It is the 21st century, and people are gradually drifting away from the conventional business models, thanks to the internet. Long gone are the days when starting a business meant renting a space to set up. Today, you can start and run a business empire from your laptop as you travel the world and enjoy life. Hell, you can even hire people living thousands of miles away to run your business as you enjoy quality time with the people who matter, doing the things that you love. One of such businesses is dropshipping.
What is dropshipping?
Dropshipping is a business model where the retailer does not own any inventory but instead transfers the customers’ orders to the suppliers. The supplier then handles order fulfillment, shipping, and delivery. The retailer makes a profit from the difference in the retail price and the supplier’s price. Dropshipping is an inexpensive business to start since it eliminates the high costs that would be involved in acquiring inventory upfront and storing it. It also promotes a positive cash cycle since the customer pays first before their order gets processed. The profits in a dropshipping business are instant meaning that you get your profit before the customer even gets their product. You can leverage this positive cash cycle and immediate profit to scale up your business rapidly by investing in branding and advertising. So, where do you start as an aspiring dropshipper?
The first thing you need to do is choose an e-commerce platform where your dropshipping business will run. The best e-commerce platform to host your dropshipping business is Shopify which is an all-around solution to all your dropshipping needs. When you host your dropshipping business on Shopify, you get access to a list of verified suppliers, trending niches and products, free and premium website themes, among others.
Becoming a great dropshipper takes planning and massive action. Yes, the capital entry barrier might be seemingly low, but you will need a lot of hard work and some marketing knowledge to build a successful dropshipping business. Before getting started, you need a clear plan to succeed. Here are some of the things that you need to plan for:
· Niche selection
· Supplier selection
· Budget allocation
· Website design and set up
· Marketing strategies
A niche is a collection of products or services that appeal to a specific group of people. Your niche will play a huge role in determining whether your dropshipping business will be a success or a major flop. Niche selection requires you to carry out extensive research to differentiate the products that do well from those that don’t. There is also the passion factor that you need to consider when selecting a niche. Profitability should not be your sole determinant when picking a niche. You want to choose a niche that you are passionate about or at least one that you are conversant with. If it’s impossible to turn your passion into a profitable dropshipping niche, you can select a potentially profitable niche and familiarize yourself with it. So, how do you conduct niche research? Well, here are the best methods to use for niche selection in 2018
Method #1: Brainstorming
Brainstorming is the very first step to niche selection. You need to sit down and think through the kind of niches that you would like to try out for your store. Look through your recent purchases, look at what your family and friends have purchased in the recent past. These are some of the things that can help you get rough ideas for niches that you can invest in. You can also do some soul searching to determine what you are good at or passionate about. Do you love dogs? Great, you can list that as a niche. Are you a lover of art? Excellent, write it down as a niche. You should come up with at least 20–50 niches when you finish brainstorming after which you can start drilling down to find your winning niche based on these four factors:
Competition: — When settling on a niche, you first need to make sure that the market is not saturated with that niche. You can scout other dropshipping stores to see how many stores fall under your niche. You can also spy on Facebook ads to get a rough idea about the number of stores dealing in your niche and the general response from the public.
Brand loyalty: — You cannot compete with name brands when it comes to dropshipping. Well, you can try but that would be a losing battle, for you. Avoid selecting a niche that competes with big brands which have deep customer loyalty. Instead, focus on a niche that allows you to grow as a brand and encourages your customers to be loyal to your brand.
Pricing: — Pricing is critical in selecting your niche. You should not focus on one dollar items, but neither should you concentrate on extremely pricey items. If you want to move large volumes, the best price range to stick to would be $50-$250. It, however, does not mean that you cannot sell items beyond that price range. If you have the marketing skills to convince people to give you their money, then by all means, sell high ticket items.
Weight: — Shipping is expensive and the heavier the product, the higher the shipping charges. Most online shoppers are also skeptical of buying large or fragile items online because there is a higher probability of such products getting damaged during shipping. You need to find the sweet spot when selecting your niche by finding an expensive low-weight product.
Method #2: Researching on buyer trends
You do not have to reinvent the wheel to be a successful dropshipper. Just look at the buyer trends or the trending products and use that information to select a niche. The best way to identify top-selling products is by checking large marketplaces like eBay and Amazon. Both eBay and Amazon have a section where they list all the top selling products. If you want to do some research on eBay, just go to the eBay website and scroll down on the homepage. You will see a section labeled as “Trending on eBay” which contains the trending products as at that time. The trending products can give you a rough idea on the trending niches.
