resell it for profit so now let's,take a look at an example store that is,actually up and running today,it's called viral prods it's an,Instagram store that I found through,different research and they sell the you,know various products and all these are,found on Aliexpress and they're drop,shipping store so as you can see they,have a spiral ear cleaner that's we're,going to be looking at today and so they,basically resell for profit that see,that exact same product they're selling,it for eleven ninety euros which I have,a calculation - how much in US dollars,that would come out - but eleven ninety,in euros and you could find it for only,a dollar forty nine asset on Aliexpress,as you can see the Aliexpress you know,you type in what you're shopping for,basically you're buying these products,from Aliexpress and reselling it for a,higher price on your own store so as you,can see here the spiral ear cleaner,there this is the exact same product you,look at the picture exact same product,from Aliexpress they're selling it for,you know thirteen dollars and eighty,three cents is what the conversion comes,out to from euros so dollar they buy it,for a dollar forty nine they sell for,1383 obviously there's a little bit of,processing fees there that they have to,pay but they're keeping you know around,eleven dollars probably at the end of,the day which is quite a nice profit you,know eleven dollar profit in the green,after that,so that is what you know dropshipping is,you're creating your own store as you,can see here in this gift that Shopify,presents you know you customize your own,website and you know you make it how you,want it to look and you're selling your,own products so how exactly do you go,about doing this well well I use to,create store is Shopify which allows you,as you saw in the slide before to create,your own store design the website it's,very simple to use,and this is where you sell your dropship,to products as you can see these,products for example from Aliexpress it,gives you a platform to like like this,just like the viola prods website it,gives you a way to create your own,website and resell these products that,were available on Aliexpress and so one,question you might actually be having in,the process of trying to understand what,drop shipping is which I hope I've,helped you a bit in this video on the,reason why people don't buy from,Aliexpress because they just don't know,what it is you know people just aren't,aware of Aliexpress most people in the,States and so they don't know how much,this you can buy this product for,cheaper on another website they're just,going and being like oh this is a cool,unique product I want it and they're,gonna buy it from your website if you're,marketing to them through you know,Instagram Facebook or however you end up,marketing your website there's lots of,ways you could do that,so they're just unaware that it's,cheaper on Aliexpress so that's how drop,shipping works you know you're finding,products that people are just unaware of,don't know about and reselling it to,them for a markup you know it's a it's,quite a credit quite a good business,model so that's how you create your,store is through Shopify as you can see,here you know design it however you want,and that's what I use to create source,and I actually do have a free 14-day,free trial available for Shopify if you,guys want to get start with that if you,want to get started with making your own,drop shipping store you know start,selling some products making that profit,there's a link down below if you guys,click that and sign up as well as you,guys should subscribe to the channel if,you found this video helpful have a,variety of other videos on this channel,that could help you with getting started,with your own Shopify drop shipping,store you know the whole ecommerce,game I have a lot of videos on that so,be sure to subscribe to the channel,leave a like and leave a question down,below if you have any of those down in,the comment section I'll be sure to,answer them as quick as I can,but subscribe to the channel and I'll,see you guys in the next one peace out

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9 steps in starting a PROFITABLE dropshipping business! philippines

Waddup, dencies!,This is Dencel.,So, for this video, I'll be sharing with you,how to start a profitable dropshipping business with Shopify,and this video is sponsored by Shopify.,So, if you want to start your dropshipping business today,then I'll have the link down in the description box for a free 14-day trial.,So, without other further ado, let's begin.,(Intro music),Learning how to start a dropshipping business as with any type of venture,isn't easy.,Nevertheless, it is a great first step into the world of entrepreneurship.,You can sell directly to customers without holding any inventory.,You don't need to pay for products upfront,and if you are really serious about this new venture,then you can build a sustainable source of income in the long run.,So, how does this dropshipping business model works?,So, dropshipping is actually simple.,For example... I'll just explain it this way.,You are this dropshipping store,and this is your customer.,If the customer purchased from a dropshipping store,there is a third-party supplier that will ship that product directly to the customer,and this customer will pay the retail price that you set,and for you, you'll pay your third-party supplier at the wholesale price that they set,and the rest is profit.,Here in dropshipping, you don't need to do inventory.,You don't need to hold the product,or you don't need to make an effort on packaging and shipping,because