Is Dropshipping Worth it as a Beginner in 2022?

Are you sick of working a job you don’t like for 40 hours a week and considering dropshipping as a change? If so, you’re probably reading this because you want to know if dropshipping is actually worth it. By the end of this article, hopefully, you’ll be able to make an informed decision if dropshipping is right for you. But for those of you who are impatient, I’ll give you a quick answer.

Dropshipping is definitely worth it in 2022. Dropshipping has little start-up costs, can be extremely lucrative and eCommerce is growing exponentially, making this a great option for people wanting a change. It’s not, however, as easy as many gurus make it seem and will require time and effort to succeed. 

Are the Profit Margins with Dropshipping Worth it?

Before I wrote this article I did some reading on other articles to see if they thought dropshipping was worth it. Many articles claimed the margins are too thin to make dropshipping a viable business model.

Yes, the dropshipping profit margins can be thin if you’re dropshipping on eBay and Amazon where competition is fierce, however, if you dropship on your Shopify store, profit margins can be high. Products valued under $30 should be sold for 3 times the cost price and products valued over $100 should be sold for 2 times the cost price.

The reason you want to be selling at these margins at a minimum is that you’ll have a number of costs including advertising, shipping costs, refunds, VA costs and payment gateway fees. To make sure you’re making a decent profit for yourself, you need to take all these costs into consideration.

These margins are a minimum and many websites will mark up their prices much further. I have seen websites selling phone covers for $30 which they paid $1 for. So remember this is a guide and you should make up the prices as to what you think customers are willing to pay for the product.

These margins go up further if you take the next step in your business and purchase in bulk from Alibaba and have the product shipped from a fulfillment center in your own country. Yes, you will have to pay for shipping twice as it goes from China to a warehouse and from the warehouse to your customer, but your profit margin will still be larger.

These margins go up further again if you create a brand around your products and store. You can charge a premium price for a branded product as it now has a perceived higher value. Especially if your website is made to look like you are the creator of the product.

If you go down the route of high ticket dropshipping, your margins aren’t as high but the increased product price still makes profits very healthy. Selling the products for double what you paid for it will end up giving you an approximate profit margin of around 30%. This will be your profit margin after expenses including advertising and shipping costs. This means if you sell a $500 product, your profit margin would be around $150 after costs.

These profit margins may not seem as high as a standard retail store but you have no major overhead costs compared to a retail store. You have no property rent, bills, employee wages and you get to stay home and your potential customers are the whole country compared to your local area.

As you can see the profit margins are reasonable with dropshipping as long as you dropship through your own Shopify store. If you’re dropshipping on a marketplace like Amazon or eBay, it may turn into a price war and your margins can be thin.

When dropshipping gurus show off all the money they are making with dropshipping, it’s far from accurate. The money they are showing is revenue and not income. After they pay for all their costs including product costs, the profit margin will be around 25% of the amount they are showing. So if they’re showing they made $20,000 in a month, they probably made closer to $5,000 for the month.

Can You Get Rich from Dropshipping?

If you’re a beginner and want to know if you can become rich from dropshipping, the answer is YES, if you think it’ll be easy, the answer is NO. To become a millionaire from dropshipping, you need to create a brand and become an authority in your niche to increase the perceived value of your products.

Money flying through the air

Creating a brand around your store will give your customers a better experiencing and keep them coming back. This can only really be done with quality products and fast shipping, something you don’t associate with AliExpress dropshipping.

Your 2 options of doing this are to either:

Partner with suppliers in your country to sell high ticket quality products on your own niche dropshipping store.

Source quality products in China, ship them in bulk and private label the products. For more info check out my article Is AliExpress dropshipping dead? The new way to dropship from China.

I love to hear people who are entering this with the goal of becoming rich, this means they are going to take it seriously and put in the time required to be successful. If you think dropshipping is a get rich quick scheme, you’ll be disappointed.

Are Dropshipping Courses Worth it?

I brought 6 different dropshipping courses over the years, yes I’m a sucker. When I first got into dropshipping in 2016, I completely immersed myself in the world and watched countless Youtube videos, read blogs and paid-for courses. It became an obsession for several months. I paid for most of the well-known courses including high ticket and low ticket dropshipping.

Personally, I found most of the courses slightly disappointing and underwhelming. Most YouTubers will give you 90% of the information for free on Youtube, but make you pay for the course to give you the other 10%. You can generally get all the information you require without having to pay for it by reading blogs and watching various dropshippers on Youtube.

If you really want to purchase a course, I wouldn’t spend more than $200 on a course. If you spend more than that, you’ll be disappointed. Most courses tend to make out they have some special formula success which is complete Bull****.

This is why I created this blog, to answer the questions beginner dropshippers have without having to pay for a course. If you’re a beginner and you’re stuck and can’t progress any further, feel free to contact me and if I get enough of the same requests, I’ll write an article on it.

I have a step-by-step dropshipping tutorial which is essentially a mini course if you are interested.

Is dropshipping too Competitive?

When you see the increased interest in dropshipping over the past 5 years, the obvious question is “Is it too competitive?”

