Dropshipping is one of the great ideas in the history of entrepreneurship. It allows you to establish your brand, set your prices, and sell products, and you don’t have to maintain inventory. If you want to learn how to be a dropshipper and start a dropshipping business, then you’re at the right place. Today, we’ll discuss what dropshipping is, how dropshipping business model works, how to be a dropshipper and how to start a dropshipping business, and many other frequently asked questions.
What is Dropshipping Business?
Dropshipping business is a bit different type of an e-commerce business model. It allows you to run and manage an online store without storing and maintaining inventory. After receiving an order from the customer, you transfer the order to the supplier, and the supplier would directly deliver the product to the doorsteps of customers.
How does the Dropshipping Business Model work?
The business model of dropshipping revolves around three main players. They’re as follows;
The role of the manufacturer in the dropshipping business model is product creation, storing, managing inventory, delivering products to the customer on behalf of the retailer, returning/changing the defective order, and restocking the inventory. The retailer buys products from them at wholesale price and the manufacturer has to take the risk of unsold inventory.
A retailer or dropshipper is the one that sells the products of the manufacturer on its website. Its job is to make the product selection, its marketing, and promotion, setting the price, incurring the shipment cost, and making a profit after carrying all the costs.
The customer is the person in the dropshipping business model that buys products from the retailer. If the customer finds any issues, then s/he would contact the retailer.
How to be a Dropshipper
It’s time to get down to the main question of how to be a dropshipper and how to start a dropshipping business. Follow these below-mentioned steps one by one;
Dropshipping Business Idea
It matters whatever you sell. Therefore, you should take some time and chose the best dropshipping business. Many people say that you should choose what interests you and what you’re passionate about. As a matter of fact, it’s always about passion and profit. You can develop passion once you’re making a profit. It’s important to remember that the best dropshipping business ideas are profitable.
You should start by creating a list of trending products like backpacks, purses, tech, beauty, jewelry, fashion, fitness, and others. They’re some of the competitive evergreen niches that many online stores have succeeded in it.
For instance, Tim Kock started his pineapple dropshipping business and it failed and his watch business made 7K dollars in 8 weeks. The point is that the selection of the right niche matters. Therefore, you should do a thorough search on niche dropshipping business ideas. While working on the business ideas, here are some of the things that you should keep in mind;
- Google Trend is a very good tool that tells you whether a certain business niche is trending upward or downward. But it does not provide sufficient information to make a decision. It’s because some business niches are trending upward, but they don’t have enough current search to sustain their popularity in the future.
- You should search the top stores in your business, and visit their store and check out that how they’re organizing things into different categories. It would give you an idea that how you should add different trending categories to your store.
- You should also check out the product volume and its popularity. Some new products wouldn’t be in high volume and the market would take some time for them to grow. Therefore, you shouldn’t rule them out if they’re newer and have low volume.
Sometimes, you won’t see the profitable business ideas trending upward. It’s because they’re trending within them. For instance, Marble phone case in the phone case niche, artificial eyelashes in the beauty niche, and denim apparel in the fashion niche. They’re the trending product within a certain category and not the whole store.
After choosing your business niche idea, now you should conduct research about your competitors. It would answer some of the questions like what they’re selling and how they’re selling it. Here’s how you could do the research;
- You should Google each of the products that you want to sell, and the top 10 results in the searches are your competitors. If your target audience is in a different location than where you are, then you should use tools like Aherf and SEM Rush to check the search results in different parts of the world.
- You should also consider using SimilarWeb and Alexa to find out your niche competitors and they won’t appear in the general search. Such browsing websites would provide you a complete list of the websites, their traffic and audience, their advertising tools, and their social media profiles.
- You should also conduct competitive research on social media platforms like Facebook. The niche Facebook advertisements of the top brand and pages would give you a better insight. It would tell you things like; what right/wrong things you should copy and avoid, how you could differentiate, the user engagement, their marketing methods, and their followers.
- You should carefully study the content of your competitors and think that how you could perform better. Tools like BuzzSumo would help you to replicate the content of your competitors. It would also provide you an insight into the content that receives more shares and more user engagements. It would help if you sign up for the competitors’ newsletter and get an update on their latest content.
Suppliers play a significant role in your dropshipping business. In fact, you couldn’t run your online store without a reliable supplier. However, if you have reached this stage, it means that you’ve chosen the business niche idea and have conducted the research. Now, you want a supplier. E-commerce platforms like Shopify and Oberlo make it easier for you to find dropshipping suppliers.
