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What is dropshipping? [Complete Beginners Guide]

Did you know that dropshipping is a form of an online business approach that most sellers practice? THIS IS WHY:

If you clicked on this article is because you heard about the word “Dropshipping” but didn’t know “what is dropshipping”, and you want to know what the fuss is about this business method. You’re in the right place!

In this article, I will explain every detail about dropshipping, the pros and cons of it, and how to properly execute it — especially if you’re a complete beginner in the eCommerce world.

Dropshipping is a low-risk business model that doesn’t require a huge investment to start. Furthermore, you can start profiting by simply putting in the work for a couple of hours a day. 

This business approach is practiced by millions of online sellers that have a presence on different platforms or marketplaces. 

Here is what we will speak about in this post:

  1. What is dropshipping? 
  • How did it become popular?
  1. Examples of dropshipping: Retail arbitrage in dropshipping.
  2. Pros & Cons of dropshipping.
  3. Is Dropshipping legal?
  4. Is it worth dropshipping in 2022?
  5. The correct approach to dropshipping.
  6. How the supply chain works in dropshipping.
  7. Where can you dropship: Marketplaces.
  8. How to find a dropshipping supplier.
  9. The best dropshipping categories & products.

Let’s go straight to the point.

What is dropshipping?

how drop shippign works

Alright, let’s define what dropshipping is: This business approach is a type of order fulfillment where sellers don’t manage their own inventory. Instead, dropshippers buy the items from a third-party supplier who fulfills customers’ orders for them. 

So in other words, you don’t hold physical inventory, you’re simply the middleman between your client and the supplier you choose to source from. The buyer purchases from you and you then place the order directly to your supplier with your client’s information (name & mailing address) and they’ll ship out the order to your consumer’s doorstep. 

— That’s it!

How did drop shipping become popular?

Let’s head back 22 years ago. Back in the 2000s, eBay and Amazon changed the eCommerce world to what we know today, they made it possible for people like you to sell online. Moreover, both platforms allowed the regular dropshipping model. They used to take dropshipping fees. 

Let’s fast-forward 10 more years, AliExpress has been one of the biggest platforms for dropshippers. The platform enabled anyone in the world to buy products directly from Chinese manufacturers. The launch of AliExpress massively influenced the dropshipping industry because the buying process became easier and cheaper. The ability to have an online business where there’s no need to hold physical inventory reducing product costs, warehouse costs, and all the shipping logistics became appealing for most sellers — sounds awesome, right?

Retail Arbitrage in dropshipping

Retail arbitrage is the process that consists in buying a product at a low price and re-selling it at a higher price in order to get profits. The process starts by finding trending products with high demand on a Marketplace such as eBay or Amazon. Then source the same item on a different website at a lower cost and lastly list it in your store at a competitive price.

drop shipping business model

So, in the dropshipping model, you sell items online without holding a physical inventory or being on top of anything involving shipping logistics, making your business journey easier to start. Not to mention that it is cheaper since you don’t need to buy inventory ahead.

Let me give you an example of retail arbitrage:

I found this military cord rope on eBay with 3 sales made so far. It is being sold for $31.44 by a seller who is sourcing the item from China.

example of dropshippign product
Seller’s product page on eBay

I found the same item with the same exact characteristics, on AliExpress, for a cheaper price. It is being sold for $13.29 and to send it over to the US, you pay a shipping fee of $4.22 through AliExpress Standard Shipping which is an air cargo carrier. 

dropshipping example
Supplier’s product page on AliExpress.

In total, if we calculate the price we would need to cover if we dropship from AliExpress this product, that will give us a total of: $17.29 (product cost + shipping fee).

If we sell it on eBay, we need to take into consideration the selling fees the platform charges which is around 12.55% for the majority of categories. We have an excellent Profit Calculator that you can use to easily calculate your profits.

We’re talking about a difference of $9.98 that could be your potential profit to take out of one successful sale!

— Get the picture?

Lastly, if you decide to source the product and add it to your listings, simply offer a better deal or a lower price for the item compared to your competitor (the seller who you sourced the item from at the beginning).