your supplier is doing it already.,The easiest dropshipping process for Shopify stores is through Oberlo.,Here, you can source millions of products,from the Oberlo marketplace through AliExpress.,There.,You will just connect Oberlo and AliExpress in your Shopify store,and the product will be imported directly to your store.,Also, in dropshipping, you're responsible for making your own website,marketing your products, and all the ways to have customers that would buy your products.,Now, I have here 9 steps in starting a profitable dropshipping business.,First, we need commitment.,You need to decide if you would commit to dropshipping business.,In this commitment, we will invest two things.,That is time and money.,But here, what we advise or what we recommend for you to invest,is time instead of money.,Why time?,First, you'll know how the business operates.,Second, you will know your business and your customers,and it will help you to make the right decision for your business.,The third reason why you need to invest time is for you to not have additional...,expenses that are not aligned with the success of your business.,It's like, "Nothing. Just an extra.","I just want to spend because I thought it would help my business.",So, you can avoid that if you're the one handling your business,or you really invest time to learn this dropshipping business.,Lastly, you would develop skills for you to become a better entrepreneur.,So, these are the reasons why we least recommend,investing a bunch of money here in dropshipping store.,First, if you don't know how your business works,you'll be at the mercy of expensive developers, marketers...,What else?,Programmers,and they will eat any profit that you were gaining.,But it doesn't mean you'll be alone with these things,that are needed to do your dropshipping business.,The point here is you need to learn how it works,or you are the driver in your business.,I'll just mention this, but about investing money.,Yes, you still need to invest small cash to get your business launched and operational.,It's because you still have things to pay, and those are the minor operating expenses,like web hosting and your dropshipping suppliers.,It's up to you if you want to run ads right away,or reach out to influencers and other stuff.,The second step is to choose a dropshipping business idea.,Here, we will think about the niche of our dropshipping business,what are the products that we'll sell,the teams.,Choosing products that we'll sell is very tricky, so I have this video.,These are the trending products that you can start selling right now.,I'll just link down in the description box so you can see the things we can sell now,because it is really difficult to brainstorm and do product hunting.,I hope that the video helps.,The third step, do a competitor research.,Here, you will study--,In other words, you'll look at the businesses that have the same niche as yours.,Of course, it is really unavoidable that almost all the products on the market are the same.,So, what I mean in competitor research is you'll study their website,how they present their products,so that at least--,Wait, my necklace.,So that at least you know how you will market your products differently.,The thing you know that no one has.,Where you will stand out.,If they are all the same and duplicates one another,you need to have something that will make you stand out.,So, you really need to study your competitor's store.,Fourth step is, choose a dropshipping supplier.,As I said earlier, the Oberlo through AliExpress.,Those will help you to find products that you'll import to your stores.,I will put the link of Oberlo and AliExpress down in the description box.,Fifth step is to build your e-commerce store.,This is where Shopify enters,because Shopify is so easy to use as your store's website.,In other words, this is where your customers will be directed to the products they will buy,and this is the link you will share where they can buy those products.,You will also see here the orders, payments, and traffics that your business gets.,As I said, Shopify is a complete package.,It is also user-friendly and not too complicated to use.,That's why you can try it because I have a free 14-day trial,that I will link in my description box.,Sixth step is to decide on a business structure.,This is it, guys.,I studied this when I was in Senior High.,You will decide if what structure do you want for your dropshipping business.,It's either sole pri...,pri...,Oh my God.,proprietorship.,Throwback in my Senior High.,So, sole proprietorship is the simplest structure in business.,There's also the limited liability company.,There's also C corporation where you have more protection on liabilities.,It's better if you research more about that.,Try to read.,Seventh step is to get your finances in order.,Meaning, you will separate them as much as possible,because more likely, you will not have...,you know...,What's the right term?,You can't track much of the progress because it's like,you have your business income, then you have to spend for your personal needs,the money is just coming in and out.,You don't see much the total of what you save, your income, how much you spend,because they mixed up so more likely it would be confusing,and you'll end up feeling "Wow, I have more money left.",But what you don't know is, you have to buy this, you have to pay for this.,As much as possible, I will recommend that you should separate it.,Eight step, market your dropshipping store.,This is where you will run ads like Facebook ads.,That's a big help because more people can see your businesses.,Influencer marketing