February 20, 2020
Benefits of Drop Shipping  (Video 3/10)

Benefits of Drop Shipping (Video 3/10)


Hi everyone, Anton here again, and welcome to day 3,
module 3 of the Drop Shipping mini course. In this video,
I’m going to keep it pretty brief, but I’m just going
to go over some of the benefits of owning a drop ship business, and I’m also going to talk about some of
the things that maybe aren’t so great about it. I think it’s very important
that you do watch this video just because it’s important to really review every business model
you might be considering right now. Maybe you’re still thinking of importing.
Maybe you’re thinking of private labeling. Maybe you’re thinking of selling
on eBay or Amazon or whatever it maybe. I think it’s important that you know what could really be beneficial
if you decide to drop ship and what could be
maybe not so great about it. So let me go through
this list here that I created. The first benefit and probably
the one that’s most important to me about drop shipping is the location
independence that comes along with it. Right now, when I’m recording
this video, I’m actually in Vietnam. I’m living out in south-east Asia. Last year I was living
in South America for a bit. Before that, I was back out in
south-east Asia in Thailand, living there. So with these kind of drop ship
businesses, you really can really live and work from wherever you want. I mean it could be somewhere in the States If you’re from the UK,
you could stay there. We’ve plenty of people that are successful in Australia who are living there. But if you want to build a business
that allows you to work from anywhere and really just be free
to travel and work as you please, then drop shipping, in my opinion,
is much better than private labeling. It’s much better that importing. It really allows a level of
location independence that not many of these other business models do, and that’s why my main course,
my main coaching program is called “Drop Ship Lifestyle,”
because of that location independence. Another benefit,
this one really applies to everyone whether you feel like
traveling the world or not, there’s no inventory costs. So when you’re starting with drop shipping, you’re not laying out
any money for inventory. And obviously, when you’re a retailer,
inventory is your biggest expense. You need products to sell,
but with drop shipping, you don’t. You need approvals with suppliers
you have products to sell. So a huge benefit is you’re not
laying out any money upfront for inventory. You only pay for items
after you sell them to begin with. So one of the biggest benefits:
No inventory costs. There’s also no warehouse costs. Now, if you realize,
in some of my earlier videos, I spoke about how I actually got started with e-commerce by importing. So when I first started,
I actually had these inventory costs, and I had warehouse costs. I was spending tons of money every month. to store my products. It’s not cheap. But if you work on the drop ship
business model, you’re not paying for this, someone else is. All of your suppliers
have their own warehouses. Many of them
will have multiple warehouses, and they’re paying to store these items. So it’s another cost
that is not on your shoulders. Something you don’t have
to worry about when starting out. Another benefit is no handling returns, and this might be a little misleading. If you ship an item to a customer, or I should say, if your supplier
ships an item to your customer, and they want to return it, you still will have to tell them
where to return it to, when you’ll have to go back and forth
with emails with them or maybe a phone call. But these items
are not coming to you. If you’re running
one of these drop ship businesses, you’re not going to get boxes
showing up at your house that your customers want to return. They’re going to be
shipped back to your supplier, and then based on
the policy of that supplier, you’ll get your refund or
they’ll ship the customer the new item. But it’s not going to be showing up at your warehouse or at your house with tons of inventory
that has been returned that you don’t know what to do with. So one thing that I go into detail with in “Drop Ship Lifestyle” is how
to find suppliers with low return rates. So ideally, you won’t even
have to deal with emails about returns. But if anyone ever
does want to return anything, don’t worry about it. It’s not going to show up
wherever you’re in the world. That’s going to go back to your supplier, and you don’t have to deal with trying
to sell an used item or anything like that. Another benefit and this… If you’re really planning on getting
into e-commerce in a massive way, again I’m talking about building you know, a high seven figure
or eight figure business, then one of the biggest benefits
to you for drop shipping is that you can
gather data while getting paid. So, let’s just say for example, one of the examples that I gave
in “Drop Ship Lifestyle” is chandeliers. Let’s say you want to sell
lighting fixtures or chandeliers. and let’s say you know
that you want to be the importer. You wan to build a brand.
You want to create your own product line. Okay, that’s great, and let’s say
you have even money to invest in that now. Well, before you just,
kind of, throw money at it and have products manufactured
and start trying to sell them, I’d still recommend that
you start a drop shipping business. This way you could actually be marketing and selling other people’s products. And knowing what sells, so if you want to sell,
let’s again just say chandeliers, instead of trying
to manufacture your own brands, create your own products and learn that way learn by selling other people’s products. Not only will you profit from it, but you’ll get all this data to know what product type sell,
what price point works the best. what features do the customers
in this niche the most want. and you’ll get some
great data that you can use when you’re actually building up
your importing business or building your own brand. So a huge benefit:
Gathering data while getting paid. The another huge benefit is
it’s very easy to scale this. So what I mean by that is grow it. Let’s say you start
your first drop ship store and you’re doing
$100,000 a year in sales. Well, if that’s from one store,
it’s very easy to build multiple stores that create that same type of income. So you could do this
over and over and over again. I always do recommend
starting with one store, so you could really learn the process, go through it and master it. But after you do it one time, it’s very easy to do it
