In the era of e-commerce, there’s hardly a person who has not heard this word. If you have ever wondered “What is dropshipping? What is all this hype about?”, this article can explain it.
How to Start a Dropshipping Business in 2021
- 1 What is Dropshipping: definition and main principles
- 2 How dropshipping works
- 3 6 Steps to Building a Successful Online Drop Shipping With Alidropship
- 4 How much does it cost to start a dropshipping business?
What is Dropshipping: definition and main principles
Dropshipping is the form of retail where the reseller (and you actually are the reseller) collects orders from customers and transfers them to the actual manufacturer or another reseller (supplier). Are you ready to learn, how to start a dropshipping business, Let’s Start :
In this model dropshipper doesn’t possess any stocks, he only markets the goods. However the reseller markets the goods setting the prices that are pretty higher than the ones set by the supplier, this difference is your profit.
When you open a retail store, you have 2 choices: to hold inventory, or not. You can buy products in bulk, unpack them, and ship them to your customers as you generate sales. OR, you can find a wholesale distributor (supplier) who will warehouse the items for you and ship individual items directly to your customer.
Drop ship, “pack and ship”, “direct fulfillment” – they all mean the same thing. A supplier will ship the item to your customer for you, and you never have to handle the product. Drop shipping allows the reseller to focus on marketing the business and eliminate the hassle, time, and cost of dealing with the actual products they are selling.
In dropshipping model, although you don’t need to stock the goods you will still need some money at the very start. The reason is when you receive the order from the customer the money he pays won’t transfer to your account immediately but will be frozen for safety reasons. At the same time, you will have to pay for the order to the supplier which will require your own money.
Start your Dropshipping with Alidropship and buy plugin start your journey today.
How dropshipping works
Is dropshipping worth trying?
Dropshipping business has numerous benefits:
- It’s easy and cheap to set up and manage
- Your risks are very low
- You can run your ecommerce business from anywhere, so it is highly mobile
- Your possible profit and scale of your business are practically not limited
- You can combine dropshipping with other working activities
But you should be ready to some potential pitfalls:
- You badly need reliable suppliers
- The level of competition is very high, so you should have a deliberate promotion strategy
- Shipping issues and inventory management can complicate your customer service
6 Steps to Building a Successful Online Drop Shipping With Alidropship
If you are ready to start a business that can compete with retail giants, and do so on a limited budget, then follow the six steps below. While it doesn’t take a lot of startup funds to launch a drop shipping business, it will require an immense amount of hard work.
1. Select a niche.
The niche you select needs to be laser-focused and something you are genuinely interested in. A product range that isn’t focused will be difficult to market. If you aren’t passionate about the niche you select, you will be more apt to becoming discouraged, because it takes a lot of work to successfully scale a drop shipping business. Here are some points to consider when selecting your niche:
- Seek attractive profits. When you are running a drop shipping business model, your focus is on marketing and customer acquisition, so the amount of work required to sell a $20 item is essentially the same as it would be to sell a $1,500 item. Select a niche with higher-priced products.
- Low shipping costs are very important. Even though your supplier or manufacturer will handle the shipping, if the cost is too high, it will act as a customer repellant. Find something that is inexpensive to ship, as this also gives you the option of offering free shipping to your customers and absorbing that cost as a business expense in order to attract more sales.
- Make sure your product appeals to impulse buyers with disposable income. When you are focused on driving traffic to your website, you want to experience the highest conversion rate possible because most visitors will never return. The products you are selling should trigger impulse buys and appeal to those with the financial ability to make a purchase on the spot.
- Make sure people are actively searching for your product. Use Google’s Keyword Planner and Trends to check some common search terms related to your potential niche. If nobody is searching for what you are planning on selling, you are dead in the water before you even begin.
- Create your own brand. Your drop shipping business will have more value if you can rebrand whatever it is you are selling and pass it off as your own. Look for a product or line you can white label and sell as your own brand with custom packaging and branding.
- Sell something that isn’t readily available locally. Pick something your customer can’t find down the street. That way, you become more attractive to a potential customer.
2. Perform competition research.
Remember, you will be competing with other drop shipping operations as well as retail giants such as Walmart and Amazon. This is where a lot of potential drop shippers go wrong, because they look for a product that has little to no competition. That’s a sign there isn’t demand for that particular product.
