If you have come across the dropshipping business model then you may be wondering if it is worth your while. You’re also likely to want to know whats involved from a time management and process perspective; is it passive or is it very hands on? I have ran multiple dropshipping stores over the years so I would like to share some information on the topic here with you today.
So, is dropshipping passive income? Yes, dropshipping can be a passive income business model. This is because while it does take work to get set up and running, it can earn you money while you sleep. However, you will need to set up processes, have a structured business plan and be willing to outsource to make it truly passive.
Let us know explore passive income and the dropshipping model in further detail so you can help decide if it is preferable for you.
What Is Passive Income?
Passive income is considered the best way to generate and earn money. This is because of its compounding effect.
Passive income is defined as money that is earned that does not need daily effort and time to maintain. While all passive income streams will require work to set up initially, where they provide true long term value is that they can ultimately start to earn you money while you are away from the computer, desk or not actively working. In the best-case scenario, you can earn while you sleep.
Why You Want To Earn Passive Income
How much you earn largely dictates the quality of your lifestyle; what you can afford, the things you can do etc. But you know this already.
Earnings, in the traditional sense, are largely dictated by the income that you receive from your full-time job. Unless you are working in a position that provides commissions, your earnings are largely capped at a yearly salary.
Even if you earn commission, this will be on a performance basis and will require you to put in the work and the hours to achieve.
Regardless if you love your job, it requires you to show up. It requires you to undertake work, and do so to a good standard consistently.
Passive income on the other hand, affords you the ability to earn more and work less. Here are the benefits that people earning passive income receive:
- Increases their overall income,
- Typically involves building an asset that has a value and worth (and can be sold as such)
- Provides an income if your job was to cease, or you could no longer work
- Prevents ‘burning out’ and over-committing to work and projects
- Can be started on the side whilst transitioning from a full-time job to a self-employed status
Passive income is perhaps the holy grail of income. It afford you more time to pursue the things you enjoy and typically involved less work in the process.
Where passive income really delivers, is that it it typically snowballs and gains momentum in time. The work you do now typically provides benefits in future times.
So while the work you do at your 9-5 or other income pursuits provide you with a fixed amount for the work you do today, passive income pays long into the future.
Why Is Dropshipping Passive Income?
If you are not familiar with the dropshipping business model it is essentially fulfilling customer orders with stock and inventory that you never physically see, manage or handle.
The basis of the business model is that you set up a store, market your products and then fulfill customers orders when they are placed on your store.
While initially it is anything but passive, in time there are plenty of ways to nudge it in that direction. In time, you can even establish systems in where it pretty much is earning income for you passively.
The major benefit with dropshipping is that you can make your processes fully-automated or as automated as you like an/or can afford (whether this is through initial investments or reinvested profits). You can outsource entire operations and processes to virtual assistants, hire freelancers and other professionals to work on your store and for your store on your behalf.
Moreover, if you work with a platform like Shopify, you can benefit from a suite of functionality and applications that can undertake tasks automatically. Its a very effective platform at eliminating tedious and repetitive tasks.
It is important to note here that there will always be things that you will need to do for your dropshipping store. Whether this is managing/changing or introducing processes, doing some of the work yourself, or managing the people you employ.
Even if you was to outsource all of the work there will be things that you need to do to keep the business running profitably. For example, paying your staff!
While this may indicate that dropshipping is not actually passive, it is important to consider that no income strategy truly is, 100% of the time (especially in the initial stages).
If you were to consider investing in stocks for example; even though once you own a stock it can be earning for years to come – you still need to manage your portfolio, analyse price changes and fluctuations etc.
With dropshipping, in the beginning there will be work involved like setting up your store and advertising campaigns. When it is time to outsource, it will also take time to train staff, and put the processes in place.
However, once you have scaled a store to consistent earnings, outsourcing and setting up automation can be a highly effective strategy to work less in your business, and to run it more passively.
Is It Worth Starting a Dropshipping Business?
With all of this being considered, is dropshipping actually worth starting? I’ve written a couple of guides here that will be of particular interest:
- How Fast Can You Make Money Dropshipping
- Is Shopify Dropshipping Dead?
- Is Dropshipping Worth It?
- Is Dropshipping a Scam?
To summarize the sentiments of these articles, dropshipping is a business model that is not new nor is it showing any signs of slowing down.
As you can clearly see, eCommerce retail sales have trebled in the last three years and this trend is forecasted to continue.
eCommerce is the new way customers are purchasing products and customers are more and more open to buying from new brands.
If you were to learn that Amazon started off, and in many ways, still operates from the dropshipping business model, if you are questioning dropshipping then you are also questioning the future success of this leading global eCommerce giant.
Dropshipping affords a lot of benefits, and is one of the lowest risk strategies that you can pursue. It doesn’t take much to get started (relative to other businesses) and you can get up started quickly and effectively.
In fact, if you was to follow an A-Z dropshipping plan, as outlined in the cost-effective course eCom Elites by Franklin Hatchett, you could have a store up and running, products being advertised, and sales coming in this very week!
It’s perhaps the best way to get started, because it gives you all of the information you need in one easily consumable and chronologically ordered package.
This course has over 30 hours of content not only on dropshipping but building passive income strategies online in general. It covers all the major topics like eCommerce, SEO, online marketing and more.
You’ll of course learn to automate and make your dropshipping business passive and automated too!
As such I would thoroughly recommend that you sign up if you want to succeed with dropshipping.
As standard, dropshipping is one of the most time effective business models currently available.
Even if you were to undertake all the work yourself, once you get everything set up, its just down to management and order fulfillment. There are plenty of freelancers, virtual assistants and services that you can tap into to make the entire model easier and more effective along the way.
With a little careful planning, outsourcing and automation, there is no reason why this cannot be your full-time income that enables you to sell products while you sleep.
If you are serious about starting and succeeding, a well-structured and comprehensive course can help you to reach your end goal a lot quicker and save you a lot of time, money and frustration.