Dropshipping: Selling on Amazon and eBay Without Ever Owning Inventory
Instagram is flooded with individuals selling products online. From watches to expensive home décor, there is nothing that you won’t find on social media today. But are all of these suppliers? Or do they have the bandwidth to provide such exciting offers on Black Friday?
Today, let me introduce you to a relatively new concept that has emerged as an iconic business model for any Jack you come across on social media today.
The best part? You can replicate the model on authentic e-commerce sites like Amazon and eBay to earn huge without ever owning the stock. The model is named dropshipping, and here is everything you need to know about it.
What Exactly is Drop-shipping?
Dropshipping breaks the traditional method of retail business in which an individual or organization sells products to its customers without having to own any stock or inventory for itself. In this rapidly growing model, the seller runs out of the risk of owning the product and acts as a middleman between the buyer and the supplier.
The Advantages of Dropshipping as a Business Model
With businesses becoming extremely complex and the emergence of new formats, dropshipping cuts the ice and hence could not be ignored at all costs. Following are the advantages of this new setup.
· The business model allows the entrepreneur to take on new risks on products as he does not has to own the inventory.
· On the other hand, retailers could experiment with different product lines and products as long as he fulfills his promises.
· Retailers are not tied to geographic location and can venture into new geographies as long as he has suppliers who deliver products in those locations.
Exploring the Flip Side: The Disadvantages of Dropshipping as a Business Model
While dropshipping comes with a ton of advantages, there are flip sides to this model as well. Some of them are listed below:
· The entry barrier to the industry is minimal. That translates to; anyone with huge savings could stroll in and make some serious profits in this industry.
· Being only a retailer, the margins are pretty basics. One has to pay the supplier as well and keep the price competitive enough to make sales happen. This leads to low-profit margins and hence should not be ignored at all costs.
The Curious Case of Tom Cormier
Tom Cormier, or eCom Tom as he is popularly known, graduated with a degree in Chemical Engineering in 2016. Back then, he was searching for some extra money when he came across dropshipping.
Cormier’s journey began with re-selling old video games, which eventually translated to the re-selling of cell phones until things went South and he has to change the entire business model in a night.
In August of 2017, Cormier bought an online course on dropshipping, and he opened his first store on eBay. To his surprise, the first sale came the very next day. He earned $1 for the sale of an $11 iPhone case.
eBay, Amazon, and Facebook
What came a mere profit of $1 now yields him more than $5000 every month. The sale boosted confidence in Tom as he went on building a massive empire out of it.
However, as per Tom, things have started to do away with their charm. What once pretty unknown to most people has now become a common norm. With the increasing competition, profits have trickled down, and hence one needs to work around the ways to earn substantially.
Furthermore, it is extremely difficult to battle with the Amazons and eBays of the world, and hence one needs the right training to navigate the digital jungle. Tom calls Facebook’s Marketplace the “Wild West of dropshipping” because it is still in its “initial stages.”
Tom is a true digital entrepreneur in all aspects. What came as a side hustle for ends to meet translated into a full-time job. Next, he founded the Dropshipping University, where his students tap on his expertise to earn substantial. This is what Tom has to say about his students, “I have students that are absolutely killing it like $40,000 profit in first two, three months.”
Tom promotes the dropshipping business and loves the way the industry is booming. For individuals interested in starting a dropshipping business, Tom has a tip in his sleeves. Start with eBay. This is what he would recommend to most beginners.
“eBay brings the right traffic in; you just have to be selling the right items…eBay is what I would always say to get started off with because it’s beginner-friendly, it’s easier.”
Dropshipping pose a lucrative opportunity for most entrepreneurs and is expanding aggressively. It is the right mindset, network, and knowledge that makes the difference.