What is Dropshipping, and can I do it in 2024?

Dropshipping is perhaps one of the hottest terms in the younger entrepreneurial generation today. While the basic definition of dropshipping is likely understood, the landscape is not. This guide aims to shed light on this often misrepresented topic. Upon finishing this guide, you should be able to know enough about dropshipping and what it might take to succeed with this method in 2024 and beyond.

What is Dropshipping? 

Dropshipping is a fulfillment method that allows you to operate an ecommerce store without ever having to physically handle the products you’re selling. This is because the supplier you’re working with is taking on the responsibility of all aspects of fulfilling the product, including storing, picking, packing, shipping and in some cases also returns.

Dropshipping can be a great way to get started with making money in ecommerce because of these previously mentioned perks, however, before you dive in, it’s important to know more precisely how it works so you know what you’re getting into.

What is a dropshipping business?

A dropshipping business is an ecommerce venture that operates using a hands-off fulfillment model in which a third party supplier agrees to fulfill orders in the background–that is, dropship–as you make sales on your storefront. For more detail, read this guide on the difference between dropshipping and traditional ecommerce.

As the owner of a dropshipping business, with fulfillment being handled in the background by your supplier, your job is to set up an online storefront and attract customers through your own marketing methods.

Because your supplier is fronting all of the inventory, there’s no need for you to make any purchase before selling, meaning there is reduced risk with minimal upfront investment. With a variety of easy to use platforms that make setting up a store quick and easy, it’s also one of the fastest ecommerce businesses you can start.

Let’s dive in more with a thorough breakdown of how dropshipping works if you’re starting a store from scratch.

How Does Dropshipping Work? 

Here’s exactly how dropshipping works, step-by-step:

1. Market research

Dropshipping by nature is heavily trend dependent, so your first step to succeeding is performing research to understand what is hot in real time. Your goal is to be on the pulse of trends so that you can not only see what products are hot right now, but also jump on what’s quickly emerging early so you can get a head start over competition.

Take your time and make use of free analytics tools such as Google Trends, searching for dropshipping products to see if they’re still trending. You’ll also see related items and topics that are rising in interest, allowing you to potentially predict trends early. 

You can also simply scroll through social media but with the mindset of a consumer, paying attention to what types of products you see promoted through ads or influencers. You should settle on a niche to give you a more efficient way to filter potential products, paying attention to what other dropshippers are currently selling.

By gaining a good grasp of the market first, you’ll gain a huge advantage over others who skip this part and go straight to trying to find a winning product.

2. Product selection

Now that you’ve got the finger on the pulse of what people are buying, it’s time to pick your winner. During your research, you may have found a product that made you want to buy it yourself. Anything that stirred up this interest or desire in you should be a top product choice, but even if a certain product didn’t particularly resonate with you, if you noticed in the comment sections a strong desire to buy the product immediately, this is also a huge green flag for a winning product.

You’ll then need to get a rough idea of how much your gross profit margin would be by figuring out how much people are selling the product for and how much it costs directly from a dropshipping supplier.

While you might not know the exact name of the product as it is advertised by a supplier, you’ll likely have success finding it if you simply type in a general description of what the product is in the search bar on Aliexpress.

For example, if you see a portable juicer that is advertised as easy to clean, you can simply query “easy clean portable juicer” on Aliexpress and most of the time with some scrolling you’ll find the exact same product that’s being advertised along with its actual cost.

Remember that although picking your product is one of the most important factors that contribute to the success of your dropshipping store, you can always quickly test new products so don’t get too attached to your initial choice.

3. Picking a supplier

A winning product could lose a significant part of its value if it’s not coming from a solid supplier, so it’s important to choose one that displays green flags that show they are a good candidate for someone to work with.

While there are several different traits that make for a good supplier, one of the most important and easiest to quickly test is their communication. If they don’t respond quickly or if they ignore a specific question of yours, it’s best to move on to someone that is both prompt and thorough in their response.