over and over and over again. So a very easy business to scale. Now another huge benefit
of building a drop shipping store is that you’re building a real asset. So let’s just say you’re considering
various business models right now. Maybe affiliate marketing, maybe
writing e-books or something like that. The thing that, in my opinion,
could provide you with the most value as for
something you could sell is building an e-commerce store, specifically a drop ship store. Now when I first started with
this business, I didn’t realize it. But they actually become
very valuable to a lot of people. There are a lot of buyers out there that are looking for
profitable e-commerce stores, and especially drop ship stores. Because basically, these buyers could
just plug themselves into your business. They could buy it from you and be making money the next day
without having to take over your inventory or take over your warehouse. And to give you an idea,
what these sell for, let’s say at the low end,
you build an e-commerce drop ship store that’s making you
$1000 a month a profit. So something that I think everyone could pretty much wrap their heads around. And while I do have much bigger income goals for everyone that joins my
“Drop Ship Lifestyle” coaching program, let’s just say, you built a store
that makes you $1000 a month profit. Again, very, very reasonable, very attainable. That store to a buyer is worth $20,000. So that is what I mean here
when I say building a real asset. You could build
a store that isn’t that big at all, that’s making a moderate $1000 a month net profit and you could turn around
and sell that asset for $20,000 through a number of
different website brokers that do recommend in “Drop Ship
Lifestyle,” in my coaching program. So a huge asset. Now let’s talk about some of the
drawbacks or some of the negative things about owning a drop ship store, when compared to something
like owning your own brand. So your own brand of products. First off is a smaller margins. So obviously the profit margins when you’re selling someone
else’s products are going to be less than if you create your own products. If you go to China, let’s say,
and have your products manufactured then you’ll have a warehouse. You can negotiate
better deals for the product price, because you’re having everything done, you’re doing a lot more work, you’re taking on a lot
more of the responsibility. But your profit margins will be higher. So with drop shipping,
there are smaller profit margins than with having your own brands. This isn’t always true,
but overall it is true. So, to get into the exact numbers of
what the profit margins usually look like, just check back in future videos, because we are going
to cover that in this mini course. Another thing that’s not
so great about drop shipping and in my opinion it’s probably the biggest negative is that
you have no control over inventory. So what that means is: Let’s say you have one supplier whose
product sales so well on your website, you’re making great money with him, and it’s a great partnership,
it’s a great business relationship. Well, what happens
if that supplier runs out of stock? What if they sell all of those items? Well, that means the customers are
still going to want to order from you, but you can’t fulfill these orders. So you’re basically going
to lose money in that situation. You’re not going to lose money,
you’re not going to make money. You’re going to lose potential money. Because you have
no control over the inventory, and because maybe
your suppliers aren’t so great about managing inventory
and keeping every item in stock. This is something that
great suppliers do know how to deal with, but it probably is something
you’ll run into at least a few times if you decide to get into drop shipping. You’ll run into suppliers who
don’t have great inventory management and who do run out of stock, and it just leads to, kind of,
lost sales that you could have. So when you own your own brands, if you’re good with cash flow,
if you can manage cash flow, then you should always
have items in stock that sell. So that’s a negative of drop shipping. You have no control over the actual inventory and what your suppliers
keep in stock and at what times. The last thing
that I could really think of and I’m sure there’re some more, but the last thing that I could really think of as a negative when
it comes to drop shipping is the increased risk of competition. So if you create your own brand, let’s go back to that chandelier niche, and you make whatever it’s called. Let’s say in my situation,
it was Anton Chandeliers. No one else can go out
and create Anton Chandeliers, because that’s my company, that’s my brand. When we’re drop shipping,
we’re selling other people’s brands that are looking to get more retailers. They want retailers
that could sell their products. So, you know, the way
that we find these suppliers, the way that we find these competitors, we’re basically going out
and trying to take market share and it will happen
that people do the same to us. So it’s competitive,
but like I’ve said in earlier videos, if it wasn’t competitive, it would probably mean
there wasn’t money to be made. If there’s no competition,
it just means the market is not there. So it’s definitely a drawback, but you know, again,
if you find a niche with no competition, it’s probably not a good thing. So those are my three real negatives when it does come to drop shipping, but obviously I’m overlooking all of
them because of my list of the benefits. In my opinion, obviously,
I’d recommend drop shipping. It’s what I recommend
to family and friends. It’s what I teach to people, because it works, and it’s a great way to build
really a location independent business for not so much money
that could have a huge return and that could become a huge asset. So I hope you enjoyed this video. I hope you’ve learned a little bit
more about drop shipping and as always, I will be back tomorrow. In module 4, I’m going
to talk about if drop shipping works and if it’s actually a proven model. I’m going to talk about how much time
and energy and effort it actually requires if you want to get started. And I’m going to give you some
actual numbers when it comes to margins. So what kind of
profit margins you’re looking at. So I will see you tomorrow and if you have
any questions in the meantime, feel free to reply to the email
that this video is linked from. As always, I’m happy to help.
Thank you.

