DO NOT DROPSHIP - advice from a dropshipper

[trulyandres]

If you're a younger entrepreneur like me, you might be drawn to start a dropshipping business. With how easy it is, and how many videos there are online about it, it seems like a strong candidate for your first entrepreneurial venture. This post will be about why I would strongly recommend against getting into it.

I'm going to write this as if it were a letter to my younger self.

Quick background:

• I've started four dropshipping businesses and worked with one other
• I went viral on TikTok many times, with the most successful video gaining 2.5 million views
• I've studied and taken notes on countless dropshipping books, courses, and YouTube videos

Given my experience, I believe I'm qualified to give my advice on this.

To write this post, I totaled up all of the profit that I made from sales across all of my projects. With all of the work I put in, and all the recognition my brands got, I should have gotten a pretty decent yield, right?

Wrong.

I didn't even make one thousand dollars.

Why? Because dropshipping cheap products you don't own is a fundamentally flawed money-making vehicle. I'll go into each of the issues I ran into with it.

1. It breaks THREE of the CENTS commandments
C (control) - To get website visitors, you need to either post ads or make your own posts in the hope of going viral. If you're young and broke like me, the second option is the only one available. However, the biggest issue with it is that you have zero control over the videos you post once they're out of your hands. My most viral video was taken down by TikTok for zero reason. I couldn't even post during the three-day period that it took to appeal the strike! I got it back up, but by that point, it was too late. The video was dead. Imagine all the possible sales that I lost! Additionally, if you're sourcing your products from Aliexpress, etc. you only get to hope that everything goes through without issues. The customer wants his product in your guaranteed 14-day shipping period? Sucks to suck! Your provider just decided to take a week-long vacation, and according to the tracking, the package is somewhere in Astana, Kazakhstan.

E (entry) - Dropshipping is easy right? Wrong. I was misled to this conclusion, too, by the gurus. The reality is that the competition is simply so fierce that to get any traction, you need to be in it for the long game. Expect at least a month of daily 5x posts to pass by before you make your first sale. This is a major downfall of any "easy" business. Not only does your website need to be one of the best, but out of TikTok's thousands of ads posted daily, yours needs to be at the top too. Good luck.

N (need) - The supply of dropshippers to the demand for their products is vastly asymmetrical. Either you can hop on the train of a "proven" product, and clean up the crumbs of those who came before you, or you can try and find a new winning product. Chances are, though, that this new product won't perform--and you won't figure that out until a month of grueling ad production has passed. You just have to hope that the algorithm picks it up and that you're in the right place at the right time.

Hope, hope, hope! Are you starting to see the pattern?

2. The Margins
As with any dropshipped product, margins are going to be slim. You aren't ordering these items in bulk, and your supplier needs to make money too. Be prepared to jump for joy when you see your gross revenue in Shopify, only to get on your knees and cry after you subtract product, subscription, and advertising costs. The Millionaire Fastlane 's Law of Effection states that if you effect millions you'll make millions. This is true--unless you're a dropshipper.

3. The Customers
The people who will buy your product aren't exactly the cream of the crop kind of customers. They scrolled on TikTok for hours, saw your video pop up, and decided it would be a wise choice to purchase from a company they have never heard of before off of a poorly built Shopify website. Unfortunately for us, this means that they are also the type of people to constantly refund, scam, and otherwise screw you over. Recently I've started working with much higher-paying clients (upwards of several hundred dollars per transaction) and I've personally found that they are 10x easier to work with. My recommendation would be to work with a handful of businesses and high-ticket clients over hundreds/thousands of small-paying customers.

Conclusion
I hope that I've been able to convince my fellow young, aspiring entrepreneurs to avoid making the same mistake as I did. Understand that dropshipping is not impossible. If you genuinely believe that you have a market-breaking edge over your competitors, I fully support your decision to enter the industry. Even though my ventures didn't make me much money, they taught me almost everything I currently know about business, instilled in me a sense of entrepreneurial confidence, and gave me skills that I'm currently using in the next step of my entrepreneurial journey.

That being said, I strongly recommend steering clear of dropshipping and investing your valuable time in something else.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Jeix]

While I agree with your statement, I feel like your story is incomplete.
What did you do after giving up on dropshipping? What would you recommend young people do instead? Writing "high ticket b2b sales" could mean anything and it's certainly not something any young person can set up from their dorm room.

Could you elaborate further?

 

[Kevin88660]

If you're a younger entrepreneur like me, you might be drawn to start a dropshipping business. With how easy it is, and how many videos there are online about it, it seems like a strong candidate for your first entrepreneurial venture. This post will be about why I would strongly recommend against getting into it.

I'm going to write this as if it were a letter to my younger self.

Quick background:

• I've started four dropshipping businesses and worked with one other
• I went viral on TikTok many times, with the most successful video gaining 2.5 million views
• I've studied and taken notes on countless dropshipping books, courses, and YouTube videos

Given my experience, I believe I'm qualified to give my advice on this.

To write this post, I totaled up all of the profit that I made from sales across all of my projects. With all of the work I put in, and all the recognition my brands got, I should have gotten a pretty decent yield, right?

