Why Shopify Dropshipping is Not Sustainable (Alternative Ways to Make Quick Money Online)
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Right now one of the biggest digital marketing trends has to be Shopify drop-shipping. It seems like every entrepreneur and their grandmother is building chintzy-looking niche shops and expecting to become the next 6-figure sales guru online. The reality is, these kinds of Shopify platforms are not sustainable. Do some people make money off of them? Sure, but from a real business standpoint, they are a massive amount of hassle, specialized knowledge, and a huge time sink, in comparison to more sustainable online business models.
What Exactly is Shopify Dropshipping?
Shopify has become known as one of the best ways of creating an online store. They have respectable site templates, a decent interface, integrated payment systems, and to be honest, the storefronts that are created on their platform look great when a designer is at the helm. All of these factors have made people flock to Shopify to open fly-by-night operations, however.
The premise is simple: trundle over to a website like AliExpress, find a niche item on the cheap, then resell it on Shopify for a higher price. You pocket the profit, and everybody’s happy.
Of course, that’s how it goes in theory. Of course, there are a lot of moving pieces in all of that, not all of which are even remotely sustainable.
First of all, and perhaps most importantly, the entry level into this right now is insanely easy. The market is being flooded with this kind of thing. If you’re one of the lucky few who found a great product or niche, put together a decent marketing campaign with Facebook and Instagram, and are riding the profits into the sunset, more power to you. But for the majority of people who attempt to do this, they are in for a rude awakening. It’s not necessarily because the business model is faulty, though. In theory, it’s workable. The problem rests with the fact that there are thousands of people doing the exact same thing, and every day, brand authority grows on sites like Amazon, while niche sites are looked at with skepticism and sometimes even paranoia.
Another issue with this business model is that it is the furthest thing from passive income you can possibly imagine. Part of the goal you should have for yourself as an entrepreneur is to develop a system. Business systems are what truly differentiate entrepreneurs from any Joe working a 9-to-5. Regardless of your niche, product, or service, you should be working on a system that delivers for you even while you are sleeping. You should be able to climb Mt. Everest and still make a profit while you are freezing your butt off at 15,000 ft. If you’re not working toward passive income, then why are you in this to begin with? Financial freedom is, to be sure, the freedom to do what you want to do when you want to do it.
If Shopify Dropshipping is the name of your game, though, then expect to spend massive amounts of time doing market research, creating and running Facebook ads, crafting a brand-orientated social media prescience, doing SEO for your Shopify website, and performing all manner of customer service. Of course, you can pay people to do these things for you, but that adds another level of absurdity to the mix. You’re thinking of creating a digital agency based around selling phone cases and custom tee-shirts on a fly-by-night Shopify store? That is the definition of backwards. At that point, you should just hire people to build you a product that you can sell yourself, on your own hosted website, so you can keep 100% of the profits. But I digress…
Issues With Dropshipping
Dropshipping is an online business model just about as old as the Internet itself. Marketers and entrepreneurs have been doing this forever. It’s really a solid way to make money if you know exactly what you are doing and you have a few “ins” (have rapport with a wholesaler, already have brand presence, etc.) But it’s not without its flaws, especially the way in which people are going about it now.
First off, customer trust is so vital these days. When a customer comes to a website or is thinking of buying something, they want to be swaddled in a warm blanket of protection. They want to know that their purchase is 100% secure, nothing amiss will happen, their product will arrive safely, quickly, and they will be able to track what is happening in case they get anxiety and want to rant at a customer service agent. In other words, they are trusting their money, peace of mind, and choices, in your hands.
Most newbies aren’t ready to meet those demands. People out here trying to meet Amazon and Etsy levels of trust with web-shops that look like they are ran by a credit card scammer in a Nigerian basement. Saw an obvious Shopify store while I was doing ad research a few months ago, and the splash page read: “Perfect Vapping Stick: Best Buy Online!” spelling error and all. I cringed so hard I thought I would fall into the Upside-down.
