Is Dropshipping a Good Side Hustle In 2024?

With months of straight-up interest rate rises and the rising cost of living, Aussies are turning their skills into lucrative side hustles to supplement their income. According to the Australian Bureau of Statistics, around one million Aussies have a side hustle. As side hustles are growing in popularity in recent years, it's the right time to consider starting a side hustle. Popular hustle ideas and side gigs include driving for Uber, freelancing on apps such as Airtasker and Fiverr, babysitting, and affiliate marketing. Some side hustles are better than others. With ecommerce taking the world by storm, more and more people are considering dropshipping to create a second source of income.

Is dropshipping a good side hustle? The experts at Dropshipzone are here to answer this question. Read on to find out whether a dropshipping side hustle is profitable, if any risks are involved, and how easy it is to start dropshipping.

Can you Make Money From Dropshipping?

Dropshipping is one of the most popular ways to make money online in 2024, and it can be profitable for both new and established businesses. Forrester's Research findings state that nearly 23 per cent of all online sales are funnelled through dropshipping, and 33 per cent of online stores rely on dropshipping as a fulfilment method. The global dropshipping market value is  expected to grow in value, reaching $476.10 billion by 2026. This exponential growth is attributed to global changes in online shopping and increased ecommerce capabilities such as tech integration, inventory sync and more.

The dropshipping business model has many advantages, making it a lucrative enterprise even for beginners. With low overhead costs and lower risk compared to other business models, you have a high chance of turning a profit within a short time frame. The stakes are even lower when using the right tools. Dropshipping platforms such as Dropshipzone take the guesswork out of finding trending products from quality suppliers, giving new businesses the ideal starting point for success. 

One potential downside to dropshipping is low-profit margins. The average dropshipping profit margin is between 15-20 per cent, depending on your product niche and the average cost of goods. Products under $10 may not have high profitability, but impulse purchasing makes them best sellers. Home products or other hard-to-find products have growing demand and a good chance of getting sold at a premium price. Furniture has one of the highest profit margins, but shipping costs will take away some of your profits. No matter what you sell, there are many ways to improve your profit margins and boost sales.

How Hard Is It to Be Successful in Dropshipping?

Dropshipping can be profitable if you do it the right way and has a low barrier to entry, which means new stores will have a lot of competitors. Unfortunately, there is no easy way to stand out from the competition. However, there are some simple ways a business can attract new customers:

• Maintain an attractive, accessible, functional website. 

• Offer excellent customer service.

• Have clear store policies for shipping delays, returns and refunds.

• Maintain a social media presence and share quality and relevant content.

• Stay on top of trends and regularly undertake market research.

• Maintain a good relationship with suppliers.

Between the first six months to a year of starting a new dropshipping business, you should be ready to invest time and effort to see it succeed. Individuals who refuse to put in the effort required to make their online business grow do not see results. Successful retailers usually spend over 30-60 hours a week to grow and scale their new online business. While building a successful online store as a side hustle is not impossible, you may want to consider focusing on the business full-time or hiring additional help for the first year. 

To know the average time invested in dropshipping business, check out our blog ‘How Many Hours Do Dropshippers Need to Work?’.

Why Dropshipping Can Be a Good Side Hustle

Low-risk opportunity

There are several aspects of dropshipping that make it a low-risk business opportunity. Retailers don’t have to stock their own inventory. Instead, they buy products when a customer places an order, meaning they don’t have to worry about overstocking and warehousing. Suppliers also offer shipping and logistic services, which also cuts costs. Many B2B2C marketplaces are free to join, enabling new business owners to start and scale right away. With very little upfront capital, you can test the waters of dropshipping without losing much money.

Easy to start 

You don’t need a degree to start dropshipping. Dropshipzone provides an easy-to-use platform that instantly connects retailers with suppliers and products after signing up. We also provide tailored customer support, seamless integration with Shopify through Sofortig, and valuable resources to help new entrepreneurs scale their business. A quick Google search can provide other resources, including free courses, YouTube tutorials, or other content that can be helpful when you’re just starting out. There are also many website-building sites, such as Squarespace, WordPress and Shopify, which you can use depending on your requirements. They can help you build professional, responsive websites with their ecommerce store templates and offer third-party apps to help manage inventory, track your site health, connect various platforms and assist with Search Engine Optimisation (SEO). Beginner programmers can use AI tools like ChatGPT to write code for the entire backend or acquire some expert IT knowledge and use APIs.

Flexible business

Dropshipping enables retailers to work anywhere, anytime, on any device, as long as there’s an internet connection. Without inventory or shipping to manage, there’s no need for an office. Retailers can work from a home office setup, coworking space, or their favourite coffee shop. The business model is infinitely scalable - retailers can sell as few or as many products as they want, use multiple suppliers, and operate on any ecommerce platforms that support dropshipping. Once a business owner has established the online store and has an ongoing presence online, they can work as little as five hours a week, thanks to automation software that automates the processes. It's the dream business model for people who like to work on their own schedule.