 

how dropshipping works

Examples of dropshipping

Alright, do this example with me so you understand how dropshipping works. Here’s a quick walkthrough of how to find a good product and how to quickly source it. I will be using eBay and Ali Express for this example.

First phase – Finding a product with high demand on eBay:

We need to find a good dropshipping product. It’s important to detect what buyers are looking for. Try to find products that have at least 4 sales made in the past month. 

Some of the richest categories to find winning dropshipping products to sell are:

  • Home Decorations.
  • Home & Garden.
  • Home Improvement & Tools.

Take a look at this example:

searching for a dropshipping product
Example of a product of eBay dropshipper

As you can see, this item has been sold 33 times by this seller. If you take a closer look at where the product is being shipped from, we can see that the item location is based in Hong Kong, China. This means that even though the shipping timeframe will be longer, users are still willing to purchase the product

If you click on the number of sales highlighted in red, you will be taken to the “Transaction History”. Here you can see how many times the product has been purchased, the date of sale, the variation of the product sold, etc. 

This product has been bought 6 times over the course of the same date. So we clearly see a trend here — buyers really like this item!

— Check out the image below:

product sale history
Product’s Transaction History.

Second phase – Sourcing the product from AliExpress:

We have found a product we can try to sell with a decent amount of traffic. Now, it’s time to source it from AliExpress which will be our drop shipping supplier for this example. 

Tip

The first thing I will recommend to you if you’re planning to dropship your products from AliExpress, is to install AliTools. This is a great price tracker and image scanner extension from AliExpress. 

You can easily scan any image from a given product and AliTools will automatically give you different sellers who offer the same item on AliExpress.

When you find a winning product on eBay or any other eCommerce marketplace, you will be able to quickly scan and find other suppliers on AliExpress who offer the same product in order to source the item and list it in your dropshipping store.

alitools search by image
Using Alitools Aliexpress extension

Based on the calculator, if we offer this item at the same price as our competitor, we gain $18.13 profit per sale! We want to be competitive therefore we include in the calculator sheet a recommended selling price. 

You can modify it however you want, as long as you offer the product for a cheaper price, then you will have a somewhat competitive standpoint over the rest of the dropshippers. 

Pro tip: Just make sure you are constantly checking on your competitors, what they offer and the prices they set.

— Further along with this article, I will show you the best dropshipping categories & products you can find

To sum this part up:

So when somebody purchases from your online store, you just place the order to your dropship supplier directly and they will take care of all of the logistics when it comes to shipping & handling. 

All you need to do as a seller is to get the customers to your online store, add profitable products to your listings, and provide good customer service.

— The best thing is that you can do that from anywhere as long as you have a laptop and internet connection!

Not yet making money online?

Start your own dropshipping business. Sign up for a free trial to DSM Tool and we’ll help you get started. Today is the day.

Pros & Cons of dropshipping

Okay, let me be clear about something here. When it comes to dropshipping, aspiring sellers have a pretty easy way to enter the e-commerce world. There’s no need to have a fancy degree from a business school or large sums of money to enter the market. 

— It’s all about common sense and a little research from your end.

However, this doesn’t mean that this business model is totally flawless. There are a few shortcomings to this approach. Let’s review the good and the bad and the ugly of dropshipping. This way you know exactly what you’re getting into. 

Let’s begin with the pros of drop shipping business approach:

pros and cons of drop shipping

Pros of dropshipping

  1. Easy to get started: Dropshipping is all about finding trending or profitable products you can sell in your drop shipping store. Once you’ve found quality products, you can launch your first online store in a couple of hours. It’s only a matter of opening a seller account on a marketplace you choose to sell, looking for a supplier where you can source your items and then uploading them to your shop. 
  2. No big investments needed: One of the best things about this business model is that normally you don’t need a big investment to start your store. There’s no need to buy inventory ahead or manage shipping logistics since your provider will do that for you. All you need to do is search for quality products, optimize your listings, place orders, and provide good customer service. You may need to invest in a monthly subscription on the marketplace you decide to sell and a dropshipping platform to automate your workflow & execute product research if you want to take your business seriously.
  3. No headaches when it comes to shipping logistics: Like previously mentioned, you don’t need to rent a space or warehouse to hold inventory nor do you have to ship out the packages. Your third-party supplier takes care of the order the moment your customer buys a product from you. With this business approach, you don’t need to: 
  • Pack and ship your products.
  • Rent a storage space.
  • Manage your inventory.
  1. Easy to scale business model: Since you don’t need to focus on packaging and logistics as a whole, you can merely focus on growing your drop shipping business through marketing efforts. The more you profit, the more money you’ll have to invest in advertising through the marketplace, Google Ads, creating a solid website in Shopify, etc. 
  2. You work remotely: This means that you can work from anywhere around the world, just make sure the shipping costs are worth it (depending on the item location and where you want to sell). However, with this business model all you need is access to the internet and you’re golden.
  3. Delegate your workflow to apps or softwares: There’s no need to hire a workforce to help you grow your business. You have apps and software that will help you automate dropshipping and your marketing processes.

    You can use a Dropshipping Software such as DSM Tool to automate your business policies, customer supports predetermined messages, set up beautiful templates for your store, schedule the publishing of your listings, etc.

    Another example is that you can run Facebook ads on autopilot instead of spending weeks trying to figure out the best practices of dynamic Facebook advertising. 
  4. Be your own boss: No, this is not your typical pyramid scheme that a lot of scammers sell where they say you can be your own boss and achieve financial freedom in a matter of weeks. This business model actually allows you to be your own boss. Instead of working in the typical hierarchical structure, you get to make the rules. Normally, people start dropshipping as a side-hustle where they put it for 2-3 hours a day. It could be over the weekend or during their free time. But anyway, you control everything. Of course, the idea is to achieve financial freedom, but it won’t be as fast, it’ll take time and patience.

So far you’ve read the pretty things about dropshipping and it’s a great business model to start your eCommerce journey — easy, low cost and efficient.

However, just like any other business approach, there are some setbacks you will have to overcome. 

Don’t wait for the profits, make them.

Start a profitable dropshipping business with DSM Tool. Get a free course and a free trial for the software.

Cons of dropshipping:

  1. Shipping complications: When it comes to shipping, even though you don’t have to worry about logistics, not having control is hard. Especially if there’s a delay. You merely depend on the drop shipping supplier. Furthermore, most dropshippers tend to have more than one provider for different products. It can get a little bit tricky to calculate the fee for each supplier. The shipping costs and timeframe will vary.

— Try starting with one supplier and then build up as you grow.

  1. Little to no control on branding & packaging: When you dropship products, you can’t do much about their customization. One thing is that you can definitely have a nicely laid-out website with quality product descriptions. If you’re more serious with your business, you can go the extra mile and arrange a high-quality photoshoot of your products. However, you won’t be able to do much about the packaging or the instructions that come with the products you sell. 
Tip

Although you have different options when it comes to the customized packaging. CJ Dropshipping is a great supplier that’ll allow you to customize your packages. 

Another example of how you can customize your packages is by dropshipping from Alibaba since the website allows product shipping directly from the manufacturer. Therefore you can negotiate directly with the producer to add your brand. Keep in mind that you’ll have to be willing to pay more upfront because changes usually require the minimum order quantity, as well.

  1. Dealing with angry customers: The most difficult part of customer service is dealing with complaints about wrong items received, damaged goods, or late deliveries. Since you don’t control inventory nor the shipping logistics, because your supplier is the one taking care of it, it’s hard to control the outcome. Unfortunately, you’re the one to blame since the client purchased from you directly. 

— In such cases, you need to open up a dispute with your supplier. Whenever a client complains about a specific issue, always ask for proof.

  1. Profit margins could be low: Even though you can definitely profit from dropshipping, there’s always a small catch, your profit margin will be low — at least at first.

When you enter the dropshipping world, you’ll have a huge number of competitors therefore it won’t be easy to get a lot of traffic into your store. Until you get a solid customer base, you will need to keep your price pretty low in the order. 

— Make sure you look like a legit brand so you gain a little bit of credibility from customers. This means that it could benefit you to invest some time in creating the name of your store, work on your store templates, business policies, etc. This way you could price your products a little higher.

