Greetings, side hustlers!
Dropshipping is on the rise as one of the most popular side hustles in the post-pandemic new normal. With a market size worth $162550 million in 2021, it is expected to grow 20.7% between 2022 to 2028.
In 2021, 19% of global retail sales were from eCommerce. This far into 2022, it’s already at 20.3%.
Of this number of eCommerce sellers, 22-33% use dropshipping exclusively.
There are plenty of ways to do it, especially if you take advantage of the Internet and online marketplaces that provide ready-to-dropship products.
Some of these sites make it even easier by providing customer service and delivery on your behalf. All you have to do is list the items on your eCommerce store and promote them!
But just because it’s easy to start doesn’t mean it’s also easy to succeed. Before you dive in, you need to know the basics.
Stay tuned; we will give you everything you need to know to take on dropshipping as a side hustle in 2022 and beyond!
What you can expect this week:
- Trends: Is dropshipping dying out? The stats say otherwise!
- Strategies: Enter the eCommerce industry without experience or heavy lifting. We’ll show you how!
- Tool of the Week: Bigcommerce is to Dropshipping as Robin is to Batman. A very supportive and useful sidekick for dropshippers!
Trends
Dropshipping is only getting more popular and that trend is set to continue for the foreseeable future! This week we’re taking a look at the global market size of dropshipping as well as the most popular product categories for dropshippers. Enjoy!
Global Dropshipping Market Size
In 2020, the estimated value of the market for dropshipping e-commerce was 128.6 billion U.S. dollars globally. Over the six-year period between 2021 and 2026, the value of the market size was forecast to grow to 476.1 billion U.S. dollars.
Most Popular Dropshipping Niches
In recent years dropshippers preferred to operate in the gadgets, devices and accessories niches. However, in 2019, fashion accessories topped the list while gadgets moved to the second position.
Baby & kids’ products remain popular as well and occupy the third place while clothing and health & beauty became 4th and 5th most popular niches.
Strategies
Looking to make extra cash or take over the world one marketplace at a time? Dropshipping as a side hustle can be a great way to get your feet wet in the eCommerce business.
The barrier to entry for starting an online store has never been lower, thanks to the advent of dropshipping and marketplaces that provide ready-to-dropship products. You don’t even need to stock physical inventory before starting to make sales.
Before we get into the nitty gritty of how to start a dropshipping side hustle, let’s go over what dropshipping actually is and look at whether or not it’s still a valid side hustle in 2022.
What is dropshipping?
It’s one of those innovative online selling concepts that initially struggled to catch on but has become increasingly popular in recent years.
The idea is simple: rather than having inventory stored somewhere and shipping it out, sellers link up with vendors with ready-to-ship products. When an order comes in, the Seller gives the details to the Vendor, who then ships it directly to the Customer — no need to store any products or manage any logistics.
This is a great alternative for small businesses because they don’t need to spend money on storage or other overhead costs associated with selling. All you need are basic eCommerce tools and a website where you can list your items for sale.
For customers, dropshipping is also convenient because they get their orders faster. Cheaper, too, since most (not all) dropshipped items are non-branded.
Dropshipping seems like a win-win situation for everyone involved! But is it actually? Read on to find out.
Is dropshipping a valid side hustle in 2022?
Starting an online dropshipping business has advantages and disadvantages. There’s no limit to how much time you can put into this side hustle, but there is also no guarantee that it will ever turn into a full-time gig.
Be sure to weigh the pros and cons of running your own dropshipping business before deciding that it is your best side hustle option for 2022:
Benefits
Flexibility
You have complete control over when and where you work and even how much income you make. This means you can stay in your 9-5 job while doing your side hustle.
If things go well, you could end up with two incomes without having to put in extra hours or give up your weekends. And if it goes very, very well? Well, that’s a nice problem to have, isn’t it?
Low upfront investment
Unlike brick-and-mortar stores, you don’t need to invest large capital in starting an eCommerce business using dropshipping. Your initial costs mostly cover either a website or a storefront in an eCommerce platform like Shopify or Bigcommerce.
Easy to scale
Because you don’t have to deal with storage, packaging, and shipping, you can grow your online store faster. Use your side hustle time marketing your products and let the suppliers do the leg work.
Dream big and sell your items on multiple marketplaces in the future. It’s called multi-channel selling, the holy grail of eCommerce businesses.
Many promotional options
Speaking of marketing, you should explore different platforms to promote your listings. Think social media and affiliate programs. All this is possible when you don’t have to worry about inventory and fulfillment.
Disadvantages
Very busy competitive landscape
We won’t sugarcoat dropshipping as your yellow brick road to financial freedom. The truth is, thousands of competitors are already out there with many selling items similar to yours.
Why is that? Well, simply because you’re not manufacturing unique products under your own brand. And you will most probably be sourcing yours from the same vendors as other sellers following this business model.
Limited control
When running a dropshipping business, you rely heavily on your vendor for the following aspects:
- Customer service: Some suppliers provide premium services that include 24/7 customer support. However, most won’t offer anything beyond basic information about shipping times and return policies.
- Product and packaging quality: While you can request that vendors send you samples, you cannot guarantee they’ll deliver the exact same thing to your buyers.
