Dropshipping business is an innovative way of selling products online. And here you don’t need to store the inventory. There are many drop shipping service providers in the market. And they do the all hard work on behalf of you when you get orders. However, they will charge fees for the services.
Among all the online selling options, dropshipping is the most profitable one. Additionally, you can start this online business with a very minimum infrastructure to start with.
What is Drop Shipping Business?
First of all, you set up an online store. A customer places an order at your online store. The money changes hands and is transferred to your bank account.
At that point, you forward the order to a drop shipping company and pay for the same product (at a lower price than what your customer is paying you for the same item). The drop shipper takes the product from their warehouse, packages it nicely, and sends it to the customer.
Your customer receives the product days later. Your company info appears as the sender. Your customer is happy with the product. Additionally, you are happy because you made a sale that resulted in only profit, all without ever having to stock or even touch this product throughout the entire transaction.
A good product from a trusted dropshipping supplier will eliminate the need for any up-front investment on your part. At the same time, you are returning with a healthy profit margin on each and every product you sell.
Step Wise Guide to Starting a Drop Shipping Business
Certainly, there are many crucial aspects of this business. And you must consider those seriously to get the success from the business. Here we put some of the important considerations in starting the business.
1. Find a Niche Product
Choosing the product is the most important aspect of the dropshipping business. In the dropshipping business, it is always advised to choose a product that is not too competitive and sufficient profit margin. In order to be successful as a drop shipper, you must concentrate on a focused product or group of products.
Consider the following aspects while choosing a niche product:
- Select high-profit margin products.
- The product has low shipping costs.
- The product must satisfy the upper-middle class who are impulse buyers with sufficient disposable income.
- Check whether the product has a considerable amount of searches online. If there is less or no search, it does not make any sense in starting the dropshipping business. Take help from Google’s Keyword Planner and Trends.
- Avoid those products which are easily available in local markets.
2. Find a supplier
The second most important step is to select the right supplier for the products you choose. You can search for suppliers locally and online. A company like Salehoo is a good source of finding suppliers for niche products.
3. Register your Business
You have to register your business as per government rules. Most suppliers will ask for necessary documents before cutting dropshipping deals.
4. Build your Drop Shipping Site
You must have an online store. Unless you have it, reputed suppliers will not feel confident to deal with you. If you are good at coding and technical knowledge try Magento or Woocommerce.
Our personal favorite is Shopify. Shopify is best for beginners who want to focus more on marketing and less on technicalities of building an online store.
If you are new to dropshipping, finding the right products and suppliers is a big headache. An app like Oberlo is an easy solution for them. You will find this app integrated with Shopify. This is one more reason, why we suggest Shopify for new drop shippers.
While you build your dropshipping site, don’t forget to create a product listing page. You must add and update relevant products as much as possible.
Try to get as many reviews of your products as possible. Companies like Trust Pilot help store owners in collecting reviews quickly.
5. Promote your Online Drop Shipping Site
Create a marketing plan to generate traffic to your site. Take help from Google Ads, Facebook Ads. Try to have a blog and write articles relevant to the product. Find sites related to your product and contact them for writing a guest post for them.
To be successful in the dropshipping business, you must concentrate on marketing and customer acquisition. You have to be constantly innovative in finding new opportunities, recent trends, etc. You must use tools like Google Analytics, Facebook conversion pixel data in gathering information about where your customer is buying, what is their age group, etc.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their business. Our aim is to educate the entrepreneur on the various stages of entrepreneurship.