How To Start Dropshipping (2022 Update): Everything You Wanted To Know!

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Updated: August 30

By: Scam Risk - Expert Reviewer

How To Start Dropshiping

In 2022, starting a dropshipping business is one of the simplest methods to generate money online. 

Because of the advent of online marketplaces and platforms such as Amazon, eBay, Etsy, Shopify, and others, anybody may establish an online business for as little as $20. 

However, since the barrier to entry is so low, dropshipping has surged in popularity over the last decade, resulting in many areas becoming very competitive. 

Learning how to establish a dropshipping business is not easy like any other form of business. Nonetheless, it is an excellent starting step into the world of business. 

You can sell to clients even if you don’t have any goods. You do not have to pay for things in advance. And, if you’re serious about your new enterprise, you can create a long-term source of revenue

If you’re thinking about starting a dropshipping company, examine the following business and financial stages in our dropshipping tutorial below.

DISCLAIMER:
This How To Start Dropshipping review has been thoroughly researched with information and testimonials that are available online to anyone in the public. Any conclusions drawn by myself are opinions.

Table of Contents

Pros: What I Liked

  • No need to maintain inventory
  • Low cost of entry
  • Minimizes startup risks
The Good

Cons: What I Didn't Like

  • Low profit margins
  • High competition
  • No control over the supply chain
The Bad

Dropshipping isn’t too different from most dropshipping courses. 

Sure, their marketing makes some great promise you haven’t heard from the other dropshipping gurus, but at the end of the day, no magic bullet overcomes the massive pitfalls of this business model.

Let’s get something clear: 

There is NOTHING passive about dropshipping, no matter how well most course creators sell the dream. 

If you want that travel-the-world-making-money-while-you-sleep-laptop-lifestyle, dropshipping isn’t for you. 

To run a successful dropshipping business, you need to be constantly on the lookout for new products. 

Scouring the internet for hot trends and trying to find the next fidget spinner will take hours out of your day. Not to mention, it’s not enough to just have the hot new product…

You also need to get the customers. That means ads…Lots and lots of ads. Testing, tweaking, targeting, spending thousands if not tens of thousands of dollars before breaking even. 

Not to mention, Facebook hates dropshipping, meaning one of your top traffic sources could shut you down at any time. 

All of this leads to a very stressful life, not a lot of money, and a lot of time wasted. Time that could be better spent so you can actually live the life you want. 

Now, what if there was a way you could build a passive income stream that’s actually passive?

An income stream that doesn’t require:

  • Physical Products
  • Low Margins
  • Long Wait Times
  • Angry Customers
  • Thousands of dollars testing different ad campaigns

An income stream that brings in consistent revenues every single month (from a couple thousand dollars to well over $10,000)? 

An income stream you could actually build in your spare time, and grow as large or as small as you want to, without having to spend hours a day running ads, researching products, and trying not to get banned by whatever platforms you’re using?

TESTIMONIAL - STILL GETTING PAID

If that sounds like something you’d be interested in, check out Digital Real Estate. 

This is nothing like dropshipping, and that’s probably a good thing. However, if you’d still like to know more about dropshipping, keep reading.

What Is Dropshipping?

What Is Dropshipping

Knowing the ins and outs of the dropshipping business model is critical since it differs significantly from typical retail and eCommerce operations

The official definition is as follows: Dropshipping pertains to the supply chain management system in which the retailer doesn’t store items but instead transmits customer orders and shipment data to either the manufacturer, another retailer, or a wholesaler, who then delivers the goods straight to the customer.

How To Begin A Dropshipping Business In 2022

How To Begin A Dropshipping Business In 2022

Step 1: Select A Dropshipping Niche

How to start a dropshipping business and have your own online store? 

To begin a dropshipping business store, you must first select your specialty. A niche is a market sector where you choose to specialize. 

Bluetooth speakers, for instance, are a prominent niche in the home audio industry. Outdoor, waterproof Bluetooth speakers can be considered a sub-niche of the Bluetooth speaker niche. You get the idea—the more narrow your specialty, the better.

Step 2: Locate A Dropship Supplier

Finding a dependable supplier is the most difficult part of beginning a dropshipping company for many prospective eCommerce entrepreneurs

You depend on dropshipping suppliers to keep your product in stock, maintain product quality, and send orders to your customers on time. Your dropshipping supplier is your most crucial business partner as a drop shipper. Shipping costs are important too.