You should also test out the whole process of ordering a product from the supplier from ordering it to seeing how long it actually takes to arrive. Once you have the product in hand, see that it matches the description, is packaged nicely, and has easy to understand instructions if it requires any form of set up.

A good supplier will be communicative, stock high quality products, fulfill orders in a reasonable time as quoted and handle issues gracefully. Remember that even though finding a supplier with these qualities might take time, it’ll be well worth it to make this investment in the long run.

4. Setting up a store

Now that you have your product of choice that’s backed by a good supplier, it’s time to set up your online storefront.

Thankfully, today there are many user-friendly platforms with low to no-code drag-and-drop builders and prebuilt themes so you should be able to set up your store in no time even if you don’t have much technical experience.

One of the more popular platforms for dropshipping specifically is Shopify, which also has the benefit of custom apps that allow you to smooth out parts of the dropshipping process, including the potential ability to connect directly with suppliers and their products for automated fulfillment. 

Dropshipping is also possible using other platforms such as Etsy, Woocommerce, and even Facebook Marketplace.

While you want to pick a good platform for your store, don’t stress too much on which one you choose as long as it looks professional and works as it should to effectively convert customers while providing them an easy browsing and checkout process along the way. 

We’ll also dive more in depth on this topic later on in the article with some pro tips for store setup, including a quick overview of the main platforms and how to launch a dropshipping store on them.

5. Creating product listings

When it comes to picking your online platform and its design, one of the most important considerations is the design of the product pages. 

Make sure that these pages allow for the creation of listings that are attractive and easy to browse if you plan to stock multiple products. When it comes to creating the actual listings, you should choose high quality images that you can either take yourself or ask your supplier to provide. In addition to the images, you need to create attractive descriptions along with easy to follow CTAs.

Some apps and platforms allow for direct integration of products and their images and descriptions directly from the supplier so you can automate this process. However, be sure to double check and update the description to make it more appealing for your customers before going live.

6. Efficient marketing

Once your store is set up, looking good, and stocked with products, it’s time to get the word out. The best way to market your product is using social media, as in today’s age this is how many consumers make their purchasing decisions. TikTok and Instagram are the two best channels for marketing your product, but it’s also possible to market within Facebook groups if you have the right product and strategy.

In the beginning, you should start with organic marketing, making videos with the hopes of going viral without needing to spend money for the increased reach.

Focus primarily on creating videos that showcase your products in action, highlighting the problem that your product is a solution to. You can also make videos that show how cool your product is, throwing in some lifestyle shots as well. Pair these videos with trending sounds and engaging edits and you’ll have the highest likelihood of going viral.

When you’ve proved that your product can convert with organic efforts, it’s time to turn up the numbers with paid marketing. Remember to start small and test as much as you can, doubling down on what works and taking inspiration from competition.

Consider influencer marketing as well. You can start by partnering with smaller influencers, offering free product and maybe a small monetary incentive as well for a review.

While there are many ways to market your dropshipping business, focusing on organic first then moving on to paid to scale is a tried and true method that the biggest dropshippers use to find success and stay there.

7. Testing

Signing up to the dropshipping lifestyle means constant testing. There are many factors that cause a customer to convert, including the design of your store and its individual pages, the type of marketing you’re using to promote your product, and even how you describe or frame your product in addition to its pricing.

Something as small as eliminating steps to make buying a product more seamless or changing a button’s color and text (for example, from a green “Buy Now” to a red “Get Yours”) can make a difference in conversion rate.

You can utilize A/B testing apps on platforms like Shopify to run two different designs simultaneously so you can gather data that will allow you to understand what’s working so you can do more of it.

Testing is all about coming up with your recipe that makes for a winning store, but remember to be patient throughout the whole process as it takes time to get the exact ingredients for your secret sauce.

Remember also that testing never ends, so keep an eye on your data to make sure your performance is steady and be ready to make changes if you see any new data that shows that things aren’t working as they used to.

8. Scaling

The final step to dropshipping if you want to win big is learning the art of scaling.

