Dropshipping is a popular retail business model when an entrepreneur is not responsible for producing and delivering products that he sells in his online store. This business form allows to reduce investments to zero and not spend money on inventories. All customer orders are transferred to Manufacturers, wholesalers, or other fulfillment companies, which ship directly to the customers. Many popular e-commerce platforms (Walmart, eBay, Amazon, BestBuy, Costco, AliExpress) work with dropshippers as source or target marketplaces.
Working with a laptop – illustrative photo. Image credit: Glenn Carstens-Peters via Unsplash, free license
Dropshipping is considered as one of the best startups for beginners. It allows one to try several product niches, create several online stores, and learn the most effective advertising campaigns with minimum investments. There are many automated tools and guidelines for creating a dropshipping business that will guide you from an idea to a profitable online store. This article gives you the essential steps for dropshipping business organizations with minimum investments.
Five essential steps on how to start dropshipping
In this part, you will learn how to organize a dropshipping business correctly. We recommend following these essential steps to escape potential losses, even of insignificant money. But please be notified that a dropshipper profit comes from the difference between the sales and production prices; the market also determines the sales price unless you have unique products. So, at the beginning, we can’t promise you huge revenue from a part-time job, but after several months, your profit will increase significantly after your online store becomes popular.
1. Choose a product niche
A dropshipper is not responsible for product quality or appearance; he can only choose the product for sale correctly. This could be performed via social networks, analytics of the most popular requests in search engines, checking best sellers on marketplaces, or checking your competitors. The most profitable niches in 2023 are clothes, car accessories, health and beauty care products, baby products, and car accessories. The manual research of a product niche may take significant time, but it is the basis of your whole business.
If you have some money, try dropshipping automation with Easync tool. Such a tool, among other automation tools, helps to discover the bestseller using their finder tool across marketplaces and other sites. Detailed analytics shows sales, estimated profit, markets for sales, and other essential data for beginners. You can use filters to find products inside the niche, whether you have some passions or thoughts.
2. Find reliable suppliers
After you have found the product, you need to find reliable suppliers. It is recommended to have several suppliers from different locations; this will help you to reduce delivery time or to cover peak loads. Not all suppliers work with dropshippers, but on AliExpress, Alibaba, Megagoods, Doba, and SaleHoo, there are numerous dropshipping suppliers for each product niche. This step you can fulfill manually or use automation tools as well.
We recommend you find the ones with warehouses in the country of your online store location. Otherwise, delivery from China will take one or two weeks. Before entirely relying on your supplier, do not hesitate to perform test orders and sign a contract. The contract should cover returns, delivery terms, production quality, refunds, and discounts; this will help to have stable order fulfillment.
3. Creation of an ecommerce store
Using an Ecommerce store – associative photo. Image credit: Zyro via Unsplash, free license
A dropshipper can open an online store on popular e-commerce platforms like eBay or Shopify or create their own online. If you open a store on the platform, you should pay some registration fees and percentages from executed orders; in return, you will receive access to the marketplace traffic, advertisement campaigns, and guidance on how to promote a store. To create your store, you must purchase a domain, find a catching domain name, build a website, and perform advertising campaigns. Such tools as WordPress help quickly create a website using thousands of themes and templates, but the subscription is paid.
Website design is a key factor of customer attraction, but you should also provide detailed descriptions with photos and videos of items. A dropshipper should also update prices and check the availability of goods at suppliers. The more precise you will be in your updates; the less financial losses you will have. For such routine tasks, automation tools are highly recommended. You may try some in their free trial period and purchase a subscription with the first profit.
4. Legalize your business
Pay attention to this step of preparation of all official papers to legalize business. Based on the laws and regulations of your country and local area, you need to organize a legitimate business entity and receive all licenses, whether an LLC or a Corporation. After receiving all the papers, you can open a working bank account or organize other payment methods. It is better to separate personal and working accounts to prepare proper financial reports and pay sales taxes. You must pay for professional consultations if you need more legal and finance knowledge.
5. Perform a marketing campaign
Marketing campaigns are drivers of all stores! You can ideally execute all previous steps, but without adequately organizing an advertising campaign, your store will not be visited. The marketing campaign consists of two parts – advertising and website SEO.
Website SEO is aimed at the natural attraction of customers from search engines who are searching for similar products. SEO report includes recommendations to the website regarding technical aspects, optimization content, and availability of external links to your website, giving brand awareness. Meanwhile, advertisement campaigns can be organized in social networks (paid ads), via influencers in your product niches (blogs or reviews), communities, or as targeted ads on popular online resources. Some marketing tools are free; even SEO analysis can be executed with free tools.
The more automated the routine processes of your dropshipping business are, the more time you can spend advertising and expanding your business.
Conclusion
Our detailed guide covers all the essential steps for a beginner dropshipper; as you see, you can start without money. If you choose an unprofitable niche, you can always try another one, as you do not have storage; just find a new supplier and reorganize an online store. The dropshipping business is very competitive, so you need to perform perfectly. Do not forget about the best customer service during order fulfillment. Return customers and good reviews are other drivers of successful dropshipper. We hope that we inspire you to launch a new dropshipping business!