For all those planning to start a dropshipping business, it is your first step to attain entrepreneurship. You are your boss, and you can set your prices and market them the way you deem fit. If you are sincere, starting a dropshipping business can help you build a brand of your own.
Dropshipping has been quite popular with the gen-Z for the last few years, primarily due to the availability of cheap internet and digitization. It is similar to an eCommerce model but has some fundamental differences.
What is Dropshipping Business?
Dropshipping is a business model where you do not hold any inventory with yourself and instead act as a link between the seller and the buyer.
As soon as you make a sale, you contact your supplier and ask him to ship the products to the customer.
You do not have to care about packing, logistics, or other aspects involved in sending the product to the end-user.
What is the difference between eCommerce and Dropshipping?
Dropshipping is a part of a vast eCommerce model. In the latter, the seller has an inventory of products and is responsible for ensuring that they reach the end customer safely.
He is the one managing the packaging, shipping, and the entire logistics process.
Dropshipping is all about accepting the order from your client and placing an equivalent requisition to your supplier.
How can I make money by Dropshipping?
Starting a dropshipping business can be a highly profitable business, provided you choose the right niche and market your offerings in the right way.
You can set up your store and earn a commission of up to 20 percent for every product sold. All it needs is dedication and a lot of time in marketing your gig.
How do I start a dropshipping business?
Once you buckle up and ready to make a place for yourself in the eCommerce scenario, follow the given steps to start a dropshipping business:
Find the right niche
Before you start your marketing, it is requisite to choose the right niche for yourself. It must be the one you are genuinely interested in and have some idea about the products that come with it.
Limit your choice to a specific niche to laser focus on your endeavors and target the right set of customers.
Here is what you must consider for selecting the right niche for yourself:
- Profitability – Whenever we are out to set up a business, the first thing to consider is profitability. Since it is a commission-based work, we suggest you go for a higher-priced product niche which will help you to earn more for every sale.
- Acceptable shipping costs – In dropshipping, you are not the one handling logistics or its charges. But if the shipping cost of your products is too high, it will deter customers from trying them. You must choose products inexpensive to ship. You can also provide a free shipping option to high-value orders and absorb the transportation charges yourself to woo more customers.
- Ensure that the products you choose have sufficient demand – Look for products that people are actively seeking on the internet. It will give you a higher chance of earning better profits.
- Look for unique offerings – Most people won’t come to buy from you if the products listed on your market are readily available near them. It would be best if you instead looked to sell those that are unique to a location and difficult to find.
Know your competition
Whenever you choose to drop ship a particular product or a group of products, you must remember that you are directly competing with eCommerce honchos like Amazon or Alibaba.
Most amateur drop shippers look for products with no competition, which means that few people are looking for it.
If you do not have enough prospects, you will have a little chance of earning a decent profit.
A beginner drop shipper must build his business model around products that have a sustainable demand.
Find a reliable supplier
Remember that you don’t own any inventory, and your market is virtual with no physical presence. You must choose a reliable supplier to ensure that the products reach the customers safely and securely.
There are chances that you will stumble upon your perfect dropshipping partner located overseas.
Look for their history and communication abilities. Response time is a crucial factor in dropshipping, and if you are unsure of their antics, it is better to move on.
Look for the supplier who believes in your idea and is willing to scale with you.
Build a virtual market
There are several portals that let you start a dropshipping business for free or with minimal charges.
These sites allow you to create your online store and place your products. You need not be an expert in tech to set up your virtual market, and it will take you some hours to do it all.
If you have a considerable budget, you can hire people to design the market for you.
They can deploy additional resources to ensure that your site stands out from the crowd and attract customers.
But it is not feasible for a beginner. If you are starting, you are better off in selecting a given template and upgrade once you have established your business.
Look for creative marketing techniques
When in the world of dropshipping, you cannot copy what your friend did when he was a beginner.
What worked for him may not work for you. A drop shipper must know where he is more likely to find his audience and accordingly build an action plan to woo them.
Set up an email sequence to rope in more customers over time and leverage your existing customer base to generate additional sales by smart marketing.
Optimize your strategies
The Internet is a continually evolving world. It means that a dropshipping business must be on its toes to be able to thrive.
Look into all the key metrics regularly to track every single customer and the reason behind the sale.
You must be proactive and act timely to curb the chances of the competition, taking away your potential customers.
Dropshipping is not one of those set-and-forget options. Here you would have to develop and optimize to withstand the competition continually.
How much money do I need to start a dropshipping business?
It won’t cost you more than $1000 to start a dropshipping business, and you can upgrade your services as you make more sales.
The initial costs involved buying a plan for setting up your virtual market and hiring experts to help you do it.
The dropshipping business model is a conservative one.
You need not hold on to inventories, nor do you need to spend on shipping your products in most cases.
Is Dropshipping an Outdated Business Model?
The eCommerce scenario has been on a constant rise over the last few years.
The pandemic has further ensured that more and more people are looking to buy products online.
2019 saw the US eCommerce sales jump 14.9 percent to $523.54 billion, which should give you an idea about the potential of dropshipping.
180 Dropshipping Websites to Help You Start a Dropshipping Business in 2020
Dropshipping is still a profitable business in 2020, and we hope that our article gave you a ray of hope to start your virtual market soon.
The profits won’t come easy, and you will have to work hard for that. If you have a proper plan for marketing your products and execute it efficiently, there is no way that anyone can stop you from making big bucks from drop shipping.