Skip to content

How to Start Building Your Dropshipping Business [Ultimate Guide]

dropshipping-business

Honestly speaking, we all at some point in our lives look forward to having a second source of income, isn’t it? When this happens, it is obvious to put in the dedicated amount of time and energy in the process. Looking back at the statistics, there has been a whopping 44 million Americans who opt for a side hustle business.

This is where we learn about how to start dropshipping as a business structure.

There is nothing wrong with wanting to earn more money as a passive income. In fact, most of us look to have a passive income apart from a regular 9-5 job. This is done by either becoming an influencer, or by being a YouTuber, or the best is through opening an eCommerce platform. However, for many of us, this is not an absolute solution.

The reason people consider backing out from having and building their own eCommerce platform is because of the trouble that is likely to strike. Some of them are the complex management system of inventory, shipping, order-related queries, and so on. If you are comfortable with the hardships that are going to be a part of your business, then dropshipping is that one thing you can consider opting for.

Also, if done in the right way, dropshipping helps in bringing a lot of money into your pocket. So, let’s get started with the basics of dropshipping and how you can actually start with drop shipping if you follow the right set of rules.

Dropshipping – The Basics!

It Is quite important to learn the business model for dropshipping business. However, the learning curve is a bit different compared to other but nevertheless, it still does a pretty good job to earn profit.

Dropshipping could be termed as a method i.e., supply management or a retail fulfillment which allows online shops and stores. However, all of this is possible without the online stores actually having an inventory of their own. They don’t have or maintain an inventory.

Wondering how it works?

Well, the customers buy goods and items directly from the retailers but the one who manufactures these products is the one who takes care of the shipping.

This can be counted as one of the biggest differentiators that work between dropshipping and a traditional eCommerce business. You just don’t to handle even a slight bit of inventory and shipping. This is one of the best things as anyone who has a website of their own and also carries the required set of skills to open their own store can be a part of the process by also maintaining their sales profit.

With dropshipping, there is one drawback though. The profit margins are not usually high and customers have to suffice with the maximum that reaches out to them. Therefore, stores distribute their focus on other products to increase their sales and profit.

Speaking simple, this is how dropshipping works.

1. A customer comes to your store and buys an item and pays the retail price of the item.

2. The order is then put forward to the supplier (to whom you pay the wholesale price)

3. The supplier now ships the item directly to the customer by doing it under your name.

Therefore, you who are the dropshipper will not need to buy, store any sort of stock that will help you to save money and eventually a lot of time.

An Example to Explain Better

Let us consider you are a customer who wants to make a purchase at AliExpress which also happens to be the greatest online store based in China.

The customer goes straight to AliExpress, buys the best clothes, pays the bill off, and leaves the store. Now, AliExpress has to buy those clothes from wholesale right from the manufacturer at the wholesale price. Additionally, AliExpress can then store it in its retail shop for the buyer to come and view and ultimately take it home.

Along with the product, you will also have to pay for the retail space which is also on display. You can then hire more workers to shift the stuff and organize them. You can also hire workers to manage cash payments, maintain and regulate the registers, and so on.

Phew! As we mentioned earlier, a whole lot of work that eventually leads to crop down the profit margins.

Dropshipping – Statistics

  • Dropshipping made $85.1 billion roughly via dropshipping in the year 2016-2017. More than 23% of the online sales were in the record.
  • Amazon, through dropshipping made approximately 34% of sales in the year 2011. These numbers have just kept on increasing.
  • As per the statistics, manufacturers who opt to start dropshipping make a marginal profit of 18% than those who depend solely on the conventional processes.

How to get started with Dropshipping?

To start a dropshipping business, it is important to settle your brains to be finally able to opt for it. It is a relatively easy job and here are the things that you have to do.

  • First things first, find the ideal eCommerce website for yourself and start designing it.
  • The second important thing to do would be to sign up with a dropshipping supplier and then choosing the items that you would need to display on your website.
  • You can directly add or sync these products on your website in the easiest way you can.
  • Now, it also is significant that you decide on the tax and shipping-related options and simultaneously set them up too.
  • Test the checkout process
  • Finally, you are good to go with launching your own website.

That is all. That is all you have to do to start dropshipping. Well, all that you need is a functional website with no glitches and a home page that gives users an insight about the products of your website as well as the ability to buy the items.

