Dropshipping – the process of taking customer orders online, and then sending the orders to a manufacturer for fulfillment – can be a full-time job. Dropshippers essentially provide the retail and customer services that many product manufacturers choose not to provide. Any product that can be ordered online can be dropshipped, though many dropshippers will focus on a particular niche. Dropshippers have an advantage over other retailers in that they do not warehouse any products. They simply facilitate the purchase. In order to be successful in the business of dropshipping, you must plan, prepare, and invest in your business so that the enterprise can succeed in the long term.

Successful dropshippers should consider the political, economic, social, technological, environmental, and legal issues that stem from their industry. They should also examine the critical success factors and cost-drivers that impact the amount of revenue required to maintain the business. As the enterprise is conducted almost entirely on the internet, a solid e-commerce platform, with reliable information technology support, is essential to meet customer expectations. Dropshippers also need to contract with wholesalers or other vendors, which will require a credit account to facilitate payments. Depending on the product sold, full-time dropshippers typically will have at least one full-time, customer care assistant to help with tasks, including fulfilling orders and interacting with vendors.

The tables below depict the common issues and costs associated with providing childcare.


Political Taxes in different locations
Labor laws – ensuring that staff is eligible to work in the US. Maintaining a safe work environment and compensating legally
Economic Varies by product dropshipped
Expensive items affected by economic downturns and can be cyclical
Social Varies by product dropshipped
Technological ecommerce store plus support
advertising online
using social media
Environmental Being aware of unsafe products, especially if imported
Legal Pricing rules and contracts from each manufacturer
Liabilities for manufacturer issues
Being aware of illegal products, especially if imported
Critical Success Factors Agreements with manufacturers to become one of their dropshippers – usually involve setting up an account with a credit card
A functional webstore
Major Activities Associated Costs Cost Driver
Fulfilling orders Order tracking system Volume of orders, types and numbers of orders/producers (varies by platform and dropshipper)
Providing customer service Customer support salaries Number of customer service staff
Supervising staff Manager salaries Number of managers
Maintaining ecommerce website Tech support Number of SKUs


Projected Expenses
Employee Costs including benefits Year One Cost per month
Owner  $          3,500
Book Keeper – Outsourced  $              800
Legal – Outsourced  $              800
Tech Support – Outsourced  $              400
Customer Care Assistant (full time)  $          2,400
Wages Subtotal  $          7,900
Taxes, Fees  $          1,185
Subtotal  $          9,085
Facility Expense (deductible part of home)  $              500
Gas/Electric  $              200
Water  $              100
Internet/Telephone  $              100
Office supplies  $              100
Property Insurance  $              208
Maintenance  $              250
Computers and Hardware  $              250
Subtotal  $          1,708
Marketing Costs
Web site hosting and advertising  $              800
Web site updates  $              100
Business Cards, Pens, Swag  $                50
Subtotal  $              950
Projected Monthly Costs   $        11,743