where we will reach out to influencers.,Commonly, these are paid.,You will pay these influencers just like running ads.,You really need to have an allocated budget for that.,This is what we say you will really invest time and money.,That involves here on running ads, influencer marketing,content marketing, and mobile marketing.,All of the marketing is there.,It's up to you as a dropshipping business owner if how you can market the products,and how you can have orders.,That's your main role here.,Check also the order details if it's correct.,About running ads, you need to study it.,That's why we need to invest time because we need to know,if what is the appropriate for our business,if influencer marketing is better than Facebook ads,so that we would not spend money on others.,We'll focus where we are gaining profit.,At first, you're not used to it, but...,Our last tip is to analyze and improve your o

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The UGLY Truth About Dropshipping That No Guru Will Tell You

in this video i'm going to answer the,most commonly asked questions about drop,shipping including the questions that,most people won't give you a straight,answer on so here's the ugly truth about,drop shipping,now drop shipping has a reputation for,being a get rich quick scheme because it,sounds way too easy you don't need to,store inventory you don't need to ship,or fulfill orders you don't need much,money to get started and you can run a,dropship store from anywhere in the,world now while all these statements are,tiknically true a common misconception,is that running a successful dropship,store is easy but in reality success,with drop shipping has many pros and,cons and isn't as straightforward as you,are led to believe so in this video i,answer all the in-depth questions,related to drop shipping to provide you,with a complete view of what it takes to,run a profitable dropship store now what,is drop shipping drop shipping is an,ecommerce business model where an online,store does not carry inventory for the,products it sells when an order is made,the online store purchases the products,from a wholesale supplier who then ships,the order directly to the end customer,so as a result the online store owner,does not have to deal with physical,inventory or perform any shipping and,handling there are no upfront inventory,cost because all products are purchased,on demand now is drop shipping legal and,legit it is 100 legal as long as you use,legitimate dropship suppliers so for,example if you sell disney merchandise,on your online store and your supplier,dropship's fake disney merchandise on,your behalf you could be liable for,fraud as long as you're careful about,who you work with and only use,officially licensed distributors for the,brands you carry drop shipping is legit,and safe,now does it require a seller's permit,and a business license well in the us,you absolutely need a seller's permit in,order to legally sell online now most,states require you to charge sales tax,to customers where you have economic,nexus and drop shipping is no exception,if your locality requires a business,license then you must get a business,license as well remember drop shipping,is simply a method of order fulfillment,your drop shipping business is a real,business and must be registered as such,now how profitable is drop shipping well,because your supplier is doing most of,the heavy lifting when it comes to,fulfillment and inventory the margins,for drop shipping are much less than,other e-commerce business models so,typical margins for drop shipping are,between 10 and 30 percent compared to 50,to 66 percent for private label and,traditional wholesale which makes drop,shipping far less profitable now the,best products of drop ship are higher,tiket items that yield more revenue per,sale,now is drop shipping worth it well,despite the low margins drop shipping,can be a great way to get started,selling online for less than three bucks,you can start a fully featured ecommerce,business that carries hundreds of,products and drop shipping is worth it,for product research as well without any,upfront risk you can list many products,online just to see what sells and then,based on your own sales data you can,private label or carry inventory for,your best selling products and keep more,of the profit now the best part is that,drop shipping can be automated except,for the customer service now most,established drop shipping suppliers,support edi which stands for electronic,data interchange edi is an electronic,system that allows your website and your,suppliers website inventory to,automatikally stay in sync so for,example if your supplier runs out of,stok on a partikular product your,website's inventory will automatikally,be adjusted in addition all orders,placed on your website are automatikally,transmitted to your drop shipper for,fulfillment however even though order,fulfillment is automated you are still,responsible for answering questions and,performing customer service now here's,how drop shipping from your own website,works now if you use a well-supported,e-commerce platform like shopify,bigcommerce or woocommerce setting up,drive shipping is a straightforward,process here's exactly how you drop ship,from your own website and how it works a,customer places an order on your site,and you accept payment the customer's,order is electronically transmitted to,your drop chip supplier where you are,charged the agreed upon wholesale price,for your goods your drop ship supply,then ships the order to the end customer,and you pocket the difference in cost as,profit now you don't have to drop ship,on your