How To Make Money From Dropshipping: 18 Clever Methods In 2021

Dropshipping creates an amazing opportunity for entrepreneurs to make money online. The model is simple to understand and easy to get into.

But, there is more than one way to make a living out of it rather than just reselling products from other retailers.

In this post, we’ll show you all methods to make money dropshipping along with their comprehensive insights, potential earnings, startup costs, benefits, and drawbacks.

What Is Dropshipping? How Does Dropshipping Work?

Before going into the topic, let’s revisit what dropshipping is.

Dropshipping is a fulfillment method in which a person sells a product without owning it. Instead, they direct their customer order to a supplier or marketplace and have these third parties handle the rest.

Essentially, the dropshipper doesn’t need to manage the product inventory, packaging, and shipment, which reduces upfront costs and eliminates tedious parts of a business.

General Dropshipping Statistics

Dropshipping is not dead.

According to Grand View Research, the global dropshipping market size is estimated to rise from $102.2B in 2018 to $557B in 2025, registering a whopping CAGR of 28.8%.

The main contributors to this growth are the rise in preference for online shopping, the increasing trend of cross-border trade, and how smartphones have revolutionized online shopping.

Asia Pacific dropshipping market size

Data collected by Google Trends also shows that the interest in dropshipping in the past 5 years is rising fast, and there’s no sight of stopping.

Google Trends for dropshipping

Because of this rapid growth, major companies are upgrading their infrastructure to provide dropshipping services.

For example, in 2017, Shopify – the second world’s largest eCommerce platform – acquires the dropshipping service Oberlo. This enables the company to hold a competitive position against its direct competitors, including WooCommerce, Magento, BigCommerce, etc.

Why It’s A Good Idea To Start Making Money With Dropshipping

ECommerce – the activity of buying and selling products online – is booming. It accounts for 21.8% of the total retail sales, generating over $6.39 trillion.

The COVID-19 has had a significant impact on eCommerce by disrupting the global supply chain and slowing down shipping times. However, it also tremendously benefits the business in the way that it escalates digital adoption and makes consumers more comfortable shopping online.

Among all types of eCommerce fulfillment models, dropshipping is one of the most popular due to its many advantages, taking up a share of 30% of all online sales.

Altogether, if you aren’t dropshipping, you miss out on a huge opportunity to make money online.

Can You Get Rich From Dropshipping?

Like any business in the world, it’s totally possible to get rich from dropshipping. If done right, you can make thousands or even millions of dollars out of it. However, dedication and hard work are always the keys. And, there is no one-size-fits-all formula to be successful.

Dropshipping requires you to do a lot of research and go through endless trials and errors to figure out what works and what doesn’t.

So, we recommend trying it out for yourself. If you’re not successful, the amount of knowledge you learn from dropshipping is immeasurable and can apply to literally any other type of business.

How To Make Money From Dropshipping

Here are 18 methods to make money from dropshipping.

1. Resell Tangible Products

Reselling physical items is the most common way to make money dropshipping.

First, you find products on other marketplaces or supplier websites. Then, you resell them on your online store at higher pricing points to make profits. After your customers purchase the products, you send the order information to those third parties to let them handle the rest, from fulfilling, packaging, to shipping.

An example store dropshipping tangible products

Insights

As shown by Grand View Research, the electronics segment contributes to the largest dropshipping market share, accounting for over 30.0%. It’s followed by Fashion, Toys & Hobby & DIY, and Furniture & Appliances.

Global dropshipping market revenue share by product

Since Amazon is the world’s largest online retailer, you can also rely on the data collected from the platform to check for the latest market trend.

According to Statista, the leading product categories purchased by U.S Amazon shoppers are electronics (44%), clothing & jewelry (43%), home & kitchen (39%), beauty & personal care (36%), cell phones & accessories (28%), pet supplies (20%), sports & outdoors (17%), and automotive parts & accessories (13%).

leading product categories purchased by U.S Amazon shoppers

This information gives you an idea of which types of physical products are the most demanding and profitable to dropship. You can also go with less popular categories to reduce competition.

Another insight that would tremendously benefit dropshippers using Facebook Ads is that the industry with the highest conversion rate is fitness, averaging 14.29%. Following are healthcare (11.00%), beauty (7.10%), home improvement (6.56%), and apparel (4.11%).

Facebook Ads conversion rates

For Instagram marketers, the top interests people pursue on the platform are travel (45%), fashion (42%), health & fitness (35%), skincare & cosmetics (30%), and sports (30%).

And finally, for Pinterest marketers, the most popular categories on the platforms are home decor (accounting for 69% of all users), beauty (50%), women’s fashion (46%), sport & travel (39%), gardening (35%), health (33%), electronics (30%), and men’s fashion (13%).

Most popular Pinterest categories

By looking at all of these statistics, you know the potential of any tangible dropshipping product and which platforms are suitable to promote it to make money.

Pros

  • Requiring little investment upfront: You don’t have to waste money on warehousing or building brick-and-mortar stores. The most you spend on is for promoting your products and purchasing customer orders one by one.
  • Taking a short time to see results: If you advertise your products using platforms like Facebook Ads or Pinterest Ads, you can quickly see how profitable they are and decide what to do next.
  • Easy to get into: With the help of many powerful tools and platforms, coupling with abundant guiding resources on the internet, anyone can start a physical product dropshipping business within a couple of days.
  • Global market: You can dropship your products to anywhere in the world, as long as your suppliers support it.
  • Becoming something bigger: In case you didn’t know, Gymshark – a global fitness brand – started out as a small dropshipping store.

