6 Easy Steps to Start a Dropshipping Business

dropshipping business

Ever thought what in the world dropshipping is?

Not to worry, today we’re going to discuss about dropshipping, what it is and how you can get started

I’ll also in the course of this discussion give you 4 actionable steps to start your own drop shipping business today.

All that is required of you is to read until the end of this article because I’ll give you a few personal suggestions and things to keep in mind as you’re getting.

Like I said earlier, we’ll be discussing the various elements of what goes into starting, operating and growing your own drop shipping business.

Dropshipping is a business model that allows entrepreneurs to sell products to their customers without ever actually stocking the items themselves.

But dropshipping isn’t a new business model. Companies like Zappos, Amazon, Sears, etc., started out with this business model in the late 90s.

As we proceed, if you have any question(s) or want to share your own experiences with drop shipping, kindly drop them in the comments section below and I will be sure to answer them.

Note, this is an informational blog specifically tailored to help aspiring and young entrepreneurs’ best position themselves in their entrepreneurial journey. Therefore, If you like what we’re doing here consider signing up to our weekly newsletter here where we dish out actionable step to help you position your business for success.

Now, let’s say you’ve been thinking about opening up your own online business but…

…You don’t know where to start

…You don’t know what you should sell

…You don’t have the money to invest in products and

…Looking around you don’t have any room for inventory.

Well that’s what drop shipping is all about. By way of definition

Dropshipping is an order fulfillment method that does not require a business to keep products in stock. Instead, the store sells the product and passes on the sales order to a third-party supplier, who then ships the order to the customer.

Oberlo.com

You see with drop shipping you can sell stuff online without the products ever being in your hand all you need is a computer, an online store, and a basic understanding of how to market and sell online.

dropshipping business
The Dropship Business Model

Here’s How Dropshipping Works

At this point you might be asking yourself, how does dropshipping work?

First, you find what you want to sell from a supplier and then list that product on your website at a price you set

Next, when someone places an order on that product your customer pays you the retail price you’ve set and you make a profit

Then, you’ll place the order with your supplier at wholesale price and have it shipped directly to your customer

So, let’s say you found this watch on the supplier’s website for $10.00 you will then have it listed on your own website for $30.00 and when the order comes through your website you would then place your order with your supplier using your customer’s information. You then keep the 20 dollars profit and have that product shipped directly to your customer that’s it.

Now, I know what you’re thinking, why wouldn’t somebody just order the wrist watch directly from the supplier’s website?

Well there’s a couple of reasons

1. it’s a very big Internet

It’s a very big Internet and customers may not know about the supplier to buy from them directly

2. Product Isn’t Everything

When people buy things they’re not just buying into products, they’re buying into the marketing, positioning, trust, brand, and lifestyle these products represent.

With dropshipping you can focus on marketing your products and saying the right things at the right time and on providing real value to the right people because you’re not warehousing any inventory or dealing with most of the other challenges that come with running an e-commerce business

Now a couple of challenges that do need to be considered when dropshipping is that of you finding credible suppliers with good quality products and making sure you have visibility and your customers’ fulfillment process. honestly you can find suppliers on your own

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However when you’re dropshipping completely on your own you can end up spending a lot of time researching and to go shooting with suppliers to guarantee your customer satisfaction

Another option is to use tools like Oberlo, Alidropship Plugin, etc which with a few clicks gives you access to millions of products to sell and has dozens of features to make your life easier like monitoring inventory levels, automatically calculating profit margins, filling in tracking orders, monitoring shipping status, measuring delivery performance, and a whole lot more.

So why do people get into drop shipping?

  1. Easy to Get Started

First thing first, it’s really fast and easy to get started and you can dropship with incredibly low investment costs.

2. No Business Entity Required to Start

You don’t need to have an established business entity when you get started even though it’s probably smart to have one once you start to grow.

3. No Inventory Management

You don’t have to worry about managing inventory, packing or tracking which means you can focus almost exclusively on marketing, promotion and merchandising.

