The True Cost of Drop Shipping: 27 Top Questions Answered!

18 min. read
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At a glance: How much does it cost to start a dropshipping business? 

$173 U.S. Dollars at least 

Website platform and hosting (such as Shopify) $29 per month
Domain name $9 per year
Auto importing product app (such as SaleHoo Dropship) $27 per month
Product samples $8 (depending on product)
Budget for ads (optional) $100

At first glance, dropshipping looks like a foolproof business model. Dropshippers don’t keep inventory and they don’t pay for the products they sell until a customer has already bought them. All you have to do is set up your listing, mark up your prices and collect your profits, right?

Not quite! Dropshipping is a great way to start making money online, but it’s not always easy when it comes to balancing costs and profits. In this article, you’ll find answers to some commonly asked questions about the true costs of dropshipping and how to make your dropshipping business profitable.

Getting started 

How Do I Start a Dropshipping Business?

Starting a dropshipping business is relatively easy and requires minimal financial investment. 

There are three core steps to starting a dropshipping business:

  1. Find a great product to sell: You can use a market research tool like SaleHoo Labs or you can browse websites like AliExpress and Amazon to find a product that you’d like to sell. Ideally the product will be small enough to fit in a shoe box, weigh less than 2kg, and have a retail price of $20-$200. 
  2. Find a supplier for that product: You can use SaleHoo’s supplier directory of 8000+ pre-vetted and verified suppliers, search for suppliers on Google, or reach out to suppliers on AliExpress or Alibaba. You need to make sure that the supplier offers a dropshipping service, which means they hold the stock and handle packaging and shipping for you.
  3. Choose a marketplace to sell your product: You can sell products on established online marketplaces like Amazon, eBay and Etsy, or you can start your own online store using a service like Shopify.

Here’s a more detailed guide to starting a dropshipping business - How to start a dropshipping business in 5 easy steps 

How Much Money Do I Need to Start a Dropshipping Business?

The biggest perk of dropshipping is that you don’t need to front the costs for the products you’re selling. There will be some startup costs, but you won’t need to invest thousands to start your online business. Here are some of the startup and maintenance costs of dropshipping:

  1. Your online store. If you use a selling platform such as eBay or Amazon, you’ll need to factor in listing and sales fees. Running your own store lets you avoid these fees, but in exchange you’ll need to pay for hosting and any extras such as website themes or add-ons.
  2. Operating expenses: Various ongoing costs involved in running the e-commerce business, such as website hosting fees, marketing expenses, customer support costs, and any fees associated with the dropshipping platform or services utilized for order fulfillment.
  3. Supplier fees. Some suppliers might charge a fee to use their dropshipping services. Choosing the right dropshipping supplier can save you time and money in the long run.
  4. Marketing costs. These costs can vary depending on the scale and methods you choose for marketing your online business. Social media, blogging, and email marketing are a few ways to market your products.
  5. Other business expenses, such as obtaining a tax ID, business credit cards and local business licenses. Be sure to check with your local laws to make sure you have everything you need to start your dropshipping business.

What Are the Disadvantages of Dropshipping?

Dropshipping has a few disadvantages, and unfortunately most of these factors will be out of your control.

One of the largest disadvantages of dropshipping is that you won’t get the same discounts that you would from wholesale buying. Suppliers usually aren’t willing to provide you with the wholesale price for items unless you’re buying in bulk, so you can expect dropshipping surcharges in the pricing they give you, up to a few dollars more per item than you would pay wholesale

In turn, you’ll have to raise your own prices if you want to profit from your sales.

Although, if you're already confident in the business model and want to fast-track and scale your dropshipping business' growth, applying for wholesale financing could also help you get more competitive with your products' pricing. 

Another disadvantage is that you will have very little control over customer service. If your supplier is late with shipping, ships out poor-quality items or suddenly disappears, your online business will take the heat. Remember, your customers are expecting their orders from you, not your supplier, and just a few negative reviews can be a death sentence for online stores.

Making Money 

Is It a Profitable Business Model?

Dropshipping is as profitable as you make it. This isn’t a get-rich-quick business model; drop shipping takes time and effort if you want to have a successful online business.

