Before You Buy a Dropshipping Store, WATCH THIS FIRST!
Updated on April 2, 2026
Transcript
Dropshipping is one of the quintessential businesses that people think about when they first think about starting an online business. And it makes a lot of sense: like, hey, you don’t need to buy all this inventory. All you need to do is focus on the marketing.
But what a lot of people don’t consider is whether you should even buy a dropshipping store. Why start a dropshipping store that has zero revenue when you can just buy something that is already working? There is a bit more nuance here when it comes to dropshipping.
So in this video, we are going to ask the question: should you even buy a dropshipping store? Is it even worth it to do? We’ll also help you avoid some major pitfalls with this business model in particular.
Now, this is a good video for you if you are building a dropshipping store and you want to be able to sell it. Because here at Empire Flippers, we have sold dozens of dropshipping stores from a little bit sub-100k all the way up to seven figures, right? So we have seen the gamut when it comes to dropshipping stores.
And over the years, we have gone a bit back and forth on whether we’ll even list them on the marketplace. Now, as of this video, we do list dropshipping stores on the marketplace—but very specific ones. And this specific trait of the type of stores we sell can also help you if you’re a seller and you want to sell the store, but also if you’re a buyer and you want to skip the whole startup struggle process and just go directly into making some money.
So let’s get into it.
First off, extremely brief: what is dropshipping? Dropshipping is just a form of e-commerce where you set up, say, a Shopify store, and you go to a catalog of vendors. You put their products on your store, and you have no inventory yourself. So every time you get a sale in your store, you reach out to the vendor: “Hey, I got a sale. Ship it to here—here’s the address.” And they handle all that good stuff for you.
So I’ve often compared dropshipping to e-commerce on training wheels. It has a lot of the same characteristics as a traditional DTC e-commerce store, but it allows you to really focus primarily on the marketing aspect, the technology, and the brand-building aspect more so than the actual product research and distribution, the logistics, and all that kind of good stuff.
With that come some cons we need to talk about.
Unlike a traditional e-commerce store, when someone buys a product from a dropship store, typically that product takes way longer to get to the end consumer. You see Amazon with Prime where it’s like almost same-day shipping at this point. That does not exist. And even in more traditional DTC stores where it takes like two to seven days to ship a product out to the customer, with dropshipping stores it could take over 15 days sometimes.
This wasn’t a big deal years ago when e-commerce was still pretty nascent and new to the internet world. But nowadays, this is way below people’s expectations—or I should say way above, but in a negative way. So this is something that dropshipping stores often have to face.
Also, unlike DTC e-commerce stores, because you are not buying the inventory in bulk—and that vendor also needs to make money—they’re going to be marking it up from whatever it costs to produce this item. You will just have lower margins overall, lower profitability, all that kind of good stuff.
The other major con here—and this is a big reason why a lot of people don’t buy dropshipping stores, by the way—is the lack of a moat.
By “lack of a moat,” I mean when you are selling a business, you want to demonstrate to that buyer why this is a good purchase. And one of the ways you do that is by showing how competitors can’t compete with you, or not very easily, right? This is your moat. You’re hard to replicate. You’ve built something that is not easy for someone to just compete with you on.
Now with dropshipping, it can be very easy to just set up a store on Shopify, get the exact same vendors as you, go to your Facebook page—or wherever you’re advertising on Meta—look at their ad library, and I can see all your creative, I can see all your landing pages, and I can set up the exact same clone of a store similar to yours in a day or two, right?
So this is one of the big hallmarks of why dropshipping stores can be really, really great when you are starting out to learn how e-commerce really works, but can be really, really terrible when you reach the endpoint where you want to get that life-changing exit.
And because you don’t have the actual product yourself, you’re basically a middleman in a lot of ways with this product. That obviously leads to lower multiples.
Now, all that sounds pretty bad. So why would anyone buy a dropshipping store? Let me tell you what can make a dropshipping store sellable.
First off, just because you’re selling someone else’s product doesn’t mean that you have to sell someone else’s product that’s trying to get everyone underneath the sun to sell it. What you want to do is have an exclusive contract with your vendors, where maybe you’re the only one who’s allowed to sell it, or maybe there’s only a handful of people allowed to sell it.
This helps you build your moat because not just anyone can sign up to sell this product. It has to be a very specific contract that they have with that vendor. So this is a very good sign. It helps keep the competition down, and it helps you build that goodwill.
Another thing that makes dropshipping very interesting is if you go the high-ticket route. See, a lot of people with dropshipping might do like a commodity of some sort, or a very low-priced item, which is going to eat into their margins even further.
But if you go the opposite direction, where you’re doing high-ticket—say like fridges and freezers or whatever—now, this puts you in a bit of a different category. One, the profit margins are way better. The competition tends to be less fierce because you’re going to more obscure niches. And people are more willing to wait to receive their product—two, three weeks—for a bigger purchase like this too. So they don’t have the exact same expectations when it comes to shipping.
The nice thing again about this is you have an exclusive contract with it. And usually with high-ticket dropship items, it tends to be easier to get some exclusivity when it comes to selling that dropshipped item.
Now, the other thing that makes a dropshipping store sellable is what sets it apart with its goodwill and brand. Like I said, the moat is very thin with dropshipping stores. So you really need to rely on building a valuable brand and, ideally, a valuable community around the subject matter of whatever products you’re selling.
Now, the easiest way to do this is something I harp on all the time on this channel, which is building an email list. Building a list—especially of customers who have bought from you—who are actively engaged, and sending them emails once a week, not just like “buy my stuff,” but also valuable stuff that they enjoy reading. This is a good sign that you are building a real brand.
