Dropshipping is an eCommerce business model ideal for entrepreneurs who want to start a business and open an online store but don’t want to deal with the logistics of shipping items to customers.
Instead, when a dropshipping store sells a product, it purchases the item from a third party and has it shipped directly to the customer.
This article is a guide that gives an idea about every detail you need to know when starting a dropshipping business for an online store.
Read on to learn everything you need to start a dropshipping business.
The dropshipping business model is an eCommerce idea where you don’t have to worry about storing, packaging, or shipping your products.
When you make a sale at your online store, your supplier will ship your product from their warehouse directly to the customer.
This way, you will not have to deal with the headaches of inventory management as a drop shipper since when your store sells an item, the order is sent to your supplier, who then ships it directly to the shopper.
This is an ideal method for an online business, where you don't have to touch the product and only pay for what you sell.
Dropshipping business today is risk-free and safe. But, remember to watch out for additional legal issues if you work with a dropshipping supplier. However, in general, dropshipping itself is legal and safe.
First, you don’t need to worry about developing new products, purchasing and storing inventory, or stocking a physical store with a dropshipping business. A third party handles inventory, and you can offer new products to your customers when they are in demand.
Secondly, with no storefront lease, mortgage, construction costs, or upkeep, you have the opportunity to test different product lines without spending lots of money.
There is also increased cash flow in dropshipping because you receive payments for the products simultaneously when you pay your providers.
You can have high product sales without worrying about other issues.
Lastly, you can earn a passive income from drop shipping instead of the retailer model where your involvement is always needed.
Dropshipping eliminates many traditional challenges of selling on your own, but it comes with its challenges.
First and foremost, when dropshipping, inventory rarely passes through your hands, so you don’t have the chance to ensure that products are in top condition.
This can lead to a loss of reputation and brand loyalty if you do not have high-quality products.
One way to address this issue is by setting yourself apart from other dropshippers by using social media or offering different services or higher quality products than your competition.
Another demerit of dropshipping is it has high competition. So you have to do something to stand out from the rest continuously.
Thirdly, you will have complicated fee structures which can change with little notice. You will have less favorable profit margins at the beginning of your online store.
Also, forget about bulk discounts till you have generated enough sales.
Lastly, dropshipping might lead to disjointed orders where one customer gets multiple packages for the same order, which might come from different dropshipping suppliers.
This will lead to unnecessary packaging, high shipping costs, and confusing branding, leading to irritated customers.
Yes, you can make a profit from the dropshipping business.
Dropshipping is a low-risk business model that allows you to sell products to your customers without incurring substantial running costs as a wholesaler would have.
Because of these lower costs, it is easier to become profitable with dropshipping much faster than other business models.
When starting an online business, finding a niche where you can sell products is essential. We believe it is among the first steps. This section will take you through the steps to find a dropshipping niche.
General stores and niche stores each have their advantages. For example, there are more products for you to choose from if you go with a general store.
However, with a niche store, you can focus your marketing efforts on one specific category of products that appeals to the audience you want to attract.
There are upsides and downsides to both niche and general stores. But if you're beginning your dropshipping business, we would say starting with a niche store is safer.
The reason is you can find customers easier by selling products that appeal to specific groups of people instead of trying to tackle a much wider audience.
But, if you can't think of anything you like to sell or if you don't find any related niches to be interested in after your research, we suggest starting with a general store.
Make sure your chosen niche is a good fit for you and your dropshipping business. You want to sell items in demand, but don't forget to make a profit!
Therefore, before selling a product, you must consider your costs, where you need to pay for inventory, advertising, shipping, and product development.
Hence, thoroughly research the costs of each item you sell and calculate the profit you'll make before you launch your online store.
You need to search popularity trends to determine if a product is on the rise or declining. To do that, use Google Trends and enter several keywords associated with your product idea.
Your product has good potential if you see a steady upward trend over the past few years. If you don’t see that, then you may need to go back and try again.
These product trends and search volume will give you an insight into what you should be selling.
To get started with keyword research, compile a list of potential markets you would like to enter.Then brainstorm keywords for those markets.
Find the most popular keywords and dig deeper to find insights about their performance over time. This helps to select a specific niche to start your online store.
