Dropshipping is an alternative method of fulfillment for aspiring entrepreneurs.
This setup allows the merchant to sell its products without keeping an inventory. The merchant would then purchase the orders from third parties and have them shipped directly to customers.
The merchant acts as an order taker for the third parties, which could be a manufacturer or wholesaler or another retailer.
Dropshipping has become a popular business strategy. It’s not surprising why dropshipping is so popular. Although it requires minimal investment upfront, it can provide a great return. This business model can be a great option for your eCommerce store. Learn all about it.
Dropshipping: What does it mean?
Let’s begin with the basics. Dropshipping is a simple and straightforward process in eCommerce.
- Your eCommerce store receives an order from a customer
- The order information is sent to your dropshipper (vendor).
- You will receive the money from your customer once you have received the order. Your dropshipper will also charge you a wholesale price and a shipping fee. They will ship the item directly from their warehouse to you.
This business model is quite simple. Your supplier will fulfill your order and you’ll be minimally involved. You still make a profit from the products you sell through your eCommerce website. How do you start?
How to Start Dropshipping
We have just published a step-by-step guide to dropship. Here’s a quick overview.
- A niche is a group of products that appeals to a limited audience, but allows you to reach a wider audience.
- Next, choose a domain name for your eCommerce store and a host provider. Your domain name should be memorable, easy to remember, descriptive, and provide insight into your business to shoppers.
- A content management system (CMS), such as WordPress, is necessary to manage your website. It is one of the most widely used website builders in the world, and it is highly regarded for its simplicity and reliability. After it has been downloaded, you will be able to run WooCommerce. This extension transforms your website into an eCommerce shop. Next, select a theme that best suits your store.
- Then you can add products to your shop. You won’t be able to keep any inventory so you will need to import products from other suppliers. However, this can be accelerated with extensions like WooDropship and Ezusy. This automates the process for adding products to online marketplaces such as AliExpress. More on that later.
- Market your dropshipping business. You will get some traffic from organic searches but you also need to create a marketing strategy, and promote your dropshipping store via channels such as Facebook and Instagram.
Develop a Dropshipping Business Plan
This framework should provide you with a solid foundation for your how behind dropshipping business. However, you will also need to answer the Whybehind question. This is where your dropshipping plan comes in. Your plan should contain the following:
- An Executive Summary: This sums up what your business offers, who your target market is, and what will set you apart from the rest – or your unique selling proposition for dropshipping. This is how you explain why your business exists.
- Dropshipping companies don’t need to be too technical. However, you should include the ownership information, tax ID numbers and name/location.
- Products & services: Think back to your niche – which items will you offer? What are the trends? It is easy to get overwhelmed by a huge product offering at the beginning. But it’s better to start small and refine your product mix based upon what’s selling.
- Marketing and Sales: How can you increase sales? What platforms are you going to use and how much money can you spend on paid advertising?
- Financial Projections: What’s your expected ROI for the next month? Quarter? Year? ?
Dropshipping: The pros and cons
Dropshipping is a great option. Dropshipping has many notable benefits.
- Less capital required
- It’s easy to get started
- Low Overhead
- Scalability
- Flexibility
Dropshipping is not without its drawbacks, just like any other business model. Dropshipping has its cons:
- Low margins: It’s more difficult to make a profit in a niche that is highly competitive than other online shops offering very low prices. Dropshipping is a very specific business.
- Shipping issues: Your dropshippers are responsible for shipping your order. If something goes wrong, you have to investigate. To minimize problems, you will need to ensure that your vendor is trustworthy.
- Problems with inventory: It’s simple to update stock levels when you have physical inventory. If your suppliers fail to update their stock levels regularly, customers could place orders for items that are out of stock without you or them being aware. Dropshipping shops can avoid this problem by using a plugin that links their inventory levels to the marketplace.
Dropshipping with WooCommerce
Although WooCommerce isn’t the only method to create a dropshipping shop, it is widely used for many reasons. Dropshipping with WooCommerce is extremely easy to set up, manage, and customize an ecommerce store. Although you will still need to manage your business after setting up WooCommerce, your store will run itself.
Dropshipping with AliExpress
Above, we briefly discussed AliExpress. It is an online shopping service that offers international buyers products. It is based in China. Dropshipping with AliExpress is a popular option for many eCommerce store owners who are savvy about eCommerce. It offers competitive pricing, a wide range of products, and easy to use. AliExpress products come with photos that you can upload directly to your website, as well as detailed descriptions.
