How to Begin a Dropshipping Business: 5 Steps to Success
Have you ever wanted to start an online business but ran across a few minor roadblocks?
Lack of time, a low initial expenditure, and, most crucially, nothing to offer appear to be major roadblocks to your poolside office.
That didn't stop Amazon, Wayfair, and even Etsy from growing into the eCommerce behemoths they are today. They all began by selling items they didn't make and grow by providing a distinct value proposition and employing aggressive marketing methods.
Since 2017, eCommerce has grown at a breakneck pace, with revenues expected to reach $4.9 trillion by next year.
With online shopping becoming the norm, entrepreneurs like you have a once-in-a-lifetime opportunity to launch an internet business by dropshipping. This isn't your typical guide to beginning a dropshipping company.
This tutorial will teach you not only how to establish a dropshipping business, but also where to look for products, how to choose them, and, most importantly, how to succeed.
You might be wondering, "What is dropshipping?" before you get started.
How Does a Dropshipping Business Program Work?
Dropshipping was created as a result of the difficulties that entrepreneurs confront when attempting to launch an internet business. Dropshipping is a retail business concept that eliminates the need for inventories.
The order of a customer is routed straight to the dropship supplier, who will fulfill and deliver it. In three simple steps, here's the dropshipping model:
- Your customer buys something from your store.
- For processing, the order is submitted directly to the supplier.
- The goods are delivered to your customer by the provider.
You'll never have to be concerned about maintaining inventory or dealing with things on your own.
You'll only have to worry about marketing your store and products and creating a one-of-a-kind consumer experience. To put it another way, this is the fun stuff.
Statistics on Dropshipping: What You Need to Know
Times change all the time, so staying on top of trends and making data-driven decisions is essential to staying competitive. We wanted to offer you a heads up on your research by sharing five facts about what's going on in the world of eCommerce.
You'll have a good sense of consumer trends and how to stay relevant and competitive while establishing your dropshipping business if you know these five truths.
61% of Millenials and 55% of Gen X said they would pay more for environmentally friendly products.
Mobile sales are expected to account for 45 percent of all ecommerceeCommerceotaling in a $284 billion industry by the end of 2020.
By the end of 2020, 80 percent of sales and marketing executives predict they will be using chatbots in client interactions.
85 percent of Millenials make a buy after watching a product video.
On their social media pages, 54% of people look at a brand's items.
5 Reasons to Launch a Dropshipping Business
So, what's the big deal about dropshipping?
We'll tell you the truth. In the realm of eCommerce, there is a lot of competition. Starting a dropshipping business takes a lot of effort, patience, and a willingness to fail quickly in order to achieve faster. It is, nonetheless, worth it, just like other small business ideas.
We understand that beginning a small business requires a leap of faith, therefore we've put together a list of five reasons why you should start a dropshipping business.
1. Only a small amount of money is required.
Saving money to start a business is a thing of the past. The best part about eCommerce and dropshipping is that you don't need a lot of cash to get started!
You can keep your day job while you start your business, and once you've established yourself, you can transition from side hustle to a full-time business owner.
The first money you'll need is to pay for your domain, an eCommerce platform, and any dropshipping platforms you decide to employ.
It may take a long time to truly develop yourself, but if you put in the effort, you can achieve financial and remote freedom.
The initial costs of launching a dropshipping business are substantially lower than the price of building an inventory of things and selling them. The inventory feature has been removed entirely.
2. Business model that can be scaled.
Scaling your business entails having a flexible business plan that can adapt to rising sales, client questions, and requests.
Dropshipping is a scalable business model. All you have to worry about is your inventory and supplier connections, as well as keeping your customers satisfied and informed.
Your customer service can be easily automated thanks to rising technology trends, and there are a plethora of possibilities for automating various elements of your organization.
3. Low operating costs.
You would have had to search the internet and wholesalers for things, order them in bulk, and store them in your home in the hopes of selling them all before using drop shipping.
