What Is The Best Way To Make Money Online? Part 2

Is Drop-Shipping And Other E-Commerce A Good Business

Now once again this is a subjective matter so in this part two of What Is The Best Way To Make Money Online I will discuss the benefits and detractors of Drop-shipping and other Eecommerce.  Like everything there are some good and some bad. If you have not read the first part here is a link to the first article in this series.

 

What Is Drop-Shipping In Short

Drop-Shipping is selling a product and having some other distribution network ship it out for you.  This can be done many different ways one of which is selling on Amazon or Ebay and having them be your sales portal or just having your own website and use that as your sales portal.  Now unlike other E-commerce this has some benefits in the fact that you do not have to keep the stock on hand and instead you can just sell other companies wares.  With that said the return is a little lower sometimes on your end since you cannot buy in bulk and save money that way.

Other E-Commerce

There are many other models other than just Drop-Shipping.  You can run a store like any other person and keep stock on hand but depending on your product that can take up a lot of room and can really be expensive if you need to have a large storage facility.

Another format that some people make really good money on is called Fulfilled By Amazon.  This is where you either have a product made for you or you find a product that is cheap for you but a good price on Amazon you create a sellers account and you buy the product in bulk and have it shipped directly to Amazon so they can fulfill the order for you.  I will go into the pluses and minuses of this business model as well.

Drop-Shipping A Good Start?

So you find a product that you can make a good margin on.  You Contact the manufacturer and you make a deal where you will use them to Drop-Ship for you.  Now you need to choose what platform you will use to sell your product.

Ebay or Amazon

Now these companies are very picky if you do not adhere to their standards you will lose your account and lose your business if you count on them souly for your income.  This is why I don’t like the idea of Drop-Shipping mainly because you count on others to keep your business afloat.  Now you could argue that Affiliate Marketing is the same but the main difference between the two is your name is not on the line with affiliate marketing.  If I send someone to Amazon and they have a crappy experience, that is not due to poor quality of product, my business maintains intact.  If on the other hand you have a customer purchase a product and your Drop-Shipper doesn’t deliver they look at you not them because you are claiming that you are shipping the product.

Now another thing about both Ebay and Amazon is their rules are made to benefit them not you.  As a seller you are not afforded too many rights.  If many people are displeased or they arbitrarily change their rules you could lose your entire lively hood in one instant then you have to start a business from scratch once again.

Own Your Own Site Vs Ebay Or Amazon

Now like I said before using Ebay or Amazon does have its risks but the audience you can reach is so much larger through them then not.  One other detractor is they take fees that cut into your profits.

You can create your own E-Commerce site but you have to do traffic optimization like Affiliate Marketing and pretty soon you are basically doing the same things you would for your E-Commerce site you would for an Affiliate Marketing site.  So me personally I would rather do the work for an affiliate product and not have the headache or customer service but make less money from each sale.

Now one tip is to first start your business out on Ebay or Amazon and then migrate your clientèle to your E-Commerce site using your name brand as a driving force for business.  This method has worked for some people and might work for you as well.

Drop-Shipping Customer Service

One headache of Drop-Shipping that makes it a business I don’t want to go into is the customer service.  If anything goes wrong you are the person they look to to fix it.  The company you used to Drop-Ship doesn’t have to handle angry customers you do.  The company has no stake in your business so they can delay shipping or you could sell a product they do not have at the time.  Some Drop-Shippers have to hire entire teams to work their customer service which in an expense I would prefer not to have.

Fulfilled By Amazon

Now this one has potential but there are also some very big drawbacks as well that you should be aware of.  First you stand to make really good money if you do it right.

So you find or make a product for the consumer.  You spend a ton of money to have it made and shipped to Amazon.  Already you are out a lot of capital just to get your business venture started.  Drop-shipping doesn’t have this start up cost one bonus of Drop-Shipping the customer pays first and you use some of that money to purchase the product and have it shipped.

So now your product is up and selling on Amazon well Amazon does not care who is selling your product so another person has your product copied and they start selling your product for cheaper.  They do what is called take your sales box.  Now your product is listed under other sellers and they are not the top seller of your product and you get barely any money.  The worst part is if their product is inferior you get all the bad reviews because of this.  Now getting this fixed is not an easy task you have to message Amazon and prove that you are the creator of the product and the only one who can sell it and hope they decide to help you out.

Now this business model does have great potential Amazon reaches millions upon millions and are a trusted company mainly because they force their sellers to adhere to some very exacting standards for refunds and such.  You can however make some very good money with this but it demands constant vigilance and watching.

Not A Passive Income

I want a business that I don’t have to constantly monitor day after day hence why I choose Affiliate Marketing.  Drop-Shipping and other E-Commerce is not passive.  Now this is not to say you cannot get services and outsource the bulk majority of the work but that is money that should be going to you going back into your business.

Not All That Bad

So with everything I said E-Commerce and Drop-Shipping have monstrous potential to make you great money and fast.  You just have to run it like a business and be flexible when things change.

Some people have made millions just using Fulfilled By Amazon alone and have founded empires.  This takes work and perseverance but is very doable.  If you treat it like a business and work hard to get your product recognized you can do very well, and the gains are more immediate for the most part.

With all this said I do believe the potential is greater in Affiliate Marketing because it can be grown exponentially you build one site it starts making money but doesn’t require much work after.  So you can move on to the next site that can generate money and so on and so forth to the point where you have multiple money making websites that each generate you a good passive income.

 

In Part 3 we will discuss Freelancing.  Thank you for reading and if you have any questions or comment please feel free to leave one below.

 

June 7, 2017

  • Hi Rick
    I have done some research into dropshipping, and what i don’t like is the long delivery time. It can be 2 weeks to 4 weeks for delivery. Because you’re ‘network’ is spread over more than one country, all sorts of things can go wrong.These are out of your control, but as you say, you’re to blame.
    I would much rather be an affiliate marketer, and direct customers to product websites, it’s much easier. Less can go wrong, and there are millions of affiliate programs available.
    With a laptop, and wifi, you can work by yourself, and not rely on others.
    Cheers

    • Thank you so much for reading the long wait time is not something I had thought of so thank you for adding that information.  I do like affiliate marketing for the fact like you said it is more in your control and less can go wrong.  Thank you for your time.

  • I did some looking into the drop-shipping model too a while back, and honestly, what stopped me from getting in deeper was my difficulty in finding a product and wholeseller! It seems like everything under the sun has a gazillion different sellers on Amazon or Ebay already, and very established. How on earth could I compete as a newbie? And finding a wholeseller you trust not to scam you, and one perhaps on the other side of the world… well, to be honest, it was way too intimidating for me. I, like you, want to build an online business, but drop-shipping seems like something to leave to the more experienced people… not someone just getting their feet wet, so to speak, in the online markets.
    I appreciated the deeper explanations you gave of the different routes you could go, though! Great article!

    • Thank you for reading my article and yes it is very daunting to say the least I didn’t even cover how difficult a task it is to find a supplier that you can trust.  I agree that it is a business that I will leave to the more seasoned online marketer.  I just find that most of the work you would do for drop-shipping is the same work you would do to get your own Affiliate marketing site going so why not go for the easier model that you can replicate and not have to babysit. 

      I applaud you for wanting to build your own online business that is amazing and if you need any help I would be more than happy to help in any way I can.

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