Is Trading better than Dropshipping in 2024 ?

It depends on the personality you have, If you are a risk taking person and you can manage it well to make consistant returns, then trading is better for you. If you are a people person and you can manage all round business well then dropshipping may suit you well.

Lets look at these businesses from a broader perspective to get an idea which one can work best for you as a beginner.

TRADING

Are you thinking to start day trading ? wait, listen and learn before investing a single penny from your large sum of hard earned money.

Lets start from the core, what motivated you ? Famous trader stories who made millions, flashy influencers or any other source. whatever it is I will give you a reality check first. It is a profession not a quick rich scheme. Takes patience, disciplines, long hours of work to develop your succesful trading setup and mindset behind.

Some stats say 90-95% traders lose money or very little money, 5% those with confidence in market make the most money. Dont lose hope, with improvements each time you make a mistake you can reach that level. As most people want money but dont want to learn.

STEPS YOU CAN TAKE INSTANTLY

STEP 1 : Start Reading books on trading regularly

If youre working in a job, devote few hours time after work on understading markets. Buy a good book and start to understand how to read charts, Dont hurry, learn first.

Few book recommendations

Trading in the Zone by Mark Douglas : Best for risk management and discipline building

Technical analysis of Stock trends by Edwards and Magee: Basics in technical analysis and understanding trends in short term and long term

The Wyckoff Methodology in depth by Ruben Villahermosa :  For Swing trading ( 2-3 days to few months), long term understanding how large investors play

Japanese candlestick Charting by Steve Nison – Deep candlestick chart understanding

Step 2 : Setup your trading account

Open trading account with a good broker, you’ll need some necessary documents. Always start small, never put too much money at stake. Even if you have spare cash, never trade with large sum when you are a beginner, 100-120 $ will be very good to go to learn equity trading. You can go smaller in capital but there are brokerage fees with each trade

Step 3: Finding your trading setup and backtesting

Make a setup using price action, support resistance, indicators etc, whichever you think suits you best. backtest for last 100 times your trade setup gave signal, then start using your capital

Remember if you’re here for quick profits, you’ll have none. But if you come for mindset to learn then you will get good over time and start making money

PROS
  1. requires about 4-5 hours effort per day, can be started as side hustle
  2. You can work from Home, location is not an issue as long as you have internet.
  3. Profits are not limited, proper risk management can give good returns
  4. Knowledge is required, but no educational qualifications needed
CONS
  1. Investment of minimum 100-150$ required to learn in live open market.
  2. Derivatives trading can be risky, wrong trades can result in heavy losses.
  3. Stressful work as you have to track to market movements.

DROPSHIPPING

What is a successful dropshipper ? one who can SELLL !!!! Sales drives the backbone of dropshipping. Similar to the field of trading, you cant expect huge profits on starting days.
You need to take care of your customers. If you sell low quality products for high margins, you wont earn for long and you’ve to process refunds most times. Focus on quality products and make a name in market.
If you build your brand well , people will come again and again without spending much money on marketing.

STEPS YOU CAN TAKE TO START DROPSHIPPING

Step 1: Find your Niche

Choose the product you are most interested in. Suppose you’re passionate about gym, you should setup an online store on gymwear it will work best for you. You can

Step 2: Setup your online store

Various E-commerce platforms are there that can provide low cost store setup, you dont need website design knowledge, you need to customise it according to you.

Step 3: Product Listing and Profit Margins

Find high demand products on your store and contact genuine buyers that provide dropshipping facilities

Step 4: Marketing and Generating sales

Start small in advertisement campaigns, see if you are getting returns. Pay per clicks or impressions which generate best sales, go with that method.

Step 5 : customer management and feedback

As soon as you get the orders send it to your suppliers, sales figures will depend on how you treat initial customers, if you’ve provided good service to the initial users they are the most easy to convert. Remember that on time delivery and product quality will drive your business.

PROS
  1. Faster growth in than traditional shops due to internet
  2. Minimum cost of handling online store
  3. No employees required, manufacturing and delivery are outsourced, your main focus is to generate sales
  4. Repetive customer base if you sell good quality products

CONS

  1. Marketing costs can be large as you have to drive traffic from ad campaigns to generate sales
  2. Customer management takes more time such as feedback, reviews, refunds etc

Conclusion

For starting you must try out both the businesses if you are interested, with minimum cost you can open your store or start trading. Dont put too much money at first. Always reinvest from money that you earn. I would say learn from the experts, books will be your best friend in this journey. Sky is the limit when you learn any of these businesses well. Very expensive courses are generally not worth it. Start learning from simple blogs for free, See how good profit making stores are designed, dont copy get inspired. Have patience for few months, as soon as you see results you will work will more confidence, start is always the toughest, its all up to you now

If you liked my content you can also see my article on is it easy to make money in trading in 2023 ?

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Hi there, i am a content creator and a part time trader. Ive been researching on trading setups and executing them in live markets. I focus mainly on swing trading.

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