You'd have to keep track of goods, manage customer deliveries, and design a system to keep track of everything.
Dropshipping simplifies the process because you simply have to worry about the orders that come in and your relationship with your supplier.
You've saved time and money by not having to store and organize these products, as well as dealing with the delivery of each product to your clients.
All you need to begin is to pay a price for your domain and eCommerce platform, and your advertising expenditures will begin.
4. Capable of locating new markets with minimal risk.
The popularity of face masks and self-care products began to rise steadily in December of 2019.
It had become an entrenched requirement by the beginning of March 2020, with face masks becoming indispensable in daily living.
Dropshipping allows you to effortlessly adapt your online store to your consumers' needs and establish a diverse product catalog that is relevant, original, and of high quality.
It's simple to adapt, and you won't have to redesign your company to meet shifting needs.
5. Begin selling more quickly.
You could have added face masks (and other additional essentials) to your product catalog overnight and started running ads and campaigns right away if you had used dropshipping.
Thousands of new consumers and a ton of leads for prospective marketing and recurring customers would have resulted from this.
These kinds of trends happen all the time, and with dropshipping, you can start selling goods as soon as they become hot.
Later, I'll go into how to spot these trends.
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How to Get Started with Dropshipping
Something big always begins with a little step. You must first enter a frame of mind that incorporates learning, entrepreneurship, and positive growth before you can begin working on your dropshipping store.
There will be failures and fears, but there will also be opportunities to learn and grow as a result of them. You'll need to learn how to fail quickly, just like most successful entrepreneurs, and how to leverage failure to fuel better decisions. In order to create the finest possible online business for your niche, stay positive, proactive, and brave.
You'll need an eCommerce platform that supports your growth, a dependable supplier, and something to sell to get started dropshipping.
After you've finalized the specifics of your business registration and sales tax ID, we've described the five actions you'll need to complete to get started.
Prepare your notepad; the following five steps will assist you in laying a solid basis for a successful dropshipping business plan.
- Your Company's Operations should be smooth.
- Choose a niche for yourself.
- Locate a suitable vendor.
- Choose and create your eCommerce store.
- Promote your dropshipping business on social media.
- Your Company's Operations should be smooth.
Create a solid foundation for your dropshipping business. You must be vigilant and make sure all of your details are sorted out because this is a very new and non-traditional way of doing company.
- Determine your company's structure.
Will you build your own website or use a third-party eCommerce platform?
Will you identify and vet dropshipping suppliers independently or will you use a dropshipping platform?
Do your homework in terms of the amount of time and money it will take to have these services performed for you.
You can start your dropshipping business right now if you utilize BigCommerce as your platform.
Building a converting eCommerce website from the ground up, on the other hand, takes a lot of work and technical know-how.
Not to mention researching website design tips that convert well. In the end, the decision is yours, but keep in mind that your time and energy could be better spent on marketing and product development.
catalog Pick a dropshipping structure that works for you.
When it comes to dropshipping, the concept of investing time and energy is quite important.
Finding new suppliers and establishing relationships with them is difficult and time-consuming. Another important condition to achieve is vetting them for quality items and communication.
Platforms like Spocket link smoothly with your BigCommerce store and allow you to explore products from reputable suppliers in the United States and Europe. All that's left for you to do now is find things to offer inside your niche, and you'll be one click away from a one-of-a-kind product catalog.
- Decide on a business name and register it.
Your company name will be a crucial aspect of your brand, so take your time and think about something that will resonate with you, your specialty, and your potential clients.
A good business name consists of aesthetically beautiful typography, lengths, and syllables, and is somewhat scientific.
Make sure to include an SEO term that will allow your customers to locate you easily. If you're selling gorgeous handcrafted jewelry, for example, incorporate the term "jewel" or "jewelry" in your company name. "The Rebel Jewel," for example.
