If you have ever considered working for yourself, starting a dropshipping business is a great first step into entrepreneurship. You’ll be able to sell products to customers and set your own product prices, without the need to pay for inventory until it’s sold to an actual customer. With ecommerce sales amounted to nearly 3.5 trillion dollars worldwide in 2019, starting an online business is an increasingly lucrative option in the current market. With the right foundation and some hard work, you can build a successful brand.
In this article, we will explain what exactly a dropshipping business is, how to start a dropshipping business, how to find the right ideas for your dropshipping business, and everything else you need to know about drop shipping.
What Is Dropshipping?
Simply put, dropshipping is a fulfillment method where you, the retailer, doesn't keep an inventory of products and instead send customer orders and shipment information to a third-party wholesaler or supplier. The third party then ships the purchased products to the customer. Dropshipping ensures that you'll never deal with inventory, shipping, logistics, fulfillment, or packaging that is required in a traditional business model.
What Do You Need to Start a Dropshipping Business?
1. Select a niche.
The niche you select, not only needs to be specific, but also something you are genuinely interested in. A product range that isn’t focused is extremely difficult to market. It takes a lot of work to successfully scale a drop shipping business so it is important that it is something you are also passionate about.
2. Perform competition research.
You will be competing with other drop shipping operations as well as the major retail giants. Don't simply look for a product that has little to no competition as that could be a sign there isn’t demand for that particular product. Instead, look for products that have competition, as it’s a sign that there is a high demand and a sustainable business model.
3. Secure a supplier.
Partnering with the wrong supplier can make or break your business, so it’s important not to rush this step. Conduct proper due diligence. With most drop shipping suppliers being located overseas, communication is extremely important. If you are not 100 percent confident in the communication abilities of a potential supplier, don't risk your business, move on and continue your search.
4. Build your ecommerce website.
The fastest way to launch a website that supports a drop shipping business model is to use a simple ecommerce platform. While that can be a viable option there is no substitute for hiring a web design and development company to create a custom solution that is tailor made for your success.
5. Create a customer acquisition plan.
Having a great product and a website means nothing without acquiring customers to buy said products. Ad campaigns, search engine optimization and email marketing should be your focus. Hiring a web design and development company with experience can make that happen.
6. Analyze and optimize.
It is important to track all of the data and metrics available to grow your business. When you are able to track every single conversion you know where the customer originated from and what path they took on your website so you can scale what works and eliminate what doesn’t.
How to Find the Right Product for Your Dropshipping Business?
Now that you've found your niche, you can start narrowing down product ideas for your eCommerce business.You should aim to brainstorm at minimum 10-20 product ideas and either qualify or eliminate them from your list. Once you have at least one solid product idea at this stage, you’re ready to progress to the next level.
The perfect dropshipping product is generally:
Not dominated by major brands: If a dropshipping product isn’t dominated by a major brand you can have a greater chance of success in that market.
Small and lightweight: A good dropshipping product should be able to fit inside a shoebox and weigh less than 2kg (4.4lb). This will save you paying extra for shipping.
Non-seasonal: Ideally, you want to avoid products that are only in demand for one season a year. The more demand a product has the greater chances of sales. Choose dropshipping products that are in demand all year round.
Retails for between $15 and $200: Anything less than $15 and there's not much of a profit margin and anything over $200 is difficult to sell large quantities quickly. Although there are exceptions to this rule, following it will make it easier for your dropshipping company to succeed.
With hard work and dedication to your dropshipping ecommerce business you can succeed. Work with a SEO to create high-quality content and bring traffic to your website today.