Dropshipping is an order fulfillment method eliminating the need for a company to hold inventory on hand. Instead, as a dropshipper, you sell the item and then send the sales order to a third-party vendor, who subsequently delivers the purchase to the buyer.
The dropshipping concept, contrary to popular assumptions, isn't a get-rich-quick scheme.
At first glance, it appears to be easy money. You sell other people’s stuff and keep a share; however, when all the difficulties, disadvantages, and daily management are taken into account, it is far from simple and can be a difficult job.
That’s why many people are looking for dropshipping alternatives.
In this article, we’ll be going through the 9 business models with the most earning potential that you could consider as dropshipping alternatives. Let’s dive in!
Why should you need an alternative to dropshipping?
Dropshipping is an E-commerce fulfillment business model where you collaborate with a supplier to display and sell its products in your online store. In other words, you sell their products without warehousing inventory, and in most cases, these products are under the merchant’s brand.
Then, the supplier will ship the item(s) to the customer directly. Your hands never come into contact with the product.
Dropshipping is ideal for solopreneurs, online entrepreneurs, and nimble startups because it is not as costly as the traditional retail model.
Isn’t this online business model too wonderful to be true? Well, not really!
In addition to noticeable benefits, dropshipping comes with the following downsides:
- Lack of control over product quality and inventory
- Challenging customer service
- Sometimes you cannot combine products for an order, especially if you’re using multiple suppliers
- Inventory issues happen sometimes, especially when you're relying on your supplier to let you know when items go out of stock. Unless they let you know in time, this can lead to orders being placed that can’t be fulfilled.
Although dropshipping is one of the most popular online business models, it is not the only one. And if dropshipping isn’t something you would like to do, you can try the following alternatives to make money online.
9 best alternatives to dropshipping you should try now
1. Drop servicing
As a recently trending business model, drop servicing involves selling a service carried out by someone else.
In short, you sell a service that you outsource to an agency or a freelancer rather than complete yourself. You’re in charge of the sale, and your hired freelancers/agencies are in charge of delivering a quality service to your client.
You might think that it sounds too much like dropshipping.
Well, you are not wrong.
Actually, drop servicing is basically the same as dropshipping with one critical difference: rather than products, you sell services.
The way to make a profit is similar: you buy a service for less and sell it for more. In both business models, you play the role of a middleman at the sale’s forefront, while the actual execution is done behind the scenes.
Let’s look at the below example to better understand how drop servicing works!
You’re designing logos for E-commerce stores. A store owner may approach you with the request to design a brand logo for $50. You accept the request, but instead of designing it yourself, you head to Upwork or Fiverr and hire someone to do it for $30. Once the freelancer completes the task, you can deliver the logo to your initial client and keep the $20 difference as a profit!
Besides creating brand logos, drop servicing can be done with social media management, video production, content creation, virtual agent services, and more.
Please note that drop servicing not only works with online services but also in real-life situations with tangible results. For instance, you bring your coat to the dry cleaner for a deep clean. Rather than fulfill the service themselves, they send it to their partner company. You still pick it up from the same store. This is drop servicing, too.
Drop servicing is becoming more and more desirable by entrepreneurs for these reasons:
- It’s less risky if you can hire someone with equivalent qualifications & experience.
- It requires low overhead costs, but you should pay attention to your website maintenance upkeep and connection costs.
- You are solving an issue for business owners (people do not buy services, they buy solutions)
- There are no shipping costs involved
- There are no returns
- Order fulfillment and delivery are way faster
Essential steps to begin drop servicing include:
- Select the service you want to drop service
- Set up a website, adding your services there
- Advertise your website
- Find someone to complete the task for a lower price
- Provide the service to your client and make a profit.
You need to spend some time working on your website. It needs to stand out and leave a convincing impression on your prospective clients.
2. Print on Demand (POD)
Print on demand (POD) is a fulfillment model that allows you (the seller) to design graphics for products. Once you receive an order, a manufacturer will “print” the designed graphics on the product and ship it to your customer.
In fact, print on demand can be described as a type of dropshipping. This model provides a way to put your logo and custom design on accessories, apparel, and other products when each customer places an order. Honestly, it’s not exactly an alternative dropshipping, but we believe it is a potential business model that you can try out.
However, print on demand and dropshipping differ in that with POD, items are only printed up and shipped once each individual order comes in. Meanwhile, dropshipping suppliers have products stocked and ready to go as soon as they’re ordered.
There are many benefits of POD businesses, such as:
- You don’t have to store inventory for the printing
- You don’t need to own printing equipment
- There are various digital printing and offset printing options
- You don’t need to worry about packing and shipping
- The investment risk is low with this type of printing model
If you are ready to start your own print on demand business, here are some quick tips to keep in mind along the way:
- Research to choose the best product niche. Figure out which product niches have the best selling capabilities and allow you to earn the most money. You can find out a lot by using search engines and social media.
- Choose products to which you will be adding your designs. Again, do the research and determine products that will sell. From T-shirts to phone cases, your print on demand options are practically endless.