You will see plenty of Youtube videos and blog posts from people claiming to make a lot of money in a short amount of time. While this is possible, you should be wary of people overselling dropshipping and have realistic expectations. All businesses require time and effort to be successful.

How much Money Can Be Made From Dropshipping?

How long is a piece of string? There are legitimate examples of people making millions of dollars from dropshipping. While that is possible, it’s rare.

The amount of money you make dropshipping depends on several factors:

  • How much time you invest
  • How much money you invest
  • Your ability to choose a great product
  • Marketing and ad spend 
  • The ability of your supplier/s to grow with you 

If you’re just wanting to dip your toes into dropshipping to make a bit of money on the side, then you can probably expect to make an extra $1000 to $2000 a month with a good product and store. If you’re wanting to make this your full-time job and have a killer product and the time and money to invest in Facebook advertising and high-quality funnels, then you could make a very respectable full-time income up to six figures or more.

Here’s a quick guide to help you make big money dropshipping.

What Are the Benefits of Dropshipping?

If you’re looking for an easy way to start an online business, dropshipping has a few benefits.

The lower startup costs are the most obvious perk. Without the need to keep inventory, your costs are limited to hosting/listing and other setup fees.

You’ll be able to start and run your dropshipping business anywhere you can carry a laptop, since you won’t need to store your products.

Dropshipping also offers the freedom to explore a wider range of products than wholesale buying. Is one of your product lines or niches not working out? No problem. You don’t have inventory to sell off, you can just find what you want to sell next and make new listings.

Since your “inventory” is unlimited, so you can try out new products whenever you like. If your business doesn’t take off like you hoped, you can walk away with very few losses.

What Kind of Profit Margins Can I Expect with Dropshipping?

If you think dropshipping offers high-profit margins, think again. In truth, the margins for dropshipping are generally low, for a few reasons.

Firstly, you won’t see the discounts on products that you’d enjoy if you purchased your items wholesale from your supplier. Dropshipped items often come with markups.

Secondly, the easy business model that dropshipping provides means there’s plenty of competition out there. You’ll have to keep your prices low to get sales.

There’s no “right” way to price your dropship products. Consider factors such as the MSRP (Manufacturer’s Suggested Retail Price), additional costs such as listing fees, hosting and marketing, and the niche your item falls under. Certain product categories, such as electronics, might sell in higher volumes but with a low profit margin, while other products might have a lower sales volume but enjoy a higher profit per sale.

Thankfully, there are ways to boost your dropshipping profit margins, but overall, tight margins are to be expected.

Is Dropshipping Still Profitable 2024?

Yes, absolutely. Dropshipping is still profitable in 2024. You might have seen articles and videos questioning the viability of dropshipping in 2024. This is because dropshipping has received a lot of attention over recent years and the eCommerce space has become highly competitive. 

There is a caveat here. It’s definitely not easy to be profitable with dropshipping in 2024, but it’s definitely possible. As with any business, it takes hard work and dedication to succeed.

The main things you’ll need to make dropshipping profitable for you are:

  • A great product that’s in high demand 
  • Marketing skills to drive traffic to your store and make sales 
  • A willingness to invest money in online advertising 
  • A strong work ethic 

Dropshipping is definitely not a get rich quick scheme. You’ll need to learn how to run ads on Facebook, Instagram and Google. You’ll want to start looking at Influencer marketing and content creation. You’ll need to stay ahead of the curve when it comes to adding new products to your store. And you’ll need to work hard and invest time and effort in building your business.

With all of those ingredients, there’s no reason why your dropshipping business can’t be profitable in 2024.

How Much Does Selling Dropshipped Products Cost?

The cost of dropshipping depends mainly on your sales platform.

The most common method of selling dropshipped products is through a marketplace like eBay. This option comes with perks such as increased traffic and ease of use, but you’ll face heavy competition. You’ll need to account for listing fees, usually a few cents per listing, and a percentage of the final sale price, which can be up to 10% per sale on eBay or even higher on Amazon.

If you’re looking for a more hands-on approach to your dropshipping business, you can choose to build your own online store.

Is Dropshipping Legal?

You might have noticed that some of the content promoting dropshipping, especially some of the videos on Youtube, seem spammy. This makes some people suspicious of dropshipping. Also, selling goods online without having to buy any stock almost seems almost too good to be true.