- Fulfillment: You send customers’ orders to warehouses or dropshippers and can only hope they send your products out as quickly as possible.
- Inventory: When your dropshipper runs out of stock on your products, you can either go to another supplier or wait until they’re available. Either way, you risk losing potential buyers.
- Promotional offers: The only incentive you may be able to provide to shoppers is a price discount. Free shipping and add-ons may be possible, but only if your vendor is willing to change their internal systems.
Low markups
With dropshipping, you alone decide on pricing. The dropshipper has no say on this aspect. However, without a brand to justify premium prices, your hands are tied at narrow margins.
How do you start a dropshipping business?
The process of starting a dropshipping business from scratch isn’t that complicated. Here are five steps that can help get your dropshipping business off the ground:
Step 1: Pick a niche
Narrowing down your products into a niche is arguably one of the most important parts of starting any business. After all, if you sell everything under the sun, how do you expect to market your products effectively?
Shopify, one of the leading eCommerce platforms, offers this insightful guide on finding a profitable dropshipping niche.
Step 2: Select products
This is the most tedious step in the process, and understandably so, with a multitude of merchandise to choose from, even in the smallest niche.
Fortunately, several online companies offer apps to help you build your list. Head on over to this article from Oberlo, a trusted name in the dropshipping industry, to discover some valuable tools.
Step 3: Find Suppliers
Now that you’ve shortlisted your product list, it’s time to source them. Searching on Google is one way to do it, though it won’t be an efficient use of your time. Also, you cannot determine the trustworthiness of a supplier, and simply taking their word for it is not a smart option either.
We’ve taken the guesswork out of the equation to speed up the process. Read on to discover the shortcut!
Step 4: Set Up Shop
Many side hustlers hesitate to sell online, thinking it requires tech skills and thousands of dollars to build a digital store.
What if you can be up and running in a week or less, spending $100 max? Ah, now we’re talking!
Check out the shortest path to starting your very own eCommerce store in our article here.
Step 5: Promote
Selling dropship products is not that different from selling private label or branded goods. You must craft a marketing strategy and utilize all available channels appropriate to your niche.
The marketing experts at Wishpond swear by these 12 proven strategies for dropshipping businesses.
Where can you find ready-to-dropship products?
As promised above in Step 3, we’re sharing the best places to find manufacturers and wholesalers that service dropshipping retailers. These platforms will help you source them, so you don’t have to spend several precious hours doing it yourself.
They can also handle all aspects of ordering for you. All you need to do is fill out some information about your products (or use their automated features), and they’ll take care of the rest.
1. Modalyst
Image Source: https://www.modalyst.co/
Modalyst is an automated, centralized dropshipping platform that eliminates the inconveniences of minimum orders and advance ordering. With a free account, you can organize everything in one place and shop from different brands without switching tabs.
The platform boasts access to over 200,000 wholesalers, brands, and manufacturers across all major product categories. The best part is that all suppliers feature only products that are in stock, ready to package and ship.
Modalyst’s offers include business tools, shipping fulfillment, and many other features that make it easier than ever to find new products or set up shop and begin selling.
Modalyst:
Supports multiple websites
Would you like your product list formatted for Amazon, eBay, Etsy, Shopify, Wix, Volusion, and other marketplaces or shopping carts? On Modalyst, you can. Simply export the list, and it will be in the pre-set format, ready for uploading to various eCommerce platforms.
Find profitable products
Modalyst allows business owners to track and measure key performance indicators as well as gain insight into products based on real data from merchants.
Supplier communication
A supplier directory facilitates communication with suppliers through the Modalyst app. You’ll also see their inventory levels, shipping times, and fulfillment process.
Shipment tracking
The Shipping Status system automatically updates you on your orders, including couriers, tracking info, and tracking links. To offer free shipping to your customers, factor in the shipping fee when calculating your product prices. In your online store, you will see a record of your shipments’ delivery when they reach your customers.
Automatic ordering process
The Digital Purchase Order automatically filters every item through the Order Management Tool.
2. Alibaba / AliExpress
Image Source: https://www.alibaba.com
Alibaba is the largest eCommerce platform in the world and is considered China’s Amazon. (Translation: You can find just about any product there.) But it is a B2B site — a marketplace for business owners to sell and buy from each other. Thus, it is better suited for private label merchants.
Dropship retailers should instead head onto Alibaba’s sister company, AliExpress, which houses suppliers selling products individually or in small batches. Many sellers on the platform also offer a relatively fast shipping option called ePacket.
To be clear, you can definitely use Alibaba as well to start a dropshipping business. However, it’s a little more difficult to find and partner with dropshipping suppliers there than on AliExpress. Some are set up to sell large quantities to wholesalers and retailers. Many don’t sell or ship individual items to consumers abroad.
Here are some tips for a smooth sailing AliExpress/Alibaba experience:
- Save time finding a supplier by checking the Minimum Order Quantity (MOQ) first. You should see an MOQ of 1.
- Use the “Trade Assurance,” “Fast Dispatch,” and “Ready to Ship” filters in your search to narrow down your results.
- Read the reviews of each candidate.