website you can also drop ship,on amazon and here's how amazon drop,shipping works you list your products or,sell on amazon as a merchant fulfilled,seller and then when an order is placed,on amazon you electronically send the,order to your drop ship supplier who,then ships the products to the end,customer now overall amazon drop,shipping is a much riskier business,model than drop shipping from your own,site because you have to follow amazon's,terms of service to the letter first off,you must source your products from a,legit wholesaler you are not allowed to,drop ship your products from another,marketplace like aliexpress ebay or,walmart otherwise you're going to get,banned as a result aliexpress drop,shipping on amazon is expressly,prohibited amazon also imposes very,strict requirements for shipping and,fulfillment that must be met if you have,a series of late shipments or inventory,mishaps your account's going to get,banned but outside of following amazon's,terms of service drop shipping on amazon,works much the same as drop shipping on,your own website you can also drop ship,on ebay you simply list your products,for sale as an auction or store listing,and then when an order is placed you,electronically notify your supplier who,fills the order and similar to amazon,you must source your products from legit,dropship suppliers and not marketplaces,like amazon or walmart otherwise you're,going to get banned so as a result get,rich quick schemes like buying products,from amazon and drop shipping them on,ebay at higher prices is prohibited now,you're probably wondering how drop ship,payments work well when you sign up with,a drop shipping supplier you'll be asked,for a form of payment and typically you,can pay by credit card your supplier,keeps your credit card on file and,simply charges your card when an order,is placed you can also use ach or direct,transfer this is where your supplier,keeps your bank information and,automatikally places a transaction at,the end of the day week or month for all,products purchased,the best way to pay a drop ship supplier,is through payment terms some suppliers,will offer you payment terms which means,that you don't have to pay for your,products until 30 or 60 days later now,whenever an order is placed on your,website two payment transactions occur,in the background the first transaction,takes place when you accept payment from,your customer and deposit the money into,your own bank account the second,transaction takes place when you pay,your supplier for the raw cost of goods,and any related drop ship fees,now where do you find drop shipping,suppliers there are four main ways to,find suppliers depending on your budget,and the types of products that you want,to sell,and by paying a fee you can perform a,search and instantly have access to,hundreds of pre-vetted suppliers you can,also use a drop shipping company a drop,ship company acts as a middleman who,automatikally connects you to a dropship,supplier you simply list the products,that the dropship company offers and,they handle the entire fulfillment,process as a result you do not have to,find or interact with any suppliers you,can also go to a drop shipping trade,show by attending local wholesale and,drop shipping trade shows you can form,drop shipping arrangements face to face,you can also use a print-on-demand,com

What Is Dropshipping? How To Start Dropshipping on Shopify

drop shipping is such a great business,model for new and seasoned entrepreneurs,because it lets you get started with a,small investment generate,passive income and work from anywhere,today you're going to learn,everything you need to know to begin,building your first drop shipping,business,and all you need to get started is a,computer an online store,and some basic marketing knowledge,[Music],now if you've heard about drop shipping,you may have come across one of those,sketchy video ads,selling an incredibly expensive course,promising to show you,how to get rich overnight and that's,exactly why we're making this video,there's a lot of information going,around on the internet about drop,shipping,and as the world's most trusted,e-commerce platform we think it's,incredibly important,to set entrepreneurs up for success so,today,we're gonna arm you with drop shipping,knowledge and strategies that you can,trust,then we're going to take you step by,step on how to set up your first drop,shipping business on shopify,first things first let's define what,drop shipping actually is,drop shipping is a fulfillment model,that allows you to buy directly from,suppliers and manufacturers,who will then ship the products directly,to your customers,this lets drop shippers focus on,marketing and customer service,instead of warehousing and the,logistikal challenges,traditionally associated with running a,drop shipping business,in digital entrepreneur communities,dropshipping has become such a notable,model,because it has so many benefits for,those just starting out,for one less capital is required and,without the need to spend thousands of,dollars,up front on inventory drop shipping is a,really accessible and less risky way to,get into the world of e-commerce,it's also a lot easier since you don't,have to deal with packing and shipping,tracking inventory or paying for a,warehouse there's a lot less to worry,about than other forms of e-commerce,because you don't have to worry about,these functions it's also easier to,scale,traditionally with retail businesses if,you were to receive three times the,number of orders,you would have to do three times the,amount of work and that's just not the,case with drop shipping,since you don't have to