But, don’t worry! Dropshipping is 100% legal if, of course, it’s done legally. Dropshipping is a legitimate business model but you still have to abide by the same legal requirements as any other business. That means you have to describe your products accurately and ensure your products are of a reasonable standard. You also have to pay taxes and fulfill all other financial requirements in the countries you do business.

Do You Need a Tax ID to Dropship?

If you’re a United States resident buying goods from US-based wholesalers and suppliers, yes you need to get a Sales Tax ID. There are only five states that don’t require you to have a tax ID. They are: Alaska, Delaware, Montana, New Hampshire and Oregon. 

The Sales Tax ID is important because it lets the government know you’re doing business and it also means you don’t have to pay sales tax on the products you purchase from wholesalers. Instead, you can pass that cost on to your customers.

So while it may seem like a bureaucratic box-ticking exercise, it’s actually of benefit to you and your business.

Learn more about getting a Sales Tax ID here and here.

Working with Suppliers

Do Dropshippers Provide Customer Service and/or Talk with My Customers?

Usually, no. When you run a dropshipping business online, your business is the face the customers see. Think of yourself as the middleman between you customers and your supplier, with your supplier working behind the scenes.

This means that customer service and all customer interactions are up to you. Finding reliable suppliers for your dropshipping business is very important because of this.

Also read: list of the best drop shipping companies 

How Do I Submit Orders to Suppliers?

Talk to your supplier about how they prefer to receive dropshipping orders. For lower sales volumes, submitting an order might be as simple as forwarding the confirmation email containing the order. If you sell in higher volumes, however, your supplier might want you to generate a daily sales sheet containing all the necessary data (item #, shipping address, etc.).

It’s a good idea to keep a list of backup suppliers on hand, just in case your primary dropshipping supplier doesn’t have the right items in stock.

How Do I Pay My Supplier?

Once your dropshipping supplier has your order, they will enter it into their system and get the order ready for shipment. You might be charged per order, or in daily, weekly or monthly invoices.

Most dropshipping suppliers will charge a company credit card provided by you for all operating expenses. Be sure to talk with your supplier about how they handle payments and invoicing.

Who Pays for the Shipping Costs on Orders?

Your dropshipping supplier will have their own arrangements with their local couriers, but they will pass the costs of shipping and handling on to you. It’s up to you to decide how to reflect those added costs in your pricing models and whether to charge for shipping.

How Do I Account for Dropshipping Costs for Ecommerce Sales?

Striking a balance between sales and profits can be a challenge. You want to enjoy a healthy profit per sale, but those higher prices might lead to fewer sales. Pricing your dropshipped items can be tricky, but understanding how to account for dropshipping costs can help you raise your sales volume as well as your profits.

  • Volume-Based Charges

    Dropshippers will typically price shipping by either weight or volume. Start with a base charge for shipping to cover packaging and handling costs, then increase the cost in increments by either the number of items sold or the total weight of the final order.

  • Flat Fee Shipping

    This means that the customer pays the same for shipping no matter what they order. This can be an easy method, and it works well if all of the items you sell are roughly the same size and weight. Be careful, though: a high flat rate can drive away potential sales, while pricing too low can lead to losses on high-volume orders.

  • Free Shipping

    This method tends to attract more sales, especially in the days of Amazon Prime and their free shipping model.

There are a couple of ways that dropshippers make up for the loss of the shipping fee. You might set up a minimum order threshold to qualify for free shipping, which can increase your average order value. You can also cover shipping by hiding the costs in the listing price.

How Do I Get Tracking Information for Orders?

It will be up to your supplier to provide you with tracking information for each order. When choosing your dropshipping suppliers, make sure you find ones that provide tracking info on all orders and find out how and when that info will be delivered.

Do Orders Appear like They Came Directly from My Company?

Yes! You’ll need to work with your dropshipping suppliers to coordinate how you want your orders to be shipped to your customers. This includes factors such as packaging, shipping labels and item tags, if applicable.

