What is dropshipping?
Before you can learn how to start a dropshipping business, you’ll want to ensure that this is the right type of business model for you. In order to make this determination, it’s important to understand exactly what drop shipping is and how it works.
In short, dropshipping is a form of eCommerce order fulfillment that allows you to sell products on your website that you are not directly responsible for warehousing or shipping. Instead, you purchase products wholesale from manufacturers or dropshipping suppliers, which oversee fulfillment for you.
How does dropshipping work?
With this basic definition in mind, let’s break down how dropshipping works in a little more detail.
Overall, there are three parties involved in the dropshipping business model of eCommerce—you, the retailer, the customer, and the supplier or manufacturer.
The dropshipping process, therefore, can be summed up like this:
- A customer buys a product on your ecommerce website.
- You send the order information to your dropship supplier.
- The supplier picks, packs, and ships the product directly to the customer.
Can You Make Money Dropshipping?
Yes, you can make money through dropshipping, like many of our successful merchants continue to do. Dropshipping allows you to find products with huge profit potential and set up a business selling them. When you are motivated to sell products you are more likely to invest more time into promotion and marketing, leading to more profits from your endeavors.
Is Dropshipping Worth It?
Yes and no. Dropshipping is worth the time and money you invest into it. If you don’t invest time into your online business you will never reap the rewards. One of the reasons why people quit dropshipping is the lack of consistency and perseverance. Dropshipping takes time as you need to set up a store, import products, decide your pricing strategy, and start selling. Nothing can happen if you don’t put in the effort.
5 Steps To Start Your Own Profitable Dropshipping Business
1. Build a Dropshipping Site
You can use a set of simple rules, given below, to choose the right solution for your dropshipping e-commerce website.
- Easy in use and cheap in maintenance platform
- E-commerce solution should support drop-shipping plugins
- The platform should provide 24/7 customer support
- It should be scalable and provide you with seamless management
- The list of most popular dropshipping platforms
If you are new and don’t have extensive knowledge about the domain, hosting, CMS, plugins then My Recommendation is to try Shopify to build your first dropshipping store. As it is easy to set up and manage a Shopify store.
Many users think that Shopify is one of the best platforms for dropshipping. Currently, the solution host over 500,000 online shops, including dropshipping sites. This platform suits even beginners. So even you can create a dropshipping website without technical knowledge.
STEP 2. Choose Your Niche and Select the Right Products
How to find a niche in dropshipping
Think about what interests you: It’s easier to sell what you know. Consider your own interests when looking for a product to sell. Chances are if you like it, other people are into it too.
Identify a specific market: When you first start, you want to focus on a smaller subset of people because you can tailor your business to meet their specific needs. An example of a specific market would be people who practice tae kwon do, or pescatarians. Ideally, you’ll find a market and a product that already interests you.
Keyword research: To help you identify a niche, you should perform keyword research via Google Adwords and Trends to see if there is any search volume around the products you wish to sell. The higher the search volume, the higher the demand for that product.
See what’s selling online: Another way to find products in demand is by checking “best selling” lists on major ecommerce marketplaces like Amazon and eBay. You can also perform a simple Google search or utilize keyword tools to see how many people are searching for the product or niche you’re considering.
Social media engagement: Check to see what people in your niche are engaging with on major social media platforms, like Reddit, Facebook, and YouTube.
Competition research: Once you think you’ve found a niche market, research the competition in that space. You’ll want to consult some of the same platforms—Google, Amazon, eBay, social media, among other channels—to see how competitors in the space are selling your product. Ideally, you’ll be able to find a niche that has some competition—which indicates that there is buyer demand and profits to be made—but not too competitive, in which you won’t be able to stand out amongst the other sellers offering that product.
Evaluate profitability: Finally, once you have identified a market and a product, you’re going to want to evaluate the profitability of your concept. With dropshipping margins being so low, you want to ensure you can actually make money in your niche. The dropship supplier directory SaleHoo recommends selling a non-seasonal product that is not dominated by major brands, cheap to ship, and retails for at least $15.