Cons

  • Slim profits: You cannot mark the original price up too high. Otherwise, no one would buy the product. As a result, it’s hard to generate a sizable profit margin.
  • Little to no control over your backend: Fulfilling, packaging, and shipping processes are all handled by your suppliers. If any problem happens, you wouldn’t know.
  • Highly competitive: Besides fellow dropshippers, you have to compete with small brands in the same niche as yours and eCommerce giants like Amazon, eBay, or Walmart.
  • Challenging in branding your business: Your dropshipping products can be sold by anyone. Thus, it’s tough to become the authority in the market.
  • Problems with payment processors: Since you don’t have any control over the supply chain, many payment services like Paypal or Stripe can ban your payment accounts left and right.
  • Troubles with customer service: You might get complaints from your customers all the time due to slow shipping or product quality.
  • Problems with returns, refunds, and chargebacks: For the same reason, your customers might demand refunds or even open a dispute to get their money back. The return process is also troublesome since you aren’t the one who directly distributes products.

Startup Costs

An eCommerce & dropshipping site builder, like Shopify or BigCommerce, costs around $30/month. A domain name is about 10$/year, and a business email also costs around $10/year. Additionally, you might need to pay for third-party applications, which can cost around $10 to $100/month. These are fixed costs you need to need in mind.

The next one is variable costs. Suppose it takes you $10 to get a buying customer and $10 to fulfill an order. To reliably sell the first 50-100 units, you will need anywhere between $1,000 to $2,000.

Altogether, we recommend around $2,500 to start dropshipping tangible products. You can go lower or higher, but that number is a good reference point.

Potential Earnings

The sky is the limit.

Some dropshippers make thousands or even millions of dollars from a single product. Others only see losses.

Although we cannot give you concrete numbers, you can look at some successful example stories below for inspiration.

The first one is a pet dropshipping business owned by Alexander and Andreas. As stated in the interview, the owners made $500,000/month and hit the $10 million mark after a year of trying, investing, failing, and trying again.

The second one is Subtle Asian Treats, a store in the plush toy niche. After a year of learning about the dropshipping model, Tze – the owner – made $19,000 in profit from just two months of selling bubble tea pillows.

Subtle Asian Treats physical product dropshipping store

There’re more success stories, which you can find on Oberlo’s blog.

How To Start

For beginners wanting to start making money dropshipping tangible products, we recommend Shopify, Oberlo, and AliExpress.

Shopify is the leading eCommerce platform, allowing you to set up an online store quickly and scale it up effortlessly. On top of that, it provides you with 100+ themes for design customization and 4200+ apps to adapt to virtually any business needs.

Founded in 2010, AliExpress is an online eCommerce giant owned by Alibaba Group. Working primarily with direct manufacturers, the platform is able to offer 100+ million tangible products at a very low price, which you can easily resell to make profits.

Finally, Oberlo helps you import AliExpress products to your Shopify store in a few clicks to start selling right away.

For comprehensive guides, check out How to start a successful dropshipping business with Shopify and The complete dropshipping checklist.

2. Dropship Print-On-Demand Items

The second method to make money dropshipping is to sell print-on-demand items. They’re goods like shirts, hoodies, hats, bags, or mugs printed with your own customized designs as soon as an order is made.

Similar to the traditional tangible product dropshipping model, third-party companies you work with are responsible for handling and delivering your customer orders.

Example of print-on-demand dropshipping products

Insights

Over the last 4 years, the print-on-demand industry has grown by 12%, and there’s no sign of stopping. This growth is largely attributed to the advancements in printing technology and the rise in demand for unique and exclusive products.

The COVID-19 affects all types of businesses in one way or another. However, the print-on-demand model seems to get more benefits than drawbacks, with a sudden surge in sales for custom products, especially face masks.

Sudden surge for custom face masks

Personalization is a big part of print-on-demand. According to Data Intelo, the global market size for personalized gifts is estimated to increase from $26.3 billion in 2019 to $41.3 billion by 2026, growing at a whopping CAGR of 9.5%.

Researchers have also shown that brands can see an increase of 20% in sales by offering personalized services. Furthermore, 77% of customers said that they spent more on stores providing personalization.

Pros

Print-on-demand has all of the advantages of the traditional tangible product dropshipping model. It also comes with additional benefits below.

  • Easy to find trustworthy suppliers: Most printing partners and suppliers on the market right now, like Printful and Printify, are reliable and rated highly by customers.
  • Branding potential: By selling unique designs, you have a great opportunity to establish a dropshipping brand. Furthermore, most suppliers provide a complete print-on-demand dropshipping solution, meaning that you can send out orders with your own custom packaging and invoices.
  • Feedback loops: You can quickly publish a new design to see how your customers react and make necessary changes accordingly.

Cons

  • Rely on your printing partners: Like the traditional model, you lose control over the fulfillment and shipping process.
  • Challenging to come up with winning designs: Print-on-demand is highly competitive. If you cannot come up with creative, eye-catching, and trendy designs, it’s nearly impossible to survive.
  • There isn’t a wide variety of products: Each print-on-demand product category contains only a few items. For example, if you want to sell a mug with the shape of a cat, no platform right now can support you to do so.
  • Longer processing time: Each product has to go through a printing phase, essentially delaying the whole fulfillment chain.

Startup Costs

Most print-on-demand services have no subscription fee, meaning you only have to pay for product prices and shipping costs.

Like reselling tangible products, you need an online store, a domain name, a business email, third-party apps, and budgets for marketing and fulfilling the first few orders.

In total, we also suggest $2,500 to start a print-on-demand dropshipping business reliably.

Potential Earnings

In the first 1-2 years, we generally see average print-on-demand dropshippers making around $100-$200/month. This result is to be expected since people have to spend most of this time learning and testing to see which design works.

After finding winning designs, it’s relatively easy to scale up your dropshipping business and make lots of money from it.

For inspiration, let’s look at 2 successful stories.

Founded by Carlos Rodriguez, The Happy Givers generates more than $200K in revenue dropshipping print-on-demand shirts with meaningful quotes. The owner did that by focusing on building a strong social brand and giving back to the community as much as possible.

