How to Start a Dropshipping Business in 8 Easy Steps
It used to be that you had to stock inventory if you wanted to sell products online.
But with the advent of dropshipping, anyone can start a product-based business without having their own physical inventory.
Dropshipping has quickly become one of the most popular online business models, and for good reason.
According to Statista, in 2016 there were 1.66 billion global digital buyers. By 2021, that number is expected to grow to 2.14 billion.
Dropshipping lets people manage physical businesses without having a warehouse or full-time employees. It’s the 21st-century solution to building a flexible product-based business.
What is Dropshipping?
Shopify defines dropshipping as “a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.”
In other words, when you use dropshipping, you can create and sell products without ever having to keep inventory on hand. Not having to buy inventory is one of the best parts of starting a dropshipping business.
It allows you to tap into the growing online market without making massive initial investments in product or finding space to store it. You can also skip the upfront cost of shipping materials and freight charges as a dropshipper.
To start a dropshipping business, all you need is a market, a buyer, and a way to reach your customers.
How to Start a Dropshipping Business in 8 Simple Steps
Starting a dropshipping business doesn’t need to take weeks or months of planning. With a little determination and persistence, you can launch within a few days.
1. Choose a Niche
First, you’ll want to select a type of business or niche.
Examples of niches include health and beauty, fashion, electronics, outdoor living, children and toys, or household products. As a beginner in dropshipping, it’s important to be specific with your business and test new lines before expanding your niche.
For instance, if you choose to enter the fashion industry, decide if you’re going to sell children’s, men’s, or women’s items. You can scale down further and sell women’s shoes. Or be even more specific and pick a certain type of shoe such as heels, flip flops, or sneakers.
Selecting a specific niche for your dropshipping business will help you focus on the right customer as you build your brand.
2. Choose a Platform
You can list products to dropship on a number of platforms including eBay, Amazon, Etsy, or your own website. List the same items on multiple sites to expand your reach.
Shopify is another popular option. You can integrate your Shopify account with your own website or a third-party site from Etsy. Shopify has affordable options for new dropshippers and also offers premium features like abandoned cart targeted marketing.
Even if your following is small in the beginning, you can decide to build your own website and use it to sell and grow an email list. At the same time, you can list your products on sites like Amazon or eBay to boost exposure. These platforms are popular and reputable, and people search them directly every day for products like yours.
Ultimately, building your own website and using a specific marketing strategy to draw customers to your storefront will give you the best profit margin. You won’t have to pay the hefty listing and seller fees that come along with Amazon and eBay.
3. Choose a Product
Once you’ve selected your niche and where you’re going to list your items, it’s time to pick the specific products you want to sell. Use your niche to help you decide.
Are you going to sell wedding dresses, sunglasses, or toddler toys? Depending on your dropshipping suppliers, you might be able to list a whole line of items within your niche.
Don’t get too carried away at first. The goal is to start small and cater to one audience. In time, you can expand your products to fill in the gaps within a broader niche.
4. Build Your Brand and Following
Next, you’ll need to brand your items, unless you decide to sell under another company’s brand. It’s not a bad thing to find established brands that allow dropshipping. But if you choose this, you may struggle to scale your business in the long run because they typically charge a high percentage on each sale.
You can simultaneously build your own brand and your following on social media. Start by creating business accounts on various social media platforms and sharing relevant information daily. If you’re consistent, people will start to notice you and your brand. Take the opportunity to grow an email list to market your products to as well.
The best social media platforms to build a following on include Instagram, Facebook, and Pinterest. Find out where your target market spends their time online and grow your social presence there. Remember to engage with your audience and be genuine and authentic. That will help them connect with and trust you, which will make them more inclined to buy your products.
5. Research Your Competitors
New dropshippers often overlook this step and fail to keep up with their competition. The online market is massive, but that doesn’t mean it’s endless.