“I do 100 kappa per month, this thing has changed my life ”: written like this, with the letter kappa representing the thousands of euros, because saying“ 100,000 euros ”in full is a boomer. And then again: “It’s easy, just do it like this and like this” and above all “to find out how, click here and buy my book“. Or my ebook, my online course, my podcast subscription.
In the realm of online selling, the concept of dropshipping has gained traction as a strategic approach. If you‘re seeking ways to enhance your sales, consider leveraging the potential of dropshipping products to boost your sales.
Dropshipping is a business and a business was born around dropshipping. A business that is tempting to many, because who doesn’t want to do “100 kappa a month”, even more if “it’s easy” and it doesn’t take much effort? But is it really so? And above all: what is dropshipping?
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Why is it called dropshipping?
The term, which can also be written staccato, comes from English words ship e drop, however, put in reverse order: they mean to ship and deliver, to give, to drop and they describe well what dropshipping is. Items that are bought and sold they are not in some warehouse (at least, not accessible to seller and buyer), they are not installed, assembled, stored somewhere: they are in fact shipped and delivered.
In the last couple of years, among other things, the term drop has expanded to intangible assets, such as a song, a film, a post on social networks, which are dropped (we explained it here) and are immediately available for those who want to use it.
How do you do dropshipping?
Put simply, dropshipping means selling something you don’t own. More precisely: something that is not kept in some warehouse, but that remains in the availability of those who produce it until the time comes to ship it and deliver it to the end customer. It works like this: the seller identifies one or more products that are right for him (smartphone covers, pen sets, cups with kittens, and so on), contacts the supplier and signs a contract with him, which may or may not provide for the ‘preventive purchase of a number of goods. That will be the commodity he will try to sell to customers. At this point two things can happen: the items remain in the supplier’s warehouse or are delivered to a logistics center unrelated to the seller and supplier (Amazon offers this service, but it is not the only one), which will keep them until the time of shipment.
The second phase it is triggered when a sale is concluded: the seller informs the supplier (or the logistics center), who will take care of shipping the item to the buyer. As you can see, the seller is freed not only from the hassle of physically managing the logistics, but above all from one of the biggest business burdenslinked to the need to find a space for a warehouse where to store the goods and bear the costs for its management.
Another low weight, compared to a traditional activity, concerns the initial investment: it is difficult to quantify it in detail, also because there are many variables, but according to Shopify’s guide (who) it is in the order of 8-10 thousand euros, divided between costs related to actual e-commerce, administrative costs and marketing and advertising costs (which is necessary and fundamental, as we will see below). Obviously, you can also start from scratch or almost, since many sites offer free or reduced-cost trial periods. But if you want to get serious, you need to spend.
The platforms to lean on for dropshipping
The activity is all done online, so it is obvious that it is needed a site that acts as a showcase for this shop that doesn’t exist in the real world: this is the other big burden that the seller is freed from, because the platforms that offer dropshipping services take care of that too.
The main ones are Shopify (it starts from here) e Amazon (through the Seller Central section)but also the Chinese Alibaba offers similar services. What is the advantage in this case? Simply that you can take advantage of the enormous visibility of these sites to open a virtual shop within them, potentially capable of reach millions of people around the world. In addition to the fact, as noted by Amazon, that you can “leave shipping, returns and customer support to us”.
Is it really “easy” to make money with dropshipping?
Probably not, or in any case it is much more complicated than what you might think or what those who sell online courses would like to believe to explain it. First of all, in Italy there are obviously tax obligations to be respected (for example, opening a VAT number and paying INPS contributions): this, connected with the fact that both the supplier and the platform on which one relies keep a part of the proceeds from the sale, means that the earnings are low. Or even very low: the same Shopify ricorda (who) that “the margin is very variable”it can be as high as 30% but also as little as 5%.
In short: if it is true that the initial capital to start a dropshipping business is definitely lower than a traditional sales business, it is equally true that stratospheric gains cannot be expected. And that the “100 kappa a month” mentioned at the beginning are more a mirage than a certainty.
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Why not dropshipping?
That of the fact that the risk (however small) does not correspond to an adequate premium, that is, that “the game is not worth the candle”, as it was once said, is the first reason why it would be better to evaluate carefully if it is really the case to start a dropshipping business. But there are others.
There is the question of providers, basically distant or very distant from the seller and therefore difficult to control: what happens if once the order is received, they do not ship the goods to the end customer? That the vendor lost his money and was scammed. Not only that: what happens if once the order has been received, they ship the goods to the end customer with great or very great delay? That the seller loses face and the customers, who will turn to others.
This is because the world of dropshipping is a world where there is a lot competition: just browse the Amazon site to realize it and see how many virtual windows all have more or less the same things on display. Furthermore, even if the initial investment to start is relatively low, the presence of an almost infinite number of rivals can only push the seller to investing money (even 100-200 euros per month, just to start) in promotion and marketing activities or perhaps in affiliation with some influencer who can give visibility to the products. If not, why would anyone buy their own kitten cups instead of someone else’s kitten cups?
There might be problems even for those who buyespecially if (as is increasingly the case) the goods arrive from a country outside the European Union: the seller may not worry about it, but the end customer may find himself paying even high or very high customs duties.
Beyond all this, it should also be remembered that dropshipping it’s not a very sustainable business: to the obvious doubts about how appropriate it is to make goods travel from one end of the world to the other, polluting all the way, there are also doubts about what happens when these goods do not fit, are of the wrong size, are damaged or go however changed. It is therefore repackaged and sent back from one end of the world to the other. Polluting again.