“Drop-shipping is dead.”
Many aspiring young entrepreneurs are misled by this statement commonly shared by online business gurus. Drop-shipping, a common e-commerce strategy, is often associated with the practice of selling products that one does not have on hand.
For example, if someone is drop-shipping phone cases, they would research and list a phone case on their store site. Let’s say the drop-shipper lists this product for $30.00. When a customer purchases the product, the drop-shipper then collects the payment and sends the order to their supplier, typically overseas in a cheap labor country such as China.
Moreover, let’s say the supplier is selling the phone cases for $10.00 each—including shipping. The drop-shipper pays the $10.00 for the product, and the remaining $20.00 is theirs to keep. From here, the rest of the process’ obligations rest on the supplier’s shoulders since the supplier mails the case to the customer.
While many claim that drop-shipping is now oversaturated and impossible to achieve, this model is optimal for teen business owners. It can be run with as little as a laptop, a phone and $100 of seed funding. Drop-shipping stores are low commitment, low cost, easy to grow and easy to gain experience with.
Drop-shipping is one of the most achievable models of business, especially for young people who still need to balance school and social life. There is little to no real life involvement when it comes to drop-shipping. Most duties include marketing, which is done mainly online, and order fulfillment, which is as simple as the click of a button. With other models of business, many owners hold countless responsibilities and hands-on involvement. It is almost unheard of for a teenager to be owning a restaurant, managing hotels, or running brick-and-mortar stores.
When it comes to drop-shipping, young entrepreneurs have much more space to dominate.
According to a study by Career Expert, average drop-shipping income can vary greatly from person to person, with some making under $35,000 annually and others making up to $100,000.
A popular appeal of drop-shipping is its low cost and low barrier to entry. Most teens don’t have more than a thousand dollars to their name, but this is not an issue since running an online store is very cheap. E-commerce website builders such as Shopify sell 3 months of any plan for $1. After 3 months, a basic plan costs around $40.00 a month, which can be earned back with just a few sales depending on which product is being sold.
According to Forbes, with a small initial investment and the appropriate product line that targets a certain market, entrepreneurs can easily grow a side project into their primary business. With as little as $100, anyone can launch and expand a business.
With social media platforms such as TikTok and Instagram, reaching large audiences has been made many times easier than before. No longer are businesses required to pay for televised advertisements, take out a column in the newspaper, or mail out catalogs every month. Billions of potential customers are online daily, making organic marketing—reaching clients through unpaid ads—an achievable, cost-efficient method for teen business owners.
When it comes to authentic marketing, teens clearly have the upper hand. As many spend hours on end on social media each day, they understand current trends. In this, they will have an easier time figuring out the best methods of brand growth.
Every successful entrepreneur has made failures and mistakes, however, they have usually had years of experience to inform their decisions. For young entrepreneurs, drop-shipping can provide an excellent learning experience on business management, social media marketing, sales, finance, and countless other essential skills.
Statistics show that only 10% of drop-shipping businesses succeed and 90% fail during their first year, if not the first month.
Ultimately, the more effort put in by drop-shippers, the more likely they will be to succeed. However, and undoubtedly, the lessons they pick up along the way will be invaluable on their pathway to success.
