Dropshipping vs. Drop Servicing: Which Online Business Is More Profitable?

Welcome back, Empire Builders! Today, we’re going to talk about a question I hear a lot. What’s better, dropshipping or drop servicing? Which will make you more money online? They’re pretty similar, so we’re going to go over what each one is and then get into which online business model is more profitable. So let’s jump right in!

What Is Dropshipping?

Dropshipping is a business model where you find a product to sell and use a supplier who will ship them directly to your customers. Instead of having a ton of products that you have to pay for upfront, store yourself, package, and ship to buyers, you just make sales. The supplier takes care of the rest. This is a great business model because you don’t have to put up the initial investment in the hopes that the products sell.

What Is Drop Servicing?

Screen grab of Peter Pru discussing the downsides of drop servicing

Drop servicing is a similar concept. But instead of selling physical products, you sell services. Basically, you find buyers who want a service—like writing, editing, or graphic design—then you take the job and collect the money, but you pay someone else to do the work. Really, you’re a middle-man between the client and service provider.  

The Pros and Cons of Each

Each of these business models can bring in good money if done correctly. They both have their strengths and weaknesses, though. Let’s go over the pros and cons of each one. That will really illustrate the difference and understand which one is going to get you the most money.

Pros of Dropshipping

You can make a lot of money without a lot of time, effort, or a large initial investment. In fact, you don’t have to worry about inventory or shipping at all. You just bring in the buyers, make the sales, and the rest is completely done for you. One of the great things about dropshipping is how much of it can be automated. You might get some customer service emails. But many of them are very similar, and you can use templates to reply.

Cons of Dropshipping

It’s not a get-rich-quick scheme. You do have to put in the work, just not as much as starting many other businesses. You have to find your niche, build a funnel, and advertise to drive leads to your funnel, which requires some time and money to set up.

Pros of Drop Servicing

It can be excellent money. Depending on the service you’re providing and the quality of the work, you could get upwards of a couple of grand a month from each client you work with. If you have a network of people who know you or a good reputation in the industry, that could mean steady clients and real money.  

Cons of Drop Servicing

Frustrated drop servicing business owner handling clients

One of the biggest drawbacks is that you’ll have to deal with the clients. When it comes to services, people expect a certain outcome. When you deliver the work, it often won’t be exactly what they wanted or expected. It’s very common for them to request changes, and you have to arrange them. You end up spending a lot of time on emails back and forth between you and the client, as well as you and the service provider.

Another issue is that you often don’t want the clients to know that you aren’t doing the work yourself, especially if it’s your reputation that brings them in. The last thing you want is for clients to come to you because of your reputation for doing quality work, only to find out that you aren’t the one doing it. That could destroy your business and your reputation, so it’s risky.

Another thing to consider is that you have to be good at advertising your services and getting sales. Bringing in steady clients and high-paying work is the hardest part. If you don’t have an existing foothold in your field, that could be difficult. If you aren’t providing something that the person or people doing the actual work can’t do for themselves, then why wouldn’t they just start their own business and make more money, right?

Another thing to keep in mind is that you have to be able to guarantee the quality of the work. Especially if you’re charging a couple of grand a month, the quality of the work has to be worth it. You can sell lower-ticket services, but then the profit is also going to be less. So, there’s a real balancing act that you have to be careful with here.

Why Dropshipping Is More Profitable

Screen grab of Peter Pru discussing the positives of dropshipping

Dropshipping is much easier to set up, it doesn’t require a specialized skill, and much more of it is easy to automate. Dropshipping suppliers buy huge quantities in bulk for a crazy discount which means you get a great deal. It’s even better if the supplier does their own manufacturing. It’s a great way to earn passive income that works well in the long term and doesn’t take a lot of time or money to start.

Drop servicing is harder to automate, so it takes a lot more time. You have to keep the client and provider separate, so the client doesn’t find out you aren’t doing the work, the provider doesn’t find out how much you’re making, and they don’t cut you out. The profit margin isn’t as good, it isn’t as passive, and it takes a bigger time investment to do properly.

