The Ultimate Guide on How to Start a Dropshipping Business

If you’re spending hours on the internet Googling “How to Start a Dropshipping Business”, this article here is the answer to your prayer.

Somewhere amid hustle culture and the rapid expansion of e-commerce, dropshipping emerged as a prominent figure. And as stats confirm, over 40 million Americans are currently active in the side hustle scene, thus, making dropshipping more engaging and relevant than ever before.

What is Business Dropship?

Dropshipping is an income-earning practice that allows sellers to ship the ordered product(s) directly from the supplier, manufacturer, or distributor to the customer.

This basically helps erase the issue of shipping or inventory management. With that out of the picture, your responsibility as a seller reduces to only marketing & selling the products, which calls for a lot of creative power.

But before we get to the creative part, let’s break down some of the Drop Shipping Business Opportunities.

Drop Shipping Business Opportunities

From 2019 to 2025, dropshipping market size is expected to register a 28.8% CAGR globally. This is largely owed to the rapid increase in online shopping coupled with the rising trend in the global e-commerce trade.

Drop Shipping Business Opportunities

So, what else is in store for dropshipping? Take a look at these statistics to find out:

  • Dropshipping fulfills about 23% of online sales.
  • 30% of dropshipped products are electronics.
  • Ecommerce retailers utilizing dropshipping can gain up to 50% more profit than retailers that deal with an onsite inventory.

Drop Shipping: How to Start A Drop Shipping Business

Starting a dropshipping business from scratch is not easy. As market size continues to grow, so does competition. Differentiating your business from competitors gives you the edge to garner more customers.

Here are some pointers on how to start a drop shipping business:

1. Find the Right Niche

In the field of eCommerce, setting yourself apart from others is what draws customers to pick you over other businesses. This is the essential step that comes before you even decide on which products to sell.

Keep your focus narrow. It may seem simple, but it’s a direct way to ensure you’re finding not just the right niche but something that sets your business apart from competitors.

2. Analyze Your Competitor

After deciding on your niche, get to know your competitors. Focus on the who, what and how of the competitor(s) – who are they? What are they selling? How do they sell the products? And there are many ways to kickstart your research.

You can go through a quick Google search on any of your products to get an indication of competitors in a certain location or make use of tools like Ahref or SEM Rush to collect search results info from different locations. Check their Facebook, Instagram, etc., to see their engagement status.

3. Find a Supplier

It’s very important to find the right supplier, so make sure to narrow your search to about five to six potential supplies.

This gives you the chance to compare the suppliers’ ratings, reviews, and history. Keep in mind to ask important questions like shipping and order quantities. After narrowing your pick to about two suppliers, place a sample order and wait to compare the results between the final suppliers.

4. Build Your Business Store

Here are two of the essential components involved in building a solid dropshipping business platform –

  • Domain name: In every business, domain name matters. So, if the plan is to make your niche the keyword for the new domain, use broad terms like fashion or beauty instead of something specific.
  • eCommerce platform signup: To have an accessible business platform, you’ll have to sign up your business under a recognizable eCommerce platform. Some examples of such platforms include Magento, Shopify, and WooCommerce (among others).

5. Market your Business the Right Way

Here are some marketing ideas to get started without exploding your budget–

  • Facebook advertising: When you’re starting out fresh, you probably won’t know which product is the bestselling item, so create many ads to figure out the best-selling product.
  • Retarget Ads: Through retargeted ads, you’re able to take in tons of free traffic and increase the chances of converting those from potential customers to paying customers.
  • Influencer Marketing: Yes, influencer rates are high, so how do you get past it? By offering the alternative of affiliate commission. This also helps reduce risks while also increasing your media presence.

Tips on How to Dropship Efficiently

Tip #1: Bundle Your Products

Bundling products can help improve your sales as it can help enhance product value, which makes customers happy and, in turn, opens up the potential for customers to keep purchasing from you.

Tip #2: Use Great Product Descriptions

According to research, customers are more likely to purchase a product based on the description, so why not implement it?

Adding great product descriptions is also highly beneficial in improving your SEO, which in turn helps create more site traffic. Just make sure you’re using the right keywords.

Tip #3: Make use of Trends

Trends provide an excellent outlet to increase your audience and sales. So, make sure you’re eyeing products that seem to be on the rise.

As a dropshipper, your business is not confined by strict rules as you’re not carrying any physical inventory, thus, making it easy for your business to switch the products and even platforms whenever you want.

Tip #4: Use Tempting Pricing

When it comes to dropshipping, product pricing completely falls on you. So, to boost sales, you’ll have to get creative with product pricing and listing. Try to meet the right balance.

Things to Avoid when Starting a Dropship Business

Here are some key points on what to avoid when starting a dropship business:

Expecting Products to Sell Without Any Effort

Dropshipping won’t make you money instantly. You have to reinvest the time & effort saved on shipping to marketing elements that will help drive traffic. Since the packaging element is beyond your control, try to increase the focus on providing quality customer service.

Not Testing Suppliers or Relying on a Single Supplier

If you’re relying on just one supplier, there’s a possibility for your business to face logical issues along the way, like running out of stock or simply going out of business.

So, make sure to keep a backup supplier to ensure a good product flow. It’s also crucial to test out suppliers before sealing the deal.

Stress over Shipping Rates

Shipping rates can be a big hassle, but remember to keep your cool and realize the bigger picture.

Balance out what you’re trying to achieve – increased sales and happy customers or accurate shipping rates? You can utilize all the wasted energy on shipping rates and direct it towards creating a better customer experience.

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