You may be wondering how easy it is to start an online dropshipping business or may already own several companies and want to give eCommerce a shot to add an income stream.
Building a dropshipping business from scratch is not too complicated but requires persistence and effort. Trying to read this article before getting into the technicalities. It will help you to fully understand what it is and how to start dropshipping successfully.
What is Dropshipping and How Does it Work?
Dropshipping is a business model that allows the business owner to sell goods directly to customers without having to keep tabs on the inventory.
Customers can find your online store to buy products, which third-party suppliers then deliver to their addresses.
The profit you generate as the store owner is the product price minus the supplier’s wholesale price, which is the arrangement you agree to once you decide to go down the dropshipping route.
There are many reasons why dropshipping businesses are appealing to entrepreneurs, such as not having to manufacture products and deal with the hassle that comes with inventory, packaging, and shipping.
You simply sell the goods and pay a percentage to the supplier, which is a pretty fair deal. Additionally, you can find suppliers specializing in customer service, allowing them to handle customer complaints instead of you becoming involved.
For these reasons, many believe that dropshipping businesses model are the future and should be considered by everyone looking for additional income sources.
7 Steps to Start Dropshipping Successfully
There are a total of seven steps you need to keep in mind when starting a global dropshipping business.
These include finding your niche, analyzing competition, figuring out the logistics, finding a supplier, building your online store, optimizing the website, and marketing your store.
1. Finding your niche
The first step is fairly obvious since you must know your target market and what you’re looking to sell.
Many people make the mistake of thinking they need to plan everything beforehand, which prevents them from executing the initial steps.
You don’t need to know every single product you’re going to sell. All you need to get started is to decide which area or niche interests you, such as selling souvenirs, decorations, fitness equipment, etc.
Once you’ve established what you’ll enjoy selling or what will generate the most sales, you can begin acquiring these goods and taking quality pictures to put on your online store.
2. Analyzing the competition
It is crucial because it helps you know how difficult or easy it will be for you to tap into a market.
If you do a quick Google search to look up the products you want to sell, you will find your competition, allowing you to check out their websites for insights on how they’re successfully running their business.
You may also use third-party tools that analyze your competition, such as how much website traffic they receive and what advertising tactics they use.
Some examples of these tools include SEMrush and Alexa, which can be purchased for a thorough analysis.
This part of the process helps you determine whether you want to replicate your competition’s process or create an even better one, which is crucial for a successful dropshipping business.
3. Figuring out the logistics
The logistics can get a little tricky, but all you need is to brainstorm and research essential aspects of the business after deciding your niche, the products you want to sell, and your competition’s strategies for generating sales.
You want to come up with a business name, choose a structure type, get an Employer Identification Number for tax purposes, become licensed by reaching out to your government, acquire a sales permit and tax license, and apply for a home occupation permit.
4. Finding a supplier
It is not that difficult since many platforms have lists of reputable and reliable suppliers, like Oberlo and Sprocket.
However, if you wish to find them yourself, you can go through an intensive process that involves looking for people with experience, checking their product quality, finding suitable shipping options, and determining the shipping fees.
These are important because you don’t want to work with someone inexperienced and incompetent, which can destroy your business reputation.
If your supplier is selling low-quality goods, this can work against you because customers will not want to buy from you again, which is why you should request samples before securing a contract or deal.
The shipping duration can be a problem since many suppliers are from China, making it essential for you to check delivery times to ensure that your customers get their products on time.
Many new businesses that enter contracts with unreliable suppliers often receive negative customer reviews due to late deliveries, which is why research and communication with your supplier is a must.
Finally, you need to ensure that your supplier isn’t charging heavy fees since the margins for this business are low, making it essential to discuss the fee structure beforehand.
Ideally, this fee should not exceed more than 5 USD per item.
5. Building your online store
After getting this far, your next step is successfully building a professional dropshipping business store.
You can either choose a Shopify store or opt for a particular eCommerce platform, allowing you to finalize the process by getting a domain name, backend platform, and design.
Hiring a website developer may be the best option for you, or you could build one yourself since it is not that difficult and can be built in a day.
6. Optimizing the website
Optimizing your dropshipping website is crucial because you need to ensure that your customers can find you easily since there are likely too many options on the Internet.
You may wish to hire an expert for this process or do it yourself, but after ensuring that you’re optimized for discovery, you need to look at conversions.
The conversion process can require a lot of tweaking, but the main goal is to make it as easy as possible for potential customers to perform an action on your website.