The future is ecommerce

No matter how you look at it, ecommerce is the future of business. The unprecedented growth of ecommerce over the last three years has solidified its position as a key economic force across all industries. Technological advancements such as AI integration will make it even easier for businesses to sell online. Dropshipping is an easy way for small businesses to break into ecommerce while it’s still relatively young and growing alongside an ever-changing, ever-growing industry.

Factors That Can Make Dropshipping Difficult

Low profit margin

Dropshipping has relatively low profit margins compared to other business models, with the average profit margin at around 15-20 per cent. With the right marketing strategy dropshippers can still see high returns, but it may take time for a new dropshipping business to make enough money to profit as a side hustle.

Highly competitive 

With so many businesses going online, the ecommerce space has become competitive. It’s a potential disadvantage for dropshippers because suppliers may often sell the same product to different retailers, so standing out from other ecommerce businesses may become challenging. Additionally, a customer may confuse one store for another less reputable store due to selling the same products. Developing powerful content marketing strategies is one way to stand out and protect the brand image. White labelling or channel partnerships can also help stand out from the competition.

Supplier issues 

Dropshippers lose control over product quality and shipping times if they outsource inventory management and logistics. In case of a product deficit or shipping delays, the retailer is responsible for fixing the situation for the customer, even if  the supplier makes a mistake. Business owners are also at risk of selling fake or defective items without proper supplier vetting. So choosing a reliable supplier is crucial. 

Slow to start

Dropshipping is not a get-rich-quick solution. It can take six months to a year to see decent profits, especially when only working on the business part-time. While it can be a great side hustle in the long term, retailers will see faster results if they dedicate full-time hours to building their business in the first year.

Who Should Start a Dropshipping Side Hustle?

Anyone can start dropshipping. There are hardly any barriers preventing new businesses from entering the industry, and it’s never too late to start selling something online. Retailers don’t need any qualifications or significant capital to start a dropshipping business. However, there are certain things new business owners will need to consider in order to meet their legal obligations as an Australian dropshipping retailer.

An Australian Business Number (ABN)

An ABN identifies businesses for tax purposes. Most Australian dropship service providers, including suppliers and wholesalers, require retailers to hold an ABN before trading. The Australian Government also requires businesses with a GST turnover of $75,000 or more to have an ABN and be registered for GST. If an online business doesn't have an ABN and doesn’t turnover $75,000 in its first financial year, it will still receive different tax treatment than a business with an ABN. For more information about ABN registration, visit our blog, ‘Do You Need an ABN for Dropshipping In Australia?’

Knowledge of local consumer law

International dropshipping companies and suppliers will sell many products that appeal to global audiences but are prohibited in Australia. For example, products that contain CBD oil cannot be purchased in Australia without a prescription from a doctor and are not suitable for dropshipping at this time. Australia also has strict gun control laws, so the sale of guns and their accessories is prohibited. Finally, Australia has strict copyright laws, so knockoff or bootleg products are strongly discouraged.

For all these reasons, retailers should have knowledge of local consumer law. Additionally,  retailers are governed by the Australian Competition and Consumer Commission (ACCC). The ACCC ensures businesses meet a set of consumer guarantees when they sell products or services. These rights are automatically applied to any sales. These guarantees include:

• Goods are of acceptable quality.

• Goods are fit for purpose.

• Goods must match their sales description and any demonstrations or examples.

• Businesses must deliver the promises they make related to the goods. 

• Businesses must provide spare parts and repairs within a reasonable time after purchase.

• Customers have full ownership of the goods they purchase.

Retailers are in charge of upholding these consumer guarantees even though suppliers deliver the product, so it’s essential for online retailers to be familiar with these laws.

Knowledge of platform policies

In addition to lawfully prohibited goods, many marketplaces have their own policies that retailers must conform to. Dropshipzone has a range of policies that prohibit certain goods. We also require our suppliers to ethically source their products. You can view our policies here.

A good work/life balance

By definition, successful side hustles generate income in parallel with additional employment. Someone starting a side business while working a part time job or studying part-time will have a different experience than someone working or studying full-time. Family, friends and general healthcare will also take away some time. New business owners should consider what a healthy work/life balance looks like and how they can fit a side hustle into their schedule. Some tips include starting small, setting aside fixed hours to work on business and wellness and delegating tasks where possible.

Patience and persistence

Side hustles take time to produce passive income. 90 per cent of dropshipping businesses will fail in the first month out of frustration. No matter how experienced the business owner is, it'll  take time and hard work for any business to get off the ground. Dropshipping presents a steep learning curve, so dropshippers need to stay patient, especially beginner ecommerce retailers. 

How to Start a Dropshipping Side Hustle 

Market research

Market research is the key to a successful ecommerce business. It involves collecting data about the current industry market, consumer behaviour, competitors and market segments. This information helps to make data-driven decisions, such as which niche markets to target, what trending products to sell, and what marketing channels will be the most effective. Businesses can collect data by themselves, through third-party data collection services, or from other businesses who have already collected data and compiled it into a report, whitepaper or case study. Tools like Google Trends, Survey Monkey, Google Analytics, Ubersuggest and Make My Persona are beginner-friendly and suitable for conducting  market research. You can find more information about how to do market research in our blogs, ‘What is Market Research?’ and ‘What is Market Segmentation?’

