Anthony Agyeman was just 18 when he started his successful dropshipping business.Provided
Right now, many people are looking for ways to create passive income or generate more income streams. Over the past several years, dropshipping has emerged as a popular option—but most people who venture into this type of business end up dropping out due to low profits, difficulty finding quality suppliers, or the stress of managing orders.
But dropshipping can turn into a highly profitable business if you know how to do it the right way.
Here’s how dropshipping works: an entrepreneur sets up a website or online store to sell certain products, but they don’t keep any of those products in stock. Instead, when a customer orders a product, the dropshipper purchases the products from a third party, and has them shipped directly to the customer.
Entrepreneur Anthony Agyeman was just 18 years old when he first started this kind of company—and with no money. I wanted to talk to him to see what lessons he could share on how to build a dropshipping business.
Q: What’s something you think more first-time entrepreneurs who want to get into dropshipping should know?
A: They should know that they are possibly just one product away from changing their entire life. Also, if you’re not getting sales, you shouldn’t get attached to the product—just move on from it and sell something else.
Q: What were some of the challenges you faced while developing your dropshipping business?
A: I pursued dropshipping for about 6 months initially. I was doing it over and over again, but I didn’t get far and honestly I almost gave up.
But I thought, “This is the 21st century. Many of the things that you want to do have already been done by someone else.” So I went and researched, and found someone who was doing dropshipping successfully, and I asked them for help.
Once I asked for help, I learned so much more about dropshipping, marketing, and the cognitive biases that explain why people buy products. After that, I started having more success, and I moved on to selling higher-ticket items. Now I sell products that are more than $1,000 each and have a 30-40 percent profit.
Q: How do you know what product to sell?
A: You can go to Google Trends and see if a product has any search demand—if it’s just a trendy product. There are also tools out there that can tell you how much the average cost-per-click, or CPC, is on Google Ads, so you can already know how much you’ll be spending per click.
Q: How long does it take before you start seeing results?
A: It really varies depending on the product, niche and ad spend. If you make sure the product has good search volume and the cost per click is low, then you can normally expect to get sales within your second to fourth day.
Q: If you're not seeing results, how do you know when you should switch products, or try a new supplier?
A: The only way you know is by tracking specific metrics. The metrics I use are Search Volume per Month—the product has to be anything with over 100,000 searches a month—and a Cost per Click of under $1.50. By using these metrics, I’ve always gotten sales.
Now if you don’t have any metrics to follow yet, here’s what I’d suggest. If you are getting traffic to your website, but no Add to Carts, and it’s been more than 3 days, then you need to switch your product. If you’re getting Add to Carts, but no purchases, then you need to implement retargeting/remarketing to encourage those abandoned carts to make that final purchase.
The global dropshipping market is poised to grow to more than $557 billion by 2025. If this isa business model you’ve been considering, now may be the exact right time to start.