6 Foolproof ways to Start a Dropshipping Business
Are you worried you might not be able to start a business with little capital? That is because you do not know how dropshipping works. The world has moved beyond the traditional business models to newer and flexible eCommerce models. This allows sellers and buyers to keep up with the ever-changing dynamics of the market we operate in.
Dropshipping is fast gaining popularity among people, all thanks to the proliferation of the internet. It is an ideal business for those with little money. You can begin your own dropshipping business with little or no money and grow it into a big money spinner in no time.
What is dropshipping?
In the traditional business model, A seller has the products they sell in stock. They ship it off to the buyer as soon as payment is made. Things are a little different in the dropshipping model. In dropshipping, you are not required to carry to have the product you sell in stock. The purchase moves from the wholesaler to the buyer, with the seller acting as a middleman.
A buyer requests a specific product from a seller; the seller sources it from a wholesaler. The seller collects money from the buyer, pays the wholesaler, and ships it directly to the buyer from the wholesaler’s warehouse.
How to start a dropshipping business
Dropshipping can be a lucrative business. There are steps you should follow to ensure the success of your business.
Step one: choose what you want to sell
Like any other business, you have to decide on what to sell. You cannot afford to sell everything. You should pick a product in a niche you are passionate about. The expected profit margin is also an essential factor when choosing the right products to sell. It is a lot easier to sustain your passion for your chosen niche if you are making money.
Step two: conduct competitors analysis
After deciding what you want to sell, the next stage is finding out what you can about your competition. Please educate yourself on the products they sell in your chosen niche and how they sell those products. Google can be a rich source of information.
Type your chosen niche and products in the search bar. Look for people that sell similar things in your environment. Knowing your competition can also be an insight into how much in demand the products are. A product no one sells might be an indication that it is not in need around you.
Step three: Find a reliable and reputable supplier
Finding suitable suppliers is key to the success of your business. Make a shortlist of five potential suppliers for your business. Contact these shortlisted suppliers to determine the minimum quantities that can be ordered and estimated shipping time. Place a sample order with the suppliers on your shortlist. Compare the quality of the products you got from them and the shipping time before making your decision.
Step four: Build your online store
Dropping shipping is an eCommerce business. You need an online store to run a successful business. You should pick a domain name that reflects what you do and is short enough so people can remember it. You can signup for Shopify if you want. Signing up with Shopify is not compulsory, but it can be a massive help to a new startup. There are other platforms you can consider joining such as CommerceHQ, GrooveKart, and WooCommerce.
Step five: Marketing and Advertisement
The next thing to do is to market your business like tomorrow does not exist. Start by placing cheap adverts on Facebook, Instagram, Pinterest, and other social media platforms. These social media platforms have a fantastic reach and audience. Create multiple ads targeting your prospective clients.
You can offer influencers an affiliate market deal if you cannot afford to pay them outrightly. That way, they get a commission for every sale they bring to your business. Do not forget the importance of networking. Discuss your business and what you sell with friends, colleagues, and families.
Step six: Optimization
Your job is not done until you have analyzed the result of all your hard work. You can use the Google search console to evaluate how much traffic your store is generating. Understand which tactics are working for you. Compare your prices against that of your competitors regularly.
Benefits of Dropshipping Business
Dropshipping is a fantastic business for new entrepreneurs. The business model is accessible to everyone. You can try selling different items till you find your niche. Below are some of the reasons dropshipping is a good business model.
Cheap to start
Dropshipping is cheap to start. You do not have to spend a lot of money on startup. You do not need a warehouse or a physical store to begin. Your store is online. You are not burdened with packaging and shipment of products or inventory taking.
Ease of growth
Dropshipping gives you the luxury of starting small and growing your business over time. You do not need to worry about capital for business expansion. You do not have to use your money to purchase products.
Wide variety of products to sell
You can decide to expand your business by adding other products to your list. Since you do not have to pre-purchase products before selling them, you can easily switch to a trending or seasonal item your customers will like.
Disadvantage of Dropshipping
Every business model has a downside to it. Here are some of the disadvantages of dropshipping to consider before starting your business.
Low-profit Margins
Low-profit margins on products are one of the most significant downsides to running a dropshipping business. Dropshipping is a very competitive business due to the low capital required for a startup. Stores can sell products at prices that give minimal profit to drum up sales. You have no choice but to follow suit, so you do not lose sales.
Less room for customization
There is little or no room for you to customize your products to be unique to your brand with dropshipping. Suppliers work with different sellers supplying the same set of products. The more popular the supplier’s brand is, the more competition you have to sell the exact product.
We hope you have found some useful tips on starting and growing your dropshipping business. Experience is the best teacher. Start your dropshipping journey today.
