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Guide to Dropshipping for College Students

Profile picture of Dimitar Alimaskoski
Dimitar Alimaskoski
11th June, 2021
12 minutes

The world of eCommerce is an open market that welcomes everyone that has an idea, good enough to win the attention of the wider consumer public. In fact, the dropshipping model of e-commerce can provide an even more diverse business environment. This means that it can open the doors to categories of entrepreneurs that do not have the starting capital but are eager to display their know-how and earn their entrance into the market. One specific category we will cover in this article are college students.

Dropshipping for students can, nowadays, become a very lucrative business model that will drive a change in students' minds and expand the horizons of young entrepreneurs. But what actually is dropshipping and how can students benefit from it?

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Breaking down the term dropshipping

The dropshipping business model is a type of retail method where the business is not in possession of the goods it sells. Whenever a customer makes an order on their online store, the store purchases the item from a dropshipping supplier, that might be a wholesaler or a manufacturer, who then sends the product to the customer. With this model, the dropshipper does not get a physical hold of the products, but only purchases them from a third party.

In short, if you are running a dropshipping business the inventory shown on the web page is actually the inventory owned by the dropshipping supplier. Once a customer makes an order you simply outsource the order to your supplier who then sends the product to the end customer in your name. Of course, this service is performed for a certain fee on a monthly or annual basis.

Another key point is that the payment for the products is performed after a customer makes the order. In particular, this is the reason why the dropshipping model might be the perfect fit for young entrepreneurs who do have the knowledge but lack the initial capital. As a dropshipper, you can now focus on the more important aspects of enriching your business rather than the shipping process which is quite costly and complex.

Benefits of the dropshipping business model

Start with low capital

The most important thing to know if you are starting a dropshipping business as a college student is that you do not have to possess a serious starting capital. In fact, the few steps you need to make in order to establish an online store are pretty affordable and do not require a huge amount of investment. Creating a website through one of the numerous available eCommerce platforms such as Shopify, Shift4Shop, or WooCommerce, and investing in the know-how are the starting costs a dropshipper would face. Of course, some other costs for the process of opening a business are inevitable, but other than that, getting started would be quite a straightforward experience.

Storage and Shipping are Covered by a dropshipping supplier

Another reason why dropshipping is perfect for college students is storage handling and the shipping process. In other words, dropshipping gives students the opportunity to handle a business without the most difficult and costly parts: managing storage space and shipping. This responsibility lies in the hands of the third-party companies who offer their capacities and logistic networks. Certainly, this service is billable and will cost you a fee, but these expenses are explicitly minimal compared to those paid if you run all these services on your own. All this said you can focus more on the advertising part and lure potential clients.

The purchase of the item from the third party is done after you make a sell

The retail price is paid to the dropshipping supplier, wholesaler or manufacturer, only after a customer pays for something on your online store. This option is certainly most suitable for students who do not possess huge amounts of money or are able to build an inventory from scratch.

Easy access to numerous dropshipping suppliers

Nowadays, there are thousands of companies that offer dropshipping businesses to store and ship products for them. The only challenge is finding dropshipping suppliers for your online store. There are numerous segments in which your business can prosper such as Fashion and Apparel, Electronic products, Home and Garden, etc. You may want to go with the Fashion industry as the profits are pretty promising. According to Statista, the fashion segment’s revenue is set to reach US$759,466m in 2021. What is even more interesting is that 24% of the overall market revenue by the year 2023 will come from online sales. Sounds like the right time to start thinking of establishing a fashion web store. If you are interested in creating a store that will offer luxury apparel items you should check BrandsGateway. This dropshipping supplier offers branded products from world-renowned fashion companies such as Dolce & Gabbana, Jimmy Choo, Prada, Valentino, and many more that will definitely catch the eye of numerous fashionistas and influencers around the globe.

Running business remotely has never been easier

As has been noted, storage and shipping will not be a topic of concern if you choose the dropshipping business model. What is left is the assembling of the store which can be done on a computer, anywhere in the world. In fact, everything you need for starting your company is a laptop, a smartphone, and a stable connection to the internet. From here on out, you can literally run your business from the dorm room, or even while sunbathing on some sandy and exotic beach.

Flaws of dropshipping

Although dropshipping is quite a practical business model and involves many advantages that other models are lacking, it is fair to say that there are some downsides to this story.

Expect certain problems from the shipping process

Although, “passing the baton” for shipping and storage to a third-party company can be a great relief and save you a lot of money, not having full control over this process can sometimes make problems. For example, some dropshipping businesses offer different types of products and cooperate with various suppliers. These operations can easily lead to a miscommunication between all the sides in the buying process and create hustles. Of course, this scenario can be easily avoided if your business is devoted to offering products from a single segment. Consider getting bonus points if you choose only one reliable supplier that will take care of the shipping and storage part.

Well-organized customer service is a must

Another thing that the dropshipping model requires is a stable customer support service. In essence, carefully crafting customer support is a very important task because your responsibilities in this section will increase at the expense of shipping and storage. Furthermore, once the dropshipping supplier or his vendor partners ship the product, your customer will receive an item with the name of your company. Therefore, any problems that might arise from there will be directed and sent to your address. Strong customer service will definitely help in these cases.