The Happy Givers print-on-demand dropshipping store

The second one is Famous In Real Life. This store has grown from an unknown online store to a reputable brand in less than two years, generating $700K in sales revenue. To get to this level of success, Mike Pasley – the owner – has constantly experimented with new ideas and product designs to unlock the secret behind a profitable print-on-demand business.

Famous In Real Life print-on-demand dropshipping store

How To Start

Printful is the leading on-demand printing platform, helping you add your designs to more than 230 high-quality items in minutes and start selling them on your store.

Its product categories include shirts, jackets, hoodies, sweatshirts, bottoms, dresses, swimwear, sports bras, leggings, hats, bags, phone cases, jewelry, socks, face masks, keychains, flip flops, drinkware, blankets, pillows, wall arts, bean bags, pet products, etc.

After a shopper purchases a product on your store, Printful automatically sends the order to the nearest fulfillment center to create the item in 2–7 business days and deliver it to your customer.

To integrate Printful with Shopify, you can check out the guide below.

Besides Printful, other recommended print-on-demand dropshipping platforms to make money are Printify, TeeLaunch, SPOD, CustomCat, Apliiq, and Gooten.

If you aren’t a design genius, consider hiring someone on Fiverr or Upwork to take care of the job for you.

3. Sell White-Label/Private-Label Products

White-label products are produced by third-party manufacturers but put on another brand name and logo to make it appear as if the brand has made it.

In fact, print-on-demand is a type of white label. However, the slight difference between it and the traditional white-label model is that print-on-demand allows you to print your designs on products, whereas customization for regular white-label goods is more limited.

Here’s an example of white-label products.

White label dropshipping product example

The term “private label” is often used interchangeably (or slightly misused) with “white label” by most people and even big companies because both types of products are rebranded under another company’s name. However, a private-label item is often manufactured exclusively for only one retailer (Hence, it’s called “private”).

Having said that, in the scope of this post, we’ll treat them as the same thing.

Insights

The white label/private label business was valued at $60.8 billion in 2019 and is anticipated to skyrocket in the near future.

In North America, private label goods accounted for 17.9% of retail sales, while the number was 31.7% for the European market.

Private label worldwide value share

According to eMarketer, private labels are one of the primary reasons consumers choose to shop at a particular retailer.

Specifically, at least 50% of millennials were open to buying private-label products in any category. 48% also said that they would buy more next year.

Percent of millennials consider buying private-label products

The rise of digital marketing makes customers more aware of white-label/private-label products and more willing to give them a try.

Pros

  • Rapid brand growth: If you’re among the first few sellers to white label or private label a unique product, you essentially stamp your brand name on the item. For example, when mentioning smartphones, people will only think of a few companies like Apple, Samsung, or Xiaomi.
  • Higher margin: Since people tend to perceive branded products as higher value than non-branded ones, you’ll be able to charge more for your white-label/private-label items.

Cons

  • Lack of reliable products and suppliers: There aren’t many trustworthy suppliers or manufacturers on the internet offering products that you can white or private label.
  • Competition and saturation: Many dropshippers will jump in and sell the same thing as you in the blink of an eye. Therefore, prepare to promote and scale fast to take over the market.
  • Manufacturer dependence: Similar to the traditional dropshipping model, you give up your backend to third-party companies. So, finding a reliable partner is still the key to success.
  • Can be expensive: Dropshipping manufacturers can charge you a lot of money on new products due to their uniqueness and exclusivity.

Startup Costs

Since white label and private label products are generally more expensive than regular dropshipping items, we recommend $3000-$5000 to get into the business. This budget has factored in all of the operating costs, such as running an online store, advertising, and fulfilling orders.

Potential Earnings

Kenzzi is a famous dropshipping store selling primarily 2 white-label products: hair removal handsets and microdermabrasion devices.

By heavily taking advantage of Facebook ads and Instagram influencers, it quickly grows viral and drives more than 350K monthly visitors to its store.

Kenzzi white label dropshipping store advertising on Facebook

Suppose the $229 hair removal handset has a humble 1% conversion rate. Kenzzi is able to make around 229 * 350,000 * 1% = $801,500/month in revenue.

And, you can imagine how profitable this dropshipping store is for a product that costs only $25 on Alibaba.

How To Start

To find white-label/private-label products to dropship and make money, Alibaba should be your go-to place. Simply go on to the platform, type in “white label” or “private label” in the search bar, and look around for what you want.

We don’t need to talk about the platform as it’s too famous already. However, for good measure, Alibaba.com is the number one platform for global wholesale trade, providing millions of products in over 40+ different major categories.

Besides wholesaling, Alibaba also has many reliable dropshipping suppliers providing products at even lower prices than AliExpress.

To quickly import Alibaba’s products to your Shopify store, you can use Syncee, Modalyst, Spocket, and Dropified.

4. Make Money With Intangible Goods

Have you ever thought of the idea of dropshipping intangible goods? Or, to be more precise, reselling other people’s digital products?

It works like this. You buy eBooks or online courses with resell rights, which allow you to legally sell them and keep 100% of the profits. You can also go an extra step purchasing PLR (private label rights) products, which enable you to take ownership of those products and promote them as if it was yours.

Intangible goods also work amazingly as a sales incentive or upsell offer for the usual physical dropshipping products.

Example of using digital products to boost sales for physical products

Insights

On the report of the eBook market size, it was valued at $16 billion in 2020. By 2026, it’s anticipated to reach $38 billion, registering a high CAGR of 15.7% over the period of 2021 – 2026.

The E-learning industry will also experience a similar trend. It’s estimated to increase from $226 billion in 2020 to $370 in 2026 at a CAGR of 8.56%.

Major factors driving the growth of these markets are the rapid development in internet connectivity in emerging economies and the affordability of online materials over offline counterparts. In addition, the COVID-19 pandemic helps people familiarize themselves with learning over the internet.

