Why Gurus Make Money Dropshipping and You Don't

The Hustle

So if you grew up searching for ways to make money online around the 2010s, chances are, you've bumped into dropshipping gurus selling you a course about how to make stupid amounts of money online.

They might have even showed you their Shopify accounts with tens or hundreds of thousands of dollars in sales eventually to lure you into buying the same copy-pasted course material. Or they told you that you could sign up for Shopify for just $1/month so they could pocket the affiliate commission.

You would then try the methods they taught and realize that dropshipping is far less lucrative or promising than you thought. The shipping times from dropshippers were ludicrously long compared to Amazon. You actually have to front the money to buy the goods. Good e-commerce practices are actually pretty complicated. And besides the margins being razor thin, it was actually pretty hard to get people to buy off your random Shopify store.

But since the age of shortform content, I think something changed in the air. It actually think dropshipping started to work for more people (who then in turn taught their "methods", ugh).

The Unethical Way to Make Money Dropshipping

Alright, so here's what is actually happening. Gurus can be a bit opaque about what parts of their process are actually impactful to their bottom line, so allow me to translate the common buzzwords you'll hear.

Step 1. Find a beauty product

First, when dropshipping gurus say "do product research", it really just means "find a unique beauty product". They also tend to suggest a dropshipping platform which is mostly a wrapper for the same oversea suppliers listed on Temu, Alibaba, or Aliexpress (they also get affiliate commissions for your signup).

You pick a beauty product because they solve a perceived problem, compared to... a taco holder (see how youtuber Elliot Choy lost a bunch of money doing this here). Nothing wrong with this requirement particularly, although I believe most courses abstract this away with a "product rubric" or "product research guide" and don't just tell you straight up.

Some may tell you other product ideas. I'm almost positive none have a higher chance of selling compared to beauty products. Much easier to create ads (see Step 3), impulse purchase driven by insecurities, generally cheap to ship, etc.

Step 2. Build a Shopify landing page

Then, they will tell you to build a landing page in Shopify. Which, all things considered, is the most legitimate part. There are indeed best practices for high-conversion rates that you can follow–though their advice might be a little more generic.

You can watch my friend Ryan talk about what makes a good landing page if you're curious about high-conversion landing pages. https://www.youtube.com/watch?v=YP-rdV60lWU

Step 3. Ads aka Stolen Content

Ok so here's where the magic happens. When gurus say "run ads", they don't just mean "run ads."

They mean: steal multiple pieces of high performing organic content, remix the stolen content into one video so that you avoid automated copyright strikes, use that remix for ads.

That's where Tiktok comes in, because it has never been easier to see which videos went viral and steal it for yourself. Also, because you're probably not the only one selling that product (too many dropshippers out there), there's always going to be content for you to steal. If not, pick another product.

Some may mention eventually making your own ads, but I somehow doubt that is happening. You'll see some dropshippers talk about how it's easier for them to get a store up and running (and selling), but that they end up having issues scaling the ads. That's because more money pumped into a campaign does not equal more money out.

At some point, you hit an asymptote. From there, you can either think about building a brand to build something lasting, try more stolen ads, or switch to another product. I suspect many opt for the latter. Or worse, they start teaching.

The Way to Make Money Teaching Dropshipping

Step 4. Only Show Revenue

See, the beautiful thing about Shopify is that the first number you see when you log in is revenue. I don't think I have ever heard a dropshipper talk about their cost of goods sold or operating margin. So that 7 figure Shopify store might be taking home $5k for the year for all we know.

But that doesn't matter. Because that 7 figure number is more than enough to validate yourself as a pro to the next set of 18 year olds searching "how to make money online".

Time to take a page out of your mentor's book and "build a personal brand" where you can start teaching the same methods.

From Dropshipping to Real Brand Building

Let's say you stumbled upon this post because you've been looking into dropshipping. Not all is lost. E-commerce is still a fine business to get into (although it has its downsides).

Take Native Deodorant for example. Moiz Ali started with just $1,000 and a simple observation: he couldn't understand half the ingredients in his Axe deodorant. Instead of dropshipping random products, he focused on making one thing better. His first supplier? An Etsy seller. He built the brand, the seller provided the goods.

But here's the difference: instead of stealing ads or chasing trends, he emailed every customer for feedback and actually improved the product. Two and a half years later, P&G bought Native for $100 million. That's the kind of exit you don't see dropshipping gurus talking about.

The path to building something real might be longer, but at least you won't have to spend your days dodging copyright strikes and praying your ads account doesn't get banned.

Good luck, godspeed.