Scaling is a lot like building a skyscraper: you should only focus on doing so once you have a solid foundation. In dropshipping, this means having a winning product with steady sales and satisfied customers, a store that converts well, and a growing organic fanbase with consistent and effective marketing methods.

Once your foundation is in place, it’s time to start adding floors to your ecommerce skyscraper, one level at a time.

You can start by increasing efforts in individual areas while paying close attention to data to ensure that your efforts are producing a good enough return on investment. Increasing ad spend on a winning campaign is the most common way to scale, but be sure to go slow and pay attention to the numbers to make sure you are maintaining or increasing your conversion rate and return on ad spend as your numbers go up.

Adding products is another proven way to scale. Make sure you do so strategically, adding items that are complements to your main winning product while keeping a close eye on conversion rate.

Having a loyal audience that you can reach through an email list is the best way to announce a new product. A good strategy is to offer a subscriber-only coupon code to boost initial sales and reviews. 

While you scale, one of the most important things to maintain is your customer service level. Don’t ever overwhelm your supply chain or ability to potential customer issues–even if youreceive the short-term reward of increased revenue, you’ll lose in the long run with a compromised reputation and thus decreased sales and conversion if you don’t handle scale well.

The Ideal Dropshipping Goal: Why Dropshipping is Such a Popular Business Model for New Entrepreneurs

Dropshipping is one of the most popular business models for new entrepreneurs not just because of its low barriers to entry, it’s also perhaps the best way to get real-life business education that presents massive entrepreneurial potential once you gain initial traction.

Once you’ve built your business properly and start to make money, you should move on to the real goal of dropshipping, which is to eventually create and own your very own product and store. 

Having your own store will allow you to establish a brand outside of the competitive landscape of other dropshippers selling the exact same product. This gives you the longevity and the potential to make a lasting brand.

In fact, many companies that end up becoming large multinational brands start out with dropshipping. They began this way in order to prove the product/market fit and to exercise their marketing skills. 

Gymshark for example, which is now a billion-dollar company, started out as a dropshipping store and evolved to make its own products from there.

To summarize, dropshipping really should be used as a stepping stone to discover a winning product. Once you have found that product, use the revenue to fund the development of a unique product with your own branding that you can sell and scale.

The Pros and Cons of Dropshipping

Before diving straight into pro tips that will help you to start a store with the most potential for success, it’s important to be aware of the full picture of running such a business, including both positives and negatives:

Ready to Start Dropshipping? Here are Some Top Tips

Now that you have been made aware of the pros and cons of taking on the business of dropshipping, on top of an in-depth guide of how it works, here’s some expert advice surrounding the most important parts of creating the dropshipping business of your dreams.

Finding your product

While some people try to populate a store with several products hoping that one will bite (or even worse, test multiple products in different niches simultaneously), you should really only pick one product to focus all of your efforts on. 

Choosing just one product will allow you to get an understanding of what a targeted audience might look like, how to capture attention and effectively market, and how to frame a product attractively so that it converts.

To get you started, here are some tips on how to find your first product and its supplier.

Think like your customer on social media

You can perform market research through social media, acting as a customer on platforms like Tiktok, searching terms like “Must have gadgets” and “Best products for (current season)”, seeing what appears. Make note of what you see and if you can follow a funnel to a dropshipping store.

Normally, if you scroll long enough, you’ll come across a dropshipping product. A tip to find a product quickly specifically on TikTok without the doomscrolling is to search the hashtag #tiktokmademebuyit.

Look at the ads being served to you

Several dropshipping stores are successful to the point of having large ad budgets, so if you spend enough time on social media, you will eventually be shown an ad that is selling a product fulfilled through dropshipping. Many times it isn’t apparent that the product is being dropshipped because it looks like a clever invention, but more often than not, it’s another company’s previously made product being marketed to you by a dropshipper.

