If you are here, then you probably heard a successful dropshipping business story and would like to know how you can make millions in a matter of months.
To tell the truth, not every dropshipping business owner is a millionaire, but it is for sure one of the most profitable business ideas you can have these days.
Currently, the dropshipping market value is estimated at $128.6 billion. By 2026, the value is expected to grow and reach $476 billion. Additionally, it was one of the rare industries that weren’t slowed down by the pandemic, as in 2020 and 2021 the market value grew by $30 billion.
So, if you read our other blog posts, you already know the basics of dropshipping. Now, it is time to roll up your sleeves and start your own dropshipping story. Here is our advice on how to do it.
In the US, more than 250 million people buy online, and the number is constantly increasing. This is very good news for dropshipping businesses because people are getting used to buying online and using virtual stores.
Dropshipping is a digital merchant business model, where the retailer doesn’t own the products they sell but rather mediates between the customers and the suppliers. This is how it works in practice:
- The dropshipping brand promotes the products
- The customers can see and order the product in the dropshipping store
- The store purchases products from the supplier
The dropshipping business makes a profit on the difference between the source and selling price.
One of the best things about starting a dropshipping business is that it involves a significantly low amount of risk. Firstly, the total expenses are low. You don’t make the products and don’t have an inventory, so you don’t pay for the production or expensive rents. The only thing you have to pay for is your domain name, website maintenance, product samples, and marketing.
In other words, the primary purpose of dropshipping businesses is to properly promote the products and communicate with the customers.
Furthermore, it is very easy to run a dropshipping store, so you don’t need many employees either. You can do it yourself, run it as a family business, or hire a virtual assistant once the firm develops and the number of orders becomes overwhelming.
One of the major downsides of dropshipping is the fierce competition. In order to beat the many competitors, you will need some research and good branding, which will be discussed later on.
Step-By-Step Guide: How to Start a Dropshipping Business?
Now that we are clear on what dropshipping is, let’s see what it takes to start a career as a dropshipping business owner.
#1 Know the Market and Pick Your Niche
Before you decide which products you want to sell, you want to choose your niche. Answering the following couple of questions might help you make the decision:
- What are you personally passionate about? It will be easier to overcome the hardships of developing a business if you actually care about it and it brings meaning to your life.
- Which dropshipping products are trending at the moment? For 2022, the absolute favorites are healthcare and wellness products.
- Which products are the most profitable? You want to find the products that are cheapest to buy and can be sold for the best possible price.
Once you choose the niche, you need to know it inside out. In order for your future customers to trust you and order with you, you should let them show that you are an expert in the field.
What are the shipping costs? Ordering from Europe is completely different than selling what is being produced in your region. Also, who are your competitors, what are their strengths and weaknesses? If there is too much competition, how will you stand out?
For your research, you want to use tools such as Google Trends, sign up on your competitors’ newsletter, and thoroughly research social media.
#2 Make a Unique Product List and Find the Right Suppliers
Although the number of products you can sell as a dropshipper is virtually endless, you can’t really sell anything. Actually, there are products that are illegal to sell or need special copyright permission. Not knowing this is one of the most costly mistakes dropshipping businesses make.
In other words, it is better to sell unbranded products.
Once you make your product list, make sure to find the supplier. You can Google suppliers by typing your niche, product, and keywords such as dropship, supplier, warehouse, wholesale, bulk, etc.
#3 Make a Dropshipping Store
Once you know what you’re selling and who are your suppliers, you need to make an online store. The website will work as your distribution channel, and enable your customers to browse the items, order, and pay for them.
There are many dropshipping and eCommerce website templates on Shopify, WebPress, and CoreCommerce platforms. Additionally, CoreCommerce offers the possibility to make a custom design, which can help a lot with functionality and brand building.
In any case, setting up a dropshipping store isn’t rocket science, and isn’t that expensive either. You will need to make an account on one of these platforms, install a template, fill in product pages, and add payment gateways. At this point, make sure to take professional product photos for your website and write SEO-optimized descriptions.
Remember that it is highly recommendable to have an SSL certificate on your website. It will ensure your customers that their sensitive data is safe with you.
Branding is an essential step for every dropshipping business, because it is what makes customers trust you and choose you over the competitors.
Once you choose your logo, brand personality, and brand promise, there are multiple ways you can advertise your business:
- Paid ads on Google or social media
- Social media marketing
- Set up an affiliate program
- Make a blog
- Email marketing
- Influencer marketing
Each of these promotion methods has its strengths and weaknesses. Therefore, you need to know very well how they work and combine them so that you get the most out of them.
#5 Monitor, Adjust and Learn From Mistakes
Just like with any other business, running a dropshipping store is a creative process. You will have to pay close attention to what works, and what doesn’t. Tools that can help you monitor your results are Google Analytics, as well as similar tools every social media has nowadays.
You want to use these tools to constantly learn about your customers and segment your audience by:
- Interests, etc.
Once you develop one or several Buyer Personas, you will be able to perform much more proficient procedures. For example, you could introduce more efficient pricing strategies, or use ads much more skillfully to drive organic traffic to your website.
Finally, don’t be afraid of mistakes. Welcome poor results as lessons, and use them to perform better in the future.
How Much Money Do I Need to Start?
Dropshipping is a business you can start even if you find yourself with limited capital or can’t get a loan from the bank. It is possible to launch most dropshipping startups for as little as $300.
However, once the brand starts developing, it will require some investments. In other words, it is cheap in the beginning, but it could take some time to actually start paying off, as you will probably need to reinvest the first gains if you want a sustainable income in the future.
Even if the bank loan isn’t an option, there are alternatives. Most governments constantly support young entrepreneurs with a variety of startup loans. Also, you can present your business idea at a pitch event and get funds from interested investors.
Are You Ready to Start Dropshipping?
Dropshipping is one of the most cost-effective business models you can choose. Although the competition can be fierce, with some effort, proper market research, a unique brand, and a compelling website, your business will thrive and you will be able to profit in no time.