- Email or send messages through the platform’s app to minimize the language gap. Also, write very simple and concise English sentences. Bullets are preferred.
- Opt for PayPal as your payment method. It’s fast, secure, and reliable.
3. Oberlo
Image Source: https://www.oberlo.com/
Founded in 2014 with the goal of building the world’s best supply chain management system, Oberlo operates out of Finland, with its headquarters in Tampere. Their website includes an algorithm for automatically calculating profit margins for each product.
The Oberlo app was released in 2015. It offers suggestions based on shoppers’ purchasing behavior and tracks buyers’ order status.
More than 10 million active users and over 40 million orders later, this marketplace has become well-loved by dropshippers around the world for the following reasons:
- No monthly fees, listing fees, or transaction fees.
- You can easily import thousands of popular items into your eCommerce store by clicking a few buttons.
- It automatically syncs your inventory when an item sells, goes out of stock, or is no longer available.
- Fulfillment services include not only shipping but also tracking and customer support.
- Buyers are also welcome to sell.
- Payment processing fees are waived for Apple Pay and Google Pay users.
- The app works on all iOS and Android devices.
- Customer service is excellent.
To date, Oberlo has raised 8.6M USD from investors such as Amino Capital and Lifeline Ventures. Now, that’s what we call a vote of confidence!
4. Spocket
Image Source: https://www.spocket.co
Spocket is another great platform where you can find all kinds of ready-to-dropship products at low prices. The best thing about this marketplace is they provide free shipping worldwide on orders above $50. And the next best thing is that their customer service team works 24/7 to answer all your questions quickly.
You can find a collection of the best US and European dropshipping suppliers on Spocket. Most will ship product samples to you for free—not all marketplaces offer this perk. Shipping is easy, quick, and reliable as well.
The Spocket app automatically syncs with your eCommerce store, and orders appear on your end without much manual input. Your integrated options include Shopify, BigCommerce, Wix, WooCommerce, Ecwid, and Squarespace.
Dropshippers also enjoy branded invoices. Your products may be unbranded, but your store’s name will make a mark with a unique brand identity.
Spocket also offers exclusive deals to its members, including 30-40% discounts on all products.
Oh, did we mention signing up for an account is free, with no credit card required?
5. SaleHoo
Image Source: https://www.salehoo.com/
SaleHoo boasts over 10 million members worldwide and 2 million monthly visitors. It’s one of the largest marketplaces for dropshipping suppliers and wholesalers across Asia.
Their inventory includes everything from jewelry, t-shirts, and home decor to bath and body products, health and beauty items, and electronics. Plus, they add hundreds of thousands (!) of new products every day.
Listed below are some more interesting features of SaleHoo:
Unbeatable pricing
All products sold on the platform come with wholesale prices and free shipping on orders over $50. Also, you don’t get charged any listing fees or commission rates on dropshipped items, so your profit margins are high.
SaleHoo directory
You have access to a vast and reputable global network of vendors. Find top products and trustworthy suppliers with no minimum order quantity requirements. And you can even negotiate on pricing.
Market research lab
This tool helps you identify high-profit, in-demand products. Quickly sort through thousands of suppliers based on your specified criteria. Access special discounts and deals exclusively available to SaleHoo members.
SaleHoo dropShip
SaleHoo offers one-click integration with Shopify. That means you can easily import your inventory to your Shopify store and automate your dropshipping.
Excellent customer support
You’ll have a dropshipping expert by your side via one-on-one phone, email, live chat, and FaceBook. This unique, customized, and private communication is the assistance you need to discover hard-to-find suppliers and specialty products.
Side Hustler Case Study: Jacky Chou and Albert Liu
Do you have what it takes to be the next dropshipping success story? These two everyday people did!
It is absolutely possible to be successful at dropshipping despite not making it your main activity. Here’s a story that proves it and should go down in the dropshipping hall of fame as one of the best eCommerce dropshipping success stories.
Business partners Jacky Chou and Albert Liu started a home decor dropshipping site on Shopify while still working their respective jobs. While Liu was a freelance Facebook consultant, Chou was the founder of Indexsy, an SEO agency.
They did have a rocky start, with the business touching a negative 3K. But Chou and Liu did not give up. Their persistence paid off when they touched $250k a month in just 8 months. And that’s at 30%-40% profit margins! Their side hustle successfully generated over $700,000 in revenue within a year.
Read more about their story here.
Tool of the Week
BigCommerce is a great eCommerce platform for dropshipping newbies. It offers 24/7 customer support, solid training, and all the tools an eCommerce seller interested in dropshipping needs. It also integrates well with all the marketplaces we listed in the previous section.
We highly recommend BigCommerce for a hassle-free jumpstart to your online selling side hustle.
Here are some features you get when you build your eCommerce store on this platform:
- Templates for setting up your storefront
- Completely customizable designs
- Integration with other eCommerce platforms, e.g., Shopify, Amazon, eBay
- Automated inventory management
- Shopping cart plugins
- Google Analytics for tracking your customers’ journeys
If you’re interested in starting a side hustle dropshipping business with the potential to grow into something more serious down the road, BigCommerce can help you get there.