Find A Dropship Supplier

Step 3: Obtain A Sales Tax ID

Suppose you are starting a company in the US or Canada. In that case, you will certainly need a sales tax identification (also known as a retail or reseller’s license, tax ID, resale number, resale certificate, or vendor’s license). 

Sales tax is a tax paid on all physical commodities sold to customers and is normally 6-9 percent of the purchase price. Most states need a tax ID, but several do not, including Alaska, Delaware, Montana, New Hampshire, and Oregon.

Step 4: Select A Selling Platform

So you’ve settled on a product and found a source; now you need a venue to sell and make money and separate your personal and business finances. 

Choosing the finest selling platform or online marketplace for your company is critical to its success—but which platform is ideal for you? 

You must select whether to sell products on an established platform or to launch your own independent eCommerce store or own brand. Let’s look at the benefits & drawbacks of various selling platforms and online marketplaces.

Step 5: Put A Customer Acquisition Strategy In Place

You need to attract clients to your shop now that you have a selling platform for your dropshipping company. 

Here is where a client acquisition plan comes into play. Customer acquisition is a skill that requires persuasion

Consider it to be advertising and marketing. Sounds pricey, doesn’t it? But it does not have to be that way. You may get new consumers in two ways: quickly (paid) or slowly (free).

Put A Customer Acquisition Strategy In Place

Step 6: Scaling Your Dropshipping Business

After you’ve set up your dropshipping eCommerce businesses and followed some of the methods discussed in Step 5, you should begin to notice some sales. 

As your business grows, consider some of the future-proof methods you may implement to make your work as an owner less stressful and to prepare for more orders to fulfill and more customers to satisfy.  For more dropshipping business ideas, check here.

Is Dropshipping A Scam?

So, is dropshipping a scam? Not technically. You can make money with this model, but it’s definitely not as easy as they make it sound. 

There’s a ton of work to be done upfront, no real guarantee of success, and – most importantly – you need to do a ton of volume to make any real money. Now, there’s nothing wrong with front-loading the work and making the money later. 

But if you’re grinding it out for 3 months, $3-5k in the hole on ads (because that whole “get started with $5 a day” thing is total BS) and then your reward is 15% profit on a $12 product (which comes out to $1.80), it’s not really worth it. 

What if, instead, you could do that same 3 months of work (in your spare time), and your reward was a $500 to $2,000 payment that came in every single month? And what if you actually didn’t need to wait 3 months? 

What if you could get started today and have your first payment in a week? And what if you could double it next week? 

Well, that’s the power of Digital Real Estate.

And, unlike dropshipping, you can legitimately do this from anywhere. It’s a true lifestyle business. 

Your laptop and an internet connection is all you need. Some of the most successful students in this program run their entire 6-figure businesses from:

  • A camper in the middle of the woods
  • A beach chair on the water in Mexico
  • A small villa in Greece

TESTIMONIAL - SAYING GOODBYE TO OUR JOBS

They’re able to travel around, living their lives first, and focusing on their income second. 

Because even if they stop working for an extended period of time, the money keeps coming in. 

So adventure, memories, and experience are the top priority. And they never have to worry about how to pay for the next trip, or consider asking for time off. 

If this sounds more like the type of life you want to lead, just click here to find out more about Digital Real Estate.

Update

Setting up your own online store can be a profitable business model. However, the most successful dropshipping companies do spend quite a bit of money each month.

They invest heavily into marketing strategy and search engine optimization.

If you’re wanting to get started, you should set up your limited liability company (LLC).

While you can get the dropshipping business model work, it is hard to manage a successful dropshipping store at scale…not to mention all the competition and stolen ads.

That’s why we still recommend digital real estate. There is less competition and better margins to be made!

Are There Alternatives To Dropshipping?

Are There Alternatives To Affiliate Marketing

Yes, there are plenty of Dropshipping programs and resources to choose from if you want to pursue drop shipping business model.  Here are just a few:

What Is My Top Recommendation In Making Money Online In 2022?

Digital Real Estate

Our review team has spent months researching, reviewing, and vetting dozens of business models and thousands of programs. 

While there may be no “perfect business”, the research IS conclusive: Digital Real Estate is the #1 online business model for those just starting out. 

