Drop Shipping is a popular business that allows anyone with great internet marketing skills to sell products without actually having any inventory. It is a fantastic business model that has proven to be the best option for young entrepreneurs who want to join the e-commerce market space but do not have the financial backing to invest in an inventory of products.
Drop shippers offer products to customers like any other online retail store, except that the customers are unaware that the products are sourced from a third-party supplier or manufacturer who then handles the fulfilment of orders.
Not only does this relieve an e-commerce website operating the dropshipping model from operational costs or the financial burden of stocking up products, but it also gives you more time to channel your energy into acquiring new customers.
One of the easiest ways to start a dropshipping business with minimal investment is by using an e-commerce platform. Shopify and Woocommerce are two popular platforms that allow you to integrate apps like Oberlo which makes it easier to add products to your store.
Shopify offers a 14-day free trial which allows you to learn how to use the platform and decide whether you want to subscribe to the different plans available or not.
If you are ready to challenge bigger online retail stores for a share of the market, while earning a good income with little investment, these 10 steps will help you build a successful dropshipping business.
While a drop shipping online business may not require a huge start-up investment, there is usually a lot of hard work that needs to go into it.
1. Develop a Marketable Business Concept
Like every business venture, you need to come up with a concept that is marketable for your dropshipping and online business. You will find that most of the successful businesses including online businesses are built around a concept.
It is this concept that you will use in determining your brand, product collection, and content. Usually, this concept could be something that you are passionate about.
Also, many startups base their concept solely on trends that are discovered through extensive product research and several attempts/trials at finding the best product to sell.
2. Write a Business Plan
You can switch between step 1 and step 2 since they go hand in hand. Just like every business, you need to write up a concise business plan. The business plan will help you have a clearer view of your ideas and how you will execute them.
Ideas are easy to come up with, but most of them die at the point of execution because they have not been planned properly with all the factors involved highlighted.
Even though a drop shipping business requires minimal funding to launch, you need to understand that other aspects will require some hard work, and your business plan is one way to identify what you need to do to be successful.
3. Identify a Niche
Niche marketing is a term that is thrown around in the online marketing world. Niche marketing allows you to choose your brand, content, and products that appeal to a specific group of customers like drone enthusiast, musical instrument players, gamers, and so on.
Narrowing down your focus will improve your website ranking on search results that are specific to one topic and will attract an audience that is interested in the topic, like drone-enthusiasts drop ship site.
However, for a startup drop shipping website, it is advised to try different products and not be super focused on one when starting.
4. Research Your Competitors
Because you are going to be competing with other drop shipping businesses that may offer similar products, it is important to do proper product research. Many new entrants make the mistake of marketing products that have little competition as a result of low demand, and then they end up on the losing side.
Usually, a product that has little or no competition has a high shipping cost, manufacturer or supplier issues, low-profit margins among other issues.
5. Find a Supplier
Partnering with the right supplier can be the one factor that can make your dropshipping business successful. Many startups crash because they are unable to secure a reliable supplier. Once the supplier is unable to deliver, then you have a huge problem on your hands.
Do as much due diligence as possible, and ensure that you have clear communication with them. Make sure to ask the potential supplier a lot of questions, especially if they are overseas. You want to be sure that they can if your business grows.
6. Build Your Drop Shopping Website
The next important step to take is to build your business website. This is your online store where all the products that you are offering will be displayed and customers can make purchases.
Some unique drop shippers leverage social networks like Instagram as their website, but we will keep our focus on a proper website. You will need an e-commerce platform such as Shopify to host your dropshipping website.
It is fast and easy to use, and you do not need to have any knowledge in programming to set up a website.
7. Add Products to your Dropshipping Website
Once your website is set up and ready to go, the fun begins. The process of selecting and adding products to your website can be fun and fulfilling. There are many ways to go about it, but the easiest for you might be to use an integrated supplier.
However, many drop shippers source and add the products to their website manually. Most experts suggest a combination of Shopify/Oberlo as the simplest way to launch a drop-ship business.
Oberlo is a Shopify app that is free to use and allows you to perform many actions on products added to your website. There are factors to consider when adding products to your website such as profitability, shipping costs, supplier reliability, and others.
8. Market Your Drop Shipping Business
It is one to add products to your e-commerce website and another to thing to have buyers visit and order. This will not happen automatically from the moment you launch your website. There needs to be a solid marketing plan put in place to acquire customers.
There are several ways to attract customers to your website, and since it is an online business, you need to leverage social media, SEO, or paid ads. One of the most effective online marketing strategies is using Facebook ads.
Facebook ad is a great way to target a specific audience who are interested in the products that you offer.
As time goes by you will need to include other strategies such as search engine optimization, email marketing that will help you gain new customers and keep old ones, as customer retention is key. With email marketing, you can send discounts and offers to existing customers.
9. Collect Data
Data is an important tool that you need to analyse the effectiveness of your marketing efforts and optimize your business to make it better. You need every kind of data that you can lay your hands upon such as user data, conversion rates, reach, social media data stats and others.
This will help you know which channel has the highest reach or conversion rate. You need to know where your customers are coming from to improve on the channel and eliminate the ones that are not directing customers to your business.
10. Stay Motivated
You can get discouraged when you are not generating any leads in the first few days or even weeks. Read as many success stories from successful drop shippers as possible – you can learn on or two things about what did right to become successful, and the mistakes they made so that you can avoid them.