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How to start a dropshipping business

how to start a dropshipping business

Dropshipping is an extremely popular home-based business model among new entrepreneurs. To develop it, you need above all internet marketing skills compared to financial capacity. Since there is no need to create a warehouse of the items you are selling, it is possible to start a dropshipping business with limited funds.

Before getting to the heart of the discussion, let’s see together what are the advantages and risks of this business

What are the advantages of Dropshipping?

Dropshipping is becoming increasingly popular as a second home business for the following reasons:

Low startup costs

There are no big initial costs, you just have to pay for hosting the site and decide on a small marketing budget to spend to start your own shop. It is not necessary to have a large capital to purchase inventory and to organize a warehouse for products.

International shipments

While if you open a traditional eCommerce you have to make arrangements to organize the shipments and make your customer pay the rates, selling through a dropshipping product provider allows you to send products all over the world at lower prices than you could get. alone.

With a traditional store, some areas of the world may be out of reach due to time or shipping costs. While dropshipping product suppliers already have a proven shipping method that allows them to send items internationally at low cost. Then you can work with them to negotiate lower rates and ship your products to geographic locations outside of your reach.

Flexible working hours

As long as you can respond to customer orders and questions within a reasonable time frame, for example 24 hours, you can choose when (and where) you want to work.

This means that dropshipping is perfect for people who want a second monthly income and need to organize their business according to their work and family commitments.

Choice of niche

You can sell whatever you want with a dropshipping business. This means that you can choose to have an eCommerce of generic products or open an online store aimed at a specific niche of customers.

What are the risks of dropshipping?

As with any business, there are some risks to consider before opening your online store.

You need reliable partners

A dropshipping supplier must be able to deliver quality merchandise quickly and clearly. If he doesn’t, you’re the one who will have to respond to emails from unhappy customers and risk losing money on returning merchandise. It is therefore essential to spend time searching for the right supplier.

You need an initial marketing budget

Although dropshipping is an excellent way to open a business with low startup costs, it is not a totally passive business. Especially in the beginning, you have to build your customer base and your follower base on social networks and this means developing a strong marketing strategy and also paying for advertising.

This can also be done for a small amount of money, but it is still a cost that you need to consider in your business plan.

In fact, you must take into account that eCommerce is a highly competitive sector and that without a convincing marketing strategy and a minimum of initial investment it is virtually impossible to emerge from the crowd.

You need time to get started

Especially if you want to make your dropshipping store a full-time business that maintains you, you will have to commit and invest time. Although thanks to tools such as Shopify, you can open a store in one day, it takes a few months and continuous promotion to start receiving traffic and visits to your site.

Consider that initially, it will be difficult to live on this business alone and that you must consider at least 6 months or a year of running in before you can see great results. This is not to discourage you, but rather to tell you not to do it if you don’t have immediate results. In fact, statistics say that people generally need at least a year before they can quit their daily work. However, you will be able to work for less than 40 hours a week once your dropshipping business is established.

How to start a dropshipping business

The items, which will be sold through the dropshipping model, are purchased from a supplier or manufacturer. This not only reduces operating costs but also allows you to focus all efforts on customer acquisition.

But be careful! While the dropshipping business does not require large funds to start, it will require an immense amount of hard work.

1. Choose a niche

The niche you select must be well focused. It also has to be something you are truly interested in. As it takes a lot of work, if you are not passionate about the niche you select, you will be more inclined to get discouraged. Here are some points to consider when selecting your niche:

  • Look for attractive profits. In dropshipping, the amount of work it takes to sell a $ 20 item is essentially the same to sell a $ 1,500 item. Select a niche with more expensive products
  • Low shipping costs are very important. Shipping costs that are too high keep customers away. Find something inexpensive to ship. You will then have the opportunity to offer free shipping.
  • Make sure your product is targeting impulsive buyers with disposable income. The products you sell must generate impulse purchases. They also need to attract those with the financial capacity to make an immediate purchase
  • Build your brand. Building a successful brand is very important. Your dropshipping business will also have more value if you can rebrand whatever you are selling.
  • Sell ​​something that isn’t readily available locally. Pick something your customer can’t find easily

2. Research the competition

Remember, you will be competing with other dropshipping companies and with giants like Walmart and Amazon. Looking for a product that has little or no competition is not productive at all. On the contrary, it is a sign that there is no demand for that particular product.

How to start a successful dropshipping business? Look for products that have competition, as this is a sign that there is high demand and the business model is sustainable.

3. Get a supplier

Partnering with the wrong supplier can ruin your business. As most of the dropshipping service providers are located overseas, communication becomes extremely important. Pay close attention to the ability to respond quickly and understand each other. If you are not 100% sure of the communication skills of a potential supplier, go ahead and continue your search.

For research, you can use Alibaba, which has become one of the largest online resources for identifying and communicating with potential manufacturers and suppliers.

4. Create your e-commerce site

The fastest way to start a dropshipping business website is to use a simple e-commerce platform, such as Shopify. No particular technical skills are needed to use it and it has many apps to increase sales.

So, especially in the beginning, if you don’t know how to start a dropshipping business, it is recommended to use one of the plug-and-play options. Only later, you can proceed with the customization of the web page.

5. Create a customer acquisition plan

There are several ways to attract potential customers. The most effective option is to start an advertising campaign on Facebook. Facebook, in fact, allows you to place your offer directly in front of a highly targeted audience.

You also need to think long term, so SEO and email marketing need to be the centre of attention. Through emails you can, for example, offer discounts and special offers for your customers.

6. Analyze and optimize

The final move on how to start a successful dropshipping business is to keep track of all available data and metrics. Only then can you grow your business. This includes traffic data from Google Analytics and Facebook. Being able to track every single conversion allows you to improve what works and eliminate what doesn’t.