Pros

  • Low overhead costs: You don’t need to buy inventory or worry about shipping and return fees.
  • Highly profitable: You essentially keep nearly 100% of profits on every sale.
  • Fully automated: You can easily set up a system that instantly sends digital goods to your customers without further intervention.
  • Complete control: You have the entire control over product quality, inventory, and sales funnels.

Cons

  • Highly competitive: You’re not only competing with other trustworthy publishers but also with free resources.
  • Keeping up with up-to-date content: Your intangible goods need to be updated frequently to deliver the latest tips and tricks to customers.

Startup Costs

Along with the cost of building your website, you only need an extra $100-$200 to buy some great digital goods with full resell rights.

Potential Earnings

According to Author Earnings, less than 3% of about 200,000 authors selling them on Amazon consistently earn over $10,000 a year. And, only 1% of all self eBooks publishers can make a lot of money from it.

Regarding online courses, creators could make anywhere between $1K – $50+ per month.

How To Start

PLR Database or PLR Me are great places to find quality digital goods with resell rights. After buying, you can use Digital Downloads or Easy Digital Products to sell them on your Shopify store.

In case you don’t find suitable materials on those websites, try contacting book authors on Amazon or instructors on Udemy or Skillshare to use their content and negotiate with them on how profits are split.

5. Set Up An Affiliate Program With Admitad

Admitad allows store owners to get a percentage of money back when dropshipping products from most Chinese marketplaces like AliExpress, DHgate, Banggood, Gearbest, etc.

It’s a well-known affiliate marketing network, connecting advertisers with publishers on a mutual benefit basis. By joining the platform, advertisers can attract more visitors to their websites, and publishers make money through commissions by helping them promote products.

Insights

Admitad has a generous money-back rate, ranging from 0.75% to a whopping 69% for every AliExpress product. The numbers are 2% – 51% for DHgate and 6% – 12% for Banggood.

In the annual Admitad report, dropshipping was the most active traffic source on the platform, generating over 1.5 million orders and $13.2 million in sales.

Most active traffic source on Admitad

For every order, dropshipping publishers (dropshippers who join the Admitad affiliate program) can make an average commission of $1.4 up to $13.

Average Admitad publisher commission

Pros

  • Small additional investment: Admitad is completely free to join. You only need to be on a monthly subscription plan of your dropshipping app to connect Admitad to it.
  • Little to no extra effort: After setting up an Admitad affiliate program, the system will automatically calculate and help you get cashback. Nothing left you need to do.

Cons

  • Low earnings: You will generally only make a couple of cents to a few dollars max on each order.
  • Rely on another model: How much money you can make from Admitad is entirely dependent on your dropshipping store’s sales.

Startup Costs

All you need is an extra $19.9-$29.9/month for dropshipping apps like Oberlo or DSers to connect Admitad to them.

Potential Earnings

Earnings from this model will generally help you pay for some of your service costs or your payment processing fees.

Let’s say you have 100 monthly orders for a $20 item with a commission rate of 3%. The total amount of money you can get back is 100 * 20 * 3% = $60/month.

How To Start

First, you need to sign up for the Admitad affiliate program as a publisher to get your unique affiliate link. Then, depending on your dropshipping app, copy the link into its affiliate section.

For more information, check out these guides on setting up Admitad for dropshipping and how to connect Admitad to Oberlo.

6. Use A Cash-Back App

Similarly, cash-back apps like LetyShops, Megabonus, or Backit also allow you to get a percentage of your spending back when paying for your dropshipping orders.

Insights

Most of these apps have a cash-back rate of anywhere between 1% and 30%. Especially, you can get up to 60% cashback on every hot product.

Pros

  • Zero investment: cash-back apps are completely free. You also don’t need to pay anything for other third-party services.
  • No extra work: After installing a cash-back app, you just need to turn it on, and everything will automatically work in your favor.

Cons

  • Low earnings: Like affiliate marketing with Admitad, you only generate a tiny bit amount of money on every order.
  • Depending on your store sales: Again, if you don’t make sales, you have no cash back.

Startup Costs

It’s totally free to install a cash-back app and start making extra money while running your usual dropshipping business.

Potential Earnings

Cash-back apps will be able to help you cover up some service costs and payment processing fees.

How To Start

We recommend LetyShops since it’s the most stable and provides great cash-back rates. Once you have done installing it, go to the website that you dropship from and activate the app by clicking on its icon. If it turns green, you’re all set. Otherwise, refresh the site and try again.

LetyShops cash-back app

7. Grow A Dropshipping Store And Flip It For Profit

The next method to make money from a dropshipping store is to flip it. It means that you buy one from a person (or create one yourself), grow it, then sell it to another person at a higher price.

Insights

Empire Flippers – a relatively well-known website flipping platform – did a study on every flipped business on its marketplace. The data shows that the average ROI is 24%, with an average flipping period of 407 days. However, the large majority of flippers had a much higher ROI, skewing towards 114%.

Pros

  • Huge profit margins: It’s pretty common seeing a good flipper doubling or tripling a store’s value after a year.
  • Consistent income before flipping: Buying a dropshipping store that already has traffic means that you can generate some good cash from the store and reinvest into growing it.

Cons

  • Fairly huge initial investment: A good dropshipping store usually costs at least a few thousand dollars to hundreds of thousands of dollars to buy.
  • Challenging to find clients: The market is highly competitive, and finding a person willing to pay thousands of dollars for a dropshipping store that they aren’t sure about how much money it can make in the future is tough.
  • Need a lot of work: It will take you a great amount of time and effort to learn about a specific store and increase its traffic, revenue, search rankings, etc.
  • Risky: If you buy a good dropshipping store that has little potential to grow or, worse yet, gets penalized by Google, you will end up losing money.

Startup Costs

In general, we recommend at least $10,000 to reliably get into this business. This has factored in all the costs from buying a dropshipping store, running ads, doing SEO, to growing social media accounts.