Browse social media with a consumer mindset

One of the biggest marketing funnels for dropshipping today is TikTok. Consumer behavior is shifting and favoring user-generated content, mostly on TikTok and Instagram, so much so that Amazon has launched a product discovery page that is similar to any other endless scroll-style video feed that you are used to on the other platforms.

Take a look at the comments to see if people say they “need it” or have bought it–this sentiment shows the demand.

Consider themes and seasonality

Selling a product to an audience that is already primed to like it is the easiest game to play in business. This is why sports and other franchise-level merchandise are such ridiculously profitable business models, and also why there are heavy-handed laws against infringing on this territory because it would be too easy to sell something to this crowd.

Rather than worry about infringing on a name brand or franchise with a cult following, you can sell a product that is within a certain theme or season. For example, you could focus on Valentine’s Day products or summer essentials. While these sales cycles may be short-lived, they can make for an excellent way to make money fairly quickly and incentivize you to continue in your ecommerce journey in different areas.

Keep in mind to always balance hot trends with those that are longer lasting. While hot trending products have the potential to make you money in the short run, you always run the risk of the trend dying out or the market becoming too saturated, so do your best to pick something evergreen.    

Choosing a supplier

While it’s fairly easy to find suppliers, especially on large websites like Aliexpress, there are certain time-saving, low key methods that seasoned dropshippers use to carry out this search like a pro:

Go straight to the source

Sometimes, the best suppliers are hidden in plain sight: some brands have manufacturers that are already open to dropshipping arrangements if you just ask.

To save time in your search, look for brands that allow for authorized distributors. This is a green flag that they could be open to a dropshipping arrangement.

Make sure to approach them formally, complete with a business plan and a professionally registered company so that they take you seriously and agree to work with you in a mutually beneficial relationship.

Network in person

The best way to meet a supplier is to actually meet the humans behind the company so you can develop real relationships. Trade shows make this happen, with some of the best happening in China–Shenzen in particular. There, you’ll have the best chance of finding new trending products early that you can test in person.

You can also search locally to see if there are any regional shows in your area. While they may be smaller, they’ll also be more likely to connect you with domestic suppliers that often offer faster shipping times and more accessible customer support.

Leverage the power of communities

As with any business niche, there’s a dedicated crew of enthusiasts that gather in a group online to share tips and advice. Search for subreddits, Facebook groups and local meetups that are focused on dropshipping and see what you find.

While it’s possible to find good advice in these public groups, you may have to filter through outdated or low quality advice in addition to trolling. 

The best advice is inside of an expert-led, private community. These groups are often equipped with proprietary tools and resources in addition to real-time advice, giving you the highest chance for early success even if you’re starting completely from scratch.

Creating your online store 

To build on the general overview for setting up your online store earlier, we’ll dive deeper in this section with some exact platforms that top dropshippers use to build thriving businesses.

Remember that the ideal platform for your dropshipping business will depend on your target audience, technical expertise, and long-term goals.

Whichever medium you use for your store, be sure to pick the one that allows for the best expression of and alignment with your brand and its message.

Let’s break down each of these top options with a quick summary to help you make a decision, complete with actionable pro tips:

Shopify

One of the most popular platforms for dropshipping, Shopify is favored for its easy customization thanks to its numerous editable themes and dropshipping-specific acts complete with integrations.

Pro tips:

• Get familiar with Shopify’s themes and built-in functionality, which includes rich analytics, upselling functionality, SEO tools and AI-powered product descriptions
• Consider using spy tools that can help uncover exact themes, designs and even ad strategies that competing Shopify dropshippers are using
• Utilize dropshipping-specific apps such as Oberlo and DSers for easy product importing and seamless inventory management

Your own website

If you want to have maximum control over your brand and customer experience without being tied to a monthly subscription or higher prices for premium features, your best bet is to build your own website.

While this requires technical knowledge or potentially pricey outsourcing, you’ll be able to have complete customization that can make you stand out as an authority in your niche.

