The number one goal of a lifestyle entrepreneur is to to maximize profitability while minimizing hours worked (see The Beginner’s Guide to a Lifestyle Business).
The aim, after all, if you’re a lifestyle entrepreneur, is for the business to support your lifestyle and allow you the freedom to enjoy life, whether that involves traveling or spending time with your family, watching Battlestar Galactica reruns, or whatever you want to do with your time.
Therefore you want to make money in a way that fits your life goals as much as your financial goals.
Drop-Shipping Kicks Ass
Anyone who has tried to make a living selling services such as freelance web design or writing will know that it can turn into an endless treadmill. This is because you are trading your time for money and so there is a limit to how much you can earn. Instead of getting your ass kicked by the daily grind, why not build a kick-ass business instead?
Ecommerce is a great way for the lifestyle entrepreneur to earn what’s known as ‘passive income’. Whilst it may involve quite a bit of work up-front, if done right, an online store can continue to earn money for a long time after the initial launch. Eventually only minor maintenance and marketing is necessary.
The always-on, international nature of the internet means you can literally earn money while you sleep. I admit this phrase has been overused to the point it is now a cliché, but it still feels mighty fine when it happens to you for real.
Where Will You Store Your Products?
If you are selling physical products rather than digital ones, you need to get them from somewhere. A warehouse full of products means additional costs for the location and building, not to mention labour.
And if a product suddenly stops selling you could be stuck with your money tied up in a lot of stock which no-one wants. A bit of bad luck could bankrupt your business before it even starts turning a profit.
This is why drop-shipping is the essential element of any lifestyle entrepreneur’s business plan. With drop-shipping, the the manufacturer or distributor ships the product to your customers – in your name.
We’ve interviewed a number of successful entrepreneurs who have used drop-shipping as part of their ecommerce business, for example Greg Laptevsky, the founder of Coin Supply Planet. Greg has generated several hundred of thousands of dollars in revenue this year from a business takes which only takes about 10-15 hours a week to operate.
The benefits of dropshipping include:
1. Less investment needed up front
It’s entirely possible to launch an ecommerce store very quickly without thousands of dollars of investment up front. Of course, you need to do some research about what products you want to sell, and choose a niche wisely, and ideally, the products should be in demand but not widely available.
Then you need to make an agreement either directly with the manufacturer or with a distributor willing to sell products at a good wholesale price so you can make a decent profit on them.
However the products are only shipped from the manufacturer or distributor when you inform them that you’ve made a sale (this process can be automated).
So you don’t need to have thousands of dollars tied up in inventory or pay for a warehouse or for the labor needed to ship products, handle returns or track and manage stock levels.
2. Low overhead and flexible location
Compared to a traditional brick and mortar business or even an ecommerce business that stores and ships its own products, an online store with a dropshipping system can run from anywhere with a reliable internet connection and on a much lower budget.
Because you only need a laptop and a host for your website, you have minimal startup costs and can be completely location independent. This gives you freedom to travel. For example, you could live in another country where living costs are low and increase your profit margins.
Isn’t this the entire point of a lifestyle business? Even if you don’t want to travel the world, you could be spending your afternoons in the gym or simply spending more time with your family.
Of course you need to learn how to automate most of your processes so you can get your work done with just 10-15 hours a week, and this will take some discipline to stick to – but the potential rewards are massive.
3. This frees you up to focus on optimizing and marketing your ecommerce store
As a lifestyle entrepreneur who wants to build an ecommerce business online, you’ve probably got a lot of ideas and a passion for digital marketing. This is your chance to play to your strengths, and develop a great brand and marketing strategy to drive customers to your store, whilst someone else does the heavy lifting (quite literally in this case).
You can also track the behavior of people who visit your store and optimize accordingly to maximize sales and your profits. Once you discover what works well, you can repeat it and save time and effort over the long-term.
4. You aren’t tied to a particular product
Your skills as an online entrepreneur are completely transferable so once you know what makes an online store successful, you can use that knowledge to sell any number of products.
You aren’t tied to a single supplier so you can offer several different products from your existing store. If a particular product line isn’t selling, you can go to a different manufacturer or distributor. This gives you multiple chances to succeed and you can even experiment with different products before leaving your full-time job, in order to find one which earns a significant side income.
5. You can sell big brand products and benefit from the credibility
If you’re lucky enough to get a deal with a major brand or distributor for that brand, and are willing to invest in high quality web design, you could position your online store as a big player in the niche very quickly. If you’re selling products from one or more recognizable brands, their credibility will rub off on you and you will be seen as even more trustworthy.
Convinced yet? It’s clear that drop-shipping is a great solution for those of us who want to enjoy our life as much as we want to build a business.
Drop-shipping provides flexibility, agility and potential profitability way beyond what a service-based or brick and mortar business could.
Building a sustainable lifestyle business from scratch means hard work up front of course, and it may take a while for the passive income to roll in, but by utilizing the opportunity that drop-shipping offers, you are at least giving yourself a chance of a decent lifestyle and business.
Let me know in the comments if you have any thoughts or questions about drop-shipping and building a lifestyle business.