How to Dropshipping: A Complete Guide to Get Started

How do I start a dropshipping business?

The importance of defining your niche cannot be overemphasized - you cannot succeed as a shipper without standing out from the competition.

If you're starting a dropshipping business from scratch, it's extremely important to choose your niche before you even start choosing which products to sell.

In e-commerce, if you are no different from your competitors, customers simply have no reason to buy from you over the other.

Moreover, having a specific objective is a simple but direct way to stand out from the competition.

You may have a general idea of what you want to sell, but when it comes time to start looking for products, it's much easier to find, negotiate, and control suppliers when your goal is clear.

It is also helpful if you are an expert in your chosen fields.

Starting a dropshipping business is relatively easy.

You need to:

• Sign up for an e-commerce platform and design your website.
• Sign up with a dropshipping supplier and choose your products.
• Add or sync the product to your store.
• Set up your tax and shipping settings.
• Test your payment process.
• Launch your website.

That's pretty much it. As long as you have a functional website with a home page, product pages, and the ability to buy products, you have an online store.

In addition, you can use an e-commerce tool like Shopify, automatically synchronize your products with a wholesale site like Inventory Source, and get your website up and running in a day or two.

If you need help setting up your drop shipping store, a great resource is Fiverr. They have a space dedicated to freelancers specializing in dropshipping, who can help you with everything related to setting up your e-commerce platform, designing your store and synchronizing your inventory.

Check out the dropshipping experts at Fiverr here.

1. Marketing your store.

With intense competition in e-commerce, effective marketing is crucial.

First, you need to research your target audience thoroughly and try to solve a problem for them.

A product that solves a real problem is essential. You can then tailor your marketing efforts to that specific customer base.

You should start by promoting your online store on the following channels:

Social networks.

Promote your store on social media channels like Facebook, Instagram, Pinterest, etc.

Here is a list of best social media management apps that can help you promote your pages. You can also run ads on social media channels to reach your target audience directly in their personal social media feeds.

Email marketing.

It is one of the most effective forms of marketing for e-commerce businesses. The email marketing allows you to communicate with your customers where they are, in their inbox.

Use email marketing software to send welcome emails (with a discount) and abandoned cart emails.

Paid ads on Google and Facebook.

As mentioned above, you can launch paid advertising campaigns on Google and Facebook. Here's an overview of the most common types of campaigns (and the goals of each).

Google SEM or PPC Advertising

If you've heard of Search Engine Marketing or Pay Per Click (same thing), these are the ads that appear at the top of Google's search engine results pages (SERPs).

For example, with this form of advertising, you choose the keywords you want to bid on and create a text ad with a title and description. You also select a geographic area where you want your ad to appear, as well as a schedule for when the ad will appear.

When a user searches for that keyword and clicks on your ad, you're paying Google for that click. This is called cost per click. This number is determined by the competition and by other people who are bidding on your keyword.

While this form of advertising can get you lots of clicks and test products quickly, I don't recommend it to new dropshippers because it can get extremely expensive very quickly.

Google Shopping.

Instead of using text-based ads, e-commerce retailers are using Google Shopping ads more often.

These ads are created by downloading a product feed and appear for searches related to your keywords. The ads feature images and text and are placed next to competitor ads so customers can compare prices.

For example, Google Shopping is a great competitor research tool to check and see how saturated your niche is. If you're starting a new dropshipping business and you find that your products are competing with big national brands, it might be time to rethink your strategy.

While there are tons of other e-commerce marketing strategies out there (which I've outlined in my guide here), these are the basics right now. Let's move on to the next strategy to think about when launching your business.

2. Inventory management.

Although the dropshipping business model does not require you to have inventory on your side, it is good to keep an eye on the inventory in the suppliers' warehouse (the supply chain) since you will be selling their products under your brand.

The good news is that there is a lot of advanced software on the Internet. Inventory management and management of direct shipments between warehouses to help you manage and track your stocks easily.

Take the example of Ecomdash.

It revolutionized the automation software market for dropshippers with multiple fulfillment centers.

Tracking your inventory using a tool like inFlow Inventory can help you on your side:

• Avoid unpleasant surprises after a customer has placed an order (which could have been avoided if the information had been available that the product was out of stock).
• Helps you place orders on time
• Helps to improve two-way communication with the customer (improves the customer experience).

3. Provide great customer support.

With the increase in income levels in the world and the massive competition between all forms of businesses, there is a standardization of the products and services provided.

One of the differentiating factors should be excellent customer support.

Here are some of the common supply chain platforms you can use to provide exceptional customer service:

• Phone
• Social media platforms
• Emails
• Live discussions

24/7 support is also something you should consider as your business grows alongside your supply chain.

4. Product exchange and refund policy.

Your exchange and refund policy is a glaring touchpoint in dropshipping business that can make or break your business.