Is Dropshipping legal?

A lot of newcomers are afraid of getting into trouble and it’s understandable — no one wants to do something that is not permitted. 

The business model started to grow more and more but marketplaces began to see a trend. Fundamentally, online platforms, brands, and supplying retailers prefer straightforward supply chain sales.

So It boils down to consumer transparency and dropshipping arbitrage sales seem to increase the risk of consumer confusion, complaints, and returns.

is drop shipping legal

There are some marketplaces that don’t allow the regular dropshipping model, this means sourcing products from another retail website. Back in 2019, eBay implemented Dropshipping Policy that states that it is prohibited to list items from other marketplaces. They want sellers to have ownership of the products they offer, that is why they developed tools that can quickly find such listings, cancel them, and restrict the sellers.

However, you can still work around this policy and start dropshipping on eBay.

Tip

You can learn more about it in our complete guide to eBay Dropshipping Policy here.

Now, to be completely clear, the eBay policy does not prohibit “Retail Arbitrage”, which is when an online seller buys goods from another retail website at a discount price and then sells that item on eBay. 

— In that case, the seller has the item in stock and eBay has no issues with such sales. 

I would advise you to start dropshipping if you don’t have a lot of capital to invest in your business. Yes, you may struggle a bit in terms of sales and traffic since you will not comply completely with the platform’s policy. However, you can still make some sales and start gaining some profit.

Look at this as a temporary business approach. It will help you gain eCommerce experience and profits in order to invest more. Eventually, you can team up with a supplier that supports dropshipping or a manufacturer that will charge a dropshipping fee. Moreover, you can also purchase the inventory of products you know will sell well. 

This leads us to another topic, is it worth dropshipping nowadays?

Is it worth dropshipping in 2022?

So now you know what dropshipping is, how it works and the benefits along with the setbacks it offers. Now the question is — is dropshipping really worth it?

There was a study back in 2019 where Research and Markets, a global market research store executed a Dropshipping Market Forecast from 2020-2027. It showed that The global Dropshipping market is segmented into four major regions: North America, Europe, Asia-Pacific, and the Middle East. 

Asia along with India led the global Dropshipping market with more than 31.9% revenue share, followed by Europe and North America. Users in these countries are inclined toward online shopping which attracts sellers to open up more stores. 

Furthermore, as previously mentioned dropshipping is one of the cost-effective models for entrepreneurs to start an eCommerce business. It enables an entrepreneur to sell products online without having to carry inventory.

As I mentioned earlier, dropshipping is not a perfect business model. However, it is the best way to start building up your business without having a high capital to invest or even dealing with manufacturers to purchase inventory ahead — not to mention that there is a huge market for dropshipping!

The good news is that with some careful planning and consideration, most of these hurdles can be resolved and need not prevent you from building a thriving, profitable dropshipping business.

is it worth dropshipping

The correct approach to Dropshipping:

So, we’ve covered what is the dropshipping model, what the majority of dropshippers do, how to source an item, and if this approach is legal or not. As mentioned before, when it comes to legality, this business model is not an illicit practice. 

However, sourcing from another retailer may be against some marketplace policies. Therefore, the best way to approach dropshipping would be by working hand in hand with different suppliers or manufacturers directly. 

— The idea is to be the middleman between manufacturers and/or suppliers and the final customer. 

Dropshipping works better as a means to an end, not the end itself. If you want to properly execute this business approach, consider these points:

Market Research: 

It’s important to understand the market whenever you approach any business model. However, when it comes to dropshipping, you can mitigate the risk in trying different listings that may or may not work. The beauty is that you don’t hold inventory so you can constantly change up what you offer. 

Furthermore, there are ways to Market Research such as Terapeak if you are selling on eBay. This is an awesome Marketing tool provided by eBay that’ll help you understand what to sell, when to sell and how to sell. 

Offering trending products or at the very least items that will always have a high demand on the market, will allow you to drive more traffic into your store and potentially drive more sales. 

