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What Is Dropshipping and How to Succeed in 2025?

Author

Ewelina Wróbel

6 minutes 32 seconds

30 January 2025

Do you dream of owning your small business? Running an online store is a popular earning solution at the moment. Dropshipping is one of the forms of e-commerce we'll encounter most often, but also one that doesn't require a large start-up contribution and reduces the risk of losses. What does it consist of? What steps should be taken? What to sell? Let's check it out!

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What is dropshipping?

Dropshipping is one of the formats of an online store, in which the whole process of order fulfillment looks a little different from the standard sale of own assortment. This type of method does not require the company to keep the goods in stock. Instead, the store sells the product and passes the order to a third-party supplier, who then sends the order to the customer (thanks to your store's integration with a wholesaler and shipping products from there).

Dropshipper

The term “drop shipper " refers to a person or company that uses the drop-shipping model in its sales activities.

Basic types of dropshipping in an online store

As for dropshipping, among its most popular formats we can include:

Re-seller.- the most common solution, that is, cooperation with different suppliers (warehouses) and reselling the products they offer on their platform
Expansion - working with retailers and selling their products online.
“Customized” products -. allowing the customer to customize the product.

Dropshipping - how to get started?

The drop-shipping model is based primarily on three branches. Those involved in the sale/purchase include:

the seller (dropshipper)
the supplier (who takes care of the inventory)
customer

Let's establish that we're talking about the vendor branch here. What should you do if you want to sell? What steps should you take to launch an online store?

Choosing the industry and the so-called niche in which you want to operate - of course, among dropshippers you will also find those who sell products from completely different fields, but if possible, it's worth betting on something you know about (/are passionate about) or that can generate traffic from search results (and you are willing to do some education in this area)

Establish a budget and divide finances into corporate and personal, in order to better control income and expenses and thus the profitability of the business being run

Analyze the market - what our future competitors are doing, what works, and what rather goes unnoticed (which will save time and money)

Research among drop-shipping suppliers - choosing one or several with whom we plan to cooperate and setting the rules of cooperation.

It is worthwhile to inquire about the division of profits and costs, issues related to returns, and the delivery itself (including time and timeliness)

Choice of business mode - setting up a business or limiting yourself only to selling as an unregistered business

If we want to run a store, operating on a dropshipping basis, additionally (or at least at first), we can bet on an unregistered business. However, we must not have partners or a company (/company) within the last 5 years. Besides, our monthly income should not exceed 50% of the gross minimum wage.

Establish the rules of the dropshipping store - ordering options, fulfillment process, delivery, payment, etc.

Choosing the identity of your store and planning a marketing strategy and establishing communication channels

Setting up your own website (online store) or choosing an intermediary platform for selling products such as Amazon, or at least Allegro

Other platforms that also allow you to run a web store profile include:

AliExpress Wish
eBay
Flipkart
Asos
Zalando
Groupon
Shopee

The upside of using such solutions is automatically a larger audience to start with, while the downside is a lot of competition in one place, very often with similar product proposals, and dependence on the platform - our profile is not our store, which we can manage according to our own concepts.

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What dropshipping model to choose?

With products sold online and classified as dropshipping offerings, we can include many types of products. Among the more common ones are

fashion - clothing and accessories
jewelry
various types of gadgets (such as phone cases)
hobby and craft (/art) products
electrical and electronic equipment
toys, accessories, clothes for children
beauty - cosmetics, care and accessories
motorization
furniture, decorations, organizers and home appliances (e.g., those known as “smart-home”)
tools, decorations and articles for the garden
books.

How to start making money with dropshipping? An online business guide for your company

In order to actually start making money online by running a dropshipping store, you need to be conscious of your decision - know what you are doing, why you are doing it and how you are doing it. The steps outlined a moment earlier play a big role in this. This approach also applies to running an e-commerce business with your own product and/or services.

It's very important to develop a budget, but we're not talking about buying an assortment of products, because that's not required of us in this case. We are talking about other issues that will help us determine our capabilities and estimate the threshold at which we can talk about the profitability of the business. These include, among others:

the time we will spend
the cost of setting up and running the site (the creation itself, domain, hosting, security, etc.) or having an account on a given platform (and the commissions it charges itself)
commissions on sales to cooperating warehouses/wholesalers
fees for tools that help manage sales (if we plan to use such)
marketing activities (such as sponsored posts)
if the offer of cooperation with a wholesaler does not include it, we also add issues related to delivery and form of payment
if you set up a business, you should also take into account the costs associated with it

It is difficult to determine the exact rate. Much depends on the demand for the presented products, the way they are presented.