Having your company’s name and logo on your dropshipped items is important to customer satisfaction, because they make the order look like it was shipped directly from you. Customers might wonder why they’re receiving a box from Dropship Co. when they ordered from OnlineStore Inc. Look for dropshipping suppliers that offer customization options.

What Is the Turnaround Time for Fulfilling a Dropshipped Order?

This will depend on both your supplier and you. One of the keys to having a successful dropshipping business is keeping up with fulfillment to maintain good customer service. Your supplier can’t send orders to your customers if they don’t know about the orders in the first place.

If you’re willing to put in just a few hours each day, you can easily keep up with daily order fulfillment. Stay in touch with your suppliers and make sure they’re shipping out orders in a timely manner. Quick turnaround times make for happy customers!

How Do Returns from Customers Work?

Return policies will vary by supplier. Some dropshipping suppliers will only accept returns for certain items, while others might not accept returns at all. In these cases, you will need to determine your own return policies.

In order for returns to be handled smoothly, be sure to clearly read and understand all return criteria, and pass that information to your customers accurately. Most suppliers will issue a Return Authorization (RA) number that allows them to identify the item in their system. Once a return is processed, your account will be credited.

Who Pays for the Shipping on Returned Items?

Suppliers will have different criteria for who pays for return shipping. Typically, damaged or defective items will be reshipped at the supplier’s expense, with no need for return shipping. If the customer changes their mind about an order, however, or ordered the wrong thing, they should expect to pay to return the item.

Offering free returns is an attractive sales model that might lead to more sales and higher customer satisfaction.

Finding the balance between sales and profits can be tricky, but it is possible to create a profitable dropshipping business online with a little research and understanding of the costs involved. Begin with your setup costs, hosting/listing fees and sales fees, then decide on the best way to price your items and finally create your policies and price models for shipping and returns.

Did we answer your questions about the costs of dropshipping? Let us know if we’ve missed anything!

Where to Sell

Is Alibaba Good For Dropshipping?

Alibaba is a China-based online marketplace that sells a huge range of products B2B (business to business). Prices are extremely cheap, but to get the best wholesale prices you have to buy in bulk as most of the suppliers have a minimum order quantity (MOQ). For that reason, Alibaba is best for online sellers who have capital to invest up front to buy bulk stock.

However, many of the suppliers on Alibaba also offer dropshipping services. You simply have to contact the suppliers of the products you are interested in and ask about dropshipping with them. You won’t get the same cheap wholesale prices, but you may find a great supplier to start dropshipping with. When starting out, a lot of dropshippers prefer to use AliExpress as you don’t have to buy in bulk.

You can also use Alibaba for market research to find products and then source them through AliExpress to begin with. Once you have an established business with decent cash flow, you can graduate to buying products wholesale through Alibaba. 

So in short, Alibaba can be a good resource for dropshipping, but it’s not the best place to start for beginners.

Can I dropship on Amazon?

Yes, you can use the Amazon marketplace to make sales and use dropshipping as your fulfilment method. For example, you could find products on AliExpress and list them for sale on Amazon. When you make a sale on Amazon, your AliExpress supplier will be notified and they will ship the product directly to your customer. Easy, right? 

You just have to be wary of the fees associated with Amazon and understand that it’s a highly competitive marketplace. These factors mean the profit margins of dropshipping can be low as it’s easy for your customers to find cheaper alternatives to your products. With the right products, it’s definitely possible to make good money dropshipping via Amazon, but it’s getting harder and requires extensive market research and testing. 

Alternatively, you could use the Fulfilled By Amazon (FBA) service, which is kind of like Amazon acting as your dropshipper. This process requires you to buy products in bulk and send them to an Amazon warehouse. Whenever you make a sale, Amazon handles the packaging and shipping for you. Obviously, buying in bulk means you have to spend more money up front, but if you’re confident in your product then this method is likely to make you more money.

You could always start by dropshipping on Amazon via AliExpress to test your products and then graduate to Amazon FBA once you’ve established that there’s a market for what you’re selling.

Products to Sell

What should I dropship in 2024?

There are new products coming on the market every week. One of the keys to being successful with dropshipping is anticipating which of these products are going to start trending.

If I were to tell you exactly what to dropship in this article, then hundreds of people could just copy the idea and it would no longer be a good product to dropship. 

