How to do Drop Shipping in Australia properly (and why you SHOULDN’T)

This guide I’ve written will cover drop shipping in Australia with Salehoo and Shopify, including how to do it without getting banned as a drop shipper. My eCommerce insights will help you make an informed decision as to whether this is a business model worth considering.

I’m an Australian dude who loves entrepreneurship, with some wise words on drop shipping in Australia. I’ve so far built 2 successful online businesses, with numerous on the way. My primary income streams are Amazon and Ebay.

Note: I no longer do drop shipping, as the market has become too saturated.

I really do believe that everyone has the power to create a side-hustle, and in 2 to 3 years, take that side hustle into a full time hustle. The internet has really changed the game, but it’s wise to come in with realistic expectations. You won’t get rich overnight, but potentially, with some work and commitment, make a full time income eventually.

Thousands of Australians read my blog every single week and appreciate my honest insights and opinions. Let’s get into the details…

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Drop shipping in Australia: Here’s how to do it

Firstly, you’re going to want to create a website. You’ll need a few things to do this:

• A domain name that’s relevant to your products
• Hosting that’s reliable and is well priced
• A great theme for your new online store
• A payment processor so that customers can purchase

It’s much easier to accomplish all of this via Shopify. It’s effectively everything you need in 1 simple solution. Plus, if you learn Shopify for drop shipping, you can pivot into the future with having your own store with your own products.

Drop shipping Australia: A good business model?

Mostly, I recommend people NOT to do drop shipping. Instead, I recommend using Shopify to build your own brand. That is – with your own products. It’s hard to build your own social media following through products that could be out-of-stock tomorrow without you realizing.

Most people make money through the education of drop shipping, than through their own business. Drop shipping did work more effectively a few years ago when the bulk of these teachers actually had a thriving business, but there’s more competition now.

There’s some advantages that beginners find attractive:

• Lowest startup cost of any business opportunity (apart from MLM)
• Ease of getting started and making money online (though its minimal)
• Lower ongoing costs, you spend money mostly when you make money
• You won’t have to hold stock yourself, so you won’t have space limits

I get it – you want a slice of the pie. It’s just that, so many have already eaten the pie. There’s mostly crumbs left.

It’s wise to remember that Zappos (now owned by Amazon) started as a drop shipping business in the day, and over time, transitioned towards their own inventory. If this is your intention, then an excellent starting point!

Finding the best products to drop ship

Finding products to drop ship is both an art and a skill. Not only do you have to find the products, you also have to find suppliers who are willing to work with you. Double negative!

It’s actually easier to NOT pick a product based upon your own personal interests. Yes – I understand the need to be passionate, but your objective should also be profitable first and foremost. Otherwise, you effectively don’t have a business. Set your own personal passions aside, and you’ll be surprised at the type of products you’ll find.

You can actually drop ship just about anything, provided it will ship. Large things and small things, cheap stuff (95% of drop shippers) and expensive stuff. Klint Parker at Drop Ship Down Under once drop-shipped a $160,000 item, and there’s more details here.

Courses will always help you in ideas on what to drop ship, but finding those winning products is always your call. They won’t do the work for you, but will happily up-sell you on coaching on how to find suppliers and products.

Drop shipping banned in Australia: is it true?

This is a common question, and I’ll answer it directly here.

Drop shipping in Australia hasn’t been banned. However, eBay Australia has really tightened the rules due to customer confusion. This caused a lot of drop shippers to be upset, and some of them quit. The main criteria now, particularly on eBay, is that the item ‘Sent From’ address needs to be yours, and you also need to put on accurate shipping times.

Australia has numerous states. These include Queensland, New South Wales, Victoria, South Australia and Western Australia. Each state has particular rules and regulations, and we’re also governed nationally by the Australian Consumer Commission.

You will, as the displayed seller of the product, have to provide a 100% refund or replacement if the product is faulty or isn’t as described. So you’re heavily reliant on your supplier (generally in China) to follow through on the deal.

Refunds and replacements can be hard to stomach when you’re making 10% to 15% margins. That is, after paying for Shopify and PPC ads. Especially when you could make 30% on your own products that you purchase in bulk, and have total control on the supply chain when selling on Amazon, without paying those two expenses.

This fantastic article direct from a lawyer will further clear up confusion.

The best courses to learn drop shipping

Given that every man and his dog now has a side hustle, or wants one, there’s been a massive growth in drop shipping teachers online in recent years. Why? Because there’s more money in teaching drop shipping than building a drop shipping business. Unlike selling on Amazon directly, where you’re still likely to make great income regardless. Most Amazon sellers create courses as a complimentary part of their business, despite what others claim.

