What is Dropshipping?
According to eCommerce expert William Rivera “Dropshipping allows a store owner to sell directly to consumers without stocking any products. When a client purchases a product, it will be shipped directly to them by a third-party supplier”
Tips to Start a Dropshipping Business
1- Choosing a Dropshipping Business Idea
You should take some time to find the best dropshipping business ideas. Most people tell you to pick a niche you’re passionate about. But that’s only a half truth. It’s about a combination of profit and passion, skewed towards profit. The reality is the best dropshipping business ideas are usually the profitable ones. It’s a lot easier to be passionate when you’re actually making money.
2- Perform competition research.
Remember, you will be competing with other drop shipping operations as well as retail giants such as Walmart and Amazon. This is where a lot of potential drop shippers go wrong because they look for a product that has little to no competition. That’s a sign there isn’t demand for that particular product.
There are many reasons why a product might not have a lot of competition, including high shipping costs, supplier and manufacturing issues, or poor profit margins. Look for products that have competition, as it’s a sign that there is a high demand and the business model is sustainable.
3- Secure a supplier
For many aspiring eCommerce entrepreneurs, finding a reliable supplier is the hardest part of starting a dropshipping business.
You rely on suppliers to keep your product in stock, to uphold product quality, and to ensure orders are shipped to your customers in a timely manner. As a dropshipper, your supplier is your most important business partner.
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.
- Fees: With margins being so low, you want a dropshipper that won’t hit you with unreasonable fees.
- Fast shipping: With dropshipping, the expectation is that the product will arrive within one to two weeks.
- Product samples: 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.
4- Build your e-commerce store
The fastest way to launch a website that supports a drop shipping business model is to use a simple e-commerce platform such as Shopify. You don’t need a tech background to get up and running, and it has plenty of apps to help increase sales.
Even if you have a sizable budget that would allow you to hire a web design and development company to create a custom solution, it’s a much wiser move to use one of the plug-and-play options, especially in the beginning. Once you are established and the revenue is coming in, then you can explore additional website customization.
5- Get a robust marketing strategy
Now that you know how to start a dropshipping business, it’s time to talk about marketing your new store. To stand out in your market, you may want to put extra effort into your marketing and advertising efforts when building your dropshipping business plan. We recommend settling on a few that work best for you.
- Email marketing: Most e-commerce 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.
Whether you’re a new entrepreneur or an ecommerce vet, a dropshipping business is a great low-risk, low-cost way to start selling online. With the rise in third-party apps and marketing automation tools, it’s no longer a struggle to run your business online.
Good luck building your e-commerce business!