Wrong.

I didn't even make one thousand dollars.

Why? Because dropshipping cheap products you don't own is a fundamentally flawed money-making vehicle. I'll go into each of the issues I ran into with it.

1. It breaks THREE of the CENTS commandments
C (control) - To get website visitors, you need to either post ads or make your own posts in the hope of going viral. If you're young and broke like me, the second option is the only one available. However, the biggest issue with it is that you have zero control over the videos you post once they're out of your hands. My most viral video was taken down by TikTok for zero reason. I couldn't even post during the three-day period that it took to appeal the strike! I got it back up, but by that point, it was too late. The video was dead. Imagine all the possible sales that I lost! Additionally, if you're sourcing your products from Aliexpress, etc. you only get to hope that everything goes through without issues. The customer wants his product in your guaranteed 14-day shipping period? Sucks to suck! Your provider just decided to take a week-long vacation, and according to the tracking, the package is somewhere in Astana, Kazakhstan.

E (entry) - Dropshipping is easy right? Wrong. I was misled to this conclusion, too, by the gurus. The reality is that the competition is simply so fierce that to get any traction, you need to be in it for the long game. Expect at least a month of daily 5x posts to pass by before you make your first sale. This is a major downfall of any "easy" business. Not only does your website need to be one of the best, but out of TikTok's thousands of ads posted daily, yours needs to be at the top too. Good luck.

N (need) - The supply of dropshippers to the demand for their products is vastly asymmetrical. Either you can hop on the train of a "proven" product, and clean up the crumbs of those who came before you, or you can try and find a new winning product. Chances are, though, that this new product won't perform--and you won't figure that out until a month of grueling ad production has passed. You just have to hope that the algorithm picks it up and that you're in the right place at the right time.

Hope, hope, hope! Are you starting to see the pattern?

2. The Margins
As with any dropshipped product, margins are going to be slim. You aren't ordering these items in bulk, and your supplier needs to make money too. Be prepared to jump for joy when you see your gross revenue in Shopify, only to get on your knees and cry after you subtract product, subscription, and advertising costs. The Millionaire Fastlane 's Law of Effection states that if you effect millions you'll make millions. This is true--unless you're a dropshipper.

3. The Customers
The people who will buy your product aren't exactly the cream of the crop kind of customers. They scrolled on TikTok for hours, saw your video pop up, and decided it would be a wise choice to purchase from a company they have never heard of before off of a poorly built Shopify website. Unfortunately for us, this means that they are also the type of people to constantly refund, scam, and otherwise screw you over. Recently I've started working with much higher-paying clients (upwards of several hundred dollars per transaction) and I've personally found that they are 10x easier to work with. My recommendation would be to work with a handful of businesses and high-ticket clients over hundreds/thousands of small-paying customers.

Conclusion
I hope that I've been able to convince my fellow young, aspiring entrepreneurs to avoid making the same mistake as I did. Understand that dropshipping is not impossible. If you genuinely believe that you have a market-breaking edge over your competitors, I fully support your decision to enter the industry. Even though my ventures didn't make me much money, they taught me almost everything I currently know about business, instilled in me a sense of entrepreneurial confidence, and gave me skills that I'm currently using in the next step of my entrepreneurial journey.

That being said, I strongly recommend steering clear of dropshipping and investing your valuable time in something else.

You walked away with skill and experience. Hustle to learn is a good philosophy and way of doing things.

 

[Xeon]

With Temu and other similar platforms doing B2C, the only chance someone has when trying to do online product sales (especially when starting in 2023/2024) is to invent something new and revolutionary, apply for patents, then go church and pray that some Chinese manu doesn't replicate it before you make bank.

The days when you identify a needed product, source it from China, do some private labeling and ship to a 3PL warehouse, run ads and "Sell X for Y times for Z years" is over.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[trulyandres]

While I agree with your statement, I feel like your story is incomplete.
What did you do after giving up on dropshipping? What would you recommend young people do instead? Writing "high ticket b2b sales" could mean anything and it's certainly not something any young person can set up from their dorm room.

Could you elaborate further?

I appreciate the question. I wanted to keep the post short, so I excluded this part.

I used my social media management skills to run the accounts of local businesses and post content for them. This worked better because in addition to driving sales, social media is also handy for brand recognition, and I can upsell my clients paid ads to specifically geo-target our town. I used Alex Hormozi's strategy of doing several clients for free before going on to start charging for the service; but right before their "free trial" would have ended, school started back up and I decided that it would be a better choice to focus on school. (For context, it's my last year of high school and I'm trying to make up for my first two years where I performed very poorly. They hit my overall high school GPA like a truck. This year I'm taking three AP classes and two math classes). It's my last semester and I would prefer to do it well and wait five more months before I go all-in on entrepreneurship.

There are a few schools that I am applying to with practical, hands-on business programs that I would love to attend because my dad is offering to cover a large portion of the cost, so I really want to end high school with a bang.

I'm excited because in about a week this semester will end. Freedom at last!