Listen, you can’t hate the hussle. For all I know, dude was killing it. But I can tell you this, if you are looking for a sustainable business model that you can grow into a brand and expand as you see greater profits, that ain’t it.
That’s the second main issue I have with dropshipping this way. The room for growth as a business, otherwise known as “scaling,” is extremely limited. The idea is once you start seeing a profit come in after finding a working product, you spend more on ads, drive more traffic, and there you go, more sales. But that isn’t scaling. Hack entrepreneurs and people who have no idea how businesses really work will call it scaling, but all you’re really doing is increasing your potential profit. When you scale, you actually have to expand the model of your business. For example, going from a dropshipping model to having your own product, with associated branding, market research, and bigger social media presence, that’s scaling. You’re expanding the scope or framework of the business. Just because you need to hire more employees or you add new products, doesn’t mean you are scaling. I don’t even necessarily think that’s a sign of “growth” in all cases. Plenty of businesses need to hire additional employees just to replace the skills of one veteran employee, or to offload extra busy work (which a lot of this online marketing grunt work tends to be).
People need to step up their game and think in terms of real business when getting into this stuff.
The other major issue that is a constant thorn in the side of dropshippers, is the crazy wait-times for shipping products from China to customers in the U.S. Some people who buy stuff from all over the world often don’t mind this kind of thing, but for the average shopper of Amazon, the typical 2 1/2 to 4 weeks it can take for AliExpress to fulfill an order is somewhere in between “this has to be a scam” and “nervous breakdown” for most people. Do people still buy from these niche sites despite the agonizing shipping times? Of course. But here’s the rub: the repeat buyers are few and far between.
This is the huge drawback of these Shopify stores and why the business model is not all that sustainable. Yes you can make money doing this, and if you are good, you can rake in a respectable income if you treat it like a full time job (note, the opposite of what you’re striving for as an entrepreneur…). But the money will almost certainly dry up unless you switch up your products and market aggressively, because repeat buyers to these sites are often few and far between. There are exceptions, such as shoppers in the Asian clothing niche (they expect long waits), but outside of that and a few others, this can have a serious impact on how your brand is viewed.
Sustainability in Online Business
If you’re going to take the time to create a “business,” you better think of the long-term. If someone can watch a Youtube video or take somebody’s “masterclass”, then two weeks later copy exactly what you’re doing, same niche and all, you don’t really even have a business. At that point you’re just mowing people’s lawns and shoveling snow. Great in a pinch, but is it a business? Hell no. Not even close.
The idea behind a business model should be sustainability: what is something no one else is really doing, and how can I build a system around it? Now, it doesn’t have to be something completely new. You’re going to be chasing a holy grail that will never come if you go down that road. But it has to be a fresh take on a tried and true product or service, and the model has to be able to be adapted to changes in the market, changes in your life, and the ebbs and flows of the Internet itself.
For example, what if some scandal rocked Shopify’s CEO, and they suffered such loses that they had to fold? What if an Internet law gets passed that says places like eBay and Shopify can’t sell products that aren’t being sold by their creators (no reselling, in other words)? There would be quite a few “business owners” suddenly staring at their computer screens in a stupor.
It goes beyond even this though. Let’s say that you are making a little profit off of your Shopify business and you catch the attention of another brand that wants to partner with you, or maybe a model or Instagram influencer wants to promote your product. Well…you begin to enter into heaps of legal ambiguity that I wouldn’t want to touch with a twenty foot pole. You essentially have to turn offers like this down. In fact, your brand becomes limited to only being a “supporter of other people’s products,” IE that of being a reseller. So if you want to expand into your own product, you may have to work on rebranding, or promoting the product under an entirely new label altogether, unless you want to run the risk of people assuming you are just hawking another person’s product again.
From a professional standpoint, you also lose out on investment opportunities and business deals. It is extremely hard to procure investment capital if you’re just reselling products. You need to have something to call your own. You need to be able to tell the Internet world: “this is my product and this is what I do.” Unless, of course, you’re not very interested in scaling.
See the conundrum?