14 thoughts on “Benefits of Drop Shipping (Video 3/10)

  1. Awesome videos, ive watched so many and i like yours best because your HONEST and you tell it as it is like an ordinary person not a business man.

  2. one random question: I wa thinking of making a Store that sells random nichey stuff that is somewhat related (as cool, unique products). Would it be better making a store selling very specific products (ex. chandelier store) ???

  3. I actually have a question about selecting a niche. The only thing I could think of that I'm actually interested in (an am interested in learning more about) is coffee. Coffee and coffee related products so coffee grinders and mugs and machines. Is that a niche you would recommend that I go with or should I try thinking about something else?

  4. Is there anywhere where I could be selling my stuff, besides shopify, because I don't really want to pay until I see results. And yes I do know of ebay and amazon, besides those sites, as well.

  5. Hello from Vietnam. Great videos. Could you be my mentor in dropshipping business. I'm willing to work as your virtual assistant for free in 3 months. I'm an experience accountant looking for location independence work. Many thanks and keep up the good work.

  6. What is the price of the course? I searched on your website and every time it takes me to optin page/form.

  7. I have been researching how to sell items online and I have found your course to be easy to understand and what I think I am going to be pursuing!
    Thank you!

    Mariela

  8. thank god i found yall im loving your videos you actually explain how we can do this and explain everthing for free unlike tai lopez

  9. Thanks Anton for the information. I think the benefits of DS very much outweigh the "disadvantages". My goal in the coming months is to purchase the DSL program.

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