Does Dropshipping Give You a Life of Luxury?

In this video, Matt reacts to this story by a creator on TikTok. It’s another story about how dropshipping has changed a person’s life and is so easy to do and you can get rich quickly. But do we believe it?

There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!

Video Transcript: 

Business Advice Video: 

I was working as a realtor, I loved it at first but I quickly realized that it was not going to be a sustainable career path for me. I was making okay money but I was working like 50 hours a week. I was exhausted, I was dealing with demanding clients, I was stressed out, I had no work-life balance and I realized that in order to make more money I would have to take on more clients which meant more time I would have to spend actively working. I knew I wanted to make a lot of money, okay? I had always envisioned that for myself but I didn’t wanna give up my life in order to do it. I wanted to make more money but I didn’t want to work long hours to get there. That’s when I started my first dropshipping business and this is where things get kind of crazy. So I started dropshipping and I was doing it while I was still working as a realtor and really I was just hoping to make enough money to cover our utility bill. Within six months of launching my dropshipping store, I made over $100,000 and I was working like 10 or 15 hours a week. My mind was blown. After that, I quit my job as a realtor to focus on dropshipping full-time. I was making multiple six figures a year, I was working less than 15 hours a week, and I was finally living a life that I was obsessed with. From here I started getting a ton of questions from family friends and even random people online asking me if I could mentor them and help them get started too.

Matt’s Review:

Okay, I’m gonna stop it right there because who can’t envision for themselves a life of luxury and unlimited financial rewards? That’s what she pictured for herself so that’s what changed, right? Everybody would like probably to make a bit more than they’re making or maybe a lot more than they’re making, but just wanting it doesn’t make you anything special. And then she discovered dropshipping and she made over $100,000. But she says made $100,000 and to me and probably people listening that sort of implies that she then had $100,000 of money that she could spend on whatever she wanted. But I suspect strongly having worked with a lot of people who do dropshipping that what she actually meant is, and if we even take her in a word, that she sold $100,000 worth of product, whatever it was. But that probably cost her at least $50,000 for the product and maybe another 25 30 $40,000 for the advertising cost to drive people to that store to get those products to sell. And out of that hundred thousand dollars that she sold how much did she actually keep? 5,000 – 10,000 maybe. Most dropshipping businesses are pretty low-margin. 

So to say that you made $100,000 makes it sound like she had $100,000 drop into her bank account she could blow on whatever she wanted, but I strongly suspect that is not at all what happened. If she sold $100,000 at all she probably kept 10% or less of that as is typical in dropshipping businesses. So it sounds good on paper. It sounds good when you present it like, “Oh it was so easy. I just started a store and all of a sudden people are flocking to the store and buying my products. I didn’t even have to pay for them and I was making a ton of money.” It’s never that easy, it’s actually really really hard. And if you don’t have a plan you don’t have a customer base and you don’t have a reason for people to come to your store instead of 17 million other places they can go, including a big one called Amazon, right? That we’ve all heard of, many of them are – many of us are members, right? They send us stuff to the door within the next, you know, few hours or next day with guaranteed refunds and returns. None of what your little dropshipping store is gonna be able to do. People are gonna go there first instead of to your store. So these kinds of “I got rich quick doing something so easy anybody could do it let me tell you how” stories just never ever really hang together. They’re never really what they’re presented as and they always at the end of them want you to buy their course. So to me, that is a big red flag about a legitimacy of this story. And the realism of the average person being able to pull off something like she’s implying you can pull off, implying that she pulled off, whether she did or not. So yeah some people can make money with dropshipping but not nearly as easily or quickly as she is implying.