One method you may wish to employ includes taking customers directly to their cart, allowing them to easily purchase whatever they want and leave.
You may use an upselling tactic from there, but it’s best to keep it as simple as possible.
Another key method is to use trust badges, which indicate that your business is reliable and trustworthy, allowing customers to retain their peace of mind when purchasing goods from your business.
Finally, the store’s marketing allows customers to discover your store, which is possible through various means, such as email marketing, paid advertisements, social media, and more.
However, you should remember that this process will take some time, and you will need to spend some money.
If you just put your store up on the Internet, it will be difficult for anyone to find it, which is why finding ways to generate traffic is a crucial part of the process.
How to Find a Reliable Dropshipping Supplier?
As we’ve mentioned before, you can either use certain platforms to find a list of suppliers or do the research yourself.
Ideally, when choosing a reliable dropshipping supplier, you should look for the lowest prices for bulk orders, allowing you to maximize profits without sacrificing supplier quality.
We recommend using FillSell, which helps you find China’s best sourcing agents.
FillSell allows you to find the best suppliers in China within 1-2 days of making a request, especially ones with a strong supply chain.
Once you receive several quotes from various suppliers, you can look at their reviews and ratings to find one you like.
By choosing FillSell, you can also find discounts and expedited shopping privileges, which work exceptionally well for your new business.
Why choose FillSell?
How does FillSell work?There are four main stages of this platform’s process: receiving quotes, choosing the right supplier after comparing pricing and reviews, auto-syncing orders from your eCommerce platform (like Shopify) to FillSell, and getting products delivered directly to your customer through the best shipping companies. FillSell is the best option for you since it saves time, and the process is fairly simple with few action steps, allowing your customers to receive their products quickly and efficiently. If you’re looking to order your products in bulk, you will likely be prioritized by these sourcing agents. Additionally, there are so many reasons to trust FillSell as the platform of choice, such as their strict entry to suppliers, quick delivery process, and quality assurance of products. After deciding to use FillSell as your platform for linking with the right sourcing agents and getting the best suppliers, you need to look at the steps described in the previous section. These are for building your website, creating a customer acquisition plan through discovery optimization, SEO, and conversions, and analyzing and optimizing your process to generate sales.
FAQ About Dropshipping
If you’re new to the dropshipping business, you may want to look at some FAQs to put your mind at ease and answer some important questions.
1. How much money do you need to invest?
Although it is possible to begin your dropshipping journey for free, it is not recommended because every business requires some investment to work optimally.
You will spend your budget on your Shopify plan, domain name, product testing, and marketing.
Tallying up the expenses, they should be less than 400 USD to get your dropshipping business started.
2. Can my customers not choose Amazon for buying products?
Although Amazon has a wide variety of products available on its website, dropshipping businesses are so successful because the customers are mainly impulsive buyers.
If you see a link to a dropshipping store on Instagram and like a product, you can easily buy directly from the store instead of browsing through Amazon, which is a major advantage.
Another reason is that many people are not comparing rates for specific products; they like to find the cheapest deal, which is why dropshipping stores offer quick purchases.
3. Aren’t there too many dropshipping stores as competition?
The answer is yes and no. Although many dropshipping stores and new ones are coming out every day, statistics indicate that Ecommerce is continuing to grow.
Why is that?
If your ads are successful and your products are marketed well, you can easily generate sales for lots of revenue.
4. Is Dropshipping Legal?
Dropshipping is certainly legal and used by retailers from around the world as an effective business model.
As described in the previous section, as long as you get your licenses and permits and pay your taxes, you will not have any issues using the dropshipping eCommerce business model.
If you’re looking to add a sizeable income stream, it is definitely worth exploring dropshipping as a viable business option.
5. Pros and cons of dropshipping.
However, before you begin, there are some pros and cons of dropshipping to consider.
The advantages of dropshipping are that there’s no inventory stock, it’s easy to set up and get started, there are few costs to worry about, and you can choose from a wide variety of products.
Some disadvantages include being slightly more expensive than conventional retail, not much control over the quality of products, reliable customer service being difficult to offer, and tracking inventory is an extensive process.
Starting a dropshipping business is an excellent option for many people looking to add a significant income stream. Although choosing the right supplier can be tricky, you can use platforms like FillSell to help you find the right sourcing agent who can get you in touch with the right suppliers for your business. By carefully following the steps laid out in this article, you can begin your dropshipping journey today and start earning in less than three months.