However, I can help to steer you in the right direction. These are the markets that are always rich in opportunity:

  • Health 
  • Fashion
  • Accessories 

The health market is huge because people are always looking for ways to look and feel good. Health can include beauty products, such as makeup, face creams, teeth-whitening kits, essential oils, sports and fitness products, as well as food products, such as herbal teas, protein powder, herbs, and nutritional supplements. Dropshipping health products is certainly something to think about! 

Fashion includes clothes, shoes, watches, sunglasses, hats, scarves - anything that someone can wear to project a particular image.

Accessories are items that accompany existing product trends. For example, when the Apple Watch first came out, some people made a lot of money dropshipping custom Apple Watch straps. The same goes for smartphone cases and finger holders, selfie sticks, wireless charging docks. 

How do you know what to sell? You need to become obsessed with observing trends. Follow influencers on Instagram and see what products they’re promoting. Keep up with technology and think of accessories that can complement the latest gadgets. Follow fashion models or clothing designers and preempt what might be hot next season. Staying ahead of the curve will help you to decide what to dropship in 2024 and beyond.

If you need some extra inspiration, check out this article with Product Ideas for Dropshipping.

Keys to Success in Dropshipping

How do I actually make sales from dropshipping? 

After you've made your dropshipping store, you'll need to invest time and money into marketing if you expect to make any sales. That's because you need people to actually know about your store and see what you're selling so that they can decide whether to purchase from you or not. There's plenty of ways to market your dropshipping store. You can choose from organic ways such as building blog posts and content to rank organically on search engines, but this could take quite a long time since, as you know, Google is already extremely competitive. Another organic method is by posting on social media and growing through hashtags, but this could also take awhile as there are so many social media accounts out there. And then there's paid ads, such as Google, Facebook, Instagram, TikTok, Snapchat, etc. where you can pay a certain amount for them to bring your product ads to potential customers. If you don't want to pay for ads or wait a long time to be found organically, you can opt for influencer marketing. You can find influencers, give them your product for free, and ask them to post on their social media accounts. That way, you can use their traffic and audience to promote your products. You'll have to pay for the products that you gift them though, and ship them free of charge to the influencers.

How do I find winning niches and products that sell? 

Finding that winning niche and product is half the battle with creating a successful dropshipping store. Generally, you'll want to find niches that have a high perceived value so that your markup on the products actually make sense and don't seem overpriced to your customers. For example, selling a $100 beanie doesn't make sense unless it's branded but being that your dropshipping store will be fairly new, the branding value wouldn't be there quite yet. You'll also want to go for an evergreen niche, something that's not seasonal and only sells at a certain time of the year. Lastly, you'll probably be inclined to choose a niche that your passionate about - which is good as you'll know the in's and out's of that niche. However, you'll want to make sure that the profit is there. The last thing you want is passion taking over the profit side of things and fail to make any money with your dropshipping store. Once you have the niche sorted out, you'll want to think about which products you want to sell from that niche. The beauty with dropshipping is that you can test products until you find the right one. You don't have to bulk purchase products and bet all your money on that one product. You can create a general store in your niche, test multiple products, and see which one turns out to be the winner. 

What skillsets do I need to be successful with dropshipping? 

Honestly speaking, all the skillsets you need to be successful with dropshipping can all be learned on the spot. You don't need any particular skillsets to begin with. However, through your dropshipping journey you will learn a lot. Some of the things you'll learn are how marketplaces work (if you decide to dropship through a marketplace like Amazon or Walmart) and how to build an eCommerce website (if you decide to dropship through your own store on places like Shopify or WooCommerce). These platforms are pretty intuitive so don't worry about coding or doing anything very technical. Other skillsets you'll learn are very marketing related such as creating your own content, working with influencers, creating ads, and building a brand. You'll also learn some basic financial skills such a calculating profit margin. While you don't need tons of skillsets to start dropshipping, you'll definitely be learning a lot through the process which makes the journey very rewarding. 

If you want to learn more about dropshipping or eCommerce, simply contact our experts here to get any of your questions answered. 