If you're looking for an eCommerce platform for your dropshipping business, Shopify is a good option.
A Shopify dropshipping store allows you to create your customizable website, manage products and orders, process payments with a credit card, multiple taxes, and languages, optimize your store for search engines, and much more.
AliExpress dropshipping is a popular choice for dropshipping businesses because it simplifies your supply chain.
Instead of handling an inventory and shipping, as you would have to on most other marketplaces, your orders are shipped directly to your customers.
It is a dropshipping solution with a wide selection of products, including women’s clothing, jewelry, electronics, and home decor.
The products come from overseas manufacturers, and the prices are very competitive. Moreover, many sellers give you a 100% markup. So, you don't have to worry about holding the stock or shipping it out, and the seller does that for you.
This is an excellent site for an online store builder.
Amazon’s Fulfilled by Amazon program lets you sell your products on the largest online platform in the world.
Amazon makes sure that customers get their products quickly and efficiently. As a supplier of products to Amazon, you don't need a warehouse, which can be expensive.
An Amazon relationship allows you to grow your dropshipping business quickly and operate globally.
In addition to that, account managers help you strategically guide your business to increase profits long-term.
Lastly, as a sales channel for your products, Amazon has enormous returns potential.
What's in a name? That might cross your mind when choosing one for your dropshipping store.But, when branding your online dropshipping store, your store name could be its most important part.
You want it to be memorable but not too long or confusing. Further, your name should represent what your brand is all about and be easy to remember.
So, an excellent place to start looking for inspiration is the naming conventions of other successful brands. Lastly, see if it is available and select the one that suits you best.
When choosing a domain name, pick one that is similar to your store's name. This will help customers recall your actual store name, making your site easier to find in search engines.
Conversely, having a domain name that has nothing to do with your store's actual brand name can make it difficult for people to recall and find your site.
If you want to create an online retail business, try using a free business name generator. Always purchase a .com domain. If not, then .store will also work.
If you have a broad niche like beauty, jewelry, and fashion and want your niche as the keyword for your domain, make sure it’s broad rather than very specific.
Use software to get your domain registered. Some software options are NameCheap, Porkbun, etc.
Lastly, look for coupon codes, so you will have to pay less for the name.
You might want to create an email address with your new professional-looking domain name, like firstname.lastname@example.org instead of email@example.com.
We suggest you look at Zoho Mail, where you can create a professional email address for free.
You can set up your website or use a platform called Shopify. This is a rich and comprehensive platform for starting an online shop.
With new features, tools, apps, and more being added regularly, you’ll find it easy to use and manage.
Plus, if you want help from an experienced professional, you can reach out to one of the experts who will guide you through any steps for free.
Tweak up the colors and themes according to your likes and give it a personalized look according to your brand. Remember, any design that is easy to navigate will make it easy for customers.
So, when setting up your online store, think about how you want your brand to be perceived. Is your business edgy and modern, or traditional?
Ask these questions and then set them accordingly. You can then customize the look of your store's theme, choosing colors and photos that give the impression you want.
As you build your online dropshipping store, you must create various pages. Create a collection of pages that inform and delight your customers.
You can make specific pages for every store—a homepage, an About Us page, a Contact page, a page detailing your return policies, a FAQ page, various collection pages, and product pages.
After you have added products and created product collections, web pages, store policies, or blog posts, you can organize them in your online store so that customers can find them.
Depending on the theme design, menu components are usually separated into Main Menu, Verticle Main Menu, Submenu / Mega Menu, and Mobile Menu.
You can view and change your store navigation from the Navigation page in your Shopify admin. Know that the appearance and location of menu components depend on your store's theme.
You can add your products via the dropshipping app of your choice. In addition, you can upload, edit the title and description of your products, and add images to them.
Once you've done that, you can create collections of your products that you can group by category.
That way, your customers can easily navigate through the various product categories you have for sale, and you can sell products.
Review each product and edit its details. Some product titles and descriptions are stuffed with keywords. So, modify these details to make the items more appealing. Further, add some personality and copywriting flair to make things more attractive.
Also, use tags to label products so you can categorize them, making it easier to find items in your shop.