Potential Earnings

The standard flipping rate of a dropshipping store can be around 30 – 36 times its monthly profit or 2.5 – 3 times its annual profit. So, if your store makes $10k in profit per month, you can sell it at around $300K – $360K.

Success stories from this model are not rare. For example, a case study from Onfolio shows that a niche site owner managed to buy the website for $2,700 and flipped it for $24,000 in under 12 months. Another case study from TheWebsiteFlip states that they acquired a site for $5,560 and were able to resell it for $30,100 in just 5 months.

How To Start

Besides building a store from scratch, you can visit ExchangeMarketplace or Flippa to find and buy one that has already generated some good revenue. Although most marketplaces will automatically calculate all of the metrics and not let sellers modify any number, it’s still important to double-check the store’s product catalog, social media accounts, SEO profiles, traffic, and profits to ensure authenticity and also evaluate its potential.

After growing the dropshipping business, you can relist it on the mentioned marketplaces to make money.

Flipping dropshipping stores on ExchangeMarketplace to make money

8. Become A Dropshipping Supplier

As you might have already known, a dropshipping supplier is a person or company that provides products to another seller.

By becoming one, you don’t have to directly advertise your products to the end customers. Instead, other dropshippers will be the ones generating sales, and you will be the one in charge of the fulfillment and shipping process.

Dropshipping supplier example

Insights

Some popular dropshipping suppliers are CJDropshipping, BrandsDistribution, BrandsGateway, or Ruby Imports. However, to become like them, you might have to spend millions of dollars sourcing products.

Examples of low-budget dropshipping suppliers are PrivateLabelExtensions or PepperAndCute. They sell products to usual shoppers and offer service for dropshippers at the same time.

Pros

Being a dropshipping supplier has the exact opposite benefits and drawbacks of reselling other people’s products.

  • Control over back-end processes: You can control product quality, fulfillment, packaging, and shipping to ensure the best service for your customers.
  • Lucrative: Resellers help you do one of the most costly parts of any business, which is advertising. As a result, you will be able to generate sales consistently and keep healthy profit margins.

Cons

  • Huge investment: You will have to spend a lot of money sourcing and warehousing products.
  • Problems with inventory and distribution: It’s troublesome to keep up with a sudden surge in demand and ship products on time.

Startup Costs

Suppose you’re in the stationery niche. Each notebook costs around $1.5 and an additional $2 shipping fee if you source them in bulk. So, 1000 units is (1.5 + 2) * 1000 = $3,500.

To have around 50 different types of similar stationery products ready in your warehouse, you will have to spend $3,500 * 50 = $175,000.

The number is a rough estimation, but you have a sense of how much money you need to become a dropshipping supplier.

Potential Earnings

In general, you can expect to make a profit margin of 20% for each product. Some other industries have a margin of as high as 40%.

How To Start

Alibaba is the number one place to buy products in bulk at a very low price.

Once you have sourced your products, you can sign up with Spocket, Syncee, or Modalyst to get your products in front of thousands of retailers and dropshippers.

9. Create A Supplier Directory

A dropshipping supplier directory is a database of high-quality dropshipping suppliers in different dropshipping niches. The owner of it usually makes money by charging people for access to it.

Dropshipping supplier directory example

Insights

Some well-known dropshipping supplier directories on the internet are WorldwideBrands, SaleHoo, WholesaleCentral, and SuppliersData.

Pros

  • Profitable: Since the cost for building and maintaining a directory is super low, you can keep most of the profit.
  • Automation: You can easily set up an automatic system to collect your buyers’ payment and give them access to the directory.

Cons

  • Updating frequently: It’s vital to keep your supplier directory as fresh and up-to-date as possible. Otherwise, some might complain and demand refunds.
  • Requiring a lot of research: You have to surf the entire internet to find the most trustworthy suppliers in various niches. A good directory should have at least 1000 entries.

Startup Costs

You only need a website to display your list of suppliers, which is around $50/year.

Potential Earnings

You can charge people anywhere between $49 (e.g., SuppliersData) and $299 (e.g., WorldwideBrands) for accessing your dropshipping supplier directory.

How To Start

WordPress or Wix are two of the most powerful tools to create a website. They offer many features to create whichever kind of website you want, including a supplier directory.

WordPress is the most popular CMS on the internet, powering more than 30% of all online websites. Using it, you can freely design and customize your site. On top of that, it provides an extensive plugin marketplace to help you extend your site’s functionality quickly.

Wix is a drag-and-drop website builder with over 200 million users. It’s easier to use and faster to set up than WordPress. However, it doesn’t have as much customization freedom.

10. Do Amazon Affiliate Marketing On Your Store

Amazon Associates is the largest affiliate marketing program on the internet, enabling content creators and publishers to earn commissions by sharing products on the platform with their audience.

By monetizing your existing dropshipping store’s visitors with Amazon items related to your niche, you can make some good money.

Example Amazon product on a Shopify store

Insights

Amazon Associates allows you to earn up to 10% in commissions for every qualifying purchase. Categories with the highest payout rates are Luxury Beauty, Handmade, Physical & Digital Music, Amazon’s Devices, Watches, Jewelry, Luggage, Shoes, and Handbags & Accessories.

Commission rates of different Amazon product categories

During bounty events, you can earn flat commissions of up to $15.

Pros

  • Small additional investment: Amazon Associates is completely free to join. You only need to pay a little extra for third-party apps to quickly display Amazon products on your dropshipping store.
  • Amazon is famous and trustworthy: Almost everyone knows the site and feels safe buying from it.
  • Millions of products: You can find pretty much anything in any niche on Amazon.
  • You still make money for products you don’t directly promote: As long as your visitors visit Amazon through your referral links and buy something, you still earn commissions for that.