About the author
Simon Slade
CEO of SaleHoo Group Limited

Simon Slade is CEO and co-founder of SaleHoo, a platform for eCommerce entrepreneurs that offers 8,000+ dropship and wholesale suppliers, 1.6 million high-quality, branded products at low prices, an industry-leading market research tool and 24-hour support.

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  • Brooks Morgan 3rd of May
    Your also forgetting the price of shipping to get ranking at the top of Ebay you have to offer free shipping. I sell lot of things on Ebay but none are drop shipped. It also depends on the market up of the product some manufacturers tell you in order to sell there product you have to use there price guide lines or you won't be able to sell there items
  • Orville Bumgardner 3rd of May
    The comparison is simplistic. There is no mention of the extra shipping costs "both ways" for items bought at wholesale. Some drop shippers get volume discounts for shipping that are not available to the average Ebay Merchant and pass at least part of it on to their customers. At best, there are some additional packaging costs if you stock and ship your own merchandise.
  • Sergio Zavalla 3rd of May
    En realidad la compra al por mayor si que conviene , ya que podemos incrementar nuestras rentabilidad, en el caso de mi pais Argentina es muy difícil por las restricciones existentes, muy buen artículo , los felicito muchas Gracias un abrazo Sergio Zavalla
  • Thanks for the article. Now, what percentage markup is applied by wholesalers? For example, let's take the 'Remote controlled helicopter'. (Drop ship price: $39.41 , Wholesale price: $29.97) If this is being sold by wholesalers at, say $40, then drop shipping is not viable. However, if wholesalers are selling for $60, a 100% markup, then it would still be worth selling these via drop shipping at, say$50; leaving about $10 in near pure profit. Or not?
  • Orlando 3rd of May
    I can see you can have more profits buying wholesale rather than dropship . Can you show examples of the profits after shipping costs for the items listed. Some items look like it's a break even proposition after shipping.
  • eddie knight 3rd of May
    very interesting this is good stuff,l have tried dropshipping programmes and tried to get a website running only to find out later l was so ripped off, l have also studied prices on ebay too and found you can't buy cheaper than what a lot of sellers are selling for so where's the excitement of running your own show anyway l will follow you a bit more now thanks eddie
  • Richelieu Hoff Jr 3rd of May
    I am currently a drop shipper because I cannot afford to wholesale.
  • Carlos Akira Higuti 3rd of May
    Hello, Alice! The system dropship is still the best option for those who will start or is a novice seller. See wholesale buying for the future, when getting enough profits for purchases of larger lots. Or not longer be a dropshipper, but an e-commerce retailer. But anyway thanks for the article because there is a difference between good profits, depending on each product. And I think it very interesting! Thank you for the post!
  • Howard Ford 3rd of May
    Very useful information to make note of.
  • Brian Fox 4th of May
    In many cases in order to get wholesale prices, you have to buy bulk quantities. This means you have to carry inventory, which costs money. This can be costly. Much more costly than drop shipping. As for fees, many companies do not charge a drop ship fee.
  • Pete 4th of May
    While it is true that drop shipping in certain cases can eat into your profit, not all drop shippers charge for their service. It does take some research to find a good drop-shipper that does not charge for drop shipped orders, but they are out there. Even if a drop shipper does charge a small fee, it may be worth the trade off. The biggest problem with the drop ship supplier is low inventory on "Hot" items. You may list an item for sale that is not any longer in stock when you get an order. For this reason, selling on your own web site is an advantage. If you sell an item on eBay that you can't fulfill, you won't last long on eBay. Buying wholesale and stocking inventory does give you better control, but it has it's drawbacks too. With buying wholesale you will also have shipping cost to pay just to get it to your facility. This adds to the cost and can quickly eat up the difference between having the item drop shipped and shipping the item yourself. With buying wholesale you also have to do your own shipping. This means buying boxes, tape, shipping peanuts, shipping lables, etc. Not to mention the time it takes to package, run to the PO or UPS. If you do your homework and ask a lot of questions, both methods can be profitable. Wishing you success. Pete....
  • Robert Dionne 4th of May
    You comment on a $10. Savings when buying wholesale lots which is significant, but what is the cost of wharehousing, insurance and capital on held inventory, handling and shipping. This doesn't cover the cost given or accounted for , with the ability to travel and have a smaller permanent foot print when drop shipping. I am still in the infant stage of my business plan, but am wondering if the extra ten dollars in expense may be justified in some business scenarios. For me, time will tell.
  • paul Cost 6th of May
    Yes agree with all above points the other danger with buying wholesale is even though it saves you money, but if that product suddenly stops selling you are stuck with the stock, where as with drop shipping is not your problem
  • I live in Hawaii. Dropshipping seems to be the only realistic way to go for me. If I buy wholesale, I have to pay shipping from the mainland to Hawaii and then when I sell something, pay to ship it back to the mainland from Hawaii. I am beginning to wonder if it is even worthwhile it try to do this from Hawaii.
  • JERRY GAN 25th of May