It's not required, but it certainly aids in your Google marketing efforts. It could actually save you a lot of money and time in the long run!
Next, as soon as you've decided on a domain name, make sure to register it. This can be done through BigCommerce or by transferring an existing one that you've previously acquired. Aim for the a.com domain, which is recognized to be more trustworthy and used in the search. For a booming online store, discoverability is crucial!
- Obtain an Employer Identification Number (EIN) (depending on your location).
Obtaining an EIN is both a legal requirement and a cost-free way to protect your company. This can be done quickly and easily via your government's application online, which will guide you through the process.
This is also a good method to establish trust with your customers by demonstrating that you're a respectable small business with a local presence.
Submit an application for a business license and permit (depending on where you are located).
In order to operate, you may need to obtain a business license, depending on your location.
Make sure your legal duties are met before you begin the fun part of establishing and maintaining a drop shipping firm, so you can sail effortlessly into a successful small business.
This not only protects you but also legitimizes your small business and strengthens your position as a small business in your country. Make sure to include these on your website so that potential buyers know you're trustworthy and safe.
- Choose a niche for yourself.
When we suggest "pick something you love," we're not trying to be corny. Choosing a niche you enjoy suggests you're already a member of this audience, and you're knowledgeable and passionate about what people like you desire.
This gives you an advantage over the competition and a head start in selecting the correct items and marketing techniques.
Let's pretend you're a new mother. Motherhood is an exciting time, and tools that make raising curious tiny people easier are always welcome. New moms are always seeking methods to make life easier with their children, from hip seats to potty training equipment.
You can create a store with gadgets and videos on training and "puppy-proofing" your home for new dog owners. Nobody wants their shoes to be bitten to tears, which is where you come in with incredibly durable dog toys!
- 1. Go to Google Trends and see what's new.
Google Trends is a free tool that can help you with market research and understanding what consumers want. When we need answers or solutions, we naturally turn to Google.
When you're looking for popular niches, trends, or products, this tool will be one of your first stops. Simply type in a keyword that someone in your field would be searching for and see what comes up. This keyword can be anything that is relevant to your industry.
"Dog collars" for the pet niche, or "bath bombs" for the self-care niche, for example.
Let's take a look at "Dog Collar" for the pet niche as an example: When reviewing the results, you should ask yourself a few key questions.
- Is the demand for search engines stable?
For your chosen niche, search demand should always be consistent. It's clear from the example above that people adore their dogs and will continue to do so in the future. It will never go out of style, and it is not a passing fad. This is fantastic news for the pet industry!
- Is the number of searches rising or falling?
It's crucial to keep track of whether product searches in your niche are steadily increasing or steadily diminishing.
This provides you with information about your niche's future, as well as the stability of your clients and revenue. Choose products and a niche that have a consistent, or even increasing, search volume.
- Who is looking for this?
The most difficult aspect of marketing when establishing a dropshipping business is determining the ideal target market segment.
Some of them result in sales, while others fail to accomplish so. You can check who searches the most for these goods on Google Trends and target them specifically.
Because West Virginia appears to have the highest searches, why not target your social media advertising there?
Overall, keep in mind that trends and times change all the time. Keep an eye on the news and what's going on in your consumers' worlds. You may make data-driven decisions about what to sell and to whom to sell it using Google Trends and social media.
- 2. Look at what's hot on the internet.
See what people are buying the most on eCommerce giants like Amazon, Etsy, Pinterest, and eBay. In the case of Amazon, you may look at their "Most Wished For in Pet Supplies" to get a sense of what people are looking for and how you can fill that void.
On Etsy, you can search for products based on "Top Customer Reviews" and learn why buyers like them. Take a look at the best-selling "dog collar" items and pay attention to what people are saying about why they like them.
You'll learn why these products are so popular, and how you can apply what you've learned to your own store. This is not a one-time project. To be competitive and current in your area, you must continually monitor what's selling. If you can't do it every day, at the very least do it once a week. You'll always be up to date on the best sellers this way.