Pro tips:

• Make sure to pick a good payment gateway to integrate with your store. Ensure that you’ve set it up securely and fully tested everything before going live. Read more about the best payment gateways here
• Stand out with a thoughtful, product-specific design that creates urgency to purchase, complete with clear CTAs, social proof and a checkout process that’s as short as possible
• Build out a blog section so you can establish authority and potentially gain organic traffic with SEO

Amazon 

Amazon’s massive reach and strong trust means that it has some of the most loyal customers that are willing to pay top dollar for any product, making it an ideal space to dropship a product for profit.

However, if you do choose to dropship on Amazon, be sure to comply with their strict rules surrounding this, including avoiding any customer confusion surrounding who is the seller of the product.

Amazon FBA is a good alternative to dropshipping on Amazon, but if you want to take up the challenge, here are some things to keep in mind:

Pro Tips:

• Double check Amazon’s rules and make sure that you’re compliant. The platform is notorious for suspending or banning sellers with little warning, so it’s better to rest easy knowing that you’re not at risk for this inconvenience
• Partner with a brand as an authorized distributor. This way, you’ll already be selling an item with established demand and a good reputation. Although this realm is competitive, it’s still possible to fit yourself into the supply chain with the right research 

TikTok Shop

While you might still know it as home to effervescent, short-lived trends and dances, TikTok also had a massive impact on how people shop online, particularly with younger generations.

The platform has long been home to dropshippers who would direct viewers to an external store, but recently it’s launched its own native store, TikTok Shop, which makes for a more seamless purchase experience and thus a higher conversion rate.

Some dropshippers have seen this as potential competition for the traditional TikTok-to-external store dropshipping business model, but others have adopted and continue to thrive, with some choosing to sell dropshipping products directly through TikTok Shop. Check out the Ultimate Guide to Selling with TikTok Shop

Pro Tips:

• TikTok is still heavily trend dependent, with some trends having short opportunity windows, so be sure to act fast and early for your best chance to go viral 
• TikTok Shop is very much a form of social commerce, so those that are willing to show their face and give personal recommendations while remaining entertaining will likely have higher sales–although it’s still possible to succeed with faceless content with the right strategy 
• Build up your audience to make the most of TikTok’s live shopping feature which will allow you to interact with customers and run exclusive promos while streaming and fostering a greater sense of connection and loyalty

Marketing your dropshipping business

Your product won’t sell until you start spreading the word about it to the masses. Here’s how the pros approach this somewhat daunting task.

The first pro tip is to keep things simple. While it’s good to test things out, don’t go too crazy spending money on ads or sponsorships without first trying to reach an audience organically.

Learning to gain an audience on social media platforms is one of the most valuable entrepreneurial skills that you can have today. So, consistently posting videos that highlight your dropshipping product will help you hone this skill and get paid as you get better.

For quick reference, here are the general categories for marketing your dropshipping product:

Different dropshipping marketing methods

• Organic reach on social media platforms- best done with consistent posting of a variety of attention-sustaining videos with a great hook
• Paid ads- it is recommended to only start dropping money on ads once your product is already selling, so your intent here should be to test and scale
• UGC and Sponsorships- While user-generated content, or UGC, can be highly effective, it’s hard to predict the reach, even for large creators. This is why you should be the number one producer of user-generated content for your own store and product.

Is Dropshipping Worth It?

While it is certainly within the realm of possibility to earn a living dropshipping, expect to deal with the elements of luck, competition, frustration, and fleeting trends that are all inherent to this realm of ecommerce. As with any business, once you have sufficient knowledge of the landscape and your skills, it is really up to you to make the final call.

That said though, there are many individuals out there who have chosen a winning product in 2024 and will tell you that dropshipping is totally worth it. The best thing for you to do is to seek their advice, and if you feel inspired to take action–go for it. If anything, you’ll learn valuable and transferable entrepreneurial skills.

Whop has several communities where you can learn about dropshipping from the experts. Join one of these pro groups for your highest chance of success, and as always, best of luck in your entrepreneurial endeavors.