You can organize your products into collections. Collections allow customers to find items by using filters and searching tools.
Here are some ways to group them:
When organizing your products, you can use Manual or Automated collections. Manual collections take more effort to maintain, but they work well if you have a small, curated catalog.
Automated collections automatically include matching products, but you can set up the conditions so only tagged “sale” products are included. Choose whichever works for you.
Now, let’s talk about site preferences. You can find them under the Site Preferences in the left-hand menu.
You can edit your site’s title and meta description from here and add your Google Analytics tracking code and a Facebook pixel. You will find it by clicking the “Preferences” link on your left-hand menu.
If you have reached this step, then congratulations to you! Most people cannot get here because it is hard work.
So now that you have reached this step of setting up your own dropshipping business, just the last step is left out, which is to launch your store.
After this step, your online store will be open to the public.
You might be able to get some of your target customers' attention by using Facebook’s advertising tools.
Statistics show that Facebook has over 2 billion active users. If you have the budget to advertise, Facebook lets you target your message to specific groups of people. Go ahead and advertise on Facebook.
You can use our Ad maker to create ads that draw more people to your dropshipping store.
Instagram has a monthly user base of roughly 1 billion people, making it one of the most popular visual platforms. If you want to drive more traffic to your dropshipping business and brand, consider partnering with influencers who have built up audiences on Instagram.
You can partner with influencers to grow your brand's organic reach. You can get traffic and make more money too.
If you're looking for a video-based platform where people go not only for entertainment but to learn new things, YouTube may be the place for you.
Optimizing your video titles and descriptions for SEO can help you find success on YouTube by driving more traffic to your videos.
Moreover, including calls-to-action in your videos and creating helpful playlists can make it easier to keep your audience engaged.
Google is the premier search engine for many consumers, enabling you to reach the people actively searching for your products.
You can place ads on results pages by bidding on relevant keywords and creating ads that match the searcher's intent.
You could also set up a Google Shopping Campaign, which entails creating shopping ads to show users a photo of your product, plus a title, price, store name, and more.
This way, your dropshipping business will reach your target market.
This step focuses on choosing an advertising platform or platform(s) for your dropshipping store.
You can always change places you advertise your shop later, or you could promote on multiple platforms, social media, or other electronic media.
However, suppose you're a beginner and don't have any experience with anything eCommerce-related.
In that case, it's best to stick with one platform at first and learn it well before expanding to other platforms.
As you’re getting ready to open your new dropshipping store, remember that it’s also an excellent opportunity for you to promote your business.
When creating your store, do something special with the opening. Perhaps you could run a giveaway with one of the products you’re selling in your store.
Moreover, you could also discount one of the products in your store on launch day. These unique ideas will let you advertise your business and lead to profits.
Setting reasonable prices for your products is vital. First, you can retail for average prices — like the ones you find in stores. Second, you can offer free plus shipping on your products.
Finally, do not put all your products on sale because your sale won't be meaningful anymore. However, there can be some exceptions, like Black Friday sales.
Remember, whenever you make a sale, do it so that people will feel a sense of urgency and purchase it from you rather than some other retailer.
If you don't understand the costs of running your dropshipping store, you risk running out of money! You may be advertising or fulfilling orders and not realize how much money is being spent.
Bottom line: Know what you are spending and when it comes in! Manage your money so you can be among the top dropshipping stores. Without a budget plan, it is a ship without a rudder.
Suppliers are essential to a successful dropship business because they provide you with the goods you sell, fulfill your orders and help your business bring in the profits that make it possible for you to stay in operation.
When you partner with the right suppliers, you can deliver your merchandise to customers in a timely fashion, which helps build trust and credibility and keeps existing customers returning.
Keep your profit margins in mind when deciding which products to sell. Think about overheads like office supplies, staff, and marketing expenses.
Do not undercut your competitors' prices just because they're doing the same. Instead, focus on offering quality products and pricing them reasonably within the market value you will find customers.
To increase profits from every order, focus on improving the average order value. For example, offering upsells and cross-sells as part of your e-commerce platform's marketing features will help drive up each customer's average order value.
If you want to get your site noticed, offer sales or special deals. This type of promotion is a very effective way to generate interest in your site and boost sales.
