The Ultimate Guide to Dropshipping and How to Start your Dropshipping Business the Right Way

Starting a dropshipping business was all the rage in 2020 and the trend is continuing to thrive for a good reason. Currently, statistics show that there are around 2.14 billion people who shop online, which means that you have a huge chance of landing a small portion of them as your potential customers. This essentially means that there is a huge market that new companies can tap into and earn money from.

However, before starting any new venture, you have to prepare yourself for all the possible obstacles that it presents. That’s why in this post, you will be able to read everything you need to know about dropshipping – what platform to choose, how to get started, what the best products to dropship are, and a ton more.

So buckle up and let’s get started.

What is Dropshipping?

Dropshipping is a business model that has grown in popularity during the last couple of years. With it, you don’t have to hold any stock; instead, customers order products from your online store, and your supplier processes packages and ships their orders. Simple, easy, and profitable.

What everyone on the internet says is true: dropshipping is quite simple. For it to work there are two main roles: yours and that of your supplier.

Your role is to create the online store, find the best products to dropship, and then market them. The differences from the standard business model come afterward.

When you get an order, instead of shipping the products yourself, you forward the order to your third-party supplier. He takes over from there and it’s his responsibility for the order to reach your customer. This means that you’re able to sell products without having to buy them first and without having to deal with managing orders. Sounds great, right?

Upon learning about this business model, many start to think it sounds too good to be true and begin pondering how they can actually make money off of this type of startup.

Well, the answer is quite simple: in your store, you will be charging your clients the retail price of the product, but you will be paying the wholesale price to your supplier. The profit comes from the difference between those two price tags.

Let’s take an example: say you sell a dog leash for $20 on your website, but you pay $8 to your supplier. In this scenario, you profit $12 off of each sale you make.

That’s precisely what draws people into dropshipping: you don’t have to risk spending your money to stock up on products you may never sell. Instead, you only pay for what has already been sold and your only job is to turn your new company into a recognizable brand.

Is Dropshipping Even Legal?

“Is dropshipping legal?” is a question that is often asked by people who are just starting to learn about this business model. And that’s normal seeing that it looks a little too easy for it to actually be completed within the realms of the law. However, in most cases it’s totally legal; you just have to stay away from selling guns, drugs, tobacco, alcohol, food, and medicine as the offering of such products is usually carefully regulated in almost all countries.

But for almost everything else, dropshipping is a possible way to do business – you can dropship clothes, accessories, kids’ toys, gym equipment, and you can even get into dropshipping books, as long as you have the right supplier for the job.

5 Things You Must Know Before Starting a Dropshipping Business

Now that you know what dropshipping is and how it works (generally speaking), let’s take a look at some of the vital things you need to keep in mind while creating your own dropshipping company.

Let’s get started.

1.Build a Niche Store

Say you want to buy your dog a new leash – do you go to your general store that sells everything from dog leashes to dumbbells or do you go to the pet shop?

The answer is clear.

The same logic applies when it comes to dropshipping. If you want to have a successful store, it’s better to invest your time in building a brand that is able to offer a unique product in a niche sector, instead of wasting your time in trying to create the next Amazon.

There are a few more advantages you get from launching a niche store:

  • It’s easier to create a target audience and run digital marketing campaigns designed to attract it.
  • SEO becomes a lot simpler – it’s almost impossible to create an SEO-friendly general store, but with a niche one, the task becomes a lot less irritating to accomplish.
  • You don’t have to compete with big marketplaces such as Amazon, AliExpress, and eBay, which will likely offer the same products you do, just without the specific branding.

2.Do the Needed Research Before Choosing a Supplier

When it comes to dropshipping, your supplier is your business partner. You have to be able to work well with the supplier, trust the supplier, and lean on the supplier when the situation gets difficult, and it certainly will, at one point or another.

That’s why it’s important to do in-depth research when considering which supplier to work with. However, the most vital question remains: “How do I figure out whether a supplier is reliable or not?”

There are a couple of ways to look for possible suppliers to work with:

  • A quick internet search on AliExpress or Alibaba will give you plenty of possible companies to work for that are in the business of manufacturing items.
  • Use a supplier directory – even though they can be expensive at times, they are worth it as they provide you with a ton of useful information about manufacturers.
  • An alternative route you can take is to first try to find the products you like and then search for the company that produces them.