Oberlo allows you to find suppliers and sell products online. Whether your product category is toys, fashion, electronics, or something else, just choose the product with a good profit margin of different suppliers, and add it into your store. The automation system of the application would transfer the order to the dropshipping suppliers, and they would do the rest.
Some of the main steps of establishing an online dropshipping store are as follows;
The name of your business is very important especially if you want to establish a long-term brand. You could use any of the online business name generator tools to make it easier. You should make sure that the domain name must end with dot com (.com). If you want to use a keyword in the domain, then use a broader keyword like fashion, business, or beauty, instead of niche-focused.
Login to Shopify
Shopify is a very diverse e-commerce platform. It regularly adds features like apps, resources, and new tools. Such tools would help to easily run business on your platform. If you find it baffling, then contact the Shopify guru for the free guide.
If you have a limited budget, then you should choose any of the free themes like Minimal Vintage. It’s clean and easy. Whatever you choose, you could change it anytime you want. Free themes are good in the beginning, once you start earning, and then buy a new theme.
Oberlo dropshipping is a very good platform that allows you to find and choose various products in different niches online. You should start with 10 to 25 products in the beginning. Even writing product descriptions and image descriptions for 25 products are overwhelming. If you have any questions, then you could contact Shopify support online and Oberlo.
Marketing of your store
You’ve chosen the product, completed the competitor analysis and market research, found the supplier, establish a dropshipping store, and installed the theme. Now, you have to develop a marketing and business plan in order to start selling things. Here’s how you should start the marketing;
If you’re thinking that making a huge investment in Facebook ads would increase your sale, then you’re wrong. Therefore, you should start with the lowest possible budget like 5 dollars and 10 dollars. Most importantly, you should create several ads and check all of them in order to find out which one works well. Make sure to choose the world as your target market instead of choosing it in terms of countries like the UK, Canada, Australia, and the US. If you select these 4 countries, then your marketing cost would be higher. However, if your business is growing and earning well, then you could choose it.
If your store has a plethora of traffic and you have a limited budget, then you should consider retargeting ads. It’s important to keep in mind that the retargeting ads work well if your store already has got a plethora of traffic. For instance, you have written an article and it becomes popular. Now, influencers are sharing your content and doing marketing for you. In such circumstances, you should use retargeting ads, it would allow you to convert traffic into paying customers.
Marketing through Influencers
If you have limited money to hire an influence then it’s a good thing and considers yourself lucky because it’s a long shot. Instead, you should offer them affiliate commission for every sale, such offers would reduce the risk and cost. Influence marketers rarely would increase the sale of your product is niche focused.
Free Media coverage
You should subscribe to free media tools like HARO and select the email three times a day. The report would contact you repetitively to get an insight and story for their article. If you’re running retargeting ads to backup the traffic on your page, then free media coverage would increase the sale.
Review & Optimize
After selecting the business, researching the marketing, establishing the store, and launching various marketing campaigns; now it’s time to review the results. You should also compare the pricing with competitors and make some changes if it makes any difference.
You should use Google Analytics and Search Console to review the traffic on your website, make sure that it should be moving upward. If you’re using any other marketing tool, then you should request the weekly or monthly report. A quick snapshot would help you to analyze whether the campaign is working or not.
Where can I find a dropshipping business for sale?
If you’re a non-tech person and find it difficult to establish a Shopify Dropshipping store, then you can buy it from Exchange. Exchange is a platform of Shopify Stores for those people who want to buy and sell a fully established and functioning dropshipping business. It offers a great collection of online stores, e-commerce businesses, in different niches and categories with different price ranges.
How much money does a dropshipper make?
Some successful dropshippers make an annual profit of more than 100,000 dollars. If you also want to make 100K, then you choose the right niche and right supplier to establish a brand.
How to start a dropshipping business?
You can start an online dropshipping business by following these steps; choosing the niche, conducting the competitors’ analysis, finding the reliable dropshipping supplier, establishing an online store, marketing and promoting your business, and performing analysis to improve it.
Is the dropshipping business profitable?
Yes, dropshipping is indeed a profitable business because it doesn’t involve a lot of risks. For instance, you don’t have to worry about manufacturing the product, storing, inventory management, and shipment costs. You just have to manage the store and earn a very high-profit margin.
How can I find the best dropshipping product?
It’s no doubt the success of your dropshipping business relies on the selection of the right business niche. The formula is very simple that you should look for high search volume products with low competition.
Conclusion: How to be a Dropshipper
After an in-depth study of how to be a dropshipper and how to start a dropshipping business, we’ve concluded that dropshipping is indeed a very profitable business. It would only proliferate and become successful if you follow the abovementioned steps carefully.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.