How To Build A Successful Online Drop Shipping Business
Dropshipping is an extremely popular business model for new entrepreneurs. With drop shipping, you don’t need to stock or handle the items you are selling. It’s possible to start a dropshipping business with no funds.
An eCommerce website that operates a drop shipping model purchases the items it sells from a third-party supplier or manufacturer, who then fulfills the order.
It doesn’t take a lot of startup funds to launch a drop shipping business, but it will require hard work.
Select a niche
Select a niche that 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 discouraged because it takes a lot of work to successfully scale a dropshipping business.
- Seek attractive profits niche.
- Select a niche with higher-priced products.
- Sell something that isn’t available locally.
- Pick something your customers can’t find down the street.
Shipping costs are very important. Even though your supplier or manufacturer will handle the shipping. Find something that is inexpensive to ship. as this also gives you the option of offering free shipping to your customers in order to attract more sales.
Make sure people are actively searching for your product. If nobody is searching for what you are planning on selling, you will find it difficult to sell.
There are many reasons why a product might not have a lot of competition, 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.
Partnering with the wrong supplier can ruin your business, so it’s important that you conduct proper due diligence.
Learn from other entrepreneurs who have walked this path in the past. There are plenty of information sources available, from business and tech blogs about dropshipping.
An eCommerce website
The fastest way to launch a website for your dropshipping business is to use a simple platform such as Realjossy.
We will help you set up and manage your eCommerce website while you stay focus on your business. it’s affordable and the best service out there for someone starting up.
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. Facebook allows you to place your offer/budget.
This gives you the ability to compete with the largest brands and retailers immediately.
Other Reasons Why Dropshipping Is Such A Popular Model
Dropshipping is a great business model for aspiring entrepreneurs to start with because it’s accessible.
With dropshipping, you can quickly test different business ideas with a limited downside, which lets you learn a lot about how to choose and market in-demand products.
- Less capital is required. The biggest advantage to dropshipping is that it’s possible to launch an e-commerce store without having to invest huge amounts of capital With the dropshipping model, you don’t have to purchase a product unless you’ve already made the sale and have been paid by the customer.
- Easy to get started. Running an eCommerce business is much easier because you don’t have to deal with physical products.
With drop shipping, you don’t have to worry about managing or paying for a store or warehouse, you don’t have to worry about packing and shipping your orders.
- Flexible location. A dropshipping business can be run from just about anywhere with an internet connection. As long as you can communicate with suppliers and customers easily.
- A wide selection of products to sell. Since you don’t have to pre-purchase the items you sell, you can offer an array of trending products to your potential customers.
Disadvantages Of Dropshipping
Generally speaking, convenience and flexibility come at a price.
Here are a few things you should consider.
If you stock all your own products, its simple to keep track of which items are in and out of stock.
But when you’re sourcing from multiple warehouses, which are also fulfilling orders for others. inventory can change on a daily basis.
If you work with multiple suppliers-as most drop shippers do. the products on your online store will be sourced through a number of different drop shippers.
This complicates your shipping costs.
Let’s say a customer places an order for three items, all of which are available only from separate suppliers.
You’ll incur three separate shipping charges for sending each item to the customer. it’s probably not wise to pass this charge to the customer.
Limited customization and branding
Unlike custom-made products or print on demand, dropshipping doesn’t give you a lot of control over the product itself.
Usually, the product drop shipped is designed and branded by the supplier.
Dropshipping Supply Chain
You simply need to understand the three most applicable players that make up the dropshipping supply chain: manufacturers, wholesalers, and retailers.
Manufacturers. Manufacturers create the product and most do not sell directly to the public. they sell in bulk to wholesalers and retailers.
Buying directly from the manufacturer is the cheapest way to purchase products for resale.
but most have minimum purchase requirements you’ll need to meet.
Wholesalers. Wholesalers buy products in bulk from manufacturers, and then sell them to retailers for resale to the public.