Shipping Strategies:

Dropshipping is a perfect way to solve some problematic shipping issues when it comes to locations that fall outside your profitable regions. Partnering up with a supplier that has warehouses all over the country where you are dropshipping or even all over the globe will definitely benefit you.

Moreover, just as dropshipping can be useful in market research, you can also use it to test new locals. 

Stick to High-Ticket Products & Low Ticket-Products:

As mentioned above, Product Research is very important and it is because there are products that will have high demand when it comes to dropshipping. You have products that will drive a lot of traffic into your store known as low ticket products. These types of items will certainly help your seller metrics since they’ll boost potential sales and in the long run, it will profit your business. 

In contrast to low ticket items, you have high ticket products that are more expensive to acquire but you can sell them at a higher price in order to cover the cost and gain profits. I would advise newcomers to start with low ticket items first because it will help boost visibility — if you properly optimize your listings that is.

Tip

If you want to learn this topic better, here is the guide to drop shipping high ticket products.

How does the supply chain work in dropshipping

drop shipping supply chain

In dropshipping, a supply chain is the process that consists on moving a product from a manufacturer to a customer — it seems simple, but there’s a bit more to it. 

The dropshipping supply chain consists of the involvement of three parties:

  • The manufacturer or supplier.
  • The supplier.
  • The retailer.

The manufacturer:

The manufacturer is the one in charge of producing the items you will be dropshipping. They produce and sell it in large quantities to different suppliers or wholesalers. 

There’s a way you can cut the “Supply Chain” by dropshipping directly from the manufacturer. This way you’ll pay less for your products. Another upside is that you will also be able to customize your branding a little too. 

However, manufacturers usually have minimum order requirements you’ll have to meet. This means you’ll have to invest large sums of money upfront, which for beginners, can be risky when starting a dropshipping business.

— You can use Alibaba instead of AliExpress if you wish to go down this route.

The dropshipping supplier:

The supplier or wholesaler is the one in charge of buying the products in bulk from the manufacturer in order to sell them to retailers or individual sellers and/or dropshippers. Suppliers usually specialize in a particular niche, this will certainly make it easy for you to find the items you want to sell. 

— Keep in mind that they will obviously mark up the products a little.

The retailer:

The retailer in this case will be yourself as a dropshipper. This is the point of contact between the final seller and the customer buying. The product you offer will have a marked-up price several times (depending on how long the supply chain is) — it’s part of the business.

Your job is to make sure your profit margins are high enough for you in order to earn some bucks into your pocket. However, be careful, don’t set your price too high since you might scare off potential clients and send them over to your direct competitors.

drop shipping business chain

Marketplaces where you can dropship

When it comes to dropshipping, you have several options where you can start your business. For beginners, I would recommend starting on a platform that allows you to easily create a seller account. 

marketplace

Dropshipping on eBay

One of the best places to start is eBay dropshipping. The eCommerce platform is one of the largest websites for independent dealers or retailers. It has over 187 million active users constantly buying products from this online marketplace. 

It is extremely easy to open a seller account on eBay therefore anybody who wishes to sell can start right away. The cool thing is that you have access to great tools such as Terapeak Product Research tool to identify the best selling products on the eBay market. 

eBay seller hub

Furthermore, eBay’s monthly plans are very affordable therefore there is no need to invest a lot of money to start your dropshipping business. Simply follow the best dropshipping practices and you should be golden.

Lastly, eBay has a new integrated payment method for sellers to receive their funds and where they can pay off the eBay commission fees or selling fees — it’s called eBay Managed Payments.

Dropshipping on Facebook Marketplace

Speaking of marketplaces that offer sellers to easily create their own dropshipping store, Facebook is another great option. Currently, the Facebook marketplace counts 250 million active stores worldwide. It has more than a billion active users who navigate through the social networking of this social platform. 

Selling products on Facebook is easy, especially if you’re selling items that you own. It is a matter of uploading the pictures of the item you wish to list and provide details on the description. Furthermore, Facebook is about selling in certain areas so normally sellers will be selling in areas nearby their homes. 

However, there’s a slight catch, being a Facebook dropshipper is easier to US residents, but there’s a series of requirements if you want to properly become a Facebook seller. 