Overall, when it comes to learning how to start a dropshipping business, finding a niche can be one of the most time-consuming steps. This being said, however, it’s important to take the time necessary to identify the right niche to put your business in the best place for success.
Find the right supplier.
Once you settle on a niche you want to target with a specific product, it is time to find a supplier that sells that product. To this end, if you’re wondering where to source products for dropshipping, the process shouldn’t be nearly as difficult as identifying a niche—as there are a variety of dropship suppliers out there that offer millions of products.
This being said, your dropship supplier is a key partner in your business. In order to find the right supplier, we recommend prioritizing the following criteria:
Experience: You want to make sure your supplier has a proven track record in the dropshipping business and also provides good customer service. Before reaching out, look up their Net Promoter Score and see what’s being said about them on review websites like TrustPilot and Better Business Bureau.
Fees: With margins being so low, you want a dropshipper that won’t hit you with unreasonable fees. Again, SalesHoo says you shouldn’t pay more than $5 per item for stocking, packaging, and shipping. Some dropshippers will also charge you a small monthly fee for working with them.
Fast shipping: With dropshipping, the expectation is that the product will arrive within one to two weeks (most dropshippers are located in China). Any longer and you will likely face backlash from your customers.
Product samples: A major occupational hazard with dropshipping is suppliers that sell products of low quality. Before contracting with any supplier, you should request and receive samples of the products you wish to sell.
Referrals: A good supplier will provide you with referrals to other businesses they work with upon request. If they refuse, consider it a red flag.
STEP 3: Create a Good Product page
ESSENTIAL PRODUCT PAGE MUST-HAVES
The basic information that visitors expect to see on a product page before making a purchase decision. The following items are a must for almost any detail page:
- Add to Cart button
- Product Description
- Product Details (material / dimensions / weight / care)
- Sizing Information
- Return Policy
- Shipping Options
NICE TO HAVES
The following add credibility and provide confidence to make a purchasing decision
- Ratings / Reviews
- Add to Wish list
- 360 Views
STEP 4: Market Your New Dropshipping Business
Once you’ve actually created and launched your dropshipping site, the last step will be to do everything you can to bring in customers.
Therefore, regardless of which platform you choose, you are going to need to market aggressively and optimize your site for search. This is typically done through a combination of email marketing, paid ads, and social media. Each ecommerce marketing approach has its own merits. We recommend settling on a few that work best for you.
Email marketing: Most ecommerce platforms have a plugin for an email marketing tool like MailChimp. Collect your customers’ emails and reach out to them each week highlighting new products, sales, and content on your site.
Facebook and Google ads: You can post ads for your website that will appear for terms related to your business on Facebook and Google. Both give you the ability to tap into a huge audience and target your specific niche. You can also pay extra to ensure your ads reach your target market.
Social media: Posting content related to your business on Facebook, Instagram, Twitter, and other major social media platforms is a cost-effective way to organically market your business.
Search engine optimization (SEO): SEO should be the backbone of all your marketing efforts. It is a set of strategies that improve your website’s ranking on search engines. Steps you can take to improve your ecommerce SEO include working with a website builder that prioritizes SEO (like WooCommerce), engaging in keyword research-based content marketing, and building up the number of backlinks to your website.
STEP 5: Optimize
Once you have spent time building your website, brand, and marketing you can start to analyze the results of your hard work. You may find that certain marketing activities are hugely successful while others are not so much. Or you can look at your pricing against competitors and see if you could change things up a bit to make things more competitive.
You can use tools like Google Search Console or Analytics to evaluate your online traffic to make sure that traffic is increasing, not decreasing. If you are using third-party tools for email marketing or social media reporting, set up weekly or monthly automatic reports so that you will be reminded to analyze this information regularly. Even a quick snapshot of data from a tool can be enough to decide if a campaign is working or not.
Overall the most important part of a successful online ecommerce store is to test and optimize in order to increase the revenue that you generate online. This makes sure that your website will not fall behind best practices and keeps you ahead of your competitors too.