How to Start a Drop Shipping Business in New Zealand (Quick Start Guide)
Have you recently heard of drop shipping in the news? If so, you’ll probably have heard how you can make cash from your own home’s convenience, selling products directly to customers without ever touching or keeping physical inventory. If you are enthusiastic about this then maintain reading, I will demonstrate you how to begin a shipping company with a fall.
The NZ Herald revealed last year that a 19-year-old made more than $180k a year from drop shipping in his bedroom, and only yesterday they reported on a young block selling vehicle mounts turning over $800k a year.
Although you would have to be fairly fortunate to replicate comparable achievements, using drop shipping is certainly feasible to accomplish comparable outcomes. Let me explain to you to better comprehend the notion.
What Is DropShipping?
Drop shipping is a notion that defines a method of delivering products straight from a provider to the end client without going through the warehouse or hands of distributors (you).
You discover a vendor, list their products on your website and buy the item that is delivered to your client with plain packaging once you sell something take the gross quantity.
Your client never understands where the item came from and the distinction is pocketing you.
How do you know what to sell?
You will need to discover winning goods (tried and tested or fresh trends) and then list them in your own shop, which is a do it yourself platform to create a web store that will accept payments directly to your bank account in real time.
New trends, including Twitter and Instagram, can be found in many locations. A nice product curating website is called Thieve.co, which is a shoppers ‘ group that enjoys using a Chinese drop shipper called Aliexpress.
Note that there is plenty of junk on Aliexpress so it may be useful to purchase the product for assessment reasons before trying to sell the item. Control of quality can create your company or break it.
Isn’t creating an eCom store expensive?
You definitely don’t have to spend thousands hiring a geeky web designer to build a website, and you don’t have to know how to link your web address to a hosting supplier.
Shoping costs $29 (USD) per month and provides you a full platform to build your own shipping shop on your own. They give a wealth of free templates and topics to tailor your shop to your needs. They also give a large app store to further customize your shop.
Some of my favorite applications include cart retrieval to keep your customer carts stored if they close the browser and return in the future again. Another is a coupon box popup that shows when a customer enters their email address, which is good for creating a marketing newsletter that you can interact with over and over again.
Is the dropshipping business risky?
There are two ways to consider answering the question, the first is the level of investment required and given that you don’t buy any stock you can change products quickly if something doesn’t work for you.
If you compare that to an ancient fashioned retail store, you may need to purchase $50k of inventory to fill your shop. What if it doesn’t sell? Drop shipping eliminates this risk and, if necessary, is a much easier business model to alter products.
When dropshipping, the primary risk aspect is dealing with client refunds and fraud that will eventually plague your company in the future at some stage.
Can you Dropship with good profit?
Journalists who write about these dropshipping from high school rarely affect the real company expenses. Just because somebody has an income of one million dollars doesn’t imply that they’ve taken so much from home.
Remember that you actually have to purchase your supplier’s products. Usually this is 40-50 percent of the selling price. You will probably have a 10-20 percent advertising price. You will also need to make a difference in operating costs, wages and wages if any, and the IRD will want their cut too, of course.
Most shipping companies create a net profit of about 20-25 percent.
Making a million dollars would see approximately $250k pre-tax profit. Still beats a day job, but originally it takes a lot of work to get started. Regardless, one of the most profitable kiwi companies is still beginning right now.
How to Start A Drop Shipping Business NZ
How to Start A Drop Shipping Business Okay so if you are still interested and want to know how to set up a drop shipping company then you can check out my fast starting guide below. This guide was tailored to citizens of New Zealand but could be implemented throughout the world.
1. Setup Your Business Structure
If you are going to do this entire shipping business correctly then you should set up yourself as a sole trader or business as quickly as you start making more than a few hundred bucks of profit.
Personally, I have chosen to set up a business that requires a training fee and this enables you to open a business bank account with most kiwi banks. I chose Bank of New Zealand and set up a check, savings and credit card account with a credit limit of $2,000.
In New Zealand, the credit card is not as helpful for free airline flights and upgrades as other nations, but is a handy way to accumulate points as you will constantly fulfill instructions and repay the credit card when depositing money into your bank account.
To set up an NZ company or a sole trader statement, you don’t need an accountant, but if you do, it’s likely worth a while. Make sure you set up a separate bank account for your company if you only take one main point from this step. If your declaration is full of private purchases as well, it will be highly hard to file your tax returns.
Benefits of owning a company are restricted liability vs. unlimited liability for which you would be liable if your business were to go down. By purchasing through a business, your clients will have more reassurance than your personal name.