With the popularity of social networks, communication is no longer a challenge. However, in the case of online retail, positive word-of-mouth marketing can do wonders for your business, but negative word-of-mouth marketing can be harmful.

If you want to earn the trust of your customers, be sure to take quick action every time a customer requests an exchange or refund.

The handling of customer complaints and product exchange and refund policies reflect the company's culture and the priority it places on its customers.

Offering a high level of customer satisfaction can lead to improved customer lifecycle value (CLV) as well as the generation of new customers.

Here is an example from Gymshark's return and refund policy.

As you can see, the return policy allows the customer to effortlessly return the wrong product.

However, the refund of dropshipping products is a bit different from that of a traditional e-commerce site.

For example, in this case, you will need to work with the supplier to pick up the product from the customer and then proceed with an exchange or refund.

These points are by no means a complete overview of what you need to do to run a drop shipping business. But following them will go a long way in setting up and running your drop shipping business.

How to develop your dropshipping business?

Keep one thing in mind: the dropshipping model is a slow business model.

Expectations of very strong growth and large profit margins in a short period of time are unrealistic.

On the contrary, the business model requires a long-term investment to become a profit-generating entity.

But that doesn't mean you have to let go of all the impressive work you've done over the days on your site.

Now, you need to focus on scaling and growing the business.

The following steps can help you grow your drop shipping business:

1. Use multiple marketing channels.

It is never a good business idea to put all your eggs in one basket. It is therefore a good idea to take advantage of the multiple channels at your disposal, including Amazon, Alibaba, eBay, etc.

That way, the number of customers you can reach increases exponentially. It's impossible to reach such a large audience if you only use one channel.

However, when using multiple channels, you need to ensure that your top-selling products are always in stock and ready to be shipped. Otherwise, if you sell the same product on different online stores and the number of customer purchases is very high, the product can very easily be out of stock.

Products that are out of stock on your site result in pending orders and can cause a significant delay in delivery. This can create a negative customer experience.

Once you've made sure you're well-stocked, you can even target a global audience.

2. Create your e-commerce store

While using multiple channels as part of a dropshipping business idea can contribute to the profit margin, building your own store is also critical to improving your brand image.

There are a number of benefits to creating a drop shipping store, such as:

• Better control of the website's user interface
• Greater control over products, storage, and marketing.
• Better decision making when it comes to discounts and bulk sales
• Control the positioning and image of the brand on your site

The ability for owners to have their own dropshipping stores also means that they don't have to pay a commission to online sellers for presenting their products.

As a result, the profit margin per product increases, which ultimately results in higher revenue.

You can use multiple online websites and e-commerce store builders to create your store.

Most of these creators offer engaging templates and various marketing and analytics tools to help you grow your store.

Take a look at my review of some of best e-commerce platforms to choose the best option to build your dropshipping store.

READ MORE >> Step-by-Step Guide to Building a Shopify Store

3. Take advantage of email marketing.

According to the Oberlo email marketing statistics, With a return of $32 for every dollar invested, email marketing offers one of the highest rates of return on investment.

This is why it is essential, to make dropshipping profitable, to focus on your email marketing strategy.

To do this, you must first create a list of email addresses composed of a relevant audience. The advantage of email marketing is that it gives you direct access to prospects who have voluntarily signed up to receive your emails.

To build your email list, you can pique the interest of your audience by offering something valuable for free.

Take a look at my form:

To encourage my readers to sign up for my newsletter, I am offering them a free PDF when they sign up.

After creating your email address list, be sure to involve your audience regularly. Send follow-up emails, offer discount coupons to encourage them to buy from your store, etc.

However, don't go flooding your subscribers' inboxes every 2 days. Let them know how often you plan to send out email newsletters and then keep your promise. A very high sending frequency can work against you and encourage customers to unsubscribe.

4. Use the right advertising channels.

While the right investment is needed to get your business off the ground, it's imperative to spend the money in the right places for that money to pay off.

That's why, before increasing your marketing budget, you need to devote time to proper market research.

Try to identify advertising channels that can help you maximize customer visits to your website.

For a dropshipping business, where you don't have a physical store, it's crucial to take advantage of online advertising methods like pay-per-click (PPC). It's easy to launch advertising campaigns on multiple social media platforms like Facebook, Instagram, and Twitter, among others.

Be careful not to waste your money by spending it on websites that only bring in low traffic.

Here is a example of a dropshipping business done right :

Optimizing the budget for advertising campaigns, among other measures, has done wonders for Andreas and Alexander. They optimized their Facebook ads in order to get maximum performance.

5. Use video ads.

Video marketing is the new way to reach your customers.

Here are some statistics that will make you aware of the amazing benefits of video ads :

• 82% of Twitter users use video
• Over 500 million hours of video are watched on YouTube every day
• 33% of online activity is spent watching videos
• 85% of American Internet audiences watch online videos

Video has the power to reach a massive audience, which multiplies your reach.