Amazon Best Sellers is another resource that you can utilize to identify winning niches and products. Amazon Best Sellers is a list of Amazon’s best-selling products. You will find the best-selling products listed according to their category. Alternatively, you can use Amazon New Releases, Amazon Movers & Shakers, and Amazon Most Wished For sections. To access the Amazon Best Sellers page, search Amazon Best sellers on Google and click on the first result. In addition to Best Sellers, the page you land on has other tabs namely New Releases, Movers & Shakers, Most Wished For, and Gift Ideas. These are all resources that you can use to do niche research to identify trending products for your dropshipping business
Method #3: Think outside the box
Thinking outside the box is essential for anyone to succeed in any industry and dropshiping is no exception. You have to think outside the norm sometimes so that your products can stand out from what all the other stores are selling. One of the ways to think outside the box is to look for inspiration where other dropshippers are not looking. For example, instead of looking at different stores to find trending products, you can visit the Kickstarter website and browse through the new products that are getting funding from investors. Alternatively, you can follow innovation pages on Facebook and Instagram. These pages put up pictures and videos of new innovative products. You can identify a product that solves a common problem and test it out to see the general market response. If it is a hit, then you will be smiling all the way to the bank.
The next step after picking out a niche is finding a reliable supplier. Identifying an excellent supplier is just as important as finding a good product. The supplier will be doing all the heavy lifting for you including shipping and accepting returns. You want to choose a supplier who will be discreet enough to blind ship to your customers without adding his promotional materials or invoices to the package. So, where do you get good suppliers?
Aliexpress is a subsidiary of Alibaba, the second largest e-commerce giant after Amazon. Aliexpress mostly comprises of Chinese wholesalers and is a favorite among most dropshippers because of the low cost and dropship-friendly policies. When looking for an Aliexpress supplier, you first need to search for the product that you want to sell. The search will yield several suppliers selling the product at different prices.
Do not be distracted by low prices at this stage because a supplier’s credibility is more important than their price. Check under the products to see the ones with most reviews and the highest number of orders. Once you click on a product, it will take you to the product page where you can see the supplier rating right below the search bar and above the product image and description. You can also see the duration that the supplier has been in business on Aliexpress.
Ideally, you need a supplier whose store has been open for at least three years and has a positive feedback of over 95%. Going for such a supplier gives you some sort of quality assurance because of their positive track record. Once you identify a supplier you like, it is time to make contact. When you scroll down the product page, you should see a “contact now” button on the left-hand side. Click on it to access the Aliexpress message center and talk to the supplier. Please note that you need to have an account with Aliexpress to message the suppliers, so it is imperative to open one. Just don’t open the Aliexpress account with your primary email because suppliers and even Aliexpress themselves have a habit of spamming customer emails with endless offers.
When you message the supplier, here are some of the most critical questions to ask them:
· Introduce yourself and ask them whether they support dropshipping and if they would be interested in doing a business collaboration with you.
· Ask them if they ship using e-packet. E-packet allows you to ship products faster and provides you with a tracking code that you can give your customer so that they can track their order.
· Can they give you special pricing if you keep the orders coming? You want to know if you can leverage quantity to get better prices and increase your profit margins.
· Modes of payment. Most legitimate suppliers accept credit cards as their primary mode of payment. It does not hurt to confirm it though so ask them.
Those are the fundamental questions that you should ask potential suppliers, but they should not be the only questions. Feel free to ask suppliers more questions until you are satisfied that they will make an excellent addition to your business.
Oberlo is a company that helps dropshippers source for products on Aliexpress. It also has a list of verified suppliers that you can utilize. Oberlo is an integral part in Shopify dropshipping because their sole purpose is to make it easier for you to source products, add them to your store, and fulfill orders. Oberlo’s verified suppliers are handpicked and vetted to assure merchants of the best service delivery and overall experience. The verified suppliers also know that their customers are dropshippers, so they do not add promotional materials or invoices to their products when shipping.