2. Setup Accounting Software
I suggest that you begin from day one. Platforms like Xero or Wave Apps (free), MyOB can provide a easy graph of accounts and invoicing, transaction ledgers that you can readily see for your company incoming and outgoing payments. This will immediately assist you see your profit / loss and balance sheet.
You can connect your bank accounts, credit cards and other accounts like Paypal, and the transactions will automatically flow to your accounting software for reconciliation.
Doing this from day one will create a piece of cake for your tax return. Don’t wait to attempt to find all those receipts for purchases until the following year. You’re going to have thousands of running a drop shipping company!
Most accountants can assist in setting up this platform and are generally included in their annual charges.
3. Setup Shopify Store
Only $29 per month (USD) can be begun with Shopify and there is no minimum commitment. Currently, you can also get a 14 day no obligation test that will allow you to build and test your store and see if it’s right for you.
You can customize it to create your shop even cooler by using free templates supplied by Shopify and install apps. There are some premium topics that assist your conversion rates by adding scarcity and confidence to your shop. Depending on the creators, these templates cost $97-$297.
Shopify provides plenty of free training and a vast community forum where you can seek advice and data to build your shop. Their platform enables anyone within a couple of hours to begin an e-commerce shop.
Note, choose your store URL carefully because once you’ve created it, you can’t alter it.
Finally, you’re going to need a domain name that can be bought for $25 through Shopify.
4. I suggest starting a general shop
First, particularly if you are establishing your first shop. This will enable you to test fresh products without your visitors being confused. Let’s tell you, JoesWarehouse.co.nz, called your shop. You could sell almost anything now and attempt a whole variety of fresh products.
If you began a shop called JoesBabyProducts.com, you’re just limited to baby products. It would be confusing if you then began selling consumer fitness products, and buyers would not trust your shop.
You can figure out what products work for you by constructing a general store instead of a niche shop and then scale them up. You can convert your shop to a niche shop once you discover a good collection of products.
Does that make sense?
5. Find Winning Products
Ahh, this is the one question that I have been asked all the time, how do I discover winning products? Well, nobody really understands the secret. You merely have to follow the recent trends, track fresh products and look out there for inspiration from other successful shops.
On your own shop, you can then reproduce this. Some of the simplest ways to discover trending products include searching Aliexpress ‘ best seller category, movers and shakers on Amazon, and using my private online favorite called Thieve.co, a community of Aliexpress shoppers sharing fresh products.
If you want an even better tool then sell
The Trend provides its premium site a free 7-day trial and provides over one million trending products with goals, advertisements and more for you.
You can also discover a good Facebook shop and see all their recent ads under’ Info and Ads’ on Facebook to see what they promote and get inspiration.
Finally, you can use winning products sharing platforms with you. One of today’s most common devices is called Intelligence, which is a Windows or MAC desktop platform costing $19.95/mo.
You’ll have to discover your own winning products, unfortunately. This is the hardest component about drop shipping and your bank account will explode with commissions if done properly (if you have traffic too).
On your platform of choice, you will need to discover an appropriate provider for your product. To test shipping time, quality and peace of mind, I would suggest purchasing the item yourself. As company acquisitions, these can be offset.
You can add the goods to your Shopify shop once you are satisfied. Make sure that you do not copy or paste descriptions of the item. Write your own item and sell it to your tourists. Why do they need it, why are they buying it from you?!
6. Get traffic
Your company is dead in the water without traffic. Like a propeller-free vessel. There are many platforms to get web traffic from, but with Google Shopping, most shipping companies use Facebook or Instagram Ads.
Creating such advertisements is a whole article in itself and would cause this article to go on for a few thousand words in addition.
There are plenty of resources out there on how to build marketing campaigns for social media.
You could also use free social media resources such as posting in groups where your clients are hanging out and sharing pictures about your shop using Pinterest.
Alternatively, you could look at the optimization traffic of organic search engines, more frequently referred to as SEO. Shopify enables you to customize websites to include such optimization, but you may want to seek an SEO expert’s help.
Don’t be a fool and purchase Fiverr spammy backlinks because it was a good idea for your mate to tell you. It may have worked but not in this day and age in 2004 and may have caused more damage than damage.
Would you like to dropship like a pro?
Would you like to know how to go further and automate your company, manage client returns and refunds, make your company as professional and use chatbots, cool apps and marketing funnels to make your dropshipping company even more lucrative? Learn about Facebook ads, Instagram advertisements, Google ads, Google Shopping and marketing for Pinterest.
ECom Elites is a training course with over 175 + HD videos to start a drop shipping company in New Zealand throughout the entire phase. I would suggest checking out my complete evaluation of Franklin Hatchett, an Auckland, NZ businessman who is shipping to death online. Look no further if you want to know from the finest.
Remember, your first tax return can offset the price of your course. Accounts chart, training.