There is no doubt that drop shipping businesses have shown immense growth in the last decade.
Dropshipping is highly cost-effective and can become your first step into entrepreneurship.
It allows you to set your prices, market your company and sell your products directly to consumers.
Apart from the perks, you won’t have to handle or pay for inventory.
In a drop shipping business model, you set the retail price that the customer pays, you pay the wholesale price, and the margin is your gross profit.
If you are planning or contemplating starting a drop shipping business, here’s a fun fact for you.
In 2020, Ecommerce Businesses sold $800 billion worth of goods in the United States.
Now is the best time to start an online drop shipping business model, and if you can’t figure out where to start, we’re here to help you out with dropshipping step by step.
Whats Coming Up? - Table Of Contents
Here are five steps to Starting a Drop shipping Business Online
Step 1 – Committing To A Drop Shipping Business Idea
A Drop shipping business is not a get-rich-quick scheme where you can start a business overnight and make six figures in the next few weeks.
Looking from a realistic perspective, starting a business requires commitment and effort.
To start an online store, you will have to invest either time or money.
We recommend investing a massive amount of time in kick starting your online business.
The reasons are:
- You’ll have in-depth knowledge about your customers and market.
- You’ll get to know about the functioning of your drop shipping business inside and out and will assist you when the time comes for you to hire people and manage them.
- If the business fails, you won’t be losing a large sum of money that you saved or borrowed as it was your time that you had invested in the industry.
- You’ll develop many new entrepreneur skills.
However, it is tough and challenging to quit your regular job to start a drop shipping business, and most people won’t do it.
If you plan to start a business while continuing with your job, then you’ll have to work harder, be more disciplined, focus more on customer service, and fulfill orders timely.
However, if you have the option to work on your drop shipping business full-time, then you should do it without hesitating.
When you invest a considerable chunk of your money into your business rather than time, the people you’ve hired might not be as invested in the business building process as you are.
A significant portion of your profit will vanish by paying salaries or fees to the programmers, developers, or designers.
You need to understand how your drop shipping business works at different levels, and to gain that understanding, investing your time in the company is crucial.
Market research is an effective and necessary thing to do before deciding the kind of products you’re going to sell.
While opening an online store, you should consider market trends, competitors, consumer behavior, and the sales volume of the niche in which you’re interested.
Google trends, keyword tools, and Oberlo order volume help in an in-depth understanding of the market.
Step 2 – Research On Competitors
Now that you’ve decided what kind of products you’re going to sell, the next step would be to learn about the functioning of businesses selling similar products.
You can learn from your competitor’s mistakes and take inspiration from their work.
Understanding how your competitors function can help you build a similar or better marketing strategy for your drop shipping business.
If your niche has many competitors, do not worry, as it denotes that the products you’re selling have a rising demand in the market.
Here’s how you can research your competitors:
Social Media – Instagram and Facebook ads of your niche can tell you which competitors are shining.
Check out how their feed is built, the engagement that they get, and the way they interact with their consumers.
This information will help you develop an efficient social media strategy for your drop shipping business.
Competitor’s mailing list – Sign up to your competitor’s mailing list and get regular updates about what they are up to, the discounts and offers they offer to promote sales, and the frequency of their interactions with their consumers.
Spy tools – Tools like Similar web assists you in keeping a close eye on your competitor’s activity over the internet.
Search Engines – A simple google search can help you identify your top five competitors.
Search a product keyword, and the top results will show you how your competitors are marketing their product which you use further to develop your sales strategy.
Tools like SemRush can also help segment your market into geographical areas and find the leading sellers in that region.
Step 3 – Choosing A Capable Dropshipping Supplier
Among the most critical steps in starting an eCommerce drop shipping business is choosing a supplier.
There will be no products to sell to the consumer without a supplier, and the company will cease to exist.
A reliable and economical dropshipping supplier can make timely deliveries which is essential for the success of an online store.
The three essential features that a supplier should have is communication, punctuality, and attentiveness.
Where To Find A Supplier?
Searching for a supplier requires time and money. However, you can start by searching suppliers of your particular niche on sites like Wholesale Central and then shortlist the ones that match your requirement.
Alibaba is another excellent option to find reliable wholesalers. You can also search directly on google and explore the results.
Investing a lot of time finding the right supplier is way better than lousy consumer feedback, low profit, and a dying business.
How To Evaluate Suppliers?
Once your list of potential suppliers is ready, you can test order a product from your favorites from the list and evaluate your entire experience from start to finish regarding communication, product quality, delivery time, and shipment number.
Also, keep a check on the wholesale prices as you should be making a considerable 20-30% profit margin from each product sold once you start doing business with the right supplier.