Order from Competition
Ordering from your competition is a nice hack to get suppliers easily. All you need to do is identify a competing store that sells the products that you want to sell. Once you identify one, order a small item from them and when it gets delivered, Google the return address on it. This is a tactic that you can use for items that are hard to find on Aliexpress or Oberlo. It is, however, not very efficient since it takes some time and it is not guaranteed to yield results.
Supplier directories are databases containing contact information for verified suppliers. Supplier directories handpick their suppliers and are run for profit so you will be required to pay a fee to access them. They are great when brainstorming ideas but are not entirely necessary when you know your niche. Some of the supplier directories include Worldwide Brands, SaleHoo, Doba, and Wholesale Central. The price plans vary with some charging a one-off fee while others charge a monthly fee. Wholesale Central is free so that might be helpful especially if you are on a tight budget.
After settling on a supplier, you need to place an order from them and have it delivered to you to see if they do blind shipping. The last thing you want is having an order shipped to your customer with an invoice of the supplier’s price. Your customer will feel conned and will probably leave you a nasty review and never buy from you again. A test order also gives you a rough idea of the supplier’s shipping duration so you can have an accurate estimate of shipping time for your customers
Technically speaking, you can start a dropshipping with $0.00 using the right combination of free trials and a monumental amount of luck. Realistically speaking, it would be impossible to get your dropshipping business off the ground without a budget. What do you need a budget for in dropshipping, you ask?
You can skip this step, say a Hail Mary, and hope that your supplier is not a jerk and will deliver what he promises. However, if you want to build a credible business, you need to validate all the products you sell before selling them to your customer. Ordering products from your supplier will help you verify and rate your supplier. It also helps you check the supplier’s shipping times and ensure that they do not add promotional material to the order. Another advantage of a product validation order is that it helps with your advertising. When you have the product in hand, you can take unique pictures of it and use them in your store to stand out from all the other dropshippers who use generic manufacturer images. You can also make some cool videos of your friends using the product and use them in your ads and product pages. Make sure to get your friends’ consent first before using the video for marketing purposes.
Shopify is not a free platform, neither is Oberlo, at least not entirely. Shopify has a 14-day trial which you can use to set up your store, but you cannot sell anything until you select a plan and enter your credit card details. Shopify has three plans; Basic Shopify which is $29 per month, Shopify which is $79 a month, and Advanced Shopify which is $299 a month. All these plans vary in features, but you can do with Basic Shopify when starting out. As your business starts growing, however, you may need to expand and get a more expensive plan.
Oberlo has a free forever option, but it will be difficult scaling your business with that option. You can, however, use the free option when starting out. The paid version has two payment plans; Basic which is $29.90 a month, and Pro which is $79.90 a month. Oberlo offers dropshippers services such as automatic order fulfillment, order tracking, product syncing, price automation, sales reports among others. The difference is the number of orders and products that Oberlo can provide their services to on your store. For the free plan, you can only automate 50 orders a month and add 500 products. On the basic plan, you can automate 500 orders and add 10,000 products per month. On Pro plan, you can automate an unlimited number of orders and add 30,000 products per month.
Other things like domain name and subscription apps also fall into this category. You need a custom domain for your business which costs money. You also need several apps to enhance your business which may sometimes have monthly subscription fees or one-off payments. Apps for reviews, upselling, exit intent and trust badges are just a few of the apps that you will need to make your dropshiping business a success.
Every business needs a workforce to succeed and dropshipping is no different. You can run your dropshipping business alone but you will not be able to scale it, and you will most probably end up getting a burnout. Besides, most people start dropshipping so that they can enjoy a life of time and place freedom. What would be the point of starting a dropshipping business only to end up working 60–80 hours a week? You need staff to help you with your business. The bare minimum you can do is by getting one staff member to act as your customer service assistant. Yes, you need a customer service agent for your business to handle all customer complaints and answer their questions. The customer service assistant can also help with order fulfillment and tracking. Ideally, you would need more staff members because you would need a writer for your product descriptions and blog posts, and a web developer to help you create and manage your store website.
Marketing and advertising
Advertising and marketing will chew through your budget like a piranha, so you need a big budget for that. Driving traffic to your website is the core determinant of whether your business takes off or fizzles away like a matchstick in a blizzard. If you cannot get traffic to your site, then you cannot make sales. It is as simple as that. The upside, however, is that if you do your marketing right, you can return your ad spend tenfold without breaking too much sweat. Most dropshippers put their ad budget at $500-$1000 depending on their products and nature of ads. You can work with a much smaller budget but scaling up will take you longer.