Tip

If you go with this eCommerce marketplace for dropshipping, these best practices to sell on Facebook will help you a lot.

Dropshipping on Amazon

Amazon is another popular selling marketplace where a lot of online sellers tend to go if they want to build a successful eCommerce business. When dropshipping on Amazon, sellers must ably by some standard rules:

  • Identify yourself as the seller on packing slips, invoices, and other information in connection with products. Check out invoicing checklist to get the full details.
  • Remove all information that identifies the third-party seller before shipping the order, which is very important.
  • Take responsibility for accepting and processing returns.
  • Follow all terms of your seller agreement and Amazon and dropshipping policies.

When it comes to selling fees, Amazon will be taking 15% of your profits. This is not that great on paper since the average dropshipping margin is between 10% to 30% margins. However, this does not mean that it is not a profitable business. It just means that you would need to be patient and slowly scale up your business in time. 

Dropshipping on Walmart Marketplace

Walmart is one of the most profitable marketplaces a seller can be in. It has great profit margins between 25-45% plus the platform only charges a 15% referral fee without charging any additional subscription fees. Furthermore, the marketplace is very selective therefore the competition is relatively low.

You can start to sell on Walmart with 5 steps:

  1. To fill out the application, submit it to Walmart. com and get approval.
  2. To sign the retail agreement.
  3. To complete your seller profile and connect your payment account.
  4. To pass the onboarding process and add your eCommerce products.
  5. To request launch to get a final review.

Walmart marketplace allows only certain types of dropshipping. Sellers can dropship on Walmart under three main categories:

  1. Walmart Dropship vendor (DSV).
  2. Reseller Walmart items through other retail websites such as Amazon or eBay.
  3. Selling dropshipped products on Walmart com

Furthermore, since Walmart’s nature is to be very selective when it comes to allowing sellers to use their platform, you would need to have an established US business in order to begin the application process. 

There are some great outsourcing companies that’ll help you through the process such as JungleRover. com

There are a ton of other marketplaces where a seller can start dropshipping. You can also choose well-known Chinese retailers such as Alibaba or AliExpress. It mainly depends on where you want to focus your dropshipping efforts, how much working capital you have to invest and if your business is established or not. 

Tip

Learn more about eCommerce platforms for drop shipping in this guide.

How to find a dropshipping supplier

find a dropshipping supplier

As with any other business strategy, dropshipping is a business model where having a supplier or different suppliers to source your products from is a key factor for success. Especially since you rely on your providers when it comes to the items plus the shipping logistics. 

Before we dive into some dropshipping supplier options, it is important to note the top 4 tips to find a proper dropshipping supplier for your business:

  1. Reading reviews: If the supplier has customer reviews, see what people are saying about their products and customer service. This is crucial because it’ll give you insights into how customers will perceive your own quality when you sell those products yourself.
  2. Reviewing policies: Since you will rely 100% on the supplier when it comes to the product, shipping and policies, it’s important to understand how a supplier handles broken products, missing packages, returns, and more. 
  3. Product star rating: Quality assurance it’s crucial. Remember that when you’re dropshipping, you do not handle inventory. This means that there’s no way you can completely guarantee that the product is high quality. So when you are at the product research stage, once you found a winning product, always check up on the item’s star rating given by consumers. Moreover, check up on the reviews and how many orders that product has gotten. 
  4. Look for automation processes: As your business scales,  it’s nearly impossible in terms of time management to manually manage inventory, placing orders, and tracking shipments. Ideally, the supplier should have integrations with your eCommerce platform to automate these workflows, allowing you to focus on growing revenue streams.

That is why you can check out what DSM Tool offers in terms of dropshipping integrations. The platform allows dropshippers connect with 50+ different supplier websites.

It’s time…

Don’t wait for success to come. Hire yourself and start your own dropshipping business

Top dropshipping suppliers

I will not be diving too deep into the different suppliers, I will quickly mention a few. You can read more about the top 40 US dropshipping suppliers here.

  • AliExpress.
  • Wayfair
  • SaleHoo.
  • Megagoods.
  • Amazon.
  • Costco.