Cons

  • Meager commission rates: As we have mentioned, the maximum commission rate is 10%, which translates to only a couple of dollars for small and regular purchases.
  • Short cookie duration: A cookie session begins when someone clicks on your referral links and lasts up to 24 hours. If they don’t purchase or add anything to their cart in this time period, you don’t get commissions.
  • Cannot promote via email: Amazon prohibits associates from including referral links in emails.
  • No payouts via Paypal: Available payment options are Direct Deposit, Check, and Amazon Gift Card.
  • Easy to get banned: Amazon Associates has many strict rules on what you can and cannot do. Therefore, make sure to read Amazon affiliate policies carefully and comply with everything.
  • Strict application review process: If your store doesn’t have unique content and provide value to your visitors, you may get rejected from joining the program.
  • Sales conflict: Promoting Amazon products on your store might result in a decline in your dropshipping sales.

Startup Costs

An extra $5-$10 is all you need to start promoting Amazon products on your Shopify dropshipping store and make money.

Potential Earnings

There’s no threshold to how much you can earn with this model.

However, to give you a more vivid look, suppose you promote an Amazon product that costs $20 with a commission rate of 5%. By successfully referring 100 visitors to purchase it, you can make 100 * $20 * 5% = $100.

How To Start

First, you need to sign up with Amazon Associates. The application review process can take quite a bit of time, so just wait patiently. After being approved, you can get your unique affiliate links through the affiliate dashboard.

To quickly import any Amazon products into your Shopify store and display a button that directs people to Amazon to purchase them, you can use Spreadr App.

11. Make Money By Offering Dropshipping Product Subscriptions

Offering product subscriptions is a heavily underutilized method to create a steady stream of income when dropshipping.

The model is quite self-explanatory. You provide continuous services to people in exchange for their recurring payments. For example, you send surprise gifts to your customers every month.

Offering product subscription example

Insights

As researched by Paymotion, you have a 60%-70% chance of selling to an existing customer compared to only a 5-20% chance of selling to a new prospect.

According to McKinsey, the subscription eCommerce market has grown by more than 100% a year over the past five years.

Among online shoppers, 15% have signed up for at least one subscription to receive products on a recurring basis.

Pros

  • Boost revenue: It’s 5%-20% more expensive to acquire new customers than to retain old ones. What is more, increasing retention rates by 5% increases profits by 25%-95%.
  • Increase customer loyalty: Since you regularly provide service to your customers, they will remember and more likely to turn to your brand to find new stuff rather than others.

Cons

  • Hard to find subscribers: If you don’t offer anything special, there’s no reason for people to enter a contract that more or less takes away their buying freedom.
  • Difficult to maintain consistent service: You cannot guarantee that subscription products will always arrive on time and have good quality since your dropshipping suppliers take care of all back-end processes.
  • High churn rates: Data shows that nearly 40% of consumers have canceled online subscriptions. This number will be even worse for dropshipping businesses that cannot provide coherent customer experiences all the time.

Startup Costs

Most third-party subscription apps are free to set up. However, they will usually charge you 1%-3% per transaction.

Potential Earnings

Birchbox is a prime role model of a brand that takes full advantage of the subscription model. As of now, the company has 2.5 million active users, generating a revenue of $200 million/year.

BirchBox using the subscription model

How To Start

To implement a subscription model for your dropshipping store, great app options are Recharge Subscriptions, PayWhirl Subscription Payments, and Seal Subscriptions. They take only a few minutes to install and set up for any product you like.

12. List Your Products On Other ECommerce Websites

Big online marketplaces have millions of regular visitors and supporters. Therefore, it’s a good idea to list your dropshipping products on them to gain extra exposure and increase sales.

Recommended eCommerce websites are Etsy, Wish, BestBuy, OnBuy, NewEgg, Sears, Tophatter, Fruggo, Storenvy, ArtFire, Bonanza, eBid, Shopee, Lazada, Facebook Marketplace, and Google For Retail.

It’s also possible to list your dropshipping products on Amazon, eBay, and Walmart. However, you must ensure that you’re the seller of record, meaning that your brand name (and no one else) is on all packing slips, invoices, and shipment packages. In addition, you have to be responsible for accepting and processing returns and refunds.

Insights

According to a survey, 46.7% of all product searches start on marketplaces like Amazon, eBay, and Etsy in comparison to 35% on Google.

Moreover, 65% of consumers said they feel comfortable purchasing from brands they’ve never heard of before on marketplaces.

Pros

  • Reach new potential customers: Your dropshipping products, as well as your brand, have the opportunity to get in front of an enormous number of enthusiastic shoppers of all ages, genders, and income levels.
  • Quick to set up: It only takes you a few minutes to sign up with most marketplaces and start selling. Furthermore, many third-party apps will help you sync your product catalog to those marketplaces with a click.
  • Working as a branding element: Your brand will definitely look more trustworthy if it’s on multiple sales channels.

Cons

  • Managing multiple sales channels can be a hassle: Audiences and customers buying behaviors on different marketplaces are not the same. Thus, your existing sales tactics and marketing strategies might work on one marketplace but not others.
  • Getting banned left and right: Since you have no control over the supply chain, it’s tough to follow all the rules set by marketplaces regarding product quality, shipping times, or custom packaging.

Startup Costs

You might have to spend anywhere between $14.99-$39.99/month to become merchants on major marketplaces and another $19-$29/month for third-party apps to connect them to your dropshipping store.

Potential Earnings

Take Amazon sellers as an example. JugleScout shows that 44% of them make $1,000-$25,000/month in revenue. Some super-sellers even earn $250,000/month. When it comes to profits, 68% generate a margin of higher than 10%.

Etsy sellers see a more modest income with average monthly revenue of $537.50, which translates to a monthly profit of $291 after subtracting all the costs. This is understandable since Etsy is much smaller than Amazon.

How To Start

CedCommerce provides a suite of apps to help you integrate your dropshipping store with most marketplaces we have mentioned above.