buy in bulk,right away it's also easier to test the,market,a lot of drop shippers will actually,list and sell an item to test the market,before buying it in large amounts and as,any seasoned entrepreneur will attest to,validating your idea will save you a lot,of heartbreak later,the biggest risk is building and selling,something that no one wants,lastly in today's economy the ability to,work from anywhere,is really really attractive drop,shipping does have a few challenges that,are important to take note of,the first is competition not having your,own copyrighted branded products,does leave you open to competition,secondly supplier errors,will happen leaving you to take,responsibility for mistakes that,you didn't make number three is lower,profit margins,since dropship products aren't exclusive,it can be hard to command,sizable profit margins number four is,little to no customizability,with drop shipping what you see on the,supplier's site is often what you get,lastly is longer shipping times with,drop shipping don't expect two-day,shipping,while it can widely vary shipping can,take anywhere from 19 to 35 days,however epacket shipping can,significantly reduce this and we'll tok,more about that later in this video,now that we've discussed the pros and,cons of drop shipping let's get into how,the model really works,let's start by defining the roles,throughout the supply chain,first we have manufacturers and they're,the ones that actually create the,product,then they sell it in bulk to wholesalers,and sometimes to retailers,then we have the wholesalers who buy the,products in bulk from the manufacturers,mark them up slightly and sell them to,the retailers,lastly we have retailers and they're,anyone who sell products directly to the,public,at a markup notike how a drop shipper,isn't listed in the supply chain that's,because drop shipping is an invisible,service,it's not a role drop shipping works like,this,you as the retailer choose the product,set the price,put it in your online store and run,advertisements to attract customers,soon enough a customer sees your product,and pays you,retail price once that happens you,notify your supplier,pay them a wholesale price and they ship,the product directly to your customer,here's an example let's say you're,selling resistance,bands you find a supplier that sells,them for fifteen dollars with shipping,included,then you put them on your online store,for forty dollars with free shipping,now when a customer places an order you,pay the supplier fifteen,and they'll ship the product directly to,your customer,using the information that you've,collected then you get to keep the 25,in profit now you might be wondering why,wouldn't your customer,turn around and just go buy from your,supplier well there are a few reasons,the first is that manufacturers and,wholesalers typically have what are,known as minimum order quantities,meaning they only sell in bulk also they,will typically only sell to legitimate,businesses,and not give wholesale prices to the,public secondly,people aren't just buying your product,they're buying your marketing the,trustworthiness of your site,and typically the lifestyle that your,brand represents,thirdly most suppliers don't focus on,marketing,and will typically require more effort,to find than the average shopper,is willing to expend now that you,understand the basics of the drop,shipping model,let's tok about how to set up your,first drop shipping store,if you're looking to make a serious,business out of drop shipping it's,important that you set it up the right,way,as most suppliers won't actually work,with you unless you're a legally,registered business at which point,you'll gain access to wholesale prices,here are some of the most important,steps for making your business legit,decide on a business structure legally,register your business,set up a business checking account and,credit card and lastly,abiding by the tax regulations in your,region,listen i'm not a lawyer or an accountant,and we don't have time in this video to,go into this in depth,but i'm going to link an artikle below,that will tell you everything you need,to know to get started,step number two finding the right,products,all customers aren't created equally and,finding the right products will really,help set your drop shipping business,up for success it's recommended that you,look for a niche market,a niche market is a segment of a larger,market that has its own preferences,identity and needs why are niche markets,so powerful for drop shipping,because they help you differentiate and,ultimately reduce competition,here's an example smartphone accessories,for traveling content creators,here are some general categories to get,you started,hobbyist products people absolutely love,their hobbies and will spend,mind-boggling amounts on training or,tools that support them,business products business clients will,sometimes be more price sensitive but,they will almost,always order in larger quantities than,individual consumers,products with repeat purchases if you,sell a product that needs to be,reordered frequently,then you can grow rapidly by,establishing a loyal customer base,in just a moment i'm going to show you,how to use online tools,to unearth profitable products but,before that,let's tok about some guidelines that,will help you narrow your focus,number one is pricing when picking a,product we want to look for something,that will be able to sell,between the forty dollar and two hundred,dollar price range,and that's because this price range will,allow us to maximize,profit without having to provide,extensive pre-sale support,also impulse buyers generally buy things,that are between this price range,number two is minimum advertise