Whether you’ve never made a dollar online, or you’ve been in this space for a while but never really “made it,” Digital Real Estate is for you. Why?

1) It’s Flexible: got an hour a day? You can do this. Ready to drop everything else and dive in full time? 

You can do this. Yes, the more time you put in, the faster you see results. But even with a little time each day, you can move the needle in a Digital Real Estate business. 

And because this system is so flexible, you don’t have to constantly be working to make more money. It’s called PASSIVE INCOME because if you stop working, the money doesn’t. 

Imagine taking 3 months off to just tour around Europe, rent a cabin in the woods to write a book, hike the Appalachian Trail, or live on the beach and surf all day. This is only possible if you have an income stream that’s not tied to your time.

TESTIMONIAL - JUMP ALL IN

2) You Own & Control EVERYTHING: With dropshipping, you don’t really own anything. You have no control over the quality of products. You don’t even own the products because they go straight from the supplier to the customer.

Yes, if you’ve got a Shopify store, you technically own that. But if every ad platform suits you down, you’ve got a dropshipping store with no customers. Which is literally worthless.

With Digital Real Estate, you own the assets, which means you have all the power and all the control.

TESTIMONIAL - FEELING BLESSED

3) Little To No Startup Costs: It’s possible to get into Digital Real Estate with zero dollars upfront. 

Because, using the strategies outlined in this program, you can get a client to pay you BEFORE spending a penny out of your own pocket…even before you do any work. 

Even without getting paid in advance, you can have your first Digital Rental Property up, running, and generating profits for less than $100.

TESTIMONIAL - SCOTT LEAD GEN

4) No Inventory: Ok, so technically you don’t have to worry about inventory since you’re not filling up your garage or a warehouse with products.

But, you still have all the headaches of a physical products business.
Since most dropshipped products come from China, you already have a 2-3 week wait time from when a customer places an order.

But right now, with global supply chain issues, your customers would be lucky to get anything in less than a month. 

Imagine finally landing your first customer after months of experimenting, and then getting hit with a refund request or chargeback because they had to wait 6 weeks to get their order. 

With Digital Real Estate, a 100% online business, you never even have to think about that risk.

TESTIMONIAL - ANNA DONE DEAL

5) Easy To Duplicate: Ok, here’s the best part: once you have your first Digital Rental Property up and running, you can literally DOUBLE your income with a few clicks, a couple keystrokes, and a single phone call (and you don’t actually need the phone call). 

Remember: each Digital Rental Property is worth $500 to $2,000 a month in semi-passive income (over 95% profit). Every time you decide to create another one and increase your income, it gets easier. 

Because you have more knowledge, more experience, more results, and more momentum. If you wanted to double your income with dropshipping, you’d have to double your inventory, your profit margins, OR your average order value. 

And, guaranteed that’s a lot harder than a few clicks and a few minutes of your life.

TESTIMONIAL - LANCE LEAD GEN

6) Make Money Helping Real People: This part is what makes it all worth it. 99.9% of the time, dropshipping provides no value to anyone but the seller.

In a lot of cases, it has a negative impact on the customer because of poor product quality and an overall bad experience (i.e. waiting 6 weeks to get your order). And that makes it pretty hard to sleep at night. 

But with Digital Real Estate, you’re actually helping people by solving your clients’ biggest problem: Small, local businesses need more customers, and with Digital Real Estate, you are unleashing a flood of happy, paying customers for these businesses. 

You make money by helping them make money. Not a big, faceless corporation either…a small business owner who’s using that money to put food on the table for their family, start a college fund for their kids, or take care of a sick parent. 

Once you see how Digital Real Estate makes a real impact in the lives of real people, you’ll sleep like a baby with a big smile on your face.

TESTIMONIAL - BOSS OF MY FUTURE

Now, the choice is yours. You could continue browsing, looking at opportunities like Dropshipping which could one day make you money. 

You could continue researching, never making a decision. 

OR, you could take a look inside, consider what you really want, and join a program that makes your dreams a reality. At the same time, joining a community of over 2,000 successful students that are living life on their own terms thanks to Digital Real Estate.

A consistent, reliable, semi-passive stream of income that doesn’t depend on you or your time to keep producing profits. 

All while genuinely helping real people who are grateful and happy to pay for it. If this sounds more like what you want out of life (or if you just want some nice side income), click here to learn more about Digital Real Estate.

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