Website design & set up
So now you have your niche and budget ready, and a list of suppliers. It is now time to create your store. Many dropshippers tend to overthink the process of creating a store, but you do not have to. A simple website will suffice for now when you are starting out. You can add more details later. Before creating your site, you need to have:
· A store name
· A domain name
· A business logo
These are the necessary things that you will need when setting up your store. Please note that you can hire a Shopify pro to create your store for you, but if you are a little short on cash, you can do it yourself with a bit of I.T knowledge and a DIY mentality. Let us look at the critical components of your store.
A theme determines the appearance of your store but before we get into it, let us first look at how you join Shopify. To join Shopify, go to shopify.com and click on the “Get Started” button on the top right-hand corner. It will take you to a field where you have to sign up for a 14-day trial. Fill in your email, password, and store name. Once you fill in these details and submit, Shopify will ask you a bunch of other questions about your business. Answer them and click next. You will then be asked to fill in your details like your name, address, phone number, et cetera. Fill up this field and hit the “Enter my store button” at the bottom. You are now ready to get started.
On the left-hand side, there is a panel with a bunch of options. Click on Online Store to go to the themes page. Scroll down and look for the “explore free themes” button. Click on it, and a catalog of themes will pop up. Scroll through and choose the theme you like by clicking on it and hitting the “Add” button. To start using the theme, scroll down on your theme page and look for the Theme Name section. Click on the Actions button and select Publish from the drop-down menu. Remember to add your logo and essential pages when editing your theme.
You cannot use the Shopify subdomain if you want your business to look professional. You will need to use your unique business domain. You can buy a domain directly on Shopify, or you can buy from other domain merchants. In this case, it is advisable to buy on Shopify since it will be easier to integrate it into your store. To purchase a domain, you need to look at the panel on your left-hand side of your Shopify page.
Click on Domains under Online Store. A domains page will open up with a buy domain button on the top right-hand side corner. Click on that button. Enter your domain name in the domain field and click Buy then complete the purchase with your credit card details. Shopify will then give you further instructions on how to integrate your new domain name into your store.
Shopify has an app store that contains hundreds of apps to help you run your dropshipping business more efficiently. You can access the app store by clicking on the apps button on the panel on the left-hand side of your Shopify store page. Here are some apps that will come in handy:
· Oberlo: — Oberlo helps dropshippers add products from Aliexpress and Oberlo supplier websites. It also helps in automatic order fulfillment and tracking. Oberlo has both free and paid versions
· A review app: — There are many review apps, so we will not specify a single one. A review app enables customers to add reviews to your product pages. Reviews are a great way to build trust with new customers who visit your store. You can search for a review app in the Shopify app store and make your decision based on its features and reviews.
· Trust badges: — Trust badges are very important in building trust among customers. Online customers need some assurance that your website is safe and their private information will not be stolen or sold to third parties. Trust badges do just that. These trust badges appear on your product pages assuring customers that you are an accredited business and your payment methods are safe. You can also add badges for things like free shipping and money back guarantees. You can use Free Trust Badge by Hector app or go with Trust Seals & Badges app which costs $2.99 a month.
Those are the most important apps that you need in your store. The Shopify app store, however, has hundreds of apps and you can add more apps according to the needs of your business.
Product descriptions are your selling points. An excellent product description determines whether a person who lands on your website is going to buy from you or not. Do not use product descriptions from your supplier’s product page. Instead, create your own unique product descriptions or hire a freelance writer to do so. You can get freelance writers from freelance sites such as Upwork or Fiverr. Ensure sure that your product descriptions are short and concise and they highlight the product’s features and benefits to the customer.
Website pages help your store look neat and orderly. Some pages are essential to a dropshipping business. They include:
About us: — This is the page where you write all about your business. What inspired you to start your business? What is your mission? The About us page is where you woo the customer with a heartfelt origin story to make them see you differently instead of the money-hungry enterprise that you are.
Contact us: — This page should contain all the contact info that a customer can use to reach you. Phone numbers, emails, and social media pages should all be in this page.
