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Should I Start A Drop Shipping Business? No Job, No Money, My Wife Left Me And Took The Dog;

TC Updated

"If everybody could do it, they would" is the old saying. But it's not true. Even when presented with a golden goose that lays the golden egg every day, there will still be a significant percentage of people who would sell it for the short-term gain.

Those that are prepared to take up the challenge and create something, anything, are wildly outnumbered by armchair critics.

It is far easier to tear down and criticise someone else's work than it is to build your own. Twitter is proof of that, making the skilled witty one-line take down a masterpiece to be admired. People spend more and more time tweeting what they have seen than paying attention to what just happened.

If attention span is on the wane, then so is the ability to focus on one thing. Contrary to modern workplace thinking, human beings are not made to multi-task and trying to do it results in less work getting done.

This is simply because the human brain is not wired to process conscious thinking in the background. Conscious thinking has to be done in the here and now. Companies that advertise for “multi-taskers” clearly don't understand how work gets done.

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A computer multitasks by efficiently distributing it's processing power across the tasks it is being asked to perform. The more tasks performed, the slower the CPU processes each one as it divides its resource between them. You can compensate for that by upgrading the CPU and adding more memory. That way you can run a full virus scan while you compose an email, listen to Spotify and watch cute cats all at the same time. That's where the “multi tasking” saying came from.

But humans can only task switch. They can't multi task. The brain can't do it. Try this exercise:

Open two documents to write a short story. Give each page a heading and write the first paragraph of each page. Now for each subsequent sentence switch between documents to add to the narrative.

Do you see how slow this is? Every time you switch tasks your brain has to catch up with where you were last to make progress. You are slowing production down to a crawl with this constant chopping and changing of tasks.

To make real meaningful progress, you should concentrate on one task until it is finished, then move on to the next.

Now you are easily distracted. Your phone pings regularly, you have music playing in the background, and your incoming email always gives you new tasks to do on top of the old ones. No wonder work is stressful!

This is why people look for the shortcut, the easy way out. They have been conditioned into thinking they should be managing many tasks and they don't have time to focus on one thing.

I have something new for you, a novel approach that you might like. It will help you rise above the shysters and hustlers that infest Twitter feeds with their incessant inane marketing drivel:

Slow Down And Build Something You Can Be Proud Of

Now that might come as something of a shock to you, and it may seem a bit of a radical idea, but doing one thing slowly will get results far quicker than trying to do many things quickly.

Take a deep breath. Inhale, feel the rib cage expanding. Exhale slowly, feel your chest contract. Concentrate on your breathing. Meditate for a couple of minutes. Chill. Stop looking for the answer to everything in 30 seconds.

Think about why you want to start a drop shipping business and what it entails. While you ruminate let me tell you this short story:

A couple of months ago in March, we headed off to the beach on a whim one evening. The older boys had moved back home after splitting up with their girlfriends. The house was full of kids. I love my grandkids, but sometimes it's just you know... too full on.

So we took off to the Welsh coast with the dogs.

On the way, I realized I'd forgotten my phone charger, and so we stopped at a supermarket to buy a new one. In the rack were these nicely packaged Juice boxes and I bought one.

Fast forward to a couple of weeks ago (August) and the curly orange cable had stopped charging the phone. So I visited the juice.co.uk website and emailed them asking if I could have a replacement cord.

I never got an email back, but about five days later a complete replacement kit turned up unexpectedly in the post. I was pleased as punch.

But then I got thinking about how they had handled my complaint. I didn't get any notification that they were going to replace the item, not even a “thanks for your email.” After a couple of days, I just thought that my request had been ignored and nothing was going to happen. I'd considered a follow-up but you know how it is, you just believe that it's a waste of your time.

This is the biggest problem with running a drop shipping business. It is only when things go wrong that you get the opportunity to show how good you are by putting things right. Putting mistakes right raises the bar across the board.

In my new phone package, the old curly orange cable was gone, and it had been replaced with a standard USB cable. The big white 12V charger had been replaced with a sleeker version. Some R&D magic was being worked behind the scenes.

As a drop shipper though, you won't be party to any product research and development. You'll not even see the product unless you order one for yourself and when the item arrives at its destination all the packaging will be blank, devoid of branding. How will you ever establish a brand if you have no say in the improvement of the product and no feedback?

While you continue to ponder why you want to do this here's another example, this time, a digital drop shipper:

At the same time, we went to the beach; I'd just bought a new car. A Mercedes estate to replace the Saab convertible. Much more practical for taking the dogs to the beach!

I wanted to estimate what the cost of insurance was going to be before I bought it, so I took off to compare the market to get some quotes and ticked the box where it said: “I haven't purchased the car yet.” Unfortunately, I had to stay with my current insurance provider for five months and pay their Dick Turpin rate to keep my no claims bonus. When renewal day in August came around, I re-ran the quote and signed up with the new broker saving over £1,000 in the process. Very pleased with myself.

The new insurance broker asked me for the V5 and the date I purchased the car which I scanned and emailed to them. A couple of days later I got a letter in the post asking for an extra £589 towards the premium as I hadn't stated I'd only recently bought the car. They had the date I purchased it as 01/04/2005.

