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How To Start A Dropshipping Business from Home – Complete Guide

Dropshipping business is an innovative way of selling products online. And here you don’t need to store the inventory. There are many dropshipping service providers in the market. And they do the all hard work on your behalf right from picking and delivering the products that you have ordered.

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. One can easily start a dropshipping business from the comfort of home and from anywhere in the world.

What is Dropshipping 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.

The customer receives the product a few days later. As a matter of fact, your company info appears as the sender. furthermore, if the quality of the product is good, the buyer must be happy with the product. The most pleasing part of the sales process is that you are happy because you made a sale that resulted in earning a commission. 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.

Is Dropshipping Business Profitable?

Industry experts predict that the drop shipping business is poised for huge growth in the coming years. In the year 2020, the total market size of the drop shipping industry was valued at 149. 4 Billion US Dollars. As per this report, the dropshipping industry will grow by 28.8% and is expected to reach 557.9 billion US Dollars by the year 2025.

Here are the 9 Steps to Start a Drop Shipping Business

Certainly, there are many crucial aspects of this business. And you must consider those seriously to get success in 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. It is without saying, the dropshipping business is getting competitive. Big brands have already entered the dropshipping industry.

If you are a beginner and have a limited budget, it is strongly 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 Trends or Amazon marketplace and find the products that are trending and having good demand.
  • 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 AliExpress is a good source of finding suppliers for niche products. AliExpress is a free tool where one can search best selling items in multiple categories and also find suppliers selling those products.

However, keep in mind, it is extremely important to find trusted suppliers in a dropshipping business. If the supplier turns out to be not responsible, your business can go for a toss. So, check customer ratings, and customer feedback before finalizing a supplier.

Another tool you can use for finding suppliers is the Oberlo App. However, to access this app, you need to be a Shopify Store Owner.

3. Create a Business Plan

It is essential to write a business plan for your dropshipping business. Some of the key topics that must be addressed are the following:

  • Startup and recurring costs
  • Target customers
  • Pricing strategies
  • Logistic plan
  • How do you plan to promote products to prospective customers?

4. Name your Dropshipping Store

Another key aspect of a successful dropshipping business is to select a catchy name for your dropshipping store that customers can relate to easily.

If you plan to sell a single product, a business name similar to the product may be considered. However, if you plan to sell multiple products, a more creative name must be considered. You can check our article on how to name a business to learn more.

5. Register your Business

You have to register your business as per government rules. Most suppliers will ask for necessary documents before cutting dropshipping deals.

Every country and state offers a wide range of business structures based on the size and scale of operation. It is better to talk to local law and take his or her advice in this regard.

6. Get Licenses

Furthermore, you will need to attain specific licenses to conduct business activities. Talk to the local competent authorities and procure them.

7. Cost of Starting a Dropshipping Business

The costs and investments of launching a dropshipping store will largely depend on the scale of your business. However, on a small scale. one can start a dropshipping store within $500.

The major costs are setting up a basic dropshipping store with no extra manpower are as follows:

  • Creating a Dropshipping store website( Shopify charges $29 per month for their basic plan)
  • Domain Name Registration ( domain will charge anywhere between $9 to $15 per year)
  • Cost of Product Samples (minimum of $200)
  •  Promotional Costs – ( Minimum of $200)

8. Build your Drop Shipping Website

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 have 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 for free. This is 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.

9. Promote your Online Drop Shipping Business

Create a marketing plan to generate traffic to your site. Take help from Google Ads and 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, and Facebook conversion pixel data in gathering information about where your customer is buying, what is their age group, etc.