Start With Your Preferred Business Model

You can do both at the same time, which I do myself. But without a team and a system in place like I have, it’s harder. In general, drop servicing just comes with a lot more headaches and fewer rewards than dropshipping does, especially if you’re just starting out. Dropshipping is super easy to scale, which means more money. But finding new clients for drop servicing isn’t as scalable, and each one you add means more time.

Okay, guys, that’s all I have for you. I’d love to hear what you think in the comments. To learn more about dropshipping and start building your own eCommerce empire, sign up for my masterclass. I’ll teach you how I made a full-time income online with a 5-page funnel and without touching a product, building a site, or investing in ads. I’ll even throw in the $100k funnel template FREE just for showing up. You can also subscribe to my YouTube channel for frequent tips and insights. Remember, your empire starts now! Tagged : / / / /

Exposing Dropshipping: Why eCommerce and Dropshipping Are Legitimate Businesses

Hello Empire Builders! Whether you’re new here or you’ve been following us along on our journey, we’re excited to have you here as we talk about news sources exposing dropshipping to a wider public market. If you watch any of our videos, then you’ll see that we create content that showcases the benefits and strategies that make dropshipping such a phenomenal way to make money. For a while, we’ve had the upper hand in the market with our formulas, constantly growing network, and by being unafraid to take the risk and jump into the dropshipping world. Through trial and error, we’ve found success, and we want to share that with you. 

Recently, CNBC released content exposing dropshipping as a way to make millions of dollars selling products on Facebook, Instagram, and TikTok. Today we’re going to be dissecting their content and showing how it could impact your dropshipping business. First and foremost, let’s discuss what dropshipping is and look over CNBC’s findings.

What Is Dropshipping? Why We’re Called the Ultimate Middle Man

To make things easy to understand, the most efficient way to describe dropshipping is that it’s a business model that includes three parties:

  1. The Customer
  2. You
  3. Your Supplier

In a legitimate dropshipping business plan, you’ll have the consumer, a supplier, and yourself in order to create sales. Dropshipping itself is a logistical model. It’s essentially the idea of a supplier making, storing, and shipping your product while you, as the business owner and marketer, are focused on selling the product. You don’t control the manufacturing process or really have anything to do with the fulfillment center. 

While articles and videos like CNBC’s suggest that ecommerce is a passing trend, the reality is that it’s been around for years. In the last five to ten years, people have started recognizing it more due to how quickly the world is transitioning into relying on digital markets for purchasing products.  

Exposing Dropshipping: Is Dropshopping a Scam or a Legitimate Business?

Peter Pru watching and discussing CNBC's content about exposing dropshipping

Many articles that discuss dropshipping view it as a get-rich-quick scheme. The truth is that there is a surplus of marketers and vendors looking to make a quick buck. They’ll advertise a product and the consumer will never receive it, or it won’t be as advertised. Like any business franchise, you’ll unfortunately run into your share of scam artists. However, as CNBC discovered while exposing dropshipping, it is a legitimate idea that can be turned into a revenue-friendly business. 

Due to the large number of scam ploys on the market, you have to find a way to earn trust and build rapport with many consumers. Just like your average business, it takes hard work and requires a little bit of elbow grease to create and maintain your dropshipping market.

Should You Follow Product Trends?

Peter Pru discussing how Untapped Focus is purely a dropshipped product

As Ecommerce Empire Builders, we prefer to focus on more evergreen, long-lasting products rather than short bursts of income. My personal goal is to market products that will follow a business model that lasts for years and will offer continual income instead of jumping on product trends that only go so far. While products like fidget spinners are great to throw out there and make money on, they don’t last.

As a shameless plug, one product I market is a supplement called Untapped Focus. I don’t have anything to do with the fulfillment center, the manufacturing process, or anything like that. When somebody makes an order, I don’t touch any of it. All I’m doing is marketing the product. My manufacturer is handling making the product, checking quality, storing it at the proper temperatures, and shipping it for me. They’re hands-on, while all I deal with is marketing and selling it. 

