Drop-shipping can be run by just one person, as there is no need to manage physical stock.
Since 2008, I have been selling on eBay. Most of that time it was drop-shipping.
I know hundreds of drop-shippers who do it all on their own.
You can manage this type of business as long as everything is organized.
My personal experience shows that the work you can do depends on the products you sell and the systems in place to manage them.
You will be able to handle less customer support if the products are simple to use. This is a bottleneck for small businesses.
It can be difficult to manage a list of 5+ suppliers and more than 10 orders per days. You will need to use many emails, reminder tools, and other means to track what you ordered, what your payment was, if you updated the customer with the tracking number, if there have been any delays in shipping, and so forth.
Automating your support system is key to reducing time and hassle.
Today you have multiple tools that help managing your drop-ship business, you can find a bunch of them at the eBay & ecommerce made easy blog.
You can manage a business up to a certain size, but I recommend starting to put the foundations in place right away to ensure smooth growth.
Is dropshipping legal?
While the general answer is yes to both, there are some important caveats.
Your location is the first thing you need to consider. Dropshipping is legal in most countries. However, it’s important to review the local regulations and tax policies. It may be illegal to ship a product that is legal in one country to another. When in doubt, research the local regulations and understand the implications of international fulfillment.
Furthermore, if a supplier sends faulty products that cause harm to your end customer, then you may be liable for compensatory and even punitive damages. You will be held responsible even though the supplier is not within your jurisdiction.
Dropshipping can be legal if you only use reliable suppliers and follow local regulations.
What happens if I am swindled by a supplier?
You could run into problems if your supplier runs out on you. Seeing as many people who start a dropshipping business are inexperienced in ecommerce and product sourcing, this makes them prime targets.
When sourcing suppliers, be aware of red flags. This includes suppliers who ask for large upfront payments or subscription fees. Slow responses are also a warning sign.
Is dropshipping profitable?
Dropshipping alone is not a good way to make a significant profit.
To make it worthwhile, you would have to move many products. Dropshipping is a viable option, but it comes with a lot of risks.
Dropshipping can be costly if you don’t account for marketing costs or your time investment. Online merchants who keep fulfillment in-house or use a 3PL can see better margins and drive more revenue.
What amount of money is required to start a dropshipping company?
Dropshipping could be possible with a minimum of $0. You could technically start a dropship business with $0.
Fees to dropshipping stores are the first thing that you will have to pay. A Shopify subscription costs $29 per month, which can quickly add up if sales don’t come in regularly. The domain will cost you an additional $14 per year.
If you want to make a decent profit, you will need to spend a lot on advertising. If your ads aren’t a hit with your target audience, you might end up spending a lot of money and not seeing any return.
Do not be too cautious as dropshippers often spend over $1,000 on advertising in their first three months. These online merchants aren’t able to generate enough sales revenue to pay for their marketing expenses.
To verify the quality of your products, you will need to purchase at least one unit. Although you don’t have to do so, you may be sued if your products cause any harm to buyers. Therefore, it is a good idea to test the product yourself.
You’ll be able to save some money by not having to pay storage costs and inventory stocking. Dropshipping is not a zero-capital business model that will make you rich quick.