Profit margins might be low depending on the chosen niche

The competition for entering the e-commerce market is very high, and while you can easily start the dropshipping business, your profits might be low in the beginning since high competition leads to a reduction of the profit margins. However, this can be avoided by selecting and starting a niche store that will differ from the broad competition, such as the niche of luxury fashion items.

As can be seen, opening and running a dropshipping business might be the perfect venture for young people and especially students. Despite the market criteria for starting a business, there is another thing that we need to pay attention to. Who is going to lead this business towards success? Or, more accurately, what qualities students need to possess in order to become entrepreneurs and lead successful ventures.

What is an entrepreneur?

Some might say that the word entrepreneur is strictly used for a certain group of people that follow a path filled with grant applications, sponsorships, and thorough business meetings. This is, however, a very common misconception and this term cannot be used exclusively for the above-mentioned profiles. To put it differently, entrepreneurs are people that are capable of earning money by creating something by themselves, and not under the auspices of a particular business or company. By all means, if you have ever earned money in a way that directly involves your personal skills and intellect, then you have the entrepreneurial spirit. In fact, as a student, you have the entrepreneurial spirit to create a dropshipping company, as a perfect match for your business appetites.

Now, with all this said, let’s look at some statistics in order to create a better picture.

Universities are a safe ground for students to launch a dropshipping business

Establishing a dropshipping company may even be the ideal solution if you are a student who is eager to explore e-markets. According to a Santander University report, the entrepreneurial spirit is highly present in college students and more than 450,000 are either running or are currently setting up a business while in college. To put it in perspective, that number is around 26% of all the students enrolled in the university. The most common reason behind the launch of any kind of business is the financial motivation with 60%. Right behind the financial motive with 59% is the desire for having a hobby and/or having a personal interest. Furthermore, gaining work experience and paying off the student loans are presented with 32% and 23% respectively.

Famous figures that started their companies in college

Bill Gates and Paul Allen

The story of Microsoft is the perfect example for all those students thinking about starting a business while they are in college or even at high school. Bill Gates and Paul Allen did just that. These two geniuses started their idea in high school. Naturally, they had ups and downs throughout their first years but managed to sustain the market pressure. Later, in 1981 they succeeded and with the help of IBM, licensed their product, the MS-DOS.

dropshipping for college students

Mark Zuckerberg

Another business example that had its inception in the college years is the social media giant Facebook and his owner Mark Zuckerberg. Zuckerberg began developing the platform while he was an undergraduate in Harvard, with the idea of connecting students on the campus, online. However, this simple idea grew to become the largest social media platform in today’s world with more than 2.85 billion users worldwide.

Matt Mullenweg

The idea of the most famous CMS (content management system) WordPress was actually incited in Houston University by the trio Matt Mullenweg, Mike Little, and Michel Valdrigh. In 2021, WordPress is still a leader in the web development industry as a platform that incorporates and powers about 35% of the most famous 1 million web pages in the world. The overall number of web pages that use WordPress as their CMS is estimated at around 455 million. The fact that it is an open-source platform is pretty convenient, as you can customize it to fit your needs. In fact, WordPress can come pretty handy when assembling your dropshipping website and give you the freedom needed to create a distinctively personalized webshop.

Turning your student business into a career

According to the above-mentioned Santander University research, an amount of 33% polled at the college campus, said that they are planning on turning their business ventures into a long-term commitment after their graduation. Around 52% answered that they will proceed with their business as a hobby or a second job and 9% said that they will still be running their business if they have additional support. Only 4% of the surveyed students answered that they will shut off their college-launched venture.

Young entrepreneurs can use college knowledge to succeed in their business ventures

It is very well known that knowledge acquired in university is the right fuel for your mind. In fact, this knowledge will help you start something on your own. In order to become full-fledged entrepreneurs, students must face a challenging environment in which they will experience the great struggles of the business world. Furthermore, challenges will become a vital part of the lifecycle of one’s business venture and young entrepreneurs should learn how to cope with them by taking the steering wheel. Thus, dropshipping for students could be the ideal solution for paving the road to successful business deals.

Guidance as a way of help along the way

According to Investopedia, a staggering 45% of the newly established businesses will not make it after the first five years. However, another research made by the Federation of Small Businesses reveals that around 70% of the businesses that are being guided by a mentoring figure, would be present on the market for at least 5 years. Many, now famous entrepreneurs and world-renowned business figures would not have made it if there weren’t for someone to light their way.

All things considered

Dropshipping for students can be the most suitable strategy for all the young, bright, and impendingly sharp minds out there who seek a business challenge in eCommerce. Whether in college or in high school, starting something on your own can lift your spirit and set you up for a journey filled with learning but also making money using only your skills. Given the fact that this business model can provide everything needed for a successful business prospect, it’s safe to say that dropshipping is worth it. Being aware of that, you can go ahead and set up your store and start reaping the fruits from your lucrative venture whether in profits or experience. We hope that this guide will serve you as a business lighthouse while sailing through the relentless sea of eCommerce.