Advantages of drop-shipping

You reduce the starting amount that is necessary to launch the store (much lower entry threshold than in the case of a pre-purchased store)
The responsibility for carrying out the entire sales process and order fulfillment is spread out (thus our responsibility is reduced)
The process of complaints and returns in most cases is not our responsibility - the supplier (store) is responsible for it
You bypass the costs of maintaining the premises (warehouse)
You do not have to worry about not selling the entire assortment
You reduce the time spent on running the business or redirect it to other ventures
Less risk and avoidance of losses if we try different industries
High probability that you will not need to spend time finding a carrier (supplier/courier), since many wholesalers already have their regular “partners”.

Disadvantages of drop-shipping

You will not build our own true brand with it
You do not bear all the responsibility, and therefore we also do not receive 100% of the profit from sales low margin - the size of the order is very important here
You do not have full control and decision-making power when it comes to the offer and execution of orders
In many industries, or when selling specific products, you will face a lot of competition, which will force us to bet on the lowest prices or special marketing campaigns.

How to set up a dropshipping store? Selling on your own e-commerce store

Leaving aside the variance of giving up your own store and betting on an account on one of the e-commerce platforms, setting up a sales page for a dropshipper should be no different from a page for a store that would be about offering proprietary (/own brand) products and services)What do we include in the process?

The decision: whether we rely on a coded site, from a wizard, and whether we make it ourselves or outsource it to an agency or freelancer

Convenient and clear navigation
Branding - graphic design, typography, etc.
Product presentation - product photos and their descriptions
Payment and delivery forms
Language versions
Regulations, RODO and customer data protection

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How to choose a wholesaler?

When choosing a wholesaler, pay attention to several factors that will determine the success of the cooperation.

Here are some tips:

Look for a supplier that has multiple products and different versions of products (such as color variants). Customers like to have a choice;
Opt for a wholesaler that operates in multiple industries. This will allow you to quickly change your store's assortment to one that will be more profitable at the moment;
Be sure of the quality of the products. Many prefer to pay more if they are sure that the product will be top shelf.

Summary

Running a dropshipping business can be a commitment and multi-tasking. Not everyone is prepared for this type of work. Dropshipping here can be a kind of compromise or an initial implementation stage, through which we will be able to get to know the market, consumers and gain new contacts, among other things.This form of sales already at the start involves less responsibility, but also less control, so in order not to narrow it down even more, it is still worth betting on our own website. This can make our offer seem much more unique and credible to the recipient - even if it is similar to many others.

FAQ

What is dropshipping and how does it work?

Dropshipping is a retail business model where the seller does not keep the products in stock. Instead, when a customer orders a product, the seller purchases the item from a third-party supplier who then ships it directly to the customer. This means that the seller never handles the product directly, allowing for a low-risk business model.

How can I start dropshipping in 2025?

To start dropshipping in 2025, you need to choose a niche, research the best dropshipping suppliers, set up an ecommerce website (consider platforms like Shopify), and start selling products. Make sure to focus on effective marketing strategies and customer service to build a successful dropshipping business.

What are the benefits of dropshipping?

The benefits of dropshipping include a low initial investment, the ability to operate from anywhere, a wide range of products to sell, and no need to manage inventory. This model allows entrepreneurs to test different products without significant financial risk.

What are the drawbacks of dropshipping?

Dropshipping drawbacks include lower profit margins compared to traditional retail, reliance on suppliers for inventory and shipping, and potential issues with product quality and delivery times. Additionally, competition can be intense in popular niches.

How do I choose a dropshipping supplier?

To choose a dropshipping supplier, look for reliable companies with positive reviews, good communication, and favorable shipping terms. It's also beneficial to work with suppliers that offer a wide range of products and are responsive to customer inquiries.

Is dropshipping a legal business model?

Yes, dropshipping is a legal business model as long as you comply with local business regulations and tax requirements. It's important to ensure that you are working with legitimate suppliers and that you properly disclose shipping times and policies to your customers.

How does dropshipping work with Shopify?

WebWave is a popular platform for dropshipping. It allows you to create an online store, easily add products from dropshipping suppliers, and manage orders. You can integrate dropshipping apps that automate the order fulfillment process, making it easier to manage your ecommerce business.

How do I fulfill orders in a dropshipping business?

To fulfill orders in a dropshipping business, once you receive a customer order, you place the order with your dropshipping supplier, who then ships the product directly to the customer. You need to ensure that you communicate shipping details and tracking information to your customers.

What is the profit margin like in dropshipping?

Profit margins in dropshipping can vary widely depending on the products sold and the suppliers used. Typically, margins can range from 10% to 40%. It's essential to price your products strategically to cover costs such as shipping and marketing while still being competitive.

How can I ensure success in my dropshipping business?

To ensure success in your dropshipping business, focus on niche selection, customer service, and effective marketing strategies like search engine optimization and social media advertising. Continuously analyze your sales data and customer feedback to adapt your business model and offerings accordingly.