- Build an E-commerce website that’s easy to navigate. Many platforms, such as Shopify or Wix, offer templates and graphics, so you don’t need to hire a graphic designer.
- Choose a POD service that offers integrations for your store. When your POD company integrates with your online store, the sale and fulfillment processes will be executed in the right way. Don’t forget to ask your POD supplier about fulfillment time & process, shipping costs, demand services, and more.
3. Private labeling
Private label items are produced by one company but packaged and sold under another company’s own brand name. Private labeling allows you, a retailer, to use contract manufacturers to produce items as per your specific requirements (materials, design, quality, etc.) without investing much capital to start your own line of products.
For example, if you have been to Costco, you may know the Kirkland brand, which includes items ranging from food to clothes. Kirkland Signature generates about 25% of Costco sales and is known as a private-label brand.
The Private Label Manufacturers Association reports that private label market share accounts for nearly ¼ of unit sales in the US. And this rate is expanding faster than national brands.
Why are a lot of retailers eyeballing the opportunity to use private labeling as part of their merchandise lines? Here are the main reasons:
- Higher control of production. Depending on the contract with your manufacturer, you can have more control over product quality, materials, ingredients, and design.
- Control over branding. As private label products will bear your own brand, you’ll have the final say in how, when, and where they are marketed.
- Control over pricing. As a result of your own influence over product manufacturing, you’ll get to determine product cost and set profitable margins.
- Higher customer loyalty. Successful private label products can be a customer loyalty booster while helping raise brand awareness for the retailer.
- Staying nimble. With low entry barriers along with the ability to quickly make decisions, smaller retailers can use private labeling to respond to market trends and demands.
To succeed in a private label business, you’ll need a solid manufacturer. They must produce high-quality products at an affordable cost. When you look for private label manufacturers to partner with, there’s a lot to think about.
- You should search for a manufacturer that specializes in your product category
- Understand exactly what products you want
- Order samples from your manufacturer
- Consider domestic vs. overseas manufacturers
Related topic: Private Label Dropshipping Guide: Is It A Good Idea in 2022?
4. Affiliate marketing
Have you ever accessed a link for a product/service from a blog, social network, or someone’s website?
Well, it’s likely an affiliate link!
Affiliate marketing is an online business model that generates revenue by using affiliate links. They are your own custom links that link to someone else’s product/service. When a visitor clicks on your link and buys that product/service, you receive a part of that revenue.
Studies show that affiliate marketing accounts for 7.5% of the total digital spend for retailers. Besides, up to 81% of brands use affiliate marketing programs!
If you would like to get started with affiliate marketing, there are some channels you can use to promote your affiliate links. For instance, you could start a blog around a niche you’re interested in, like pets. Then, you can write an article like “10 Best Chew Toys for Dogs That’ll Save Your Shoes” and add affiliate links to Amazon product pages for each one of them.
Affiliate marketing is usually free to join, so you don’t need to worry about high startup costs. Done well, it can go from side hustle to a profitable online business by netting you a healthy income. Besides, affiliate marketing also comes with the following advantages:
- It’s easy to execute. You only handle marketing and selling the product, and don’t have to develop, fulfill, or support the order.
- The risk is low. It doesn’t require lots of upfront investment.
- It’s easy to scale. It’s easy to introduce and build campaigns for new products/services, while your existing work continues to earn revenue in the background.
Below is how to start affiliate marketing in 4 steps:
- Pick your platform. Common platforms that affiliate marketers use are blogging, Facebook, Instagram, TikTok, Pinterest, and Pay per click (PPC).
- Decide your niche and audience. Remember that you are not paid to post. If you know what your audiences like, you can refer the best products/services to them and earn more affiliate income.
- Find your products. You can directly reach out to the owner of a great product/service you come across, and ask if they offer an affiliate marketing program. Or, visit some affiliate marketplaces (Affiliate Future, CJ Affiliate, AvantLink, etc.) to find products.
- Choose your first affiliate program. Make sure the product/service you are promoting is a fit for the platform you are promoting it on. For instance, image-heavy platforms like Instagram are great for home décor and clothing. Meanwhile, if you are promoting more in-depth purchases (e.g., software), your conversion rates may be higher on longer-form platforms, like Youtube or a blog.
Blogging is the act of starting a blog that publishes articles based on a specific topic of interest. The target of a blog is to help readers with whatever they’re looking for.
If you think you’d enjoy writing about a topic that interests you and makes people happy by helping them, then blogging could be something for you!
You might ask, “But all blog posts are free to read, so how can I make money with them?”
Well, let us tell you.
Blogs mainly make money by using affiliate marketing and displaying ads. Therefore, each time you see an ad on a blog or use an affiliate link within a blog post, the blog owner may get some money for it!
Blogging comes with many benefits, including:
- It’s fun to start a blog if you enjoy researching and writing about your topic of interest
- It requires little upfront cash
- You can establish yourself as a thought leader in your niche
So, how to start a blog effectively? These 6 steps can help you a lot!