4. Easily Access to Millions of Products

You have access to millions of products instantly the suppliers are constantly researching to determine what’s trendy and what will sell

5. You Set the Retail Price

You set the retail price so you control the margins

6. Easy to Scale

Dropshipping is really easy to scale because you can hire a virtual assistant as your order volume increases

Challenges in Dropshipping

There are some challenges associated with dropshipping too which includes

  1. Higher Potential Competition

You have to bear this in mind because it’s really easy to get started there’s a lot higher potential for competition that’s why you’ll find a lot of advice out there that recommend you start off with finding a niche audience like cat lovers or gamers so you can operate with less competition

2. Supplier Errors

There are suppliers though uncommon, it is inevitable that a supplier will mistakenly ship the wrong product to your customer if this happens don’t take it personally and handle the return like a professional either order a brand new product from the supplier or offer a complete refund

3. Shipping Times Usually Longer

Since many dropshipping suppliers are based in China. shipping times are generally longer turning some customers off the package makes it easier though delivering some orders in as little as 2 weeks but generally speaking. If you make your shipping times clear throughout the buying process many visitors appreciate the clarity especially if you’re selling an item in a niche where delivery times are a little less crucial

OK so you might be wondering to yourself how do I get started

How to get started

Step 1: Platform: start a free 14 day trial with Shopify or Woo Commerce with WordPress

Step 2: Third Party App – Use third party app to import products and setup your store

Step 3: Product Sourcing – Find products from the app that you’d like to sell and add them to your store set

Step 4: Payment Gateway – Enabling payment gateway so you can start accepting money Shopify payments is a great default option if you’re in one of the supported countries though you may want to enable a few other gateways like PayPal, Apple Pay, Amazon payments or any of the 100 plus payment gateway as the Shopify is integrated with once you have all that

Step 5: Traffic Source – you’ll need to create a plan for sending traffic to your store I won’t go into great detail about that here but you can find a great resource for building traffic

Step 6: Produce Quality Content – finally try to produce quality content for your store from eye-catching photography to engage in product photos to great pose for your blog. Your audience loves to know more about your products and how they can be used and the story behind them

Additional tips

Now that we’ve covered all the things you need to get started here a few additional things to keep in mind

  1. There is a Learning Curve: one drop shipping is pretty easy to learn but there is still a learning curve and you will experience challenges along the way however mistakes can become learning opportunities and if you can develop resilience along the way there are plenty of people out there finding a lot of success drop shipping products
  2. It Easy To Start: While there is a significant advantage in terms of capital investment over traditional e-commerce drop shipping isn’t free you’ll likely have to spend money to drive traffic market your products and handle returns
  3. There is No Overnight Success: there is no overnight success in this is not a get rich quick scheme drop shipping still requires you to work consistently for your store true you will need to dedicate less time compared to a traditional e-commerce business but it’s not going to succeed without your hard work you will always need to invest time in improving your business
  4. Don’t Source Copyrighted Items: most importantly don’t source copyright items this is illegal around the world and can cause you some serious trouble my advice choose products in over those supply and that work of trusted suppliers who make it a priority to avoid copyright infringements that way you can rest assured that you won’t infringe on any copyright laws and everybody remains. In the legal and if you’re completely new to drop shipping start small with a single product or a small handful of complimentary items from a single supplier. you can always add more inventory as you become comfortable but it’s better to start small and build than it is to start big and become overwhelmed and
  5. Diversify: My final tip for once you’re feeling comfortable drop shipping diversify many drop shippers don’t rely on a single store for their entire income stream but operate a series of stores targeting various niches to build multiple sources of income.
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Dropshipping FAQS

  1. How to Start a Dropship Business: Can You Dropship Products Easily?

of course Yes, you can easily dropship thanks to third party apps

2. Will My Customers Know If I’m Dropshipping

If you use Verified Suppliers to source your products, your customers won’t be aware that you’re dropshipping.

Why? Simply, you won’t need to worry about those suppliers including any promotional material or invoices in the packages which will be shipped to your customers.

On the other hand, AliExpress suppliers don’t know that you’re dropshipping, so we can’t make any guarantees about this.

3. Why Should Someone Buy From My Store Instead of the Supplier?

Because you’re better.

Call it better marketing execution, which reached the prospective customer first. Call it branding, which drives people to buy from you. Call it creating a store that people trust, even if based solely on location. Call it the value you offer by providing extra services or content. Call it technology that allows your customers to shop more easily.

Don’t be preoccupied with price competition – don’t try to be the cheapest, charge a price that you’re comfortable with. 

4. Shipping Takes Too Long, Will My Customers Wait?

Your task is to define your shipping policy, and then display it on your store’s website in order to set clear customer expectations.

With the commonly favored ePacket delivery option, it typically takes only 7-14 days to reach the US.

Another benefit of the dropship model is that the ePacket delivery method is now implemented across 29 countries around the world.

