With so many people wanting to buy products without leaving home, it’s never been easier to sell products online and make money.
Dropshipping is the most effective way to establish and grow your brand without investing in brand inventory.
How to Start a Dropshipping Business: 6 Easy Steps
With the rise of e-commerce, the number of people shopping online has risen to 2.14 billion out of the world’s 7.74 billion people, and that number continues to grow.
This makes it even more attractive for you to start a dropshipping business with the right niche, a reliable supplier, and a marketing strategy.
What is Dropshipping?
It is a business-to-customer business model in which the drop shipper does not need to keep stock, as the products are purchased from a third party and delivered by them to the customer.
With a dropshipping business model, you can sell a wide range of products through your online store without having to worry about manufacturing them yourself.
Is Starting a Dropshipping Business Worth it?
Yes, starting a dropshipping business is worth the effort. The number of people searching the term dropshipping business has increased exponentially; there may be lows, but the business is still growing.
Many small businesses do not put forth the effort, offer expensive products, and provide poor customer service, eroding trust in the business model as a whole.
The only thing eCommerce businesses should concentrate on is selecting the right niche, and the right products, satisfying customers, building trust, and selling quality products rather than compromising customers for profit.
This will help you build a successful, profitable online business as a drop shipper.
Pros and Cons of a Dropshipping Business
Some of the advantages and disadvantages of dropshipping are listed here.
- Dropshipping offers flexibility by allowing online store owners to sell products without having to stock them and worry about outages.
- You can always start your business with low capital or low upfront costs and calculate your profit margins.
- Starting a dropshipping business offers the store owner a lot of different products making it easy for anyone to start a business.
- It can be easy to build a profitable business model once you develop a good dropshipping business idea.
- Dropshipping is not as simple as it seems because there is no control over the supply chain. Supplier availability and maintaining quality can affect your business.
- Customer service issues may arise, such as a problem with the delivery or return policy. In this case, you need to work with the supplier and follow up on the order with your supplier or refer the customer to the supplier.
- Dropshipping is one of the most highly competitive businesses as it requires very little capital to get started. One thing that you should always keep in mind is several other companies as you are ready to offer the same product at a lower price.
- Dropshipping is not a get-rich-quick scheme; it takes time and careful planning to build, plan and market your business. But if you are willing to take the good with the bad and work to build your brand, you will succeed.
6 Steps to Help Your Dropshipping Business
You can follow the steps mentioned below to have a fruitful dropshipping business.
1. Pick Your Dropshipping Route
Dropshipping business can be started in two ways. One of these ways can be to contact a reliable person/supplier for getting your products to the customer, and the other way is by using a dropshipping market.
1.1 Direct Dropshipping from Suppliers
If you are dropshipping directly from suppliers, you will first need to establish a relationship with the supplier and agree on pricing and order thresholds.
Dropshipping directly with suppliers has a high-profit margin. There is also less competition because the products you sell are not available to everyone and you do not have to lower your prices.
The only downside is finding reliable suppliers and making sure they are not scammers and that you maintain a minimum number of orders with them each month. Many suppliers refuse to work with inexperienced dropshipping businesses.
1.2 Dropshipping Through the Online eCommerce Marketplace
Beginners can easily set up their online store with the help of a dropshipping marketplace. With the growing number of eCommerce platforms, it is now simple to open an account on these platforms and open your store and market at the same time.
Among the advantages of this method is it is a low-risk business model, and you can easily access a wide range of products from all over the world.
All you have to do is add any product that you think fits your niche and experiment with prices as you, please.
The only downside is that your competitors have access to the same products you do, but fine-tuning your marketing strategies can help you attract more customers and make a profit.
1.3 Choose the Right Dropshipping eCommerce Platform and Order Fulfillment Service
Finding a suitable dropshipping eCommerce marketplace that fits your goal is the first step to opening your store.
You can find the right platform by reading reviews, checking out policies, and trying out the products for yourself.
Here are some of the eCommerce marketplaces that can connect you with various suppliers for your business.
Shopify is simple to use and allows anyone to easily create their customizable online store. It is one of the most popular platforms because it is simple to use, allows users to customize their products, and requires little to no technical knowledge.
It also provides email and chat support 24/7. It is a paid eCommerce platform with prices ranging from $29 to $299 and a 14-day free trial.
WooCommerce, a user-friendly WordPress plugin, can be used to create your online store. Users can quickly install WooCommerce on WordPress and begin selling products online.