Here's My Recommendation to Young Aspiring Entrepreneurs
Become proficient in an area you see local businesses struggle with. Then, learn everything you can about sales, read $100M Offers by Alex Hormozi to learn how to get customers, and serve your customers as well as you can to get testimonials that are worth their weight in gold. This is as far as I have gotten, but the next steps I want to take are:
1. Reach enough clients to make enough money to live off of active work from my service's monthly fees
2. Hire and train employees to do the work for you (outsource)
3. Expand by working for bigger businesses

Target solopreneurs and older managers/business owners in your area. They are often busy, and the nature of their job requires that they be a jack-of-all-trades. This means that if you can get good in one area, you can provide a lot of value to them by both freeing up a substantial part of their time and doing something better than they can. The skills I believe are most in demand right now are: social media management + marketing, website production, lead generation, making automation systems, and video production/editing. Try to think of something an old rich grampa would need help with in his business.

I would also recommend favoring subscription services over one-time deals, so you can get a steady source of income. Steer clear of outsourcing from the beginning as many gurus recommend. These business owners aren't dumb. They don't want to hire someone who doesn't know what they're talking about. You're already at a substantial disadvantage because of your age so it is absolutely paramount that you show them that you're the real deal and that you know what you're talking about. Having other testimonials and proof of tangible results (I had screenshots of the millions of views I got) also really helps.

To me, the business skill that older folks don't understand at all but understand the value of is organic social media content production, like the kind I do. Being able to grow a social media account, garner attention, create a brand, and send leads to someone's website is a relatively unexplored market. Tell any local business that you can get a video of their brand to get millions of views for a fraction of what a paid social media ad would normally cost, and you'll get your foot in the door. The thing is, though, you actually have to be able to do what you claim. We're not throwing around empty promises here, we want to acquire real skills that will bring these people real value. That's why I ultimately dislike dropshipping so much, the value you provide to each customer is insignificant--and the dollar amount associated with that shows.

 

[MitchC]

With Temu and other similar platforms doing B2C, the only chance someone has when trying to do online product sales (especially when starting in 2023/2024) is to invent something new and revolutionary, apply for patents, then go church and pray that some Chinese manu doesn't replicate it before you make bank.

The days when you identify a needed product, source it from China, do some private labeling and ship to a 3PL warehouse, run ads and "Sell X for Y times for Z years" is over.

Why do you keep posting this negative garbage in these threads

This is the best and easiest time in history to kill it with ecommerce

 

[Kevin88660]

I'm clueless about dropshipping, but if many people are doing it means at least a tiny minority is thriving and killing it.

If there is demand and need, then that business is dead. No one will be doing it.

It sounds like the barrier of entry to profitability is very, very high. That itself is not uncommon in other businesses, too.

Most cafe owners played with parents' money for six to 12 months and closed it with losses.

If you start a business with no competition (no one is doing), it will likely be much harder than a business with a lot of competition (proven demand).

There are quite a few successful e-commerce business people who made millions here. I personally know a friend making 5k a month shipping things from China to Singapore on Shopee. Zero inventory and advertising costs. He found a high margin niche category of product.

In comparison, for a young person with limited experience, network and skills, e-commerce is a much better option than trying to self-publish ebooks on Amazon where only the already famous cash out from their existing fame.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[trulyandres]

I'm clueless about dropshipping, but if many people are doing it means at least a tiny minority is thriving and killing it.

If there is demand and need, then that business is dead. No one will be doing it.

It sounds like the barrier of entry to profitability is very, very high. That itself is not uncommon in other businesses, too.

Most cafe owners played with parents' money for six to 12 months and closed it with losses.

If you start a business with no competition (no one is doing), it will likely be much harder than a business with a lot of competition (proven demand).

There are quite a few successful e-commerce business people who made millions here. I personally know a friend making 5k a month shipping things from China to Singapore on Shopee. Zero inventory and advertising costs. He found a high margin niche category of product.

In comparison, for a young person with limited experience, network and skills, e-commerce is a much better option than trying to self-publish ebooks on Amazon where only the already famous cash out from their existing fame.

I see what you're saying here, and I agree. I just want to dispel the myth that drop shipping is easy. I'm not saying there's zero demand, just that it's not proportional to the supply

 

[Kevin88660]

I see what you're saying here, and I agree. I just want to dispel the myth that drop shipping is easy. I'm not saying there's zero demand, just that it's not proportional to the supply

But I was trying to say that you are never going to find a business need that has high demand with a low supply of competitors.

Profitability attracts entrants. A highly competitive industry comes with high demands. You will be surprised to find out that in other business that has lower supply/competition, the demand-to-supply ratio is usually worse, not better.

Enter a highly competitive industry, and grind is better than 70-80 percent of the business ideas. The reason why people all flock to dig gold at a spot is because there is gold there. The reason why people aren't digging at a specific spot is that there is really no gold.

Unless you find your personal calling or an idea that excites you, entering into a highly competitive industry with a large number of proven winners (but very low percentage) is still the soundest move.

The absolute number of proven winners is much more important than the ratio of winning players as a whole.

 

[Vntonio]

Why do you keep posting this negative garbage in these threads

This is the best and easiest time in history to kill it with ecommerce

Frustration. Failures. Employee mindset.

Could be a thousand reasons behind his comment.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.