In addition, some suppliers keep their most popular products in US warehouses, which offers even quicker delivery.

Lastly, you can opt to source products from Oberlo Suppliers or Oberlo Verified Suppliers instead – they have a proven track record of fast shipment. However, if you choose an AliExpress supplier, we can’t guarantee a delivery time of the same speed.

5. What About Quality Risk and Copyright Infringements?

I guess you have heard stories about the ridiculously quality of Chinese products. Sadly, some of these claims are true. As usual, though, there are two sides to every story.

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In reality, it easier to run into a bad supplier no matter what their geographical location is.

In the end, you need to be cautious when it comes to choosing your dropshipping suppliers. We always recommend that you source products from Verified Suppliers.

6. Do Suppliers Speak English?

Chinese suppliers’ English isn’t always perfect, but you can contact the suppliers in advance to get a sense of their level of proficiency before doing business with them. Larger suppliers are typically quite responsive. They have sales teams managing your orders and can answer your questions via live chat or email.

7. Is AliExpress Dropshipping Favored by PayPal?

PayPal is one of the most well-known and widely used payment gateways, so it makes sense that many ecommerce entrepreneurs want to use it for their businesses. 

That said, we suggest you really think this idea through before integrating PayPal too deeply into your business. From a customer’s perspective, PayPal is a great system as it tends to favor customers over merchants. If a customer has a payment dispute or wants a refund, for instance, you can bet that PayPal will take the customer’s word and respond accordingly. All of this is meant to protect the many millions of people who use PayPal to make purchases every day.

In order to create a more stable and secure experience for customers, PayPal has set some precautions in place that can make using it as a payment gateway a bit of a hassle. For example, PayPal puts limitations on the money in your account in advance. These limitations are based on your business history, track record, ability to provide proof of delivery on time (via tracking numbers), your business’s physical location, and many other factors. Holds on your funds can sometimes last for months, which can end up being a problem when you’re trying to grow your business. 

As dropshipping becomes increasingly mainstream, PayPal is also adapting some of its policies to make it a friendlier environment for e-commerce entrepreneurs who dropship, and there certainly are merchants who have success with this option. That said, we still suggest exploring other payment gateways. Some of our top picks in this regard include Stripe2Checkout, and Shopify Payments. Shopify Payments in particular is a great choice if your store is hosted on Shopify because you can accept payments directly with this inbuilt system, which eliminates the complication of utilizing a third party payment gateway. Note, however, that Shopify Payments isn’t available in every country.

8. How Can an Established Businesses Benefit From Dropshipping?

When it comes to dropshipping, learning by doing works best. Dropshipping is the ideal model for first-time entrepreneurs. It’s totally understandable that an established business wouldn’t change its order fulfillment model and adapt to dropshipping, but it’s still worth considering in these scenarios as well.

Why?

Simply, dropshipping is a great model that you can use to quickly test new product ideas.

In addition, you can add a new product category within a few days and if it proves to be successful, you can stock the products in your warehouse as you usually do. This way, you reduce the risk of stocking the inventory before knowing what sells. It increases your business flexibility.

Conclusion

Becoming adept at dropshipping requires time, careful research, and planning. I still prefer it because it’s the easiest way to kick-off your online business and it’s totally awesome for testing new product ideas. It requires low starting capital, and therefore you have the ability to try your hand at ecommerce with limited risks.

There are lots of helpful apps and services available to use in conjunction with dropshipping, including Oberlo and Shopify. These can facilitate and automate the more complicated aspects of the dropshipping process, and eliminate some of the pitfalls we’ve discussed in this post.

With these tools, you can devote your time to maximizing profits through developing the right marketing techniques and solidifying your brand. You don’t have to concern yourself with storing inventory, which only further accelerates the formation of a successful business.

All right that’s all I’ve got. If you’re looking to learn more about dropshipping check out our Resources Page for a Video Training, a 3 comprehensive guide that covers everything you need to know about building and running a successful dropshipping business

You’ll find that in the Resources Page and if you like this article please be sure to subscribe and get our weekly newsletter that solves real-time business problems.

You can drop your thoughts at the comment section below.

Also, kindly use the share button to share this post for young and aspiring entrepreneurs to benefit from it too.

To your success!

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About Ini Patrick

Hello, I'm Ini Patrick, a Serial Entrepreneur, Business analyst, and Online Business Strategist. Am committed to helping entrepreneurs grow their business by sharing hybrid information and ideas that teaches strategies and systems to help start and grow any business.

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