How to Start Your Dropshipping Business

If you are looking to break into the eCommerce scene, perhaps you should consider dropshipping.  Dropshipping can be one of the easiest ways to break into eCommerce.

Simply put, dropshipping is a business model in which you as a retailer do not keep goods in stock. Instead, it transfers the customer’s orders and shipment details to either the manufacturer or a third party who ships to the customer. This allows sellers to not worry about keeping items in stock, the stress of packing and dispatching.

Online marketplaces and platforms like Amazon, Shopify, eBay and others have now made it easy to open an online store. With and investment of as little as $20, you too can embark on your eCommerce journey.

With all the available platforms, the process has become much easier. While it doesn’t take a lot of cash to launch a dropshipping business, it will require hard work and focus. Here’s how to start dropshipping.

How to Start Dropshipping

The lure of dropshipping is obvious, it helps cut costs in terms of warehouse rent, insurance, inventory and other expenses. Dropshipping also allows to reach customers irrespective of geography without the need to build brick and mortar stores.

Essentially three major criteria need to be fulfilled to launch a dropshipping business. These are a product to sell; a supplier of that product; and a platform to sell the product.

If you’re thinking about starting an online business, here’s how to start dropshipping.

Choosing your Niche

Like in any business, it’s important that you conduct your research and know what your niche is. As more and more businesses look towards dropshipping, make sure your niche isn’t saturated in the dropshippingverse. A niche that is already saturated with sellers or dominated leaves little room for growth.

Your niche is all about the level of unique knowledge you have about your product. Do you provide solutions to a particular need that nobody else has addressed? Does your niche have a wider profit margin against other players in the market? How well do you stand out from the competition? What is your profit margin compared to your competition? Are people actively looking for your product?

Despite the fact your supplier or manufacturer is taking care of the shipping, make sure the cost is not too high. If the cost is too high, you are driving your clients away. Your products should be inexpensive to ship.

Finding your Ideal Dropship Supplier

Like in any retail business finding a reliable supplier can make or break your business. Particularly more so in dropshipping as you rely on others to handle the distribution of your products to your customers.

Once you’ve made a sale your supplier will ship your products from their warehouse, straight to your customer’s doorstep. You literally rely on suppliers to keep your product in stock, maintain product quality, and ensure orders are shipped to your customers in a timely manner.

Your business should make sure you have chosen a supplier that is a good fit for your service. Make sure your supplier has the proper certification and licenses and they have a good reputation. You also have to ensure your supplier does not expose your customers to hidden charges, provides fast shipping and has the capacity to deliver on promises.

While using dropship suppliers, you pay for the product’s wholesale cost when the item is ordered by your customers. Some dropship suppliers also charge monthly or per-transaction fees to access their platform. However, most offer a free starter plan to help you start a dropshipping or charge as low as $20. You can narrow your choice of suppliers by researching the top-rated dropship suppliers online.

Decide on a Selling Platform

You have two options here. You can start with your own website to start selling or an online platform with a market place.

If you want to go at it independently, start by making sure you can secure an appropriate domain name for your business. The fastest way to launch your own website that supports a drop shipping business model is to use a simple eCommerce platform such as Shopify.  Shopify comes with user-friendly features, themes, tools, resources and apps. You don’t need a tech background to get up and running and they offer easy-to-integrate Shopify dropshipping partners and apps.

Using your own website does require some investments upfront. You will, however, have control over the branding and don’t have to pay fees for every sale. Additionally, you will not have to share space with your competition on online marketplaces.

Selling on an online marketplace does have its own advantages. One it is easy to set up and start an account. They come with a huge amount of traffic, cutting your marketing expenses.

If you want to know how to start dropshipping on Amazon, it literally takes four simple steps. You set up an Amazon account; find the best dropshipping companies that have items for low price; identify the lowest cost items that have good buyer demand and list them on Amazon.

Marketing Your Dropshipping Business

You have a niche, identified your product, and built your online store. Now comes the fun part, marketing your business. Customers can’t come to your store if they don’t know you exist. You will need to attract potential customers to your e-commerce business. An easy and often proven way is to start a Facebook ad campaign.

The good thing about Facebook is it complements other online social media channels. So when you launch your campaign, you can start selling from the get-go because of all the integration the app has. For robust and continual growth, you will have to work towards search engine optimization, paid advertisements and email marketing.

Manage Your Dropship Orders and Customers Service

As your marketing works for you in generating leads and orders,  you will want to make sure all the gears in your eCommerce business are all working seamlessly. You will have to continue to monitor and see how you can better satisfy the needs of your customers.

Keeping a close eye on your eCommerce platform dashboard is of utmost importance. You should ask whether you can add more value to your operations thus increasing customer satisfaction. Do you regularly respond to customer queries, complaints, shipping problems, and return requests?

To follow through on customer needs you might want to set up a good customer service page for your website. Make sure you include information regarding typical delivery times, your return policy, contact information and answers to frequently asked questions.

Take Away

Dropshipping is a worthwhile venture and a proven business model used by tens of thousands of people around the world. Especially as a startup, because it dramatically lowers the cost of your enterprise. However, you have to do your own due diligence.

Dropshipping isn’t for all products. If your product requires special handling understand that your customers will have to pay more for shipping and handling. You will also have issues in terms of designing a return policy for damaged deliveries. Your products should also be in high demand and unique to warrant a decent profit margin.

Your supplier is key to your dropshipping endeavor. A reliable supplier allows for good customer satisfaction while a dodgy one risks jeopardizing your business.

Moreover, a responsive business will always look at improving the customers’ experiences. This means tweaking business processes to benefit customers. You should always look towards providing more value to your customers to have a long relationship with them. A responsive company makes the interests of its customers a priority.

With most of the tasks out of the way with dropshipping, you can really concentrate on making your customers happy and differentiate yourself.

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This article, "How to Start Your Dropshipping Business" was first published on Small Business Trends