Again, dropshipping isn’t a trendy model. It’s a logistical business model. 

Unless a trending product is in your niche, I don’t recommend using a quick trend to make a little money. It’s not how I like to do business, and it’s not a long-term way to pull in revenue

Call It What It Is: A Proper Hustle

You’re always going to have the people “exposing dropshipping” and suggesting it won’t work. But if you’re ready to put in the time and effort, it’s like any other business model — it’ll always be around, and it can be successful. Regardless of articles or videos that call out the latest scammers, dropshipping is a legitimate way to run a business. 

So many people forget that at the end of the day, it is a business, and what you put in is what you get out. Dropshipping is very easy to get started in, which is why so many people pursue it. However, many people don’t find success in it because they’re not putting in the time and effort. Instead, they’re looking for a quick way to make fast cash. Their expectations are shattered when they realize it’s not as simple as it sounds.

Dropshipping takes a good amount of time and work before you’re able to see a return on your investment. Your investment is your time, your hard work, and all of the effort you put into making your dropshipping business a success. Behind the scenes, it’s a logistical business model that requires genuine hard work and patience. In order to be successful with it, you have to recognize how it flows with the market. Also, you have to understand that you’ll face challenges as you would with any business.

Have high goals but realistic expectations. You’re most likely not going to go in and make thousands or millions on day one. You have to properly market and grow in your niche before you’re able to create the long-lasting, firm foundation for a dropshipping business. 

Make a Name for Yourself

Entrepreneur working on his dropshipping business

Once you’ve used dropshipping platforms to get your foot in the door, start taking back control of your dropshipping business. Begin branding yourself and sourcing and pulling in your products to local warehouses and manufacturers where you can make adjustments that your consumers might want to see. Grow your business by upping your customer service and providing great communication to them. This will allow you to take control of your dropshipping business, be a little more hands-on until you perfect the product, and save money on shipping times or buying in bulk. 

As fun as it is to see CNBC exposing dropshipping for the opportunity that it is, it still takes a lot of work to get started. If you want to learn more about how we find success in dropshipping by using sales funnels without using Shopify, Amazon, or any other platform, check out our webinar where we touch on the finer details of making a real business out of dropshipping. You can also visit my YouTube channel for more dropshipping insights. Tagged : / / / /

How to Protect Yourself With an LLC for Your Ecommerce Business

Empire builders, you already know that there is a lot to learn when starting your own ecommerce business. While there are many important details you need to learn to create a successful dropshipping business, the most essential element to understand is the importance of an LLC for your ecommerce business. 

A properly set up LLC will save your business so much money — money that can be reinvested into the business. I have an LLC set up for my business and have already been able to save millions of dollars through the taxation benefits it provides. Read on to learn more about LLCs and how you can utilize one to save money in your own ecommerce dropshipping business today.

What Is an LLC? 

An LLC, or limited liability company, is a form of a private limited company in the United States. It is essentially a business structure that enables the owner of a business to not be personally liable for the company’s debts or liabilities. This is a wonderful thing. An LLC doesn’t just allow business access to a number of money-saving tax codes. It also creates a protective barrier between you and the customers of your ecommerce business. 

There are also a number of different types of LLCs. They range from S Corp to C Corp to Partnership to Sole Proprietorship. There are a ton of free resources available on the internet for you to learn more about these different types of LLCs. You can also talk to qualified professionals like Prime Corporate Services to learn more about LLCs and business tax planning. These are the guys that helped me set up my LLC. They also helped teach me about the best tax planning options for my business. 

You will definitely want to reach out to them when you are starting the process of creating your own LLC. Their guidance helped me understand how I can use the tax codes to benefit my ecommerce endeavors. 