    Dropshipping is the Best of all Business Have you ever used the words “drop ship” or “drop shipper” in a sentence before? These words have both become extremely popular in terms of the online business worlds. Why? There are now thousands of small e-commerce retail websites starting up each day that follow the stockless retail business model. However, Dropshipping is the Best of all Business in their process. There is a very strong relationship between dropshipping and doing work from home. In dropshipping a retailer can do the work from home if they are running an online business. With the dropshipping method a retailer or a seller can successfully work from home running the online business by opening a website which has all the details and images of the products are that are available. An online business retailer usually does work from home due to the low overheads and flexible working conditions. By running an online business using the dropshipping supply chain process the online business just needs to concentrate on attracting customers to order goods from the website. As the marketing increases, so too does the number of orders increase due to the growth of customers and profits will rise. By doing their work from home, the online business retailer has fewer overheads enabling the business to make more profit from the dropshipping business. With the dropshipping process the online business does not require any shop, any workers, any lighting or other major expenses, and they don't even require a warehouse to store the product. The online business can easily manage all the various aspects of the business by fulfilling his/her responsibilities all from a desk . There are lots of opportunities available with dropshipping, for example with the internet there is now better information on product description and the prices available with just a few clicks, and the latest product updates and availability are all available at wholesaler's online store. But getting success from dropshipping, you have to look for a company which will give you proper opportunity , Though it is very simple and easy way to make money home, some company will not give you proper opportunity. So you must be careful selecting a company. I know about a company who will give you better opportunity than any other dropshipping companies . It has not taken membership fee, dropship charge and there is not middleman . It supplies the products to your customer directly and is not any minimum order quantity ,It can be big or small . But in other dropshipping companies, you will not find such opportunities. Therefore, I strongly recommend you to get sign up in
  • John 8th of June
    I think it's unfair to say that buying wholesale always results in higher profits. As mentioned in some of the comments above, there are a lot of factors that you have to consider when making this argument. For instance, two shipping charges incurred before reaching the customer when you're buying wholesale versus just one when using a dropshipper. Also, consider the extra work and added responsibility that dropshipping takes off your back. You don't have to worry about packaging, shipping, lost or stolen items, etc... If and when your store grows very large, you'd have to hire staff to help you with these tasks and pay them hourly. With dropshipping this cost is factored into your dropshipping fees and remains relatively constant. I would recommend reading more about our guide on how to choose between going with a wholesaler or dropshipper to source your products here:
  • Kris (manufacturer) 20th of November
    Another reason for the higher prices for the dropship is the manufacturer and/or distributor take all the risk. They build/buy the products, store, warehouse and carry insurance for the product, ship, warranty and accept returns on the product. When I have dropshippers I must stock enough product for extremes, they might not sell 10 between all of them or sell 1,000s and I have to be able to ship next day or they complain that their customers are upset.Dropshippers have no skin the game as if my product isn't selling the best or they choose not to market it for whatever reason, I'm stuck with no sales and all the exposure. When a retailer gives me a PO for a set amount of units and have terms to pay for said product, I can figure my cost down tight and offer them a better price because there are way less variables. Plus I will cut deeper into my margin for someone who is willing to commit to the sales of my product by investing their money with the wholesale purchase. And for John the post above me, you don't even make any sense. That first shipping is almost always either comped because they bought a minimum amount of product to make my numbers work and all the reasons you listed as why people shouldn't wholesale doesn't go away because they don't do it. It means I have to do it for them. Now think about this because I'm going to stay in business no matter what; if you do those things listed in house you don't pay my overhead. You will pay for all of those things to happen and you will pay my overhead too, I guaranty it!
  • Widmaer Moise 25th of March
    That was very informative. One question, should i ask suppliers for their wholesale price or their drop shipping price?
    • Justin Golschneider SaleHoo Admin 28th of March
      Hi Widmaer! There's no harm in asking for both prices if they offer both services.
  • Widmaer Moise 25th of March
    Also, what is the differences between getting products at wholesale price and drop shipping prices?
    • Justin Golschneider SaleHoo Admin 28th of March
      The wholesale price is only offered if you buy in large lots, and generally allows for large profit margins. The dropshipping price is what you'll have to pay to dropship a single item at a time and it's typically much higher than the wholesale price.
  • Dave 21st of July
    Hi, What are the benefits for a manufacturer if he provide drop shipping service for his retailer
    • Justin Golschneider SaleHoo Admin 21st of July
      Hi Dave! A manufacturer might want to provide dropshipping services for a number of reasons. The most obvious reason is that it helps them boost their sales. They can also sell the items at a much higher per-unit cost than they would normally charge, giving them higher profits.