After you’ve narrowed down a couple of companies you possibly want to work with, make sure that they comply with the following criteria:

  • Offer high-quality products. Never settle for items that break easily, aren’t made from good materials, or simply don’t look well-made.
  • Agree to a pre-order fee that works both for you and for the supplier.
  • Arrange good shipping options. Remember, people nowadays enjoy instant gratification, and thanks to Amazon, everyone wants to be able to receive packages the day after they place their order. That’s why it’s crucial that your shipping service is fast and reliable.
  • A good return policy: there will be instances where customers will want to return their orders. That’s why you need to have a working return policy in place that will make the process easy for both you and your clients.

Of course, there’s no formula to finding the perfect supplier. The supplier will not only have to offer the best products to dropship but also be able to cooperate with you and your team. As with any relationship, you will have to enjoy working with the people on the other side and you will have to build a rapport with them over a period of time. However, the things listed above will definitely help guide you in the right direction.

3.Pick the Right Platform for Your ecommerce Store

In the beginning, most people tend to focus on the best products to dropship or how to find the right supplier, which leads them to not pay attention to another vital step: picking the platform on which to create their online store.

Choosing the right platform for your business is vital – it determines how much you will need to pay for hosting, what functionalities you will be able to use and how difficult or easy it will be to build the site.

Typically, most entrepreneurs either choose to create a WordPress site and then transform it into a shop or just go ahead and create a store directly on Shopify or Wix, which makes the whole process a lot easier.

Both of these options can work and be good for your company; the choice depends entirely on how tech-savvy you are, how much you’re willing to spend on creating the site, and which method you find most enjoyable to use. However, one key thing to remember is to test the site prior to launch. Make sure all the buttons on it are usable, be certain that it works on mobile devices, and most of all, ensure that it’s well integrated with your supplier’s systems so that orders can be processed.

4.Consider Your Payment Gateways in Advance

Having the trust of your customers is vital for any company; that’s why it’s important that your clients feel secure while shopping on your website. Having secure payment gateways is the best way to ensure that.

In order to make sure that purchasing from your store is completely safe, there are several things you need to check:

  • Ensure the gateway is accessible from both your country and the countries of your clients.
  • Check if the gateway has multi-currency support – don’t forget that you will likely work with an international audience that uses all kinds of currencies for payments.
  • Make sure that your gateway works with all major credit and debit cards (AmericanExpress, Visa, Mastercard).
  • Don’t forget to include PayPal as a payment method, as many people prefer using it over their credit or debit card.

Now that you know what to look for in a payment gateway, you can go ahead and pick a provider.

5.Have a Great Marketing Strategy Which is Vital for Success

When it comes to dropshipping, the thing that helps you make sales is your brand and what it represents. Literally, all of your customers can buy the product you sell for cheaper on any huge marketplace; however, they will choose not to if your marketing attracts them to your company and your product.

That’s why the success of your dropshipping company is largely determined by the success of your digital marketing campaigns. If you’re able to advertise well, you will be able to sell even better; that’s why you need to consider your marketing strategy before you’ve even settled on a particular item to sell, even if you consider it to be amongst the best products to dropship right now.

You need to know your target audience, how they purchase products, what may attract them to go on your website while browsing on the internet and what kind of messaging might get them to be interested in your company and the products you offer. Once you have all that knowledge, you can create digital campaigns that influence your potential customers and turn them into loyal brand followers.

Conclusion

Building an ecommerce store these days seems like an easy job that can get done in minutes. Most people think they just need to do a quick Google search on “dropshipping meaning” or “the ultimate guide to dropshipping”, then create a list of best products to dropship and that’s it – a new business venture is almost done.

In reality, however, things aren’t as easy as Shopify-gurus make them out to be. Dropshipping isn’t all that different from any other type of business that you can start. That’s why it requires more than 30 minutes of your time or more than a few simple clicks.

If you want to own a successful company, it’s vital to consider the amount of effort, time and money you can invest in it before deciding whether to start one or not. Even though you get a lot of convenience with dropshipping, you will still need to spend quite a lot of time building relationships with suppliers, creating a website, and doing endless marketing campaigns on social media and through email. In order to do that, you will need to feel passionate about the products you’re selling and the brand you’re building. You can’t simply make a successful business out of boredom; it needs to be something that excites you and motivates you to work, even late into the night.

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