NO, dropshipping is not too competitive. Beginners are entering the dropshipping world every day and making money, proving it’s far from competitive. The reason it has grown in popularity is that it’s an attractive business model and there is a lot of money to be made.

People on devices

Even though eCommerce is growing exponentially and continues to grow every year, it’s still not growing as rapidly as dropshipping. Dropshipping is showing approximately 6 times the interest it was from 5 years ago. This doesn’t however mean dropshipping is too competitive.

In my opinion, I don’t feel dropshipping is even close to being too competitive to get into in 2022. Competition is a good thing it means there is money to be made. I’d be far more concerned if there was no competition, this doesn’t mean it’s going to be easy.

The area of dropshipping that is highly competitive is dropshipping from AliExpress. The reason for this is it is so easy and it’s what most people are teaching online. How many other jobs can make you fast easy money from home without any experience? That is unheard of in the real world, so of course, it’s become more competitive.

If dropshipping is something you’re considering but you’re concerned about the extra competition, I’d recommend not following in the same footsteps as 90% of the other dropshippers. For an alternative option, I suggest you check out this article for the easiest way of dropshipping as a newbie.

Pros of Dropshipping

You don’t have to go to work

This is the number one reason for me to start a dropshipping business. To live a life working a job for 40 hours a week you aren’t passionate about can be soul-sucking. Think how it will feel to not:

  • Have a boss
  • Work hours of someone else’s choosing
  • Work with people you wouldn’t choose to work with
  • Being stuck in traffic
  • Earning the same income no matter how hard you work

I’m sure you can come up with many more negatives on having a job, but you get the idea. Lifes too short to spend so much of your time at a place you don’t want to be.

You can live anywhere

Not having a physical workplace means you can literally work anywhere you have an internet connection. Being able to move where ever you want without having to live within a certain proximity of your workplace is actual freedom.

Reap the rewards of your hard work

Unlike a normal job where you receive the same income no matter how hard or how many hours you work, with dropshipping you get what you put into it. Being rewarded for your hard work is what will keep you motivated to actually want to work.

If you are starting a dropshipping business just to make a passive income stream, it won’t last. The successfully motivated people will rise to the top whilst you start looking for a new job.

Low Start-up Costs

You can start a dropshipping business for $200 with the potential to make life changing money. When you compare this to starting a business in the real world where you need to invest thousands, if not hundreds of thousands.

Ideally, you want between $1,000 to $2,000 to give you the option of testing multiple products and multiple advertising campaigns.

Profits

Although it’s not easy to make a lot of money, however, if you do figure out the formula that works for you, there are potentially millions of dollars to be made. Once your store starts making sales, you can scale as fast as you want. You can go from nothing to making 500k a month within a couple of months with the right product. This is not possible in a standard retail store.

Time

Dropshipping isn’t passive but once your store is up and running it will require far less time than a standard full-time job. On top of that, you have the option of deciding when you want to work. You can wake up at 2 am and do some work if you feel. You can work around your life’s schedule instead of organizing your life around your work schedule.

Cons of Dropshipping

Inconsistent Income

Yes, dropshipping can be profitable, but it isn’t stable. If you’re dropshipping from AliExpress, your income can be a roller coaster. You might find a trending product, optimize your ads and start making sales and think everything is going along great. Next thing the popularity of your products is dying or your competitors start noticing your success and copying you. Be prepared for some serious highs and lows depending on the type of dropshipping you’re doing.

Stressful

Don’t assume because you’re not working a standard job that dropshipping won’t be stressful. You’ll encounter all kinds of issues that you can’t predict and having thick skin is important or you could be up for some sleepless nights. One of the things that can cause you the most stress is my next con.

Suppliers

Dealing with some Chinese suppliers can be a major issue. Along with the communication problems and the cultural differences, you’ll inevitably come across some that will try to rip you off or are just plain unreliable. Suppliers on Alibaba are generally much more reliable than AliExpress.

A better option if you want to continue to dropship from China is to use a dropshipping agent.

Socializing

Especially in the early days of dropshipping when you’re still learning all the different aspects of the business and trying to get your store up and running, you can end up spending copious amounts of time all alone. Personally, I was so desperate to turn dropshipping into my full-time job, I completely immersed myself into dropshipping for several months and barely left my house. This can start sending you a little mad after a while and you can actually lose some of your social skills.

Customer Service

If you’re dropshipping from AliExpress, you will have a lot of customer service to deal with. This is why you should never scale your business fast on AliExpress because the customer service will get uncontrollable. The reason for this is simple, it’s kind of unethical as you’re giving customers a poor quality product and long shipping times. For more info on this check out my article

Summary – Is Dropshipping Worth it?

If you’re wondering if dropshipping is still a viable and profitable business for beginners in 2022, then the answer is yes. If you’re wondering if it’s worth pursuing due to the negative aspects of the business, the answer is it depends on what type of person you are.

If the above cons don’t bother you too much and you’re willing to put the work into it with the intention of changing your life, then dropshipping is definitely for you.

Thomas Sleeth

I'm the owner of Dropshipping Hustle. I have over 5 years of experience and have created multiple successful dropshipping stores. This website is a free resource guide on everything I have learned over the years.

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