Yet, if you still want to learn, then here’s some of the best courses I’ve found…

• Wholesale TED (a lot of FREE YouTube content)
• Drop Shipping Down Under (More on YouTube)
• Adrian Morrison’s eCom Success Academy

The 1st course is by a Kiwi, the 2nd is by Klint and Grant Parker (Australians living in Thailand) and the 3rd is by a North American who’s been at it for years.

You’ll be fine with either teacher, just find the one which best resonates with you. I did actually rank them in preferred order.

There’s others in the market including Andy Mai, Jack Bloomfield and Matthew Lepre. There’s reviews about these guys online, including right here on my blog. It’s good to see Sarah Crisp (Wholesale TED) really showing the boys how it’s done. For example, she did $600k in affiliate commissions last year! Wow!

Websites helpful for Australian drop shippers

It’s always good to use directories to find products to drop ship. It’s true that AliExpress is hugely saturated with crap. Total crap. These are products that you DON’T want to drop ship, because everyone else is. The quality is questionable.

Here’s some options:

• SaleHoo
• Doba
• Worldwide Brands
• Dropship Direct
• Australian Dropshippers
• Drop Ship Zone

There’s plenty more, and you’ll find these easily on Google when searching for “Australian drop shipping supplier” and other associated keywords. These companies will be more receptive to working with you.

Honest truth: Why drop shipping doesn’t work

Let’s admit it – you’ve decided to research and become a drop shipper because you don’t have much money. Likely, you’ve got less than $3,000 in Australian bank account. Therefore, better strategies such as selling on Amazon FBA are out of reach for you, so you have a belief that you could get to a full time income with the drop shipping strategy, especially as there’s less Australians doing drop shipping.

The truth is: drop shipping is HARDER. In fact – harder than what ‘they’ want you to know about. At least with Sarah Crisp, she’ll tell you the truth. Others won’t, as it will reduce course enrollments.

You’ll be dealing with several challenges:

• You will need some money to start the website and hosting
• Most suppliers won’t want to hear about your endeavors
• Expect a percentage of customers to ask for refunds everyday
• The shipping times can be super slow depending on the product
• Your margins are low, around 10 to 15% which doesn’t leave much
• PayPal will monitor your account closely for defects and refunds
• You’ll be paying monthly to use Shopify and other tools

These are all minimal to moderate challenges. At least, compared to other business models. But it aint all sunshine and rainbows in the world of entrepreneurship. You will have to work and stay committed.

I estimate 1% of every person who takes a drop shipping course actually makes money, as they’re actually committed towards success. The rest simply are too lazy, or suffer from the challenges list and burnout eventually. Australians are generally like that, and yes, in the past, I’m just as guilty! Today I work endlessly on improving my mindset and income.

Now – earning a full time income from a drop shipping business is WAY better than having a job. If you can make it to a full time income that is.

The next steps in the entrepreneurial journey

I make 100% of my income on the internet. I started in 2011, so anything worth having times time, capital and commitment. You’ll still need capital to start drop shipping.

If you want a better business model, then here’s what I do…

1. Affiliate marketing through a range of content websites (not this one)
2. Several Amazon FBA businesses selling from Australia in the US market.

Both still have challenges, but both have reached a full time income. That is – today I’m in the 6 figure income range. People see this and get impressed. The truth is – it took me 8 years to get here. How long do you have? Chances are you’ll still be working in 8 years from today.

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Closing thoughts

Every business model isn’t so easy, yet it isn’t so hard. Provided you apply what you actually learn through the courses available on the market. There’s tough competition just about everywhere with drop shipping.

You can learn simply through a Udemy course, but very few people take these courses seriously. I’ve bought perhaps a dozen Udemy courses, and have only ever finished one. Consider, of all courses available online, that the Wholesale TED course is the most realistic. I’ve written a review on it here, plus Sarah gives away lots of free content on YouTube.

You won’t make a million dollars in 3 minutes. With drop shipping, you’re unlikely to make a million dollars ever. Find a better business model if you want real results. But if you want to learn eCommerce, then it’s a cheap way to get started.

Consider Amazon as a much better wealth creation vehicle, provided you’ve got $5,000 to $10,000 in starting capital. The impact you can make is far superior, with less refunds and a greater quality product that YOU own. Also, you won’t have to spend on marketing to find customers.

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