- 3. Compile a list of competitors.
For a tiny business that hasn't yet established itself, conducting a competitive study is essential.
Consider the following questions:
- What strategy will you use to compete?
- What is your value proposition going to be?
- What can you do to outperform your competitors?
To begin, perform a SWOT analysis to determine your strengths, weaknesses, opportunities, and threats. This section will need you to concentrate on your flaws.
You're only a Google and Facebook search away from finding your competition after that. Or, even better, you find them.
Look up "dog collars" on Google and you'll find a plethora of internet retailers vying for your attention. Choose the top ten, and keep track of their names, URLs, top items, and sales propositions, as well as their marketing campaigns, in a spreadsheet. Then, shift your focus to Facebook.
Look up your competitors on Facebook, then go to Facebook Marketplace to look for dog collars. You won't have to put in much effort because you'll soon discover that Facebook is showing you advertising from your competitors. Make a list of all of them and keep track of their products and marketing techniques.
You'll always know exactly who you're up against and how you can compete if you do it this way. This phase necessitates ongoing attention and should be a key component of your marketing plan. Keep your friends near, but your enemies closer, as Don Corleone stated.
Look up the reviews for their store and specific products when completing rival research, and look for the lowest ratings. Look into what consumers are complaining about and improve your store in those areas. You'll be able to immediately provide something that your competitors can't.
- Locate the Best Dropshipping Product Provider
- 1. Suppliers can be found in a variety of places.
- 2. Perform a supplier evaluation.
- Choosing Products
- Communication
- Wholesale Prices
- Shipping Time
You'd like to create a 30% profit margin on each product while yet keeping the prices accessible for your target market.
- Choose and create your eCommerce store.
- 1. eCommerce marketplaces.
When it comes to creating an online store, using the dropshipping model can save you time, effort, and a lot of money.
But what would dropshipping is an eCommerce marketplace look like? If you've ever visited Amazon or eBay, you'll notice that the products are organized in an unimaginative and straightforward grid that makes it easy to locate what you're looking for. There are no marketing strategies in place, and there is no value proposition. The things are identical, and there are few ways to tell which one to buy other using user review filters.
There's no doubting that eCommerce marketplaces like Amazon or eBay are excellent for getting your product in front of potential customers. But how will you appear as a suggested product to your clients if your product isn't one-of-a-kind and very unique? You become just another brick in the wall, with no potential to establish a brand, tell a story, or truly stand out. To top it off, you have to fight with Alibaba on a regular basis for similar (or lower) priced competitors.
This strategy can work if you have a one-of-a-kind product with an outstanding value proposition, but keep in mind that your marketplace competitors are working around the clock to outperform you and create a product that will outperform yours in terms of price and functionality.
- 2. Ecommerce platforms.
Ecommerce systems were created to assist small business owners like you in launching their online ventures and building a fantastic brand with your own unique story.
Your consumers won't be hesitant to pay with their credit card and sign up for your offers thanks to built-in high-converting website templates and an established secure payment portal. The following are some of the advantages of using an eCommerce platform:
- You have the ability to create your own brand.
- You have the ability to provide unique value propositions.
- Your payment gateway is already protected.
- You already have website templates at your disposal.
- You may easily change with the times and trends.
- You don't have to rely on an eCommerce marketplace to succeed.
BigCommerce offers a complete set of capabilities, ranging from marketing to analytics, as well as high-quality design options and expert support. You can always utilize free website builders like WordPress, but you'll have to go through the school of design to learn how to incorporate high-converting features.
Choosing an eCommerce platform is a simple and quick approach to save time and money in the long run if you don't have the time or knowledge.
- Promote your dropshipping business on social media.
It's time for people to see your dropshipping business now that you've designed a great website, added incredible products and solidified the tiny details. One of the most crucial components of running a successful online store is promoting your dropshipping business.
