Start A Productive Dropshipping Business in 6 Simple Steps

Dropshipping business is considered the future of retail, as it maximizes seller profit by not investing in inventory, storage, or equipment. It works by using an online interface, thus cutting back on storage and warehouse costs and only processing an order once it has been sold to a consumer.

I will be discussing thoroughly how to start a profitable dropshipping business in simple 6 steps. Stay with me!

Rise of E-Commerce.

The internet age is no stranger to lucrative business opportunities in every category, niche and otherwise. People have become increasingly driven and business-minded as the 21st century has worn on. This is nowhere more evident than with startups that have crossed into every conceivable public or private domain.

As the internet dropped its veil of mystery with the coming of information technology and high-speed access, people have found it to be the ideal vehicle to propagate their own low-risk, low-capital, but high-revenue businesses.

E-Commerce sales reached a staggering 3.7 trillion dollars worldwide in 2019, cementing itself as one of the most lucrative career options for any person, irrespective of experience, hoping to get into business.

Now we can look at the steps you can take to start a dropshipping business, including everything you need to know regarding its requirements.

1. Choosing a niche in the dropshipping business.

The first step in getting your business plan to work is identifying what you can or need to sell. You must invest time and research on the best or in-demand niche markets you can target. The market you pick should align with your passion while also being profitable. The only way you can carry this business forward is if it is profitable, so you must find a niche in vogue and build your dropshipping business around it.

Fitness, fashion, tech, jewelry, and beauty are some of the niches that have produced the best numbers in terms of online sales. You must look at the latest market trends and plan accordingly because any attempt at a passion project will not stand in the long term in dropshipping.

To analyze and understand the niches in vogue, you can use Google trends that monitor upward or downward trends in markets, although it does not account for their viability. To gauge viability, you can use Ubersuggets’s keyword tool that searches for the volume of use for a keyword, giving you an idea of the market.

Another method is manually searching for order volumes, which gives vital information on how products perform in a real market. Some of the most profitable ideas are niches and trends within trends. So your store should not stock up on the market but on a particular trend.

2. Analyzing your competitors in the niche. 

After identifying the niche you want to enter, it is important to research extensively into that market, particularly competitor profiling and analysis. Analyzing your competition is essential for any company, which is crucial in adapting to or dominating any market you may enter. It would be best if you had a clear idea of where and how they sell their products.

A quick Google search that will reveal the top sellers in that niche is the easiest way to analyze the competition. This gives you a fundamental idea of competition and how to scale organically. Websites like SimilarWeb or Alexa provide a more in-depth idea of your competition in a niche.

3. Finding a good supplier. 

You should always find several suppliers who best align with your business plan. Dropship businesses rely on the supplier and seller dynamic, and you should get this right. E-commerce business relies upon resources. When you have shortlisted your suppliers, you need to contact them regarding minimum shipping quantity, price points, and shipping times.

4. Set up a Dropshipping business store. 

This is the public interface of your dropshipping business, and it should be handled with utmost importance, websites that are easy to access and find often get more orders when there is competition.

When setting up the website, you should remember the domain name, as it best reflects your brand and what it signifies. As your business grows, you can invest in themes to improve user experience.

5. Market your business.

When you have finally built your dropshipping store, the next step is marketing to potential consumers. Since the competition is high, investing in marketing should be a priority to get your business out there. The best ways include running social media ads, retargeting ads, and influencer marketing.

6. Adapt and optimise.

Now that your dropshipping site is ready, you should analyze the products and performance. Constantly optimizing strategies and price points to best suit the market trends should be a top priority. This is a significant step that helps better your customer service and, by extension, improves revenue.

Also Read: Why Should You Work For Startups? I Have 5 strong Reasons.

Now, let us take a look at some pros and cons of the dropshipping business –

Pros of a Dropshipping Business

• Low cost of inventory and entry – Brick-and-mortar and online stores need a heavy investment in the beginning: inventory cost, staffing, and funding manufacturing. Drop shipping eliminates these extra costs as we directly move to retail.
• No requirement for any store – This may be one of the clearest advantages to starting a dropshipping business, as you can significantly cut any cost related to setting up a store.
• Testing new products with minimal risk – Any store thrives with innovation, but most businesses are apprehensive about trying new products and brands. Since dropshipping does not involve stocking, you can choose to add or remove new products with the utmost convenience.

Cons of a Dropshipping Business

• The competition – Since there are countless benefits to starting a drop shipping business, competition is relentless. You must find new ways to outsell and outperform your competitors consistently.
• No product testing and control – Since the products don’t directly pass through your hands, the intermediate drop shipper will only have a second-hand idea of the quality of the product. No proper quality control could mean you would have no guarantee of the quality of products, relying on the manufacturer to provide quality items with no supervision over their process.
• No bulk discounts – As the products, you put in your online store are bought one piece at a time, you will have no provision to avail of or offer any wholesale or bulk purchase discounts. Before you establish a solid customer base, the manufacturer sets the prices.