Step 4 – Building Your Ecommerce Website Or Choosing An Established Selling Platform
Ecommerce Marketplace
Listing your products on an eCommerce Marketplace is easy, cost-efficient, and time-saving.
In addition, websites like Amazon, Etsy, and eBay have high traffic and could give a boost to your product sales.
However, such websites lack personalization, and there are many listed products of the same kind.
If your product is not very unique, your product would be just another brick on the wall.
There’s not much marketing tactics to differentiate products other than customer reviews.
It isn’t easy to build a brand and narrate a story through your products when choosing an established selling platform.
If you have an incredible value proposition and a highly distinguishable product, then an Ecommerce marketplace might be the thing for you.
Building Your Drop Shipping Business Website
Creating your online store from scratch where the site is personalized, narrating a story, building a brand, and differentiating it from competitors might be time-consuming and less economical, but that is the price you pay for independence and long-term brand building.
Many eCommerce platforms have been built for small businesses like yourself to assist you in creating your brand and convey your own story.
These platforms provide you with highly secured payment portals to enable online payments for your customer.
In addition, an eCommerce platform can ease your journey of developing an online store as it is filled with aesthetic website templates and tools.
The perks of using an eCommerce platform are:
- Secure payment methods
- Personalization
- Narrate your own story
- Templates designed by expert designers
- Independency from Ecommerce Marketplace
- Easier to establish and build a brand
- Product differentiation
Here are a few eCommerce platform suggestions:
BigCommerce – offers a wide range of marketing analytic tools, high-caliber designs, and guidance from experts.
Shopify – If you’d like a platform that gets regular updates with features, tools, designs, apps, and resources, then use Shopify. It also offers expert guidance if you find any trouble in building your online store.
WordPress – Although not as automated as the other options, it is a free website builder used globally by bloggers. You will have to do multiple tasks manually if you build your dropshipping store through WordPress.
Step 5 – Going All-in With Marketing Your Drop Shipping Business
So now that you’ve built a beautiful website with a great product line and every tiny little detail filled with thought, it is time to stand out in the market by promoting your store like there’s no tomorrow.
Your advertising and marketing activities will allow more and more people to visit your online store, and in no time, your business will kickstart with a bang.
Nothing comes close to the feeling of making your first sale.
Here Are A Few Marketing Tools You Can Use To Market Your Drop Shipping Business
Email Marketing – Collecting emails from the people visiting your website can help develop a long-term relationship with your consumers.
Offering discounts if they sign up to your mailing list is one way to do it.
For example, some businesses gift merchandise and t-shirts when customers make their first purchase from their store.
When your store visitors provide you with their information, you can use it to develop an excellent email marketing campaign explicitly personalized for various kinds of consumers.
As a result, email marketing is an effective tool for retaining customers and nurturing your relationship with them.
For example – If a customer purchases a pair of shoes from your store, why not offer them discounts on socks?
Personalization makes a customer feel important and valued.
Facebook and Google ads – As easy and basic as it may sound, advertising on Google and Facebook is tricky and requires a lot of adjusting and retargeting.
Knowing, identifying, and finding your audience while running ads on social media is complicated, and rarely anyone gets it right the first time.
Running ads multiple times and evaluating the results can help you identify and target the most converting people.
In addition, advertisement on Facebook is economical, scalable, and effective in generating demand.
Shopping ads can be run on Google using keywords.
The price is pretty competitive there, but it is undoubtedly worth a try.
Influencer marketing – There’s a tendency of people to trust influencer’s recommendations more than traditional advertising.
However, if you have just begun with your drop shipping business, you may not be able to afford an influencer’s rate.
In such a case, you can offer them an affiliate commission which would be a mutually beneficial deal.
This way, you only have to pay the influencer for the sales they’ve converted.
If the influencer has real followers of a specific niche, they would be making more money than what they would have made in a usual deal.
Social Media Posts – In recent years, social media has a significant impact on consumers’ buying decisions.
Facebook, Instagram, and even Pinterest have added the feature to create a ‘Shop’ with products in-app that send the potential customer to the merchant’s website.
As a result, your social media feed now represents your brand more than any advertisement that you run.
Optimizing your online store – From product description to home page title, every little detail should be optimized with search engine-friendly terminology to push the website’s rank in search results and ensure a profitable drop shipping business.
SEO-friendly content will boost the traffic of your online store and generate sales.
You can use google keyword planner to find SEO-friendly terms to use on your website.
Final Word
Now that you have a step-by-step guide to start a drop shipping business, you’re ready to face your entrepreneurial battles and take your eCommerce store to enormous heights.
Your profit margins are waiting for you. Choose a niche, sell products online, and make money.
There’s no doubt that the eCommerce industry is only going upwards as it shows no signs of slowing down.
And with more and more people adapting to buying products online, now is the best time to start a drop shipping business so don’t hang about and build your store today.