And even if you don’t have an exclusive contract with a vendor, let’s say you have an email list of 30,000 people. Well, I can’t just go and create a Shopify dropship store selling the same product as you and have 30,000 people on my email list in two days. I guess maybe if I am a master of media and just go ham on spending a crazy amount of money, I could, but that is very unlikely for someone to do.
So by having that email list, you have some customer data, which is fantastic. This really helps set you apart. Another way it can be, you know, social communities, engagement across your social pages, reviews on your store—all that kind of good stuff. It all shows that you have the goodwill that can make this dropship store valuable.
So those are some aspects of what makes a dropship store actually sellable.
Now, from the buy perspective, what can you do to buy this dropshipping store and make it way more valuable? This is where the real opportunity is for buyers, in my mind—where you can, say, buy a $200,000 dropship store and then a few years later come and sell it with me again for, say, one and a half million dollars, right?
What I always recommend people do—and this isn’t just for e-commerce, but really for almost every business, especially online businesses—is you need to have full control of the business funnel. Now when I say business funnel, I’m not just talking about the marketing funnel, though that is an aspect of it. I mean control end to end.
In terms of dropshipping, what are some things you don’t control right out of the gate? Well, you don’t own the product, right? You need to go and create your own product.
So if you buy a dropshipping store—say, cabinets, something like that—you can go and innovate and make your own cabinets. Now you have an advantage over, say, someone who is starting a DTC e-commerce store from scratch because you already have data. You have ad campaigns that are working. You have SEO that’s working. You already know what people are buying from your store.
And because of that, you can use that as a little bit of R&D to go and invent a better version of that product that is your own product. So this is very, very valuable.
I often recommend people, if you’re testing out different things with your e-commerce store, to use dropshipping as a way to see if your audience—or if you—can even sell a product similar to what you want to make, right? So this is a good way for you to really own full control of the full business funnel, turning your dropshipping store into a true DTC e-commerce store.
Now, you’ll probably always have a bit of a dropshipping hybrid going on with your checkouts and upsells, order bumps, and all that kind of good stuff. But just by doing this—where you own a product—you buy the dropshipping store and then you go and source your product based on the data of whatever dropship product is selling the best—can dramatically increase the value of this dropshipping store that you bought.
Because now it’s not a dropshipping store, right? It’s an e-commerce store. And true e-commerce stores almost always will get better valuations than a dropshipping store.
So that’s one of the first big things. A lot of people sell these dropshipping stores because they don’t want to deal with those kind of problems. So the opportunity for you is to go deal with those problems, and use all the data that they’ve got to make a very good, educated guess on what kind of products you should source for yourself.
That’s one of the big, big opportunities here. If you bought a dropshipping store that has everything that makes one sellable, like I just said, and you source your own products, you are now a different business model completely.
So you might have got into this business buying it at, say, like 2x SDE, and now you can go sell it for 3.5x SDE just 12 months later—hopefully with even bigger profits coming in from the growth that you do now.
Of course, this means you need to go and investigate: how do I source these products? You need to learn how do I handle logistics—like the freight, all that kind of stuff. Which warehouse am I sending it to? How do I send out these products? These are some of the major problems—the challenges—you will need to solve, in my view, if you want your dropshipping store to really grow exponentially.
Now there are other opportunities here. Just like with any business, you want to look at the classics, such as the marketing. Is it optimized? Usually it’s not. Usually there’s only one marketing channel being used, so that’s another opportunity for you as a buyer too.
But if you want my truest advice: if you are looking at buying a dropshipping store, my advice is to always veer into becoming a DTC e-commerce store. That is the number one way you can really move the value needle up.
So should you buy a dropshipping store? Yeah, I think they can be great buys. You gotta be careful. Is the moat so thin I can have a competitor tomorrow, right? Or are there some safeguards here for me to kind of ruminate and learn this business without competitors popping up left, right, and center?
So that’s one of the first things you want to look at as a buyer. But you also want to start looking at: how can I become a product owner? Because remember, just like with Google AdSense or anything else like this, if you’re the middleman, someone is making much more money than you on the back end.
So how do you become the back-end person?
I always say this to my friends with Google AdSense sites who absolutely love that business model: like, hey, that’s great. But just remember, whoever is on the other end of that ad that gets clicked, they’re making a lot more money than you—and honestly, probably way less stressed—because they have more margins to do more marketing.
And similarly, with your dropshipping store, once you get your actual product you own on that store, your profit margins will also widen considerably. And that widened profit margin allows you to do more aggressive marketing, which allows for a lot more aggressive growth.
And this could be a slow rollout for you where you phase in maybe just one product you own, and you’re still using the dropship catalog of your different vendors for the order bumps, upsells, cross-sells, and all that kind of good stuff.
But you slow-roll it, where eventually all those products, for the most part, are replaced by products you own. And if you buy a dropshipping store from us and you do something like that, and you come back to us, you will probably sell your business for a whole lot more.
So if that’s your growth plan going into it, then yeah, I think buying a dropshipping store is great.
If your growth plan is, “Hey, I just wanted to have passive income,” well, bad news: there is no such thing as passive income. Even investing into a 401k or any index funds, you’re still logging in and checking it, right? Nothing is truly passive.
I think buying a dropshipping store just for passive income doesn’t make a whole lot of sense because it’s an industry that is constantly changing so dramatically.
If you are good at marketing and you have no interest in the DTC stuff, then there’s probably a lot of opportunity for you to still buy a dropshipping store and optimize those marketing channels and do more marketing—because usually there’s only going to be one marketing channel, so there are still opportunities there.
But if you want the most explosive growth in terms of the valuation of the store you bought, go source your own products, give it 12–24 months. Once you source and launch that product to your audience, come back to me. Grandpa Empire will help you sell what you acquired.
So there’s my general thoughts on dropshipping. Hope you guys enjoyed the video. Shorter one today, but I’ll see you in the next one.
