Dropshipping is an attractive business model that has gained popularity amongst many entrepreneurs. Grandview research shows that the drop shipping market size will reach $557.9 billion by 2025.
Today, anyone can start a dropshipping company. Most e-commerce platforms are affordable. With as little as $20, you can have your company running. Keep reading if you want to learn how to start a drop shipping business.
What Is Drop Shipping?
Dropshipping is a business model where the seller operates without inventory. The seller only asks third-party suppliers to ship products to the customer after receiving an order.
How to Start a Drop Shipping Business: 5 Easy Steps
How Does Drop Shipping Work?
A customer makes an order in your store at the retail price. You then order your supplier to deliver the product directly to the customer. In other words, you’re a middleman who earns from a margin between the wholesale price and the retail price.
Your major role is to create a drop shipping website, install products and promote to make sales. But it will take time and many other steps to make your company successful. Keep reading to learn why, plus how to start a dropshipping business.
How to Start a Drop Shipping Business
Dropshipping is like any other business. You will need a product, marketing plan, suppliers and growth tactics before starting.
Having a long-term perspective will also see you setting realistic goals and overcome many roadblocks. Use the next five steps to create a successful dropshipping company.
1. Know What to Sell
Learning how to start a dropshipping business begins by picking the right niche. There are millions of products you can sell. But if you want success, you need to narrow things down to what interests you.
Without interest or passion in a niche, it cannot be easy to stay consistent or focusing on your business. A niche allows you to target your marketing efforts and boost your chances of selling.
Choosing a niche means picking a subtopic or a product within your large area of interest. Make sure your niche product is easy to sell and profitable. Products that are readily available in your local stores won’t attract buyers.
Take into account fees, shipping costs and taxes when calculating potential margins. Go for products that can guarantee 40% to 100% margins after deducting the mentioned costs.
Test the viability of your drop shipping ideas using tools like Google Trends or Keywords Everywhere. Use trends to establish the popularity of your product. Check sales volumes to establish if your product is marketable or salable.
2. Perform Market Research
After competitor research, you’ll know what it will take to building your e-commerce. Your competitors hold some of the answers to how much effort you will need to push your business.
Google search your product to see who are your top ten competitors. Scrutinize their promotional strategies by analyzing their ads, blogs, keywords or product descriptions.
Perform competitor analysis to learn about their sources of traffic or best-performing content. With this information, you’ll see what content type to create and where to target.
Other sources of competitor information include social media pages and email subscriptions. You can figure out your competitor’s strategies by visiting their pages or reading their ads. Email series can reveal a lot about a competitor’s tone, consistency, products and content.
3. Choose Your Drop Shipping Supplier
One of the most important yet difficult parts of dropshipping is finding a reliable and credible supplier. A drop shipper determines the quality and speed of order fulfillment. The wrong choice can result in many returns, complaints or your business not surviving.
Research and collect information about both overseas and local drop shippers. Dig deep into their customer service, source of raw materials, delivery times and capacity.
Ask questions that will help you see if they can meet your needs. Suppliers on platforms like Alibaba will have reviews that can help you tell their reputation. Also, order samples from your competitor as well as their competition.
The big problem when choosing drop shippers is that the options are too many. Sometimes, it can be hard to find a product that will suit your customers’ needs.
Thanks to inventory source, it has become easier to stock stores with the right products. This tool will help find a huge variety of niche products or drop shippers after one or two clicks.
4. Create a Dropshipping Website
A dropshipping store is the heart of your e-commerce business. It’s where you will store products, direct traffic and build email lists. It has to stand out and perform optimally for your success.
With many e-commerce platforms and easy-to-use website builders, you don’t need to know how to create a dropshipping website from scratch. Choose what suits your business needs and get started.
How to Create a Drop Shipping Store
The easiest and quickest way to build an e-commerce store is to use Shopify, Salehoo or Ecwid. Pick one of the platforms, choose a domain name and start installing the various apps. That’s it─ your store is ready.
Creating a store from scratch is a bit complex. You have to install WordPress and a theme like WooCommerce before launching. You have to hire a WordPress or web developer if you’re not familiar with the process.
5. Create a Marketing Plan
You need to create a marketing plan before launching your company. This is a roadmap with all the guidelines and strategies that you will use to attract customers.
The strategies you will pick will depend on your budget and how fast you want results. Find a mix of cost-friendly but effective marketing strategies. Perform audience research to establish what platforms are popular with your customers.
Whichever platform you’re using, be creative, interesting and consistent. Engage your fans, and run ads to reach broader audiences.
Also, don’t ignore SEO, blogging, or email marketing. SEO or blogging might take time. But these tactics can attract free traffic and save your marketing budget.
Ready to Create Your Drop Shipping Company?
If you can’t afford inventory or if your dream is to build an online business, start a drop shipping company. You can get started with as little as a few dollars, some hard work and the right suppliers.
Learning how to start a drop shipping business is one of the best income moves you can make. For more help with moving forward as a drop shipper, explore our site for more information.
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