To get your products noticed, offer sales or bundle products together. Finally, ensure that the group bundle offers a more enticing price than the one you would offer for an individual product.
When you order samples, you get to see, feel, and try your products before deciding whether to go ahead with a larger order.
Samples also allow handling your products and assessing the quality of your suppliers' packaging and delivery time. If unsatisfied, you can easily change suppliers before it hurts your business.
Competition keeps all the sellers in a niche on their toes, so they're always trying to improve what they're doing and give the customers more than they expect.
If you keep track of your competitors' profiles, you can decide if there's any way you can offer more to your customers.
When shopping, most customers want to complete their purchase as quickly and efficiently as possible. Offering various payment gateways will achieve this.
You should also offer local payment gateways and international ones for your customers. Trusted global payment options like PayPal for people in other countries are also good.
To make online shopping more convenient, clearly state how long it will take to ship an item and provide tracking information. In addition to increasing trust in your brand, you will build customer loyalty.
When choosing an e-commerce platform for your dropship business, you should consider the products you want to sell and the market you want to sell them in.
There are many e-commerce platforms to choose from—some offer features and capabilities that others don't.
Some key features in e-commerce platforms are direct integrations with distributors’ product feeds, streamlining the process, and making registration faster.
Automated freight costs calculations save time and money, so it's worth choosing a platform that offers this feature.
Since mobile shopping is predicted to grow within the next few years, look for an e-commerce platform that is responsive and quick on various devices.
Protect your online customers' data by having a secure platform.
Applying search engine optimization strategies is best if you want traffic to your online store. Doing so will bring new visitors to your site, and they'll keep coming back as long as you maintain your SEO standards.
With a comprehensive FAQ page, you can provide the answers to many of your customers' immediate questions without forcing them to call your customer service.
Such a page will create trust in your brand, making it easier for your customers to make buying decisions.
If you're looking for a dropshipping alternative that resembles dropshipping itself, print on demand may be the fulfillment model for you.
Print on demand allows sellers to design graphics for products; once an order comes in, a manufacturer will “print” those graphics onto the product and ship it to the customer.
Starting an online T-shirt business is a popular alternative for beginner and veteran entrepreneurs. Cheap to source, universally appealing, and relatively simple to customize, T-shirts are an excellent option for an eCommerce store.
Plus, these shirts can be profitable in just a short amount of time.
Jewelry is a great niche to enter. It has the potential to be a very profitable business, but only if you sell your wares at the right price.
The price of a necklace depends on how you price it compared to other vendors in your area. Most of the time, it ends up being about whether or not the customer thinks it's pretty, which opens up all sorts of opportunities for vendors.
We can put off buying new clothes for a while, but it's hard to resist hunger. That's why food businesses are so profitable. Food is easy to make and inexpensive to prototype.
Dropshipping is a great business model that you can start with very little initial investment. To get started, find a product and create your online shop using an eCommerce platform like Shopify.
Then try different marketing methods to see which brings in more traffic and sales. When you’ve found what works, you’ll be able to start dropshipping with little overhead and make a nice profit.
Those interested in starting a dropshipping business can earn anywhere from $1,000 to $5,000 per month.
Furthermore, you can make between 20% and 30% profit from each sale, depending on how well your business is growing.
You can open a dropshipping store for free. Starter plans and free trials let you try products and find suppliers for your store without spending much money. You can invest as much money as you want in your business. There's no upfront cost or high barrier to entry; it's easy to start.
No, it is legal and legitimate too.
Yes, dropshipping is convenient. Here, retailers can start a dropshipping business from anywhere they have an Internet connection and can communicate with suppliers and customers. Therefore, it is a very convenient business.
Dropshipping can be a great source of side income, but it is not an easy get-rich-quick scheme as it is a low-risk business model that can be profitable for merchants.
Starting a Dropshipping business is easy, but generating revenue will require you to be patient in your marketing efforts. After reading this article, we hope you can start your dropshipping business. You can run a profitable dropshipping business by implementing all these tips and steps. Use Offeo’s marketing video maker to escalate your marketing efforts and reap the benefits of the dropshipping business.