After installing the app you need, you can easily push your products to the supported marketplace and manage your listings in one place. Product inventory, prices, and customer orders are also synced in real-time between platforms.

Regarding suppliers, it’s generally not advised that you dropship from AliExpress because you cannot guarantee that items will be shipped with no trace of the platform. As noted by eBay and Amazon, purchasing an item from another retailer or marketplace to ship directly to your customer is not allowed.

Therefore, make sure to only use wholesale dropshipping suppliers like CJDropshipping and print-on-demand suppliers like Printful, Printify, etc.

13. Sell Your Dropshipping Gigs

If you’re an expert in dropshipping, providing services such as building a high-converting store, finding winning products, or running ads for others will help you earn generous money.

You can build a website to promote yourself. However, a quicker way is to create a Fiverr account.

Selling dropshipping gigs to make money

Insights

Statistics show that there’re 3.42 million buyers on Fiverr, generating over $189.51 million in 2020.

What most impressive is that the platform generates 55% of its revenue from repeat buyers. It means that if you have provided a good service to someone, there’s a high chance they will come back.

On average, Fiverr buyers spend $205/year, increasing by 20.59% between 2019 and 2020.

In terms of fees, Fiverr takes a cut of 20% for each order.

Pros

  • Can be very profitable: Some Fiverr sellers offer dropshipping service for $200. If you can land 5 gigs/month, it will be $1000.
  • Cross-selling other services: You can easily promote your other gigs or helping third-party companies advertising their products to boost your income.

Cons

  • Requiring expert knowledge: You have to know very well about the dropshipping gig you’re about to sell to provide good service to customers.
  • Challenging to find clients: With fierce competition from freelancers on Fiverr and other personal websites, you have to work hard to find customers.
  • Dealing with tough requirements: Sometimes, clients will require you to do out-of-the-ordinary jobs. It’s important to keep your head cool and work out the best solutions.

Startup Costs

It’s completely free to join Fiverr.

In case you want to build your own freelance website, the total cost is around $50/year for a domain name and hosting.

Potential Earnings

According to Priceonomics, 96.3% of sellers on Fiverr make less than $500/month. The percentage of sellers earn more than $2,000/month is 1%.

So, if you decide to start making money with your dropshipping gigs, prepare to work hard to beat the competition.

How To Start

In order to find potential clients, visit Facebook groups or Reddit forums about dropshipping and try to be as active and helpful as possible. After building enough authority and having good relationships with other members, you can contact them to offer your gigs.

14. Create A YouTube Channel About Dropshipping

Next, creating a YouTube channel to share your knowledge about it can be quite profitable. You can make money by displaying ads on your videos or promoting affiliate programs to your audience.

Creating a YouTube channel about dropshipping to make money

Insights

YouTube is the second-most popular social networking site behind Facebook, having over 2 billion logged-in users.

As studied by Google, over 40% of YouTube users use the platform to learn more about a product or service before buying it.

Speaking of income, the number of channels that make at least $10,000/year on YouTube rises by 50% year over year.

Pros

  • Easy to get started: In just a few minutes, you can have your own YouTube channel and start posting videos whenever you want.
  • Many ways to monetize your videos: Ads, affiliate marketing, donation, courses, eBooks, or promoting services for other companies are some methods to make money on YouTube.
  • See results quickly: You can immediately see how a video performs and pinpoint problems with the help of YouTube Analytics.

Cons

  • Constantly coming up with new ideas: YouTube is competitive. Without fresh and engaging content, it’s difficult to succeed.
  • Requiring a considerable amount of knowledge: You have to know the ins and outs of dropshipping to create great content for your audience.
  • Dealing with editing and optimizing videos: It takes a lot of time and effort to learn, edit, and optimize a video for the so-called YouTube algorithm.
  • Need lots of trials and errors: Don’t expect any success at the beginning. YouTube is all about putting out your content, getting feedback, learn from your failure, and try again.

Startup Costs

Starting a YouTube channel is completely free, at least if you don’t count the amount of money you might have to spend on physical equipment like cameras and microphones.

Potential Earnings

Let’s say you have a YouTube video with 100,000 views displaying AdSense ads and promoting the Shopify affiliate program.

On average, AdSense pays YouTubers $3-$5 per 1000 video views. This number can be much higher in a money-related niche like dropshipping ($15-$20 per mile is normal). However, for the sake of a simple calculation, let’s use $5.

The Shopify affiliate program pays $58 for each successful referral, and we assume that the conversion rate is 1%.

In total, the YouTube video would earn you about 100,000 / 1,000 * $5 + 100,000 * 1% * $58 = $58,500.

As you can see, doing YouTube can be very lucrative.

How To Start

YouTube Academy has plenty of great resources to help you get started doing YouTube as successfully as possible.

In regards to affiliate marketing, besides Shopify, you can promote winning dropshipping product research tools, ad spy tools, Shopify apps, or find good affiliate offers on ClickBank.

15. Start A Blog About Dropshipping

In case you’re not an avid YouTuber, starting a blog is another method to share your dropshipping knowledge and make money along the way.

Blogging about dropshipping to make money example

Insights

It’s estimated that the content marketing industry will reach $412.88 billion by 2021, and blogging takes up a big chunk of that. Out of 1.7 billion websites on the entire internet, there’re 500 million blogs.

Reports also show that 6/10 customers see the value of blog posts at the start of their purchase journey.

Pros

  • Small initial investment: Most blogging platforms require little cash to get started. Some are even available for free.
  • Lots of monetization methods: Similar to YouTube, you can monetize your blog through ads, affiliate marketing, donation, courses, eBooks, etc.
  • Passive income: You still have to work extremely hard at the beginning. However, as your blog generates enough traffic, you will not need to write new blog posts as often and instead just have to maintain the old ones.