Dropshipping AliExpress is easy: Simply use one of the extensions mentioned above to import AliExpress products seamlessly to your site. You can also update titles, descriptions and images as needed.
Dropshipping Suppliers
There are many dropshipping companies to choose from, in addition to AliExpress. These dropshipping sites may not offer the same convenience as AliExpress, but they are worth adding to your approved supplier list if you have extra time for your business.
- Doba
- Wholesale2B
- SaleHoo
- Dropshipper.com
- National Dropshippers
- International Brands
- Wholesale Central
- InventorySource
- MegaGoods
- Dropship Direct
- Sunrise Wholesale
When you are looking for a supplier, make sure to look into Amazon and eBay integrations. You may be able to find suppliers that are compatible with Amazon. Some suppliers are available to you while others are not. If this is part of your strategy, you should look for it up front.
Dropshipping is a fast-growing eCommerce business model, but it requires careful strategizing. These tips will help you create a business plan that is well thought out and launch a dropshipping company.
Why should you dropshipping?
Dropshipping can be a great way for a new online Entrepreneur to get started. Here are the reasons why:
- There is a low capital requirement.
Dropshipping is a method where you are primarily responsible for marketing the products of third-party sellers and forwarding orders to them. You would not have to store the products that you offer for sale and you wouldn’t need to pay storage or maintenance. - There is minimal risk.
This business model puts the owner in a place where there is little risk. If any of your products fail to produce significant results, there would not be stocks to go to waste. All you have to do to get another product on the market and start over. - This allows you to manage a wide product range.
There is no reason to be afraid of selling a variety of products, as the risk of having multiple products on hand is reduced by not having to stock them. Partnering with many third-party sellers will allow you to maximize your sales potential.
Essential Dropshipping Tips for New Entrepreneurs
Dropshipping is a great way to get into the e-commerce market. Here are some things you need to remember.
Marketing 101: Learn how to master it
You are not expected to sell products. These products should be easy to set up and promote.
Your company should have its own brand. You will need to invest a lot in building your brand’s reputation and gaining a lot more customers.
Despite the convenience of dropshipping, there are no shortcuts.
Find the best partners
Choosing the right third party seller to work with is a key factor in dropshipping.
There are many manufacturers, wholesalers and retailers that you can work with. But it is difficult to choose the right one.
As the person responsible for ensuring your customers’ satisfaction, you will need to be serious about product and service quality.
This is something you need to be able do before you even start your business. It’s something you will continue doing as you grow your business so you can offer more products to sell.
Make winning offers
You need irresistible offers to get customers to buy from you
Dropshipping business owners are always looking for the best deal at the lowest price.
The best deal is one that includes the highest quality product and the best service.
These two factors really do have a lot in common with the person you are partnering with. You wouldn’t have any part in the production and delivery of the products – This is something you will confidently give to your partner
It’s always a good idea to compare your prices with others when deciding on a price.
Find out how much they charge and make adjustments to lower it. If you can’t lower your prices, how are you going to be able highlight the premium you’re paying?
Your business will be successful if you create a deal that both you and your buyers find mutually rewarding.
Don’t make the mistake of underpricing
Don’t underprice your offer in an effort to get the best deal.
You can make a profit by running a business. If you lower your price, it means you’re not making any.
Gross sales are one thing, but net income is quite another. The key is to determine the point at which both you and your customers would be benefited from the offer. It should be low enough that it will make you stand out among the rest, but not so high as to put your business at risk.
Create a professional website
Your website should be a key component of your e-commerce store. Make sure it is well designed. It should be attractive and appealing to the eye. It should be worth visiting.
Your site should not only be a visual treat, but also be functional. It should be easy to use and perform well.
Your sales focus
You have the option of expanding your product range as a business owner. Would you rather open a general store or a niche store? While this decision is strongly preferable, one thing you need to consider is your confidence in the products that you choose to focus on.
Your business can reap the benefits of targeting a niche you are skilled in. If you’re not confident in your niche, a general store might be the best option – for the moment.
Your brand is your strength
To ensure the success of your business, it is important to establish a strong brand reputation.
It involves many factors, such as the quality and service of your products, the quality of the site and your social media strategy and the relationship that you have with your customers. Many of these are directly related to the items above. One thing is certain: customer relationships are important. You can communicate with them to make sure they feel more connected with you than any other brand. This is the beginning of a bright future in dropshipping.
Be ready to adjust where necessary
You will need to adjust your setup as a startup business. This is normal. There will be bumps in the road and eventually you’ll realize that your current setup doesn’t work as you intended. As your business grows, it’s okay to make changes. Business owners need to have this attitude.