- Pick a blog name. Select a descriptive name for your blog.
- Get your blog online. Register your blog & get hosting.
- Customize your blog. Pick a blog design template and tweak it.
- Write and publish your first post. Share your own thoughts with the world. This is the fun part!
- Promote your blog. Attract more people to your blog with the proper marketing
- Make money blogging. Choose from several options (i.e., sell advertising space, affiliate products, digital downloads, memberships, etc.) to monetize your blog.
6. Online teaching
If you think you can teach people something they desire to learn more about, then online teaching can be a great dropshipping alternative for you. The E-learning industry can help you earn income by monetizing your expertise and skills.
Building, launching, and marketing online courses take a considerable amount of upfront effort. However, its earning potential is through the roof.
It will not always be easy. You will have to work hard and push through mistakes and failures along the way. If you work diligently, you’ll be able to sell your online courses and make money for many months and years to come.
By teaching online courses, you can:
- Enhance your online presence/brand
- Build loyalty among your existing audiences
- Train your customers to use your products
Before creating an online course, you should consider these things:
- Come up with a course subject. Start by jotting down a list of what you have experience in and are passionate enough to educate others about. Think of your language, something from your educational background, work-related, or your favorite hobby.
- Price your online course. Finding the sweet spot where your course price can maximize profits is not easy. To do this, you’ll need to balance your online course’s value based on quality, expectations, competition, and revenue goals.
- Market and sell your online course. The profitability of your online course rests upon your marketing & sales efforts. If you want sales coming your way, you’ll need to go the extra mile and promote your course.
7. Online freelancing
If you’re good at a particular skill and are looking for a dropshipping alternative in which you’re directly rewarded for your efforts, then you should consider online freelancing.
With online freelancing, you perform services for others who don’t have the time or skills to carry them out themselves. Online freelancers can work from home and earn some extra income by taking on jobs with an Internet connection required only.
As an online freelancer, you can advertise your skills and expertise on Upwork or Fiverr, or use a website like Remote.co to search for jobs posted by others.
Online freelancing can benefit you in these ways:
- As an online freelancer, you can control your own schedule and choose who you work with.
- As opposed to starting your own business, online freelancing lets you get rewarded for your work directly and without risks.
- Online freelancing opens up the ability to work on a variety of projects and topics
These ideas below will help you build your career and carve out a niche where you can thrive.
- Define your expertise and what you want to offer
- Set your prices competitively and adjust as needed
- Build your digital presence on multiple platforms (e.g., Upwork, LinkedIn, etc.)
- Use online platforms to help you find clients
- Use contracts to clarify expectations
- Update your clients regularly on your progress
8. Consulting and coaching
To be honest, consulting and coaching are hard work, and they require a true desire to motivate others, help others achieve their fullest potential, as well as mentor people towards a specific goal.
One vital factor in considering consulting & coaching as a life-long profession is generating revenue sustainably. Although it may take time to break even in this profession, once you’ve reached that goal, the job becomes all the more fulfilling.
By consulting and coaching, you can:
- Help people develop and achieve their goals
- Strengthen your personal and professional relationships
- Expand your professional networks and communities
- Flexibly live and work where you want
We want to show you some tried-and-tested ways to make money while pursuing your passion for helping others succeed.
- Create a niche for yourself. Start with your passions as well as what helps you become energized while mentoring others.
- Create your digital footprint. That increases the chance of people knowing about your good work and recommending you to others in their circle.
- Focus on network marketing. It is the best time to make use of networks you’ve built over the years. While you’re reaching out to your network with appropriate resources, it’s also a good idea to offer a sneak peek of your services through short sessions.
- Offer complementary services. It’s a great idea to create video blogs or e-books that can be used as complementary to your service, and that can generate revenues.
- Build long-lasting relationships. Enter the consulting & coaching business with an open mind and build relationships over the years.
9. Writing E-books
We all know that a free E-book is one of the best lead magnet strategies for businesses. But do you know that there is a whole other E-book world where you can actually make money?
People believe that E-books are good for passive income, and here are some reasons why they think so.
- E-books are relatively easy digital products to make
- They establish authority
- They build trust
- They generate new business leads
- They increase traffic to your website
- They help with link building
So, how to write an E-book that helps you make money? You should follow these tips:
- Choose a specific topic that matches your audience’s needs
- Outline each chapter of the E-book
- Break down each chapter
- Design your E-book
- Use the right colors
- Incorporate visuals
- Place appropriate CTAs (calls to action) within your E-book
- Convert your E-book into a PDF
- Create a dedicated landing page for your E-book
Which one would you like to try?
Although dropshipping is so great that many people are making 6 and even 7 figures a year with it, it requires a lot of effort to succeed.
Therefore, if you are not sure whether to dropship or not, you should probably look for some alternatives that allow you to make a living from the comfort of your home.
And that’s the primary purpose of this article: to help you open new doors of opportunities and show you some dropshipping alternatives that can work.
We hope you enjoy the list of 9 dropshipping alternatives. And good luck with your new online venture! 😊