Cons

  • Super competitive: Starting a blog about dropshipping means that you will have to compete with established platforms like Shopify, Oberlo, and numerous other small businesses (including us).
  • Very slow to see noteworthy results: On average, it takes at least 6 months to see traffic to your blog and even much more time to earn any significant amount of money.

Startup Costs

There are 3 primary costs you need to keep in mind.

The first one is a domain name, which is $11.99/year. The second one is web hosting, costing around $40-$50/year. Finally, you might have to spend an additional $100 on themes and third-party plugins.

In total, we recommend $100-$200 to start a blog about dropshipping.

Potential Earnings

According to Glassdoor, the average US blogger earns $50,606/year. Many top bloggers like Adamenfroy or CreateAndGo even make more than $100,000/month, as stated in their income reports.

Blogging income report

How To Start

Most people create their blog using WordPress, and it’s also the technology behind our website.

For more information, check out our complete guide on starting a blog.

16. Develop Shopify Dropshipping Apps

For tech-savvy individuals, developing a Shopify dropshipping app similar to Oberlo, DSers, or Topdser is yet another lucrative money-making idea.

Developing Shopify dropshipping apps to make money

Insights

In 2021, Shopify app developer partners made a total of $233 million, which is more than 2018 and 2020 combined.

Starting from 2021, Shopify announces that it will collect 0% on the first $1 million app revenue earned through the Shopify app store. Concerning apps that exceed this mark, revenue share will now only be 15% instead of 20%. This creates an amazing earning potential for anyone wanting to start making money by developing Shopify apps.

Pros

Cons

  • Requiring coding knowledge: If you don’t know a thing about coding, it will take at least 3-6 months to learn how things work.
  • Highly competitive: There’re already numerous good dropshipping apps on Shopify. If yours doesn’t have any special features, it’s hard to convince people to switch.
  • Constantly updating: Shopify regularly upgrades its core, and developers have to update accordingly.

Startup Costs

It’s completely free to join the app developer program.

Potential Earnings

A new Shopify app launched in the last 3 months generates anywhere between $27 – $355/month on average.

For apps that start getting traction, the number can be around $5465/month. And, top Shopify app developers can make a couple of hundreds to millions of dollars yearly.

For example, the owner behind FORSBERG+two makes $275K in profit per year.

How To Start

To get started, simply sign up for the Shopify app developer program.

17. Build Shopify Themes For Dropshipping Stores

Besides apps, there is a very high demand for Shopify themes, which are pre-designed templates to help users quickly change the looks and feels of their store.

Shopify theme examples

Insights

Depending on your choices, Shopify takes a cut of 30%-50% for each theme sale. To be honest, the number is fairly big compared to apps. However, in September 2021, there will be some changes in revenue share for themes to help developers make bigger profits.

Apart from Debutify, which has a built-in winning product research tool, there is not really any theme on the internet right now specifically built for dropshipping stores. Therefore, you have a good chance to compete and make decent money by creating one.

Pros

  • Profitable: Usually, a Shopify theme is $180. Even if Shopify takes a 30% or 50% cut, you still have a healthy amount of income left.
  • Ample resources: Like apps, Shopify provides you with comprehensive guidance to help you get started.

Cons

  • Requiring coding, design, and marketing knowledge: To develop a good theme, coding alone is not enough. You also need to have the eyes of a designer and marketer to create one that is both beautiful and high-converting.
  • Compete with other common themes: There’re thousands of themes on the Shopify marketplace and other third-party websites.
  • Speed and compatibility nightmare: It’s tough to develop a fast theme and also keep it compatible with thousands of Shopify apps.

Startup Costs

The Shopify theme developer program is totally free to join.

Potential Earnings

As surveyed by ZipRecruiter, a Shopify theme developer earns $78,815/year. Although this number doesn’t tell you exactly how much money the owner of a theme specialized for dropshipping makes, you can use it as a reference point.

How To Start

You can start building a theme by joining the Shopify developer program just like apps.

18. Develop Winning Product Research Tools

Finally, we have winning dropshipping product research tools. Examples are Sell The Trend, Ecomhunt, AliShark, SellerPulse, and Dropispy.

Winning dropshipping product research tool example

Insights

Demands for product research tools are consistently at a high level, proving by the fact that there’s a lot of new tools recently popping up on the internet and the amount of traction they get across advertising channels.

Winning dropshipping product research tool ad example

Pros

  • Highly profitable: The cost of maintaining a web application is minor compared to the amount of money it makes.
  • Might not need much coding knowledge: Some winning dropshipping product research tools like Ecomhunt, Pexda, or ThieveCo contain items curated by hand. If you know how to spot winning products, you can build one easily.

Cons

  • Security risks: Hackers might try to steal your data or DDoS your tool.
  • Performance issues: Scraping and showing thousands of pieces of product data might cause your tool to be slow and laggy.

Startup Costs

The roughly estimated startup cost to start building a winning dropshipping product is $200-$500. This includes fees for a domain, hosting, and third-party APIs.

Potential Earnings

Take Sell The Trend as an example. The tool costs $39.97 per month and has approximately 150K visitors monthly. If the conversion rate is 1%, Sell The Trend can generate 150K * 1% * $39.97 = $59,955/month.

How To Start

To speed up your development process, you can leverage RapidAPI. The website provides numerous APIs for accessing comprehensive product data from AliExpress, Amazon, and other big marketplaces.

Conclusion

There are plenty of methods to make money dropshipping, from selling physical or print-on-demand products, setting up affiliate marketing with Admitad, using cash-back apps, flipping stores, to developing Shopify apps and themes.

They come with different startup costs, earning potential, advantages, disadvantages, and it totally depends on your preferences and strengths to decide which method to start.

However, no matter which one you choose, always remember that dedication and hard work are the keys. There are no get-rich-quick schemes or one-size-fit-all formulas to success.

Keep trying and failing. You will eventually get to where you want to be.

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