If you have heard of dropshipping and you know the basics of how to start dropshipping, it is likely that you must have heard of Shopify. It allows automatic sync of your products with any dropshipping site like AliExpress and you can get your website ready in just a day.

There are also many options available in the market that allows you to set up your very own dropshipping store. The dedicated freelancers will help you set up your website right from the scratch without having you go through any trouble at all.

The Right Methods to Grow Your Dropshipping Business

To start dropshipping might not be a tough nut to crack but to maintain it, is surely a tough task to go through. However, one thing that you do not need to forget about the dropshipping model is how slow a model is.

You can’t expect a very tremendous growth and immense profits from the start. It is sure an unrealistic thing to consider but possible. All you need to give is some time to the process. Dropshipping business requires a time investment to help you grow and reach a point that drives you the best and maximum profit margins but it all needs time.

You have to keep working on building your shop and nurturing it every day so that it works in the best way for you. All you need to do is scale up your business and growth when you are initially looking to start dropshipping. Here are some of the common measures that apart from helping you add an insight to start dropshipping, will also help you grow it.

1. Use more than one channel

Never go for a one-way when you know you have plenty of others to test. Therefore, it makes great sense that you opt for more than one channel available in front of you like Amazon, Alibaba, and so on to start dropshipping.

When you have more than one channel, more customers can reach out to you. Therefore, it is the best approach to have more than one channel to extend your hand to the maximum audience.

When you use more than one channel, you also have to keep a few things in mind. The primary thing to consider would be always decked up with orders. You should never fall out of the best-selling items that your shop has. You have to make sure that if an item is best-selling, it is available on all the channels and is never out of stock.

There is a high chance of products going out of stock when you are using more than one channel. Since the rate of selling would be significantly higher. The product runs out of stock and hence, it will become difficult for customers to get a hold of such items.

When products go out of stock, it adds significantly to the backorders and hence, can eventually result in delayed delivery. Well, to add, also adds up to negative feedback from customers.

Go for targeting audience on a global level once you know that you are all stocked-up.

2. Build your Dropshipping Store

To start dropshipping, having more than one channel is definitely an advantage that will also help you to maintain your profit margin. However, to start dropshipping, it is also crucial that you have and build your own store that will help in enhancing your brand image.

Some of the finest benefits that building your dropshipping store will bring you are: –

  • Control over the website and the user interface.
  • More control over the products, stocking, and marketing targeted to extract the maximum benefit.
  • Decisions made are better when discounts and sales are the topics of consideration.
  • Control over brands and brands image.

It is not just about getting to start dropshipping, maintaining and building your store have more efforts to put in. Additionally, you don’t have to penny in terms of commission to any online store to show your products off. As a result of this, the margin profit for every product in your store sees significant growth. This ultimately leads to translate and drive profits of higher value.

Moreover, there are tons of websites and eCommerce stores that can provide their extensive help in creating your store. Some of them also include beautiful template designs and other marketing tools that will help you to grow your store.

3. Using Email Marketing

If you follow the statistics, you will find that for every investment made of $1, there is a return of $32 and hence, this is how email marketing helps in gaining the maximum ROI

This is exactly why we are discussing email marketing strategy as it is significant to focus on the strategy as well as if you want to not only start dropshipping but also to grow it.

The first thing that you will need to do is, build yourself a list of emails that will contain a relevant audience set. One thing about email marketing is the way it provides direct access to the leads. These leads would be the same set of people who will have subscriptions to your email address.

Also, another great strategy that will work would be offering something very valuable to the audience for free. This will also intrigue your audience’s interest.

For example, you can offer users who sign up to your email list by offering them a course plan teaching them the basics of dropshipping and the marketing strategy.

Furthermore, there is one thing that most of us eventually fail to follow by and that is to engage our audience by sending them updates on a regular basis. Send them follow-ups, invites, discount coupons, to keep them on the hook.

4. Opt for the Right Channel for Advertising

Well, nowadays it takes a lot of investment to finally start with a business venture. Therefore, it is extremely crucial that money is spent in the right place and at the right time. A lot of investment could turn out to be problematic for you and your business in the future.

This is exactly the reason why you need to increase your budget and should spend a considerable amount of time doing proper research related to your business. Find out the right channels that will not only help you add profit but will also give a smooth experience to customers to directly dive into your website.

For a dropshipping business where obviously there isn’t a physical shop that you will have to deal with, it is significant that you learn to take and understand the advantage of the different modes like Pay Per Click.