Returns & refunds Policy: — Customers need to know what your policies are on returning defective goods. Do you accept returns? Do you refund when the goods are unsatisfactory? For how long are products eligible for returns after purchase. Make this page as detailed as possible on everything to do with returns, refunds and any other kind of dispute that may arise.
Category/ collections page: — This is a landing page for each category of your products. For example, if you sell clothes, you can have a category page for men’s t-shirts where customers can find all the men’s t-shirts in your store. A category page makes it easier for customers to find what they are looking for without the need to sift through countless products
Blog: — A blog is a great way to drive traffic to your store. The blog page allows you to create blog posts and post them in the blog section. If you are good with on page SEO, you can take advantage of the blog section to write some blog posts and rank your store on Google.
FAQs: — A frequently asked question (FAQs) page is essential to your business. You do not want customers contacting you to ask the same questions over and over again. An FAQ page features all the common questions that customers ask and their answers. Customers can visit the FAQs page to get answers to any burning questions that they may have
You have an optimized website, and the products are ready. It is now time to make your first sale. You will need to push traffic to your store to get that elusive first sale and get the ball rolling. There are five main strategies that you can use to drive traffic to your store. These are:
Proper content marketing has the potential to attract a lot of traffic to your store. It can also be a recurring source of traffic if you create valuable and evergreen content. The best way to do content marketing is by using blog posts. Luckily, Shopify provides you with a blog section, so you do not have to create a separate blog. You can also use newsletters and videos especially if you have a YouTube channel. The first step to effective content marketing is brainstorming for ideas and coming up with ideas that are relevant to your store and educative to your audience. It is essential to apply Pareto’s 80/20 rule which means that your content should be 80% educative material and 20% promotional material. You do not want to come off as a hard sell because that might push away potential customers.
Social media marketing
Social media marketing is a favorite with most dropshippers because it allows a dropshipper to get more personal with their customer base. The most common social media platforms that dropshippers use to advertise their business are Facebook, Instagram, and Pinterest. You do not have to stick to only those three because Snapchat and Twitter can also be sources of high-quality traffic. In social media marketing, you can decide to run paid ads, or market organically to your following. Paid ads vary from one platform to the next regarding targeting, price, and nature of the ad. Organic advertising can work well if your business has soial media accounts with a significant number of followers. You need to have consistency in your business’ social media interactions to ensure brand loyalty and cement your place in your customers’ social lives.
Email marketing is a very effective way of getting repeat customers to your business. You first need to obtain customer emails by using an incentive to get your website visitors to submit their emails. Some pop-ups can help you get the emails. Once you have a customer’s email, you can market to them over and over again via email. Emails should always be very personal and offering valuable information and an incentive at the end. You can use email marketing to inform your customers about new products and offer them a discount when they purchase through the link in the email. Remember also to monitor your email marketing analytics using the Google Analytics Dashboard to keep track of your marketing efforts success.
Search Engine Optimization
Search Engine Optimization (SEO) is essential in the digital world. You want your business website to be on the first page of search engines and among the top three results. Getting your website there, however, is not a walk in the park and requires you to produce quality content consistently.
SEO standards keep changing, and it is your duty as a dropshipper to keep up to date with them. For a website to rank on social media today, it needs to produce high-quality content that contains high-volume keywords. The site also needs to have a fast load time of at most 5 seconds and should promote a good user experience and be optimized to be error free. Utilizing your store’s blog section and writing high-quality product description can help get your store better SEO ranking.
The rule of seven dictates that customers have to see your content for at least seven times before they make a purchase. This means that a customer can visit your store for up to seven times before they make a purchase which makes retargeting a very critical marketing strategy.
Retargeting a customer involves displaying ads to a customer after they visit your website. Retargeting ads start showing up to your website visitors as they browse the internet and eventually, they will revisit your website with the intent to buy. To effectively run a retargeting campaign, you need your ads to be as specific as possible. Which product was the customer looking at on your website? You need to display ads of that particular product. Your ads also need to link to that product’s page and not the homepage. Only include the information that will entice your customer to buy from your store.
All things considered
Starting a dropshipping business does not have to be a complicated process. It does, however, require you to plan and be strategic. You need to follow specific steps to ensure that your business launches without any hitches. Following the steps laid out in this comprehensive guide will help you avoid the pitfalls that hinder most dropshippers from starting successful dropshipping businesses. As for now, happy dropshipping, and may the market forces be with you.