Besides advertising your products and your brand, video ads have the power to do a lot more, including

• Customer engagement
• Get your prospects to click and arrive in your store
• Influencing your potential customers to buy your product

To reach your target audience, you can broadcast your video on social media platforms, on YouTube, or buy advertising space on a third-party website to increase your visibility.

Find dropshipping products for sale.

We explained that dropshipping is a simple business model. With the right partnerships, the right products, and a little bit of patience, anyone can succeed.

However, dropshippers need to differentiate themselves in marketing and focus on branding above anything else.

If people remember the products they buy, they always remember the brand they bought them from.

Choosing the right niche is critical. It will help you define your brand voice and attract a specific target audience.

Here is a List some of the hottest dropshipping niche ideas that you can try.

• Technology : Wi-Fi 6 products, wireless technologies, clothing and accessories, 360 degree cameras and accessories, VR devices
• Lifestyle : Smart home devices, tourist gear, indoor gardening tools, swimwear, and water bottles.
• Fashion : Rattan bags, hair clips and barrettes, metallic clothing, women's shorts, and lace clothing.

Additionally, you should have a set of proven criteria to determine the type of product (s) you want to sell, including:

1. Rates.

When you ship products using dropshipping, much of your success and profit margins depend on retail and wholesale prices.

A low price may boost sales, but your profit margin will suffer. On the other hand, if you increase your price, you may discourage most customers from buying, but you will earn more with each sale. It is therefore essential to find a balance and to choose the right price level.

To do this, research competitors in your niche, find recommended retail prices, and develop a plan to sell products at a competitive price.

2. Size and weight.

Size and weight can manipulate and affect product prices more than you think.

A larger and heavier product will order:

• Higher packing costs
• Higher shipping costs
• Handling fees (sometimes)

It's a good idea to at least start with smaller products, and stick to a smaller margin. This will at least allow you to avoid the additional expenses that you may incur with larger and heavier shipments.

If you need help shipping heavy items, you can use a order fulfillment service such as Red Stag Fulfillment, which specializes in this field.

3. Cross-sell and Upsell.

It is best to choose a niche that will allow you to easily sell your products in Cross-Sell or UpSell.

These 2 techniques not only help you sell more, but also help you get more revenue and increase your margins at no extra cost.

A great example of cross-selling would be selling shoelaces at the same time as shoes or selling cell phones with specific, custom-made covers.

An example of upselling would be campaigns by Dollar Shave Club, which attracts you with the prospect of a $1 shave and then displays more expensive options on its website.

Their selling point? An excellent quality-price ratio!

Upselling and cross-selling can both help you make great profits and make your dropshipping business stand out.

4. Renewability.

It makes sense for you to sell products that have an average lifespan. Products with poor durability need to be replaced and, with a bit of luck, you can get more customer orders.

It's like comparing toothpaste to a refrigerator. While you need a new bottle of toothpaste every 2 weeks (low durability), you probably won't replace your refrigerator in the next ten years (high durability).

It's about playing on margins, and it's up to you to decide what type of product you want to sell.

5. Forced purchases.

A forced purchase is a product that the customer does not want to buy, but must buy because their options are limited.

For example, products like health insurance, medical supplies, car tires, coolants, and motor oil are all forced purchases. Nobody wants to buy them, but they are forced to do so due to difficult circumstances.

If you sell products such as tires or coolants, orders may be rare and retail outlets may also become a problem for you.

You should be careful when selling these products. They're also not purchased in bulk, and margins tend to be very low.

It is difficult to maintain forced purchases over a long period of time. So it's best to avoid these products at the start of your drop shipping project.

Conclusion

This article gives you an in-depth overview of the entire dropshipping business model. As stated, it's not for someone looking to make money really fast and get out.

Of course, dropshipping seems like easy money. Just act as a link between the customer and the wholesaler/supplier, and take a part for yourself. However, when you consider all the cons, challenges, challenges, efforts, effort, attention, and work, dropshipping is just as easy.

You need to stick to your business plan to make it work and then reap the rewards.

With no upfront down payment, rent, or inventory costs, dropshipping can provide the perfect environment for someone who wants to test your business acumen, try out its new products and assess the viability of the product and the market scenario.

A great option for beginning entrepreneurs and businessmen on a low budget, dropshipping is also a very secure platform. Even if you fail, you are not likely to lose a lot of money. On the other hand, the process helps you gain valuable business and market knowledge.

I hope you found this article helpful and that it will inspire you to start your dropshipping business.

Ready to start dropshipping?

Other recommended reading: Check out my article on best order management and fulfillment companies if you prefer to hire a company 3PL to provide your e-commerce with 2-day shipping capabilities and my article on