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How To Start Dropshipping Online

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Dropshipping is a very profitable and reasonable business model for eCommerce retailers just starting out.

Since you don’t have to create the product, you don’t need to set up a manufacturing unit. You also don’t need to stock inventory; you don’t need a warehouse either. That saves a lot of time, effort, and money that would have been spent otherwise on all of that. Dropshipping services also take care of order fulfillment, including shipping and delivery, which is another pain point for budding e-tailers. 

You can start dropshipping with Amazon or Shopify or even try etsy dropshipping to set up your online store and start making sales. The alternative is to use integrations on your website so that consumers can purchase a product on your site, and the order is directly recorded on your dropshipping service’s backend. 

This model allows for a lot of flexibility. It’s no wonder that 23% of all online sales worldwide are fulfilled through the dropshipping model. 

So how do you get started with dropshipping? Here are four steps you have to follow to set up your dropshipping business. 

 

Step 1: Find the right niche

This applies to both businesses and individuals that want to try dropshipping. You cannot be a generalist. Find out what sells, the competition in the market to ensure it is not saturated and to make sure you have a unique selling point. 

If you are not sure about the niche, find something that interests you. As long as you have an active interest in it, you can turn it into a business. 

Other factors that you can consider are:

  • Profit margin: Make sure that the product you are selling does not cost you more in shipping and delivery. Even a lean profit margin is important for you to keep growing the business. 
  • Shipping fees: Customers have come to expect free shipping so find something that is inexpensive to ship so that you can waive shipping off to acquire more customers. 
  • Appealing to impulse buyers: An impulse buy is when you buy one or more items from the shelves around the checkout counter. This is difficult to replicate online, but if you offer a product that has utility and is aesthetically pleasing, impulse buyers can rationalize the purchase in their minds quickly. 
  • Demand for the product: You should ideally sell a product in demand and make sure that the demand is considerable. Without demand, you virtually have no business. You can always create demand, but with dropshipping in the early stages, this will take a lot of time. 
  • Brand creation: Can you create a brand around your product? If so, then you have found the right niche. Eventually, you want your brand to be recognizable so that you don’t have to keep selling the same product or same type of product and can expand the line successfully.

 

Step 2: Research your competitors

‘If you are in a market with no competitors, you are in the wrong market.’ For you to be successful, you have to find a market where you have a sizable number of competitors. You can then research each of these companies to see what they do well and what their shortcomings are so that you can build a framework for your company. 

Pay attention to online reviews. These will tell you more than their website will.

 

Step 3: Find a reliable supplier

Your brand’s reputation is dependent on the quality of the product and service. Unfortunately, neither of those things are in your direct control in a dropshipping model. That is why it is important to find a reliable supplier that will uphold your brand’s image. 

There are a lot of dropshipping websites that list suppliers that you can get in touch with. You can also ask on online forums for some recommendations based on the first-hand experience. The last thing you can do is to look at online reviews.

If you’re still not convinced, start with a small batch of orders and test the supplier’s responsiveness before you go ahead and place actual orders. 

You should also follow up with consumers to check in with them about their ordering experience and product quality. 

A long-term solution is to use technology that holds your supplier accountable. 


Step 4: Build your website or distribution strategy

For e-tailers, building a website is a vital step. But if you are an individual reselling or curating products, you can set up your store within the main website’s domain.

Setting up a website used to be hard, but with plugins and website builders, you can basically set it up in less than a day. 

For both individuals and companies, a distribution strategy is key. Social media should be a part of it, but you should also pay attention to community building, other forums, email marketing, and content marketing.

 

To sum up

These are the four steps you have to follow to set up a dropshipping business. Once you have it all set up, you should also go over your overall marketing strategy to ensure your customer acquisition costs remain low while you rake in a profit. Another important thing to remember when selling online is that you should stay on top of data to make sure you continue selling products that are relevant and profitable. 

 

CEO of Penske Media Group. Experienced Content Editor with a demonstrated history of working in the newspaper industry. Spoken on stages around the globe - NYU, US Embassy, P&G Toronto, and much more.

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