Better Ways to Make Quick Money Online
I didn’t really cover how much work dropshipping is. Don’t think you’re going to pick a few products, bang out a Shopify store in a day, and then sit poolside and watch the dollars roll in. That is not even remotely close to the reality. Be prepared to do hours of market research, downloading and cropping pictures, creating a professional-looking store, drafting terms and conditions, setting up a rudimentary customer support system, doing SEO, engaging in social media marketing, and constantly refining your ads, product copy, and more.
So are there ways to actually make quick money that would be considered simpler and more effective than dropshipping?
One way, of course, is to simply be an affiliate marketer. I know, I know – don’t most dropshippers do what they do because they tried affiliate marketing and decided they wanted to a bigger profit margin? This is somewhat true, but keep in mind, dropshipping is by and large an “underground” form of making money. It is piecemealed together by savvy entrepreneurs trying to find hacks in the system. Ergo, it is rather complex and has numerous drawbacks. However, affiliate marketing is tailored for you to do it. Companies want you to promote their products, the payments are streamlined, sales pages and product pages are nearly always done for you, and you don’t have to play the part of a middleman. The best part is, no Shopify store fee, and no need for a Shopify store at all. In fact, if you really want to go there, you don’t even really have to have a website to be an affiliate marketer. Just a social media presence, which is something you almost certainly need as a dropshipper anyway, so why not just cut out all the extra stuff and make the process simple?
The issue with this is, though, it’s not truly a business either. It is more sustainable than dropshipping, especially for platforms such as Amazon and eBay.
Another decent way to pull in quick money online, that’s far easier than dropshipping, would be consultation services. Are you knowledgeable in something? SEO, WordPress, arts and crafts, relationships, astrology, farming…? It doesn’t matter what it is, but if it’s sepcialized knowledge, someone somewhere will pay to hear it. Now, because you don’t have brand recognition (I’m assuming), you can’t build a professional website and charge $50 an hour (well, who am I to tell you. Try it and find out!), but what you can do, is offer your service on a site like Fiverr. Ask for $5 per 30 minutes of consultation. Throw in some extras, like a cheat-sheet or PDF about the subject, over deliver in every order, build your rep. Eventually once you gain enough good reviews, you could even up your price to $10 per 30 minutes. If you generate enough demand, that’s $20 an hour. My friend, you just found yourself a full time job and all you have to do is talk about what you like. You’re welcome.
Protip: you can actually build a fully sustainable business doing this too. Shopify what now?
One final way to make quick and decent money online that IMHO beats Shopify Dropshipping by a mile, is crypto day trading. Spend half the time you would if you were running a Shopify store, jump into one of the best growing communities on the web, and make a solid profit doing it. With only about a week of training (watching YouTube videos and studying the market stats on sites like Bittrex), you can pull in minimum wage money day trading crypto. You don’t need to be some kind of hedge fund stock manager wizard to day trade. You just have to learn how it works and stick to it. This isn’t the easiest route in the world, but it’s definitely easier than dropshipping, and it’s a helluva lot easier than flipping burgers. You’re liable to make more money doing this than both of those options anyway.
Don’t Always Chase the Fad
One last word, sometimes it pays to step back and analyze business opportunities. Keep in mind that a majority of people making money online aren’t doing it with little Shopify stores. If it were really that easy and worthwhile, the big players in digital marketing would be doing it right now. I don’t know a single successful marketer or entrepreneur doing this right now. Many people in the Shopify game are making money on coaching other people on how to build Shopify stores. Their income is NOT coming from the actual Shopify business. Speaking of ways to make money…
Shopify dropshipping does work, but it’s one of those things that has all the trappings of a fad. What places it in this category the most is the simple fact of its unsustainable nature. Give it a few months, no one is even going to be talking about this way of making money, because too many people are going to be in it. There’s already like a dozen big name marketers out there who have masterclasses and apprentice programs based around teaching people how to do this stuff. The way I see it, the market is already oversaturated, it’s just that a few store owners are riding the wave of their established work. Wait until Spring 2018, there will be a new “big thing” that will be out. Don’t fall for the trends, just find a model that works and do you.