Dropshipping is a highly popular eCommerce business model that every entrepreneur can start with zero inventory. As you don't have to manage inventory, you can start a dropshipping business with less or limited money.
What is a Dropshipping Business?
Dropshipping is an arrangement that allows businesses to sell products directly online where they wish to sell, and the manufacturer or distributor will handle the shipment of the product to customers.
The eCommerce sales hit 3.5 trillion dollars worldwide in 2019. Such stats implies the increasing demand of the eCommerce market.
Dropshipping can be your first step to entrepreneurship, where you will be able to sell products online at your desired prices and don't have to manage the inventory.
I have created a 6 step guide to starting a profitable dropshipping business, that you can use to start your dropshipping business.
How Does Dropshipping Business Work?
Dropshipping business is an online store business that you can run online without holding inventory. When you get a sale on your store, then the supplier will ship your product from their warehouse to the customer's doorstep. You don't have to take care of shipping, packaging, etc.
How Much Profitable is Dropshipping?
There are 3 key players in business the manufacturer (who create goods or services), retailer, and the customer.
The manufacturer's role in the dropshipping business is to produce goods, carrying the inventory, and shipping the products on behalf of the retailer.
The retailer is you who lists the products on an online store and promote the products. You have control to set the final selling price of the product. For the final sale price, you must consider the shipment costs, manufacturing price, and the profits.
The customer is the person who buys the product directly from your store.
Why is Starting a Dropshipping Business a Good Idea for Entrepreneurs?
Dropshipping is a low-risk business model that requires fewer startup costs. As you have no burden of inventory, packing, and shipment, you can invest your time more on increasing sales and growing your dropshipping business.
It's a better business idea that you can start by working in the evening and weekends. The dropshipping business has endless opportunities. You can take advantage of those opportunities to start your new venture.
Can You Make Money Dropshipping?
You can find potentially profitable products to sell on your dropshipping store.
Is Dropshipping Worth It?
Yes, Dropshipping worth it. If you want to earn a decent income by running a side business, then the dropshipping is the right business for you.
It will take time to convert dropshipping into a full-time business.
Where to Find a Dropshipping Business for Sale?
Shopify is the aggregator portal for starting a dropshipping business. It's easy to start an online store with Shopify. Either create a Shopify store or purchase Shopify business on exchange.
Exchange is a market place where store owners list their store for sale.
How to Start a Dropshipping Business: The 6 Step Business Plan
Step 1: Choosing a Dropshipping Business Idea (Niche Identification)
In online business, every single sale matters because it drives profit to your pocket. Finding the best niche for your store is necessary to be successful, gain more expertise with every client you serve.
Why a passionate niche? Because you can put your full efforts and work better for your business success.
Step 2: Competitor Analysis
Competitor analysis is necessary firstly for validating your idea and defining work goals to beat that competition.
You don't have to find competitors locally, perform competitor research online. Some ways to find the best competition to your niche is
- Search for your product on the website you are selling
- search on google
- Search on Alexa
- social media
Step 3: Find a Supplier
Out of 3 key players of dropshipping, the supplier is one who manufactures the product. Finding a niche product supplier is the hard part of setting up a dropshipping business.
But don't worry, some third party websites like Shopify, Oberlo makes it easy for you. You can also use print-in-demand apps, supplier marketplace apps to find niche product supplier for your store.
Step 4: Building a Dropshipping Business Store
After deciding & verifying your niche and signing up for suppliers, the next step is to build your business store. The process for building an online business store is simple and takes four steps
- Purchase domain name
- Sign up on Shopify
- Setup Shopify theme
- Install third-party supplier plugins
Step 5: Promoting or Marketing Your Dropshipping Business
After setting up the business store next step comes to promoting the products. Today without promotion, you will get zero sales. So you have to promote your products online. Deciding the right platform for promoting your products is also matters. Here are four advertising systems that you can use to promote your products.
- Facebook advertising
- Retargeting ads
- Influencer marketing
- Get free media coverage
Step 6: Optimize
The primary area of optimization is promotion strategies, store design, products catalog, etc. The fundamental purpose of optimization is to maximize the profit on sales.
Look into the analytics and optimize everything for increasing the revenue.
After reading this article, you might have a clear idea about what it takes to start a dropshipping business? Now you know how to start a dropshipping business, then why are you waiting to start your dropshipping store today.