An LLC for Your Ecommerce Business Will Create New Opportunities

dropshipper discussing taxes and business finance with a professional

Now you know what an LLC is, but you’re still wondering if you really need one for your ecommerce business. Let me tell you — an LLC has the power to completely transform all of your ecommerce endeavors for the better. An LLC for your ecommerce business will give it a multitude of benefits and opportunities that you simply won’t be able to access without the creation of an LLC. Before I filed for my own LLC, I was wasting so much money in taxes each year. This was money that I could have been using to invest more in my business. If you’re making this same mistake right now, you have to take the actions necessary to create your own LLC today. 

Once you have your own LLC for your ecommerce business, your company will be given an EIN. This number is similar to a social security number given to individuals. With your business’s assigned EIN, you can set up separate bank accounts and credit cards that don’t link to your personal accounts. 

This is a huge protection that you need to take advantage of. 

If you were to sell a product from your business without having an LLC in place and a customer got sick or hurt from it, the customer can come after you directly. With an LLC, they sue your business instead of you on an individual level. This ensures that your personal assets and livelihood will remain protected throughout all of your business endeavors. I’m not telling you any of this to scare you, but rather to help you transform your business, protect your livelihood, and help you see the multitude of opportunities that an LLC can provide to your ecommerce business. 

Everyone Should Have a Business 

screenshot about business expenses and using business credit cards to organize write-offs

My final push to get you the benefits of an LLC for your ecommerce business is to highlight the many tax benefits you will access. The United States tax codes were essentially created for business owners. The idea is that business owners help to create jobs and employ citizens. This process stimulates the U.S. economy. 

Therefore, to help business owners boost the economy, the government has created a number of tax codes to benefit business owners. For this reason alone, I believe everyone should have some type of business. Even if you are happily employed, I encourage you to start some type of side business. Business owners have over 250 kinds of expenses that they can write-off. Employees simply do not get these benefits because they have no expenses for their job. The only way to tap into these benefits is by creating your own business.

Some of the top write-offs I utilize in my ecommerce business are business meals, travel expenses, computers, phone, internet, consultants, courses, and training. I even rent out a room in my house to my business as I use it for my office space. Essentially, nearly anything that is bought for the business can be written off as an expense. To get a clearer picture of what you can write-off for your business, check out the IRS’s resources for small businesses. Also, talk to tax professionals like Prime Corporate Services. At the end of the day, these tax codes are here to help business owners. You can either use them to your advantage or let them work against you. The choice will always be yours.  

Consult With the Pros 

man running his own side business at home

I hope you will be able to take the information presented and implement it into your own ecommerce business. If you feel like you need a little more guidance in setting up your own profitable ecommerce business, then feel free to reach out to us today. At Ecommerce Empire Builders, we can help you build, launch, and scale your own profitable dropshipping business. To get the ball rolling, sign up for access to our exclusive free webinar today. Be sure to check our YouTube channel for even more free resources and insights into dropshipping. Remember, your empire starts now! Tagged : / / / /

Top 3 Online Businesses for Beginners to Start in 2020

Hey, Empire Builders! In this article, we’re going to talk about the three best online businesses for beginners to start in 2020. I wanted to go over the top online businesses that anyone can start without a huge investment or any experience. While some online businesses for beginners require a massive budget with substantial overhead costs, some need a much smaller investment. Those are the ones we’ll be talking about today.  

1. Ecommerce and Dropshipping

This is my favorite option. It’s the best business for beginners because of the low risk involved. If you don’t know, ecommerce and dropshipping are terms for selling products online that your supplier sends to the customer, in exchange for a cut of the profits. It’s that simple. Dropshipping allows you to cut the usual costs for inventory and shipping.

For example, with my dropshipping business, when someone buys something from my website, the supplier is notified and they ship it out. I never even see the product in person. It’s just my job to sell it, the supplier does the rest, and I make a cut of every sale. 

It costs as little as $250-$500 for ads to get started. That may seem like a lot, but it really isn’t considering that it’s your cost for starting your own business and gaining financial freedom. This is pretty much the lowest start-up cost you’ll find. It’s going to take an hour or two a day to learn enough to be successful. But the more you invest, the more you get out.