There is a fault in the system. Where I had checked the box “I haven't bought the car yet” the insurance underwriter used this to time machine back to 2005, instead of using the day the quote was run which would make more sense. I can see that they do this to give the most competitive quote, but it's not a principled way of doing business.

Pissed off that they had added the extra premium AND stiffed me for a £39 admin charge I perused the received letter for a phone number. Guess what? Ironically http://www.onecallinsurance.co.uk has no phone number on their paperwork and ask you to use the live chat. After speaking to the live chat operator, they suggested I phone the office when it opened in the morning and helpfully gave me the number to call.

I cancelled the policy and started all over again.

What Do These Two Episodes Tell Us?

That yes, you can sell products by setting yourself up as a middleman between the customer and the service provider or manufacturer using standard advertising channels to make it happen. But you can't substitute for providing support when it's needed. When the customer is annoyed how are you going to appease them?

Let's take a look at what drop shipping has going for it over affiliate marketing:

Affiliate Marketing vs Drop Shipping

Affiliate Marketing

Successful affiliate marketers know that to keep generating a monthly income they need lifetime cookies, a decent commission rate, and long-term repeat business. Selling products with a monthly subscription like online marketing tools or weight loss products with the potential for repeat business are good examples.

Bad examples are products and services with 5-day cookies and small commission levels like white goods or household gadgets. Programs with terms and conditions that specify minimum payout levels and require x number of monthly sign-ups all need to be avoided as well. Finding good affiliate programs that don't try and screw you with the T&C's is not always easy.

The benefit of affiliate marketing is that you get started with very little outlay, just the domain name, hosting and a Wordpress theme will get you going, and the rest is down to the quality of your blogging. You don't have to deal with product returns, there is no customer engagement, and the success of your business relies on your ability to generate website traffic and send it in the direction of your affiliate partners.

I highly recommend the Moreniche network as a great place to get started with affiliate marketing. I've known them since they began in 2004, they are ethical, and you'll never miss a payment.

The downside of affiliate marketing is that if your supplier sells their company or goes bust, they'll take the business and all your affiliate commissions with them. Affiliate programs come and go with alarming frequency, and it can be devastating to see revenue streams that you've built up over months and years disappear into the ether overnight.

Drop Shipping

Drop shipping is an extension of affiliate marketing. Instead of sending potential customers away to a website via a tracked link now your goal is to keep them and convert them into customers.

Once they become your client, you will be responsible for dealing with returns, customer complaints, and payment processing. On top of that, you'll have to manage your virtual stock ensuring you are not advertising products that are no longer available and keep any promotions up to date.

Once a sale is made you'll need to contact your drop shipper and arrange for payment and shipping of the goods.

A quick word about funding: If you don't have any money, then you are going to struggle to make a drop shipping site work, and it's all going to be about how you process payments from the customer and then pay your supplier. Few suppliers are going to take the risk of being paid after they have sent out the goods.

If you take credit card payments via a merchant account, then you'll normally have to wait 3-5 days for the cleared funds which means a delay in shipping your goods. One way around this is to send and receive payments exclusively via Paypal. You may lose a few orders, but at least you'll be able to deal efficiently with the ones you do get.

Affiliate Marketing vs Drop Shipping Summary

Drop shipping is a terrible business model for those who want to start a business with no money. You are giving yourself all the grief of dealing with customers, the returns, the complaints as well as all the headache of trying to find a profitable niche and make a decent margin.

Also, you'll have an eCommerce store that is templated and probably no coding skills to speak of.

You should instead be looking at affiliate marketing to get going, and then if you want to start a drop shipping business, you can plough your profits into it.

Learning affiliate marketing will give you all the skills you need to build a successful online business. Site building, writing, and blogging, paid advertising, SEO, these are the core competencies you'll need to learn to create an online business, but it goes a lot deeper than that. Here's why:

Doing The Work

A quick glance over the Shopify Exchange shows a plethora of drop shipping sites available for sale, and you might find a bargain that was the gleam in someone's eye a couple of months ago that they simply gave up with because they realized making it a success is going to be a lot of work.

Stories abound of eCommerce retailers that got to £100,000 in six months, and some of them may be true. Being in the right place at the right time has a lot going for it but being prepared for the opportunity is what makes it work.

As well as learning all the skills you need to build a site and attract an audience you'll also need to master self-discipline and get good at turning up for work every day even though you're not getting paid for it yet.

You will need to get good at writing because product descriptions won't write themselves and your product descriptions will need to be much better than the average.

In fact, you'll need to lift your whole game to another level to make a success of it. Getting up at 5 am, writing 2,000-word blog posts, guest posting, building relationships with other site owners and working 10 hour days is the gist of it. Without it, you'll be just another drop in the big bad ocean.

Drop shipping as a starter business model for the cash-strapped entrepreneur has absolutely nothing going for it. Starting an eCommerce store and filling it with drop shipped products has nothing to do with the business of making sales.

However using it as a stepping-stone to building a fully fledged eCommerce site it is the perfect way to leverage your way into the business for a small outlay. 

If you are prepared to put in some real work and learn the ropes then drop shipping may be a viable way to start an eCommerce business. But it's not a get rich quick scheme, and it never will be.