Dropshipping is not the answer.

Dear Scott,
I’d like to know what the pros and cons are of dropshipping, and how you go about starting.
Thanks,
Liz
Click Millionaires Member
Cumbria, UK

SCOTT FOX’S ANSWER

Hi Liz,

People ask me all the time about dropshipping. This has gone on for years.

But as you found during Click Millionaires Video Office Hours earlier this week, I don't have a good answer about it. Thanks to your question, I finally realized why!

If you are new to online business, dropshipping is not the easy answer you’re expecting. It’s often the wrong first step because it suggests going into business representing 3rd party products before you have even locked down your own motivations and goals.

Dropshipping is just a tactic in search of a strategy. It's not a business by itself.
Dropshipping directories just give you lists of suppliers with products for sale. Those lists are only helpful if you have already determined both the customers you are targeting and the products you want to sell.

For most people I coach, I would start by not looking at dropshipping at all. Instead I recommend starting by identifying a passion, finding a target market, developing a differentiating online marketing plan, etc. All of this is work you need to do to identify or develop the best products for you to sell online.

Your resulting business model may include drop-shipped products, but it’s just as likely that your e-commerce business will sell ads, info products, or affiliate products. And even if dropshipping is appropriate for your new e-business, you should spend the time to determine how you’re going to find and convert web site visitors into buyers of those products before investing in dropshipping.

My Dropshipping Recommendation
Save the money you’re going to spend on a dropshipping “membership”. Start instead by developing the personalized e-business strategy you need to differentiate your site and marketing plans.

My first book, Internet Riches, can help you with step-by-step exercises and we can discuss a strategy personalized for your interests and skills in the Click Millionaires Forum, too.

Best,
Scott Fox

Comments

[Jeff]

I am considering an e-business. Is there a way to determine if internet businesses in the same industry are making money? Number of clicks? I want to sell home accessories for cabin and lake homes.

[Scott Fox, eRiches 2.0 and Internet Riches Author]

Hi Jeff,

You can get rough traffic numbers on competing web sites from sites like Alexa.com and Compete.com.

That can be really helpful in determining the approximate traffic of a site but there's no easy way to tell if they are making money from that traffic. Sales numbers are dependent not just on their traffic but on their products, prices, site layout, ads, etc.

I like your niche idea, though. That sounds like a lucrative and nicely targeted market.

Let me know how I can help you.

Thanks for your comment.
Scott Fox