The best dropshipping categories & products

For dropshipping, there are certain products that do better than others. These products tend to be in certain categories that most users look for when purchasing on any given marketplace. 

dropshipping products

When starting your dropshipping business, it is important to look for products that will have high demand, meaning lots of sales. I am not talking about high-end products such as an iPhone. I am talking about products that most customers need and purchase on a regular basis — for example, household appliances.

Users tend to purchase products in order to improve their homes so categories such as:

  • Home Decorations.
  • Home & Improvements.
  • Home & Garden.

— Etc.

These are highly rich categories to practice dropshipping in.

Traffic generating products are known as low ticket products which normally tend to sell quite quickly. This is because they are cheap to acquire therefore you can sell them for a low price. When you sell these types of products you are aiming at a larger audience and you are betting on selling on a bigger scale. 

This means that selling such items may not give you a juicy profit margin per sale, but in the long run, the more you sell on a monthly basis, the more you earn. 

— It is all about consistency.

Take a look at Terapeak’s demand line when it comes to Home Decorations products on eBay:

terapeak product research
eBay’s Terapeak Marketing Tool.

As you can see, by filtering the category, the type of sale format (fixed priced), and to get a better picture of the demand year-round, I filtered the results by 365 days —  the results show that the demand is pretty much the same all year.

Furthermore, you also have seasonal products. These products are linked to a holiday that is celebrated in the year, or even items for a specific temporary event or trend. A dropshipper must prepare ahead of time, you need to understand the market and what drives sales.

This means that scheduling different types of listings for each season is always a great idea. For example, in the US you have your traditional holidays like Valentine’s Day, Fourth of July, Halloween, and Christmas.

Tip

Follow the eCommerce holiday calendar to prepare your dropshipping store for big retail events and holidays.

Moreover, seasons such as spring or summer capture users’ attention to certain products for that specific season. Let’s look into another analysis using eBay’s Terapeak. Summer is coming soon and it would behoove sellers to start sourcing and listing summer related products.

seasonal products research
eBay’s Terapeak Marketing Tool.

It is obvious that the best time to sell summer-like products is in June and July. However, you should start looking for these items in April and/or May in order to prepare ahead. 
Another useful insight is to determine what other sellers offer prices. You need to compete against a wide range of sellers (dropshippers and non-dropshippers).

dropsipping product research
eBay’s Terapeak Marketing Tool for product research

You can see that the selling price offered on eBay for the majority of inflatable summer products will be between $20-25 at most. This will give you some idea of what price you can offer in order to be competitive. It’ll also depend on which supplier you are choosing. 

Then you have high ticket products you can also offer. However, these items are offered to a smaller niche market — more selective. 

These are products that normally tend to sell for a higher price on the market. It is more expensive for you as a dropshipper to obtain them in your inventory. Their quality is above average and they could be small parcel items such as jewelry, clothing, and electronics just to mention a few. 

Tip

We showed a lot of examples of profitable dropshipping products here. You can get product ideas for your online store.

Final thoughts

Congratulations, you’ve read through our whole guide on what is dropshipping. Hopefully, you understood the basics when it comes to the business model approach, how to start, where to start, which suppliers to choose, and what to offer in your store. 

Dropshipping is practiced by millions of people around the world. Initially, it was practiced mainly in Europe or Asia. However, as eCommerce grew, so did dropshipping. It has evolved into a big business model that Americans are using and huge marketplaces such as Amazon or Walmart understand the value of this approach.

That is why there are different dropshipping agreements with marketplaces and also with third parties vendors or suppliers to guarantee a safe business environment. Of course, you can start with the regular approach where you source from another retailer in order to avoid investing a whole lot of money and to gain more experience. 

However, it is just the beginning, as you scale your business, it would be wise to partner with a dropshipping supplier. 

Written by Enrique Cabrera

Enrique joined DSM Tool in 2020 as YouTube Content Creator. Nowadays, he is a DSM Tool's social media manager, YouTube content creator, and audiovisual content editor. He helps to create relevant, engaging, and informational content related to eBay Dropshipping, specifically for beginners. He happily shares his experience in this blog as well.

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