Amazon Dropshipping in 2021 (EXPLAINED)

[Music],what's going on everybody welcome to my,channel my name is kevin pack,in today's video we're going to be,toking about amazon drop shipping,and what it is and is it something that,i would personally do,so a little background by myself i am a,multiple six figure amazon seller but i,specialize in private label meaning that,i brand products that are already,existing and i sell those,now amazon drop shipping is different,you actually don't hold any inventory,you're not brand anything you're just,selling existing products you're kind of,like a middle,man in between amazon and your supplier,in a way right,versus private label you hold inventory,yourself and then,you send it off to amazon as well now,the thing with this,is drop shipping the way it works is you,create a product,listing on amazon and whatever customer,buys,when they buy from your listing then,you're going to contact your supplier,and they,will send it out to the customer,directly for you that's how drop,shipping works,and there's a lot of pros and cons to,this number one the biggest thing,is that there's not a lot of upfront,costs because you don't have to hold,inventory,so versus for me i have to pay for the,inventory up front and then they send it,to amazon,but here you don't have to pay for any,inventory you're just kind of,directing and leading everybody to make,the purchases and send the inventory,whatever the case may be this is,typically how they do it is,they will contact drop shipping,suppliers from alibaba or ali,express or walmart or anything like that,and they will send that,into amazon and then that's how they,make the purchase all right so,basically the customer is actually,buying from walmart or,alibaba or aliexpress and not directly,from,amazon that's basically how drop,shipping works now the problem is,that the reason why i would not do this,business model is because that's against,terms of service,now you are allowed to drop ship but you,have to do it from a legitimate,wholesale,supplier that's different you cannot do,drop shipping from another marketplace,like aliexpress,alibaba or walmart or target or whatever,because they,are retailers they are not wholesalers,that's a big difference,now most drop shipping businesses they,use retailers because they have better,margins they have better profit margins,if you go from a wholesaler,your margins are going to be very very,slim that's actually against term,service amazon does not want you to,do that and that's one of the biggest,problems with,drop shipping and why i wouldn't do it,is because i don't want my account to be,suspended i don't want to lose my,privileges,of selling on amazon i'm already doing,really really well i don't want to risk,that so that's one of the biggest,reasons is that it's against terms of,service,and the profit margins aren't too great,from what i've heard,that people are usually getting about 10,profit margins after everything from,amazon,versus for me when i do private label i,get like 30 to 35,profit margins big difference there,three times as much,profit doing that personally on my,preference i would not do drop shipping,it's not really,my cup of tea if i would say and,i want to build a sustainable business,that i want to exit in the future and,sell,off and with drop shipping you can't do,that because you're not building your,own brand you are building something,that's kind of like fast money in a way,so i don't want to make fast money i,want to make sustainable,long-term big money that's what i want,to do and that's why,i advise people don't get into drop,shipping,if you're going to start off in a,business i think amazon fba is a great,way,to start your fundamentals of learning,how to do a business because that's the,basis of how,any business is you know like for,example this laptop,basically kind of a private label item,because you see a bunch of different,laptops but there's a bunch of different,brands so basically,even though not everyone has the same,laptop it's still a laptop but there's a,bunch of different brands over it that's,how,apple's looks successful you know dell,other companies,they are creating private label products,they're improving it and making their,own,and that's basically what i do and i,want to be able to do that for the long,term and,and sell that business off in the future,if i want to right but you can't do that,with drop shipping it's just fast,turnover money,and it's not very sustainable as well,and also you could risk getting your,account,banned i don't think anybody wants to,risk that i know i would not want to do,that,that is basically my opinion on amazon,drop shipping so i really advise you,guys,do you do diligence do your research,there is money to be made on,drop shipping uh amazon but you need to,make sure you do it the right way and i,would not advise doing it the illegal,way because you are just putting,yourself at risk,and putting your money at risk as well,so that is my video for today thank you,guys so much for watching,it was just a quick one i hope you guys,gained some information on that and got,some perspective on that because i've,been seeing,this trending a little bit this amazon,drop shipping you can see a trend around,youtube and tiktok so i thought,i'd bring it to the table and from a,six-figure seller might like myself i,wanted to get my opinion out there,so that is the video today guys thank,you guys so much for watching,and i will catch you guys in the next,one as always go make that money i'll,see you later,[Music],peace,[Music],you