There are many reasons why a product might not have a lot of competition, including high shipping costs, supplier and manufacturing issues or poor profit margins. Look for products that have competition, as it’s a sign that there is a high demand and the business model is sustainable.
3. Secure a supplier.
Partnering with the wrong supplier can ruin your business, so it’s important that you don’t rush this step. Conduct proper due diligence. Most drop shipping suppliers are located overseas, making communication extremely important, both in terms of response speed and the ability to understand each other. If you are not 100 percent confident in the communication abilities of a potential supplier, move on and continue your search.
Alibaba has become one of the largest online resources to identify and communicate with potential manufacturers and suppliers. Make sure to ask a lot of questions and learn what their production capabilities are in the event that your business grows exponentially. You want to be certain they have the ability to scale with you.
Try to learn from other entrepreneurs who have walked this path in the past. There are plenty of information sources available, from business and tech blogs to this subreddit about dropshipping. It’s a popular topic that can help you avoid costly supplier mistakes.
4. Build your ecommerce website.
The fastest way to launch a website that supports a drop shipping business model is to use a simple Powerful Alidropship Plugin and create in WordPress CMS. You don’t need a tech background to get up and running, and it has plenty of add ons to help increase sales.
Even if you have a sizable budget that would allow you to hire a web design and development company to create a custom solution, it’s a much wiser move to use one of the plug-and-play options, especially in the beginning. Once you are established and the revenue is coming in, then you can explore additional website customization.
5. Create a customer acquisition plan.
Having a great product and a website is great, but without customers looking to buy, you don’t have a business. There are several ways to attract potential customers, but the most effective option is to start a Facebook ad campaign.
This allows you to generate sales and revenue right from the start, which can contribute to quick scaling. Facebook allows you to place your offer directly in front of a highly targeted audience. This gives you the ability to compete with the largest brands and retailers immediately.
You also have to think long-term, so search engine optimization and email marketing should also be a focus. Collect emails from the start and set up automated email sequences that offer discounts and special offers. It’s an easy way to leverage your existing customer base and generate revenue without additional advertising and marketing spend.
6. Analyze and optimize.
You need to track all of the data and metrics available to grow your business. This includes Google Analytics traffic and Facebook conversion pixel data if that is your main customer acquisition channel. When you are able to track every single conversion — to know where the customer originated from and what path they took on your website that eventually led to a sale — it enables you to scale what works and eliminate what doesn’t.
You will never have a set-and-forget advertising or marketing solution. You need to constantly test new opportunities and fine-tune current campaigns, which allows you to know when to optimize or shift campaign spend.
How much does it cost to start a dropshipping business?
Let’s answer a popular Dropshipping FAQs: How much funds do I need to start a dropshipping business?
Technically speaking, you can start Dropshipping for $89. With the right combination of free WordPress CMS – and a willingness to look the other way and hope for the best when it comes to the quality of your products.
This post will break down unavoidable costs that any (legitimate) dropshipping store will need to absorb to get off the ground. Read to the end, and you’ll have an itemized list of your startup costs, plus insights from dropshipping entrepreneurs who can tell you what to expect.
How Much Does it Cost to Start an Online Business?
No doubt, online stores have lowered the barrier to entry to starting a business. You can plug into suppliers from around the world and sell their products without ever holding inventory. It’s an awesome setup.
So awesome, in fact, that people can get carried away, dreaming of a six-figure business that doesn’t require any investment.
The thing is, starting a successful business has never been free, and that’s still the case. Even with dropshipping. You don’t need to get a second mortgage, but you will have to put some money into your dropshipping business before your dropshipping business puts money into your pocket.
Cost of Starting a Dropshipping Business
Alright, the most stripped down version of a dropshipping store would include:
- Alidropship Plugin or Alidropship woo Plugin
- Domain and Hosting
- WordPress CMS
We’re going with Alidropship because it’s the most Growing ecommerce platform out there.
Good news! Alidropship One Time Payment $89! After that, Lifetime free support, So Alidropship Plugin covers the store part of the equation. Now for the dropshipping part. Alidropship Chrome Extension has a forever free option to import Products from Aliexpress.