Drop shipping in a vacuum is a pretty lucrative business.
Minimal start up capital needed - you literally don’t pay for anything until someone makes an order in which case you can pay the drop shipper with the proceeds of your sale
Minimal work needed - you just set up a website or a listing of your drop shipping crap and wait for people to buy your junk. All the actual work of storage, packaging and shipping is handled by a drop shipper.
Inifitely scalable - you don’t need to pay more money to scale up your business. Every order you sell pays for itself and you keep the difference.
The problem is that due to all of the above factors and the fact that the barriers of entry are essentially zero, competition rolls in and the only thing you can compete on is price (since you are all selling the same crap from China). This means eventually the margins are almost non-existent or you get so few sales that it doesn’t make sense to even bother.
Drop shipping in a vacuum is a pretty lucrative business.
The problem is that due to all of the above factors and the fact that the barriers of entry are essentially zero, competition rolls in and the only thing you can compete on is price (since you are all selling the same crap from China). This means eventually the margins are almost non-existent or you get so few sales that it doesn’t make sense to even bother.