You'll need to put all of the knowledge you gathered from your competition to good use and create a winning marketing strategy. You can begin by following these four crucial steps:
- 1. You should send emails.
You should begin your email marketing campaign by building a robust email list of the people who visit your website. It's vital to collect emails from visitors to your online store in order to build leads – and purchases.
Offering a one-time "40% off" banner or pop-up if they sign up for your email promos is a fantastic method to do this.
Another fantastic perk is that every first-time purchase comes with a free t-shirt. This is a fantastic approach to getting others to execute your marketing for you.
Your visitors will not only be persuaded to make a purchase, but they will also provide you with their email addresses, allowing you to nurture the relationship further.
This entails building a fantastic email campaign that personalizes the content based on their information.
For example, if someone buys baby clothes for a newborn, why not send them clothes for a 6-month-old a few months later? The same may be said for clothes purchases. Why not email a consumer who purchased a sweater dress in the winter with spring selections and deals a few weeks later? Personalization is important.
- 2. Make social media posts.
If you haven't noticed, social shopping has become a mainstream phenomenon across all social media platforms. In fact, 87 percent of eCommerce customers believe that social media aids them in making purchasing decisions.
Facebook, Instagram, and Pinterest all allow you to build an in-app "Shop" with products. This means you have a lot of options for creating amazing content and establishing your own brand using these channels. You can start selling right from your social media page!
But before you can start getting excited, you'll need to come up with a content marketing plan and social posts that will really grab your audience's attention.
- Make all of your visuals and aesthetics consistent by choosing a brand color palette. You can achieve this by using the same filter all of the time or by ensuring that all of your photographs have the same simplicity and color palette. Otherwise, don't be afraid to utilize Photoshop!
- Create a way of life: Share the way of life that your store and niche represent. Do you have any minimalist clothing for sale? Use your photographs to tell a story about life's simplicity. Demonstrate how you can make a difference in their life.
- Use hashtags, location, and tags to your advantage: You need to make sure that others can see your wonderful posts after you've created them. You may run ads and make sure you're using the right hashtags.
You can also use this space to highlight special offers, sales, and a discount if they sign up for your email list.
- 3. Use Facebook and Google to promote your business.
Although it may appear to be a no-brainer, advertising on Facebook and Google is difficult to master and involves a lot of tweaking and retargeting.
Wait until you have a decent sense of who your target audience is before you start running ads. Don't get disheartened if you don't achieve a sale straight away; it takes time to gather enough data from your segment to target a high-converting group.
If you aren't getting many conversions from your Facebook advertising, don't cut them short. It can take 14 to 30 days for your dropshipping firm to observe changes in conversion rates after making changes and retargeting.
In reality, your advertising must create at least four impressions on a single visitor before they are persuaded to make a purchase from your online store. Make sure the copy and visuals in your ads are appealing.
- 4. Make your eCommerce store more efficient.
SEO is important.
When it comes to any type of writing on your website, from landing pages to product descriptions, you should consider adopting search engine-friendly vocabulary.
If you sell jewelry, make sure the wording you use to describe and title your products and categories reflects your SEO research. You may locate these keywords and incorporate them using Google Keyword Planner.
Finally, make sure you include a FAQ page so that your visitors know you're serious and you don't be asked the same questions over and over again. It's a simple method to earn trust and make your life easier when it comes to dealing with customer service inquiries.
- Conclusion
That's all there is to it! A step-by-step guide to beginning a dropshipping business and seizing the bull by the horns on your path to entrepreneurship.
With BigCommerce's resources and our integration with Spocket, you'll be able to start dropshipping in a matter of hours and create an online store you'll be proud of. We'll be there to help you every step of the way and provide you the resources you need to succeed.
Ecommerce is showing no signs of slowing down, so now is the time to get started on building a business that caters to your niche and community.
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