Woocommerece does not have a transaction fee for third-party payment gateways.
Magento is one of the most popular eCommerce platforms among the others, but it is not suitable for beginners because it requires programming knowledge.
It is simple to use, and anyone who wants to start a dropshipping business can set up their eCommerce platform. It has a support team that assists newcomers with their problems.
Besides, it’s completely free, so anyone with a little assistance can start their own online business.
A hosted eCommerce platform aims to provide entrepreneurs and small business owners with an easy-to-use dropshipping platform.
It has attractive themes and numerous templates, as well as a drag-and-drop interface and numerous other features to help you grow your dropshipping business.
It comes in three varieties:
Basic Business for: $17 per month
Business Unlimited:$25 per month for
Business VIP: $35 per month.
1.4 Order Fulfillment Services
Some of the older fulfillment services are listed here for you to try.
Spocket is an order fulfillment service that connects dropshipping businesses with a global network of wholesale merchants.
Sprocket can be integrated with eCommerce platforms such as Shopify, allowing you to add products to your store with a few clicks. It also offers custom invoice generation, which can be beneficial to your brand’s image.
If you enjoy branding your product and want to make it stand out, and you’re willing to invest, Spocket can be a great option for you, starting at $24.99 per month.
AliExpress is a low-cost, user-friendly marketplace with a plethora of products to choose from. However, you should expect competition, as many drop shippers get their products from AliExpress.
Ali Express is free, but if you want to unlock additional features such as automation, the number of products limit is only $19.90 per month, which is significantly less than other alternatives.
AliExpress is ideal for new store owners on a limited budget who have a knack for attracting customers.
Modalyst is an excellent resource for sellers looking to sell luxury brands such as Calvin Klein.
Modalyst can be integrated into a variety of websites such as Shopify, eBay, and Wix. It is ideal for online retailers who want to target European and American customers Because of the quick delivery time.
It is free for the first 25 products and $39 per month for the next 250.
A directory and research tool for online retailers and eCommerce stores. A Salehoo subscription allows drop shippers to add popular products to their online stores.
It provides access to the Salehoos research lab, which houses insights and details about the products.
Using these details, you can learn how many other businesses sell these products and how well they perform before adding them to your website.
It is cannot be integrated with Shopify and costs $27 per month.
2. Research Your Dropshipping Business Ideas
Thorough research is required before starting your dropshipping store. That means researching the competition, the target audience, the product, and its exclusiveness is a must thing to do.
We learn a lot by doing, so experiment with different platforms before starting your dropshipping business. Checking the product quality by placing your orders will assist you in deciding on the best provider for you.
2.1. How to Choose the Right Product
The product you choose for your dropshipping store should be diverse enough to appeal to people of all ages. Numerous websites such as Google Keywords and Buzzsumo will tell you about the number of people searching for the product you want to sell.
Once you’ve decided on a product to sell, the next step is to research the competition in the countries where you want to sell. You can do this with the help of various online tools like Google trends.
To know about search results in other locations across the world you can use SEM Rush and Ahref. Knowing the competition in advance will help you get an overview and identify opportunities for your eCommerce store.
Do thorough niche market research, you can do this by checking out social media like Facebook groups and TikTok.
For example, if your eCommerce business wants to sell cat leashes, going through Facebook buy and sell groups and researching cat owners’ pain points and what they are interested in will help you come up with your product idea and get you started.
All you have to do now is find inexpensive dropshipping suppliers who are ready to sell the product, market it on your online store, and target the right audience through ads or organically.
2.2. How to Choose the Right Dropshipping Supplier
To make your dropshipping business model work, you must select the right dropshipping supplier.
When you search for a product on an eCommerce platform, you are presented with a list of products sold by vendors. All you have to do is read the product reviews, look at the ratings, and consider the quality of the packaging.
Evaluate the important details about the suppliers, such as shipping time, shipping costs, and minimum order quantity.
3. Come Up With a Business Name
Conduct thorough research, a business name that should be easy to spell and also have a catchy colour, and the font you will be using also matters so be careful.
Makes sure to choose a name that is not specific and has a broad category as not doing so will limit your business to a specific product or city.
Customers perceive a “.com” domain to be more authoritative and reliable than other domain extensions.
4. Building Dropshipping Business Store
Dropshipping merchants can quickly and easily build a dropshipping business using eCommerce platforms like Shopify and WooCommerce. These sites reduce the time and cost of hiring website developers to solve their problems.