Pick your platforms

Choosing the right platform to sell dropshipping products can be a challenge. Not all platforms allow dropshipping, and others may not be suitable for particular products. The top ecommerce platforms and marketplaces for dropshipping share key features such as:

• An easy-to-use interface

• App integration and plugins

• Flexible customisation

• Regular IT support

• Built-in marketing tools

• Reasonable prices

Businesses can choose to sell on ecommerce platforms such as Shopify or Magento, through marketplaces such as Dropshipzone and Amazon, or through social media platforms such as Facebook and Instagram. The ideal platform will depend on the target market, marketing budget, and the proficiency of the store creator. For example, Amazon is a well-known brand with instant recognition, but they are restrictive regarding listings and charge plenty of fees.

Find your suppliers

Dropshipping suppliers are easy to find through trade shows, supplier directories, B2B2C marketplaces, or by directly contacting them. Legitimate dropshipping suppliers will have characteristics such as:

• Large product catalogue with high-quality images.

• Fair and competitive pricing.

• A good reputation.

• Excellent customer service.

• A clear return and refund policy.

• Fast order processing and shipping times.

• Integration possibilities.

• No ongoing fees.

Legitimate dropshipping suppliers are easy to find with Dropshipzone. Our suppliers are held to high-quality standards across all product categories to ensure customer satisfaction.

Build your ecommerce store

Having a well-designed, accessible website is very important for ecommerce. 75 per cent of a website’s credibility comes from its design, and 26 per cent of customers don’t trust a business without a website. Businesses should build easy-to-use, easy-to-navigate, professional-looking websites no matter where or what they’re selling. The website will act as a home base for potential customers to find business and product information, the brand journey and values, relevant policies, frequently asked questions, contact forms and other resources.

The first step to making a successful ecommerce website is to choose the right platform. Sites like Shopify, WooCommerce, Wix, BigCommerce, Magento, Wordpress and Squarespace provide  resources such as templates, tutorials and plugins to help build ecommerce websites. These platforms also offer hosting services, making it easy to get websites live right away. 

Domain names should be short and easy to remember. An ideal length is 6-14 characters. Domain names might include acronyms, relevant keywords or a creative twist on the business name, but make sure you avoid confusing spelling and slang where possible.

Furthermore, the site layout should be easy for new customers to navigate and convey important information in an appealing way. Make sure your website is  optimised for both desktop and mobile viewing. Include the most important information on your landing page, such as a quick blurb about your business, current promotions, new products and other relevant information.

For more information on building an online dropshipping store, check out our blogs ‘Shopify vs WordPress - Which is Best for Ecommerce in 2024?’ and ‘How to Build a Successful Dropshipping Website in 5 Steps’.

Market your dropshipping store

Email Marketing

Email marketing is one of the most effective forms of marketing available today. 99 per cent of consumers check their email every day, with some checking as often as 20 times a day. Additionally, 58 per cent of consumers check their email before anything else at the start of the day, including social media (at 14 per cent) and news (at 5 per cent). The open rate of emails is 22.86 per cent, with a click-through rate of 3.71 per cent across most industries, compared to an average engagement rate of 0.58 per cent for Facebook, Instagram and Twitter. You can generate email leads in a variety of ways:

• Create a high-value offer in exchange for an email lead. This may include ebooks, reports, webinars, contests, discounts, or other solutions to customer pain points.

• Use personalisation to create tailored emails for new and existing customers.

• Provide your mailing list with valuable content, such as through a newsletter or blog.

• Make the sign-up process quick and easy.

Social Media Marketing

Over 4.74 billion people globally use social media for an average of 2 hours and 28 minutes per day. Businesses have taken notice of it and spent $65.31 billion on social media advertising in 2022 and over $268 billion in 2023. Studies have also found that 69 per cent of Meta platform users make purchases after seeing personalised content on Facebook or Instagram, meaning high-quality content shared on social media can help businesses turn leads into profits. The top social media sites for 2024 are:

1. Facebook

2. Instagram

3. TikTok

4. Pinterest

For more information about social media marketing on these platforms, visit our blog, ‘What Are the Best Social Platforms to Integrate With Your Ecommerce Store? (2024)’.

Grow your side hustle with Dropshipzone

Dropshipzone allows retailers to scale their business infinitely. With so many products available, side hustlers can sell as few or as many products as they want. Our suppliers work with both  large and small businesses with no minimum orders. Retailers have access to dedicated customer service teams, exclusive promotions, competitive pricing and plenty of resources for beginners and experienced ecommerce professionals alike. Starting a side hustle has never been easier, thanks to Dropshipzone. Register with Dropshipzone today to get your side hustle hustling.