      However, a manufacturer has to weigh these advantages against the disadvantages. Providing dropshipping services is very time-consuming, and most manufacturers can make money faster by simply pumping out tons of goods and selling them in bulk.
  • reza 2nd of December
    Hi there,
    I have a question: While every customer has the same access to Aliexpress in terms of price and free shipping as of dropshippers, what would make customers to buy any product with higher cost from dropshippers rather than Aliexpress?
    • Richelle Monfort SaleHoo Admin 4th of December
      Hi Reza,

      I know price is a big factor, but there are other important ones when choosing your suppliers like how reliable the supplier is. Settling for the supplier who offers the lowest price is one of the many reasons many resellers are scammed online.

  • Mahmoud 31st of December
    1 - Is it possible that I make a deal with my supplier that i pay him for X amount of money and then I go sell my products on Shopify and then whatever of my products didn't sell i can have him refund my money ? Can i do it this way other than the traditional way ?
    2 - Is it possible that I make a deal with the supplier that I can give him percentage along with paying him the labeled prices forhis product ?
    3- Is it possible that I delay the receiving of money when someone purchase from my store and enters his cc until I go to aliexpress for example and send his product ?
    • Richelle Monfort SaleHoo Admin 2nd of January
      Hello Mahmoud,

      Please refer to my reply below -

      1 - Is it possible that I make a deal with my supplier that i pay him for X amount of money and then I go sell my products on Shopify and then whatever of my products didn't sell i can have him refund my money ? Can i do it this way other than the traditional way ? - You will have to ask the supplier directly. I think dropshipping would be a better method as you only pay the supplier when a product actually sells.

      2 - Is it possible that I make a deal with the supplier that I can give him percentage along with paying him the labeled prices forhis product ? - Again this question is best discussed with the supplier directly.

      3- Is it possible that I delay the receiving of money when someone purchase from my store and enters his cc until I go to aliexpress for example and send his product ?The faster you get the payment fro your customer the better, so you can pay your supplier for the products being ordered/bought by your customer.

      All the best!
  • Richard Hall 9th of December
    I've been doing the research on this business model (drop shipper) and it just does not make sense. Anyone who is willing to sell a product listed on your site and ship it to a customer is an online retailer themselves. If they want to take the time to package something and send it to a customer why would they give you the profit. As per the majority of your comments below - it doesn't work and why would it. I am struggling to find a wholesaler who would ship directly to a customer as a single item and give you the money for it.
    • Rhea Bontol SaleHoo Admin 13th of December
      To clarify, suppliers don't give you a cut for each sale. With dropshipping, you earn through the profits you make when selling your dropship suppliers' items. Suppliers normally have a separate price list for re-sellers and that where you can make profits. Supplier provide resellers (retailers) a special discount when you represent to sell their items.
  • TLW 13th of July
    What about extra shipping charges like brokerage fees, custom fees, etc?
    When getting most items shipped to Canada there always seems to be extra customs fees I have to pay if coming from another company.

    How would this be explained in the shipping charges?
    Or would it just be in the fine print?