To build a website, you’ll need a platform like Shopify or Squarespace to manage your content, web hosting, integration with your chosen drop shippers, and a payment gateway.
Do thorough research and choose the best eCommerce platform for you and your dropshipping business.
5. Register Your Dropshipping Business
Next, you should register your business, set it up as a company, and separate it from your assets. This can be accomplished by registering as an LLC (limited liability company).
An LLC protects the business owner from personal liability by acting as a barrier between the business and the owner.
When you file your limited liability company, you must have a registered agent for the LLC. An online business needs to have a registered agent as not having one can become a hurdle in establishing your business.
For your online business, obtain a tax identification number from the IRS. A TIN is a nine-digit identification number that can be used to open a business bank account linked to your payment gateway.
Most dropshipping businesses require a sales tax permit or a reseller permit, which you can obtain from the state tax office.
Obtaining this important sales tax permit can be expensive or inexpensive depending on the state or type of business model, such as temporary or permanent. Most states also require you to pay sales tax based on the number of items sold.
Businesses should also obtain a business license. Being licensed by the agency is a way to show the customer that the product you’re selling is genuine and gain their trust.
6. Market Your Dropshipping Store
After you have decided what products you want to sell, created your store, and registered your business, the next important step is to develop marketing strategies.
A business marketing strategy starts with creating content that attracts potential customers, transmits security, and builds trust.
Most of the customer purchases and queries are sent through mobile phones so make sure to create your website mobile-friendly.
These ways will help you in creating your website mobile-friendly.
6.1. Social Media Posts and Reels
With many customers now active on social media, business owners can seize the opportunity to build brand loyalty, increase awareness and drive inbound traffic with the right social media marketing strategy.
Work on social media platforms where your target audience is present. Do not just try to sell, and share relevant and engaging content. Make sure you solve their problems and answer their questions. Post regularly about products, sales, and tips in your niche.
To build a successful business and grab your audience’s attention, use social media tools like hashtags, locations, ads, and reels.
You can not expect it to be perfect on the first try, so monitor your results and make adjustments accordingly.
6.2. Facebook Ads
Facebook advertisements are highly customizable. It is simple to use, specific and targets the right audience for your ads.
Include video ads and video marketing because videos contain more information, engage all of our senses, and persuade customers to buy the products.
These video ads should be visually appealing, have a clear call to action, and be mobile friendly, as many people search and browse on their mobile devices.
Most visitors who visit the drop shipping website do not purchase on the first visit. These ads come when they leave your store. This increases the chances of the visitor becoming your customer for the site.
Businesses should make sure to create these retargeting ads more engaging and have a clear retargeting hook to draw customers in.
6.4. Email Marketing
Website plugins for email marketing tools are typically available for eCommerce systems. An effective email marketing strategy starts with getting the customer to sign up for the newsletter.
You can then engage them in your brand and online store by sending them enticing product offers, gifts, and discounts.
6.5. Website SEO
Search engine optimization, or SEO, is a natural way to raise your website’s visibility and place your eCommerce business on the front page. Your dropshipping website must be optimized if you want to boost sales.
When your website ranks high in search engines, it receives more clicks; the more clicks you receive, the more people visit your website and the more sales you make.
6.6. Join an Online Community
Finding an existing online community of your target audience on platforms such as Facebook groups, Quora, and Reddit.
It is one of the most important things that can help you to a great extent in your dropshipping journey.
With the help of an eCommerce marketplace and its templates, anyone can start a successful dropshipping business.
It does not require a large investment, and you can start your dropshipping website with thorough research and the right marketing efforts.
So go ahead and create your online store, and remember that the best way to do anything is to take the first step and create it.
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Frequently Asked Questions
1. How profitable is dropshipping?
Drop shippers typically earn between 20% and 30% gain on every sale, reaching up to $100,000 annually. This equates to a monthly payment of between $1,000 and $5,000.
2. How much money do you need to start dropshipping?
For individuals interested in starting a new business, dropshipping is an excellent alternative because it can be started for as low as $100.
The best part is that drop shippers don’t ever need to buy or keep any inventory in order to sell a wide variety of goods.
3. How do I become a drop-shipper?
Do a market niche analysis. Then, to make wise business selections, examine your competition and target market. Choose reputable vendors that will deliver goods that accurately reflect your own brand.
All the best!