Simultaneously, you can also run ad-free campaigns across many media platforms like Facebook, Instagram, and so on.

Keep in mind not to waste money or spend it on websites that are going to bring in the minimum traffic.

5. Video Ads are a WIN

To reach out to customers, Video ads have also turned out to be quite productive overall. Some of the brilliant reasons why and how videos have turned out to be effective will be proven from the statistics below.

  • On average, Twitter users usually opt for videos. Roughly around 82% of the total audience uses it.
  • Overall, 33% of a user’s average watch time is spent watching videos.
  • US audience has an inclination towards watching online videos and 85% successfully do so on a regular basis.
  • YouTube collects an average watch time of approx. 500 hours.

Videos are undoubtedly powerful when you want to reach out to a larger audience. This eventually increases the reach by 10 times.

It’s not always about your ‘brand’ and ‘product’, with videos users get the flexibility to do a lot more than the usual and some of them including, managing well with customers, contacting leads, and working around with them, influence more and more people to buy your stuff.

Dropshipping – Advantages

Regardless of having a small penny for investment, you can still start your own dropshipping business. Some of the advantages are: –

1. Cost is Minimal

Well, the best part about having your own business is not having to worry about a physical space to keep and store your products. This is the best part about this business. All you need to invest on is hosting and domain and you are good to go.

Additionally, you don’t have to worry much about occupying a lot of space in your inventory. Also, no worries to face related to the shipping cost and time.

2. Minimal Fulfillment Cost for Orders

In most cases, you will not be liable for the sourcing, packaging, and delivery of the items. Therefore, the additional cost that will incur is not a burden on you in the entire process. All you need to do is forward the request that the customer places to you for importing products and you are good to go.

They are the ones who will now be responsible and also in charge. All you need to take care and assurance from your customer would be whether or not they received their products.

3. Less Risk and Highly Flexible

Minimum risk is ensured when you don’t have to handle your inventory. In addition to that, you also get your hand on a product that makes a subtle choice.

Therefore, it is a low risk. In case you are not able to make money out of your dropshipping business, you can consider opting out anytime without any issue at all. You will not even have to bear any additional loss.

Vendors also get the flexibility to team up with more than one wholesaler or distributor to add more enhancement and functioning to their business.

Dropshipping – Disadvantages

Some of the common ones are: –

1. Manufacturers are Over-hauled

In most cases, you don’t even have to be a physical part of products. Your partners should be the ones keeping a count. Sometimes it gets difficult to manage and get along. This might lead to adding some negative reviews to the reputation you have built over time.

2. Lesser Customer Service Control

When your dropship, you will have to understand the story of both sides. You are not the one who is in charge of the whole supply chain. Some of these are packaging, delivery, and so on. Your partners need to take care of it for you.

Just in case they end up doing something wrong, the egg comes down to your basket. This is one of the downsides of having your own business.

Frequently Asked Questions

Who should opt for Dropshipping?

Dropshipping is basically for entrepreneurs, novices, and especially people who are looking to start their own business and make the necessary investments.
Therefore, the answer would be. It is ideal for: –

1. Entrepreneurs.
2. People looking forward to having a sustainable means of growth.
3. Professional who are willing to start their own business.
4. Web Savvy; People who know how to bring attention and the traffic.

What are some of the niche you can chose for your business?

Some of the very popular niches that you should definitely consider are: –

1. Tech-niche – There are tons of things that you can sell if you open up a store that is related to technology. All the latest gadgets would be easily available at your store.

2. Lifestyle-niche – This is also a great option to consider. People look forward to having the best lifestyle products and having a store that will excel in this field could be one of the best options.

3. Fashion-niche – Fashion has always been the trendiest of all and it surely brings the most traffic.

What are some of the common mistakes that you must avoid in dropshipping?

Some of the common mistakes to look by if you are new to the business or even old for that matter would include: –
1. Relying too much on Vendors is not a great idea.
2. Looking to make profits easily never goes well.
3. Not investing in promotions.
4. Compromising on Orders
5. Selling Copyright products
6. Not well maintainedReturn Policy’

Summary

Well, that was all you guys about Dropshipping. This article is surely the easiest way out there to have your own business.

Always remember to stick to your plan, no matter what. That is how you are going to reap the benefits in the coming time. Also, if you have been waiting to open your own shop, now is the time.

Copy link
Powered by Social Snap