Most are strictly wholesaler operators, meaning they sell only to retailers and not directly to the public.
Retailers. A retailer is anyone who sells products directly to the public.
Dropshipping is a service, not a role
You’ll notice that “dropshipper” isn’t listed in the supply chain. Why? Because any of the three -manufacturer, wholesaler, or retailer can act as a drop shipper!
If a manufacturer is willing to ship its products directly to your customer, it is “dropshipping” on your behalf.
Dropshipping order process
Let take a look at how a drop shipped order gets processed.
For Example, you started your Dropshipping business and have a customer to order your product
Here’s a sample of how the entire ordering process will look:
Customer Places Order. The customer needs a TV set for his new apartment and places an order on your online store.
Once the order is approved You and your customer will get an email confirmation of the new order that is automatically generated by the store software.
Your customer makes payment into your bank account.
You Place the Order:
After the customer has made the payment, you will contact your dropshipping supplier and they will bill you for the wholesale price of the goods, including any shipping or processing fees.
Supplier ships the order:
Assuming the item is in stock Supplier will ship it directly to the customer.
Through the customer’s shipping address which you give your supplier.
Your name, logo, and address will also appear.
Once the shipment has been finalized, your supplier will email an invoice and a tracking number to you.
You alert the customer of shipment:
Once the tracking number is received,
You will send the tracking information to the customer.
Dropshippers are invisible
Despite its critical role in the ordering and fulfillment process. the drop-shipper is completely invisible to the customer.
When the package is received, only your return address and logo will be on the shipment.
If customers receive the wrong item, the customer would contact you. the supplier doesn’t exist to the customer.
Suppliers responsibility is to stock and ship their products on your behalf.
Also Read: 7 Benefits When You Travel Regularly
How To Find And Work With Reliable Dropshipping Suppliers
Before searching for suppliers, it’s critical to know how to differentiate between legitimate wholesale suppliers and retail stores posing as
Wholesale suppliers. A true wholesaler buys directly from the manufacturer and will usually be able to offer you significantly better pricing.
Contact the manufacturer
If you know the product(s) you want to dropship, call the manufacturer and ask for a list of its wholesale distributors.
You can then contact these wholesalers to see if they dropship and inquire about setting up an account.
Since most wholesalers carry products from a variety of manufacturers, this strategy will allow you to quickly source a selection of products within the niche you’re exploring.
Now you’ve found a number of solid suppliers and are ready to move forward-great! But before you start contacting companies you need to be legal, most legitimate wholesalers will require proof that you’re a legal business before allowing you to apply for an account.
Finding the Best Dropshipping Products to Sell
The biggest hurdle most new dropshipping entrepreneurs face is picking a product based on personal interest or passion.
If your top priority is to build a profitable dropshipping site, consider setting your personal passions aside when doing market research.
Business clients are sometimes more price-sensitive but will almost always order in larger quantities than individual consumers. Once you’ve established a rapport and earned their trust, you open the door to a long term, high-volume profitable relationship.
Products with repeat purchases
Recurring revenue is a beautiful thing.
If you sell products that are disposable and/or need to be reordered frequently, you can grow rapidly as you build a loyal customer base that frequently returns to purchase.
Most people feel comfortable placing a #1000 order online without talking to someone on the phone. But what about a #20,000 item they’re unfamiliar with?
They would want to chat directly with a sales representative before making such a large purchase.
Sell at the lowest price
If you can offer the lowest price, you’ll likely steal business from a large chunk of the market.
The time to think about how you’ll market a business is before you launch it, not three months after you have started then you realize that customer acquisition is a nightmare.
Picking the best dropshipping products isn’t easy These guidelines should give you a good idea of the types of drop shipped products that work well.
So do your homework, research and gather as much information as possible. But then make the best decision you can and move forward despite your hesitations and fears. If you wait for all uncertainties to be resolved with the perfect market,” you’ll never get started.