How to Start an Ecommerce or Dropshipping Business

Beginner dropshipper starting his business at home

You need to pick a product and make sure it’s something people want. Google “list of hobbies,” and nearly everything on that list is a good choice. The best advice I can give you is to choose something you genuinely enjoy and find interesting. That’s the difference between waking up every day excited to get to work and being stuck in a daily grind.

Once you pick a hobby — gardening, for example — go to Amazon and search it. You want to sell what people are already buying. Remember KISS: Keep It Stupid Simple. When you look through the results, there are a number of physical and digital products. That’s how you know it’s a good niche with multiple options.

Pay attention to the “frequently bought together” section, which tells you what else you can sell and each product’s rank. If the ranking is under 20,000, then that tells you there’s a demand for it. Going to AliExpress will then show you how many units are sold, and you can find a supplier with a cheap enough per-unit cost to make you a good profit. While dropshipping is one of the best online businesses for beginners, it’s not just for beginners. As you learn, you can scale up your business and create multiple businesses.

2. Selling Digital Products

screen grab about how to create and market digital products

This includes courses, PDFs, and other digital media. The profit margins are high because it doesn’t cost money to make, so it’s pretty much 100% profit. While it doesn’t take a large monetary investment, you have to invest a lot of time into it. You must position yourself as an expert that people trust so they’ll want to learn from you, and that can be tricky if you’re just starting out on online businesses for beginners.

If you want to sell high-ticket digital products ($1,000+), you’ll need to create free content every day to show your expertise, entice them to learn more, and build that trust. If you’re selling cheaper digital products ($5-$50), then all you need to do is add value by solving a problem.

As far as the budget for this, if you’re working on the lower end of the price range, you can advertise for free. If you’re going to use ads, though, I always recommend a $250-$500 minimum.

How to Start a Business Selling Digital Products

Again, take advantage of Amazon. When you type in the example niche — gardening — you’ll see many books available. You can also sort by category for books if you don’t see any pop up immediately. You can do the same for video content.

This provides a clear picture of what information products are being purchased and what problems they try to solve. First, decide on your price point, which should generally be $5-$50 or $1k. This will help you determine what kind of informational products to look into creating. This can range between a short how-to guide and an in-depth video course.

Udemy will give you a better idea of in-demand courses. Type in gardening again; there’s a lot to choose from. The course description will tell you what people are learning. You can sell courses here without spending ad money, too.

If you want to sell text-based information products, you can write your own or go to The PLR Store to buy one. You can buy the rights to content and sell it, make improvements, whatever you want. If you type in gardening, you’ll find a pack of articles on low maintenance gardening, something you can sell for $10+ while only paying $5.99. Dress it up with images and fonts to make it look worth the money. Then you can sell it on ClickBank without paying to advertise.  

3. Affiliate Marketing

Shopper reading content from an affiliate marketer

One of the most popular online businesses for beginners is selling products for someone else and making a commission for every sale — that’s affiliate marketing. This is especially easy if you already have an audience from another business or website where you can promote products. Then this is a no-cost way of making money/ If you only promote products with a good reputation that work well and add value, then it’s also risk-free. If, however, you use your business platform to promote a product to your audience that’s of poor quality or doesn’t work, then you’ll lose trust and business. So, make sure you’ve tried it and really want to recommend it.

How to Start an Affiliate Marketing Business

ClickBank can help with this too. Use their navigation bar to find products you’d want to sell. Let’s use gardening again. Once you find one you want to sell, click promote and you’ll get a custom affiliate link. It’s that simple. Don’t forget to buy and test the product first before endorsing it. Then all you have to do is drive traffic to their site, and when someone buys something, you earn a commission.

Remember…

The great thing about these online businesses for beginners is that they work well together, too. Maximize your profits by integrating them into one business model. If you want to learn more and make more, sign up for my masterclass, where I’ll teach you how I made a full-time income online with a 5-page funnel — all without touching a product, building a site, or investing in ads. I’ll even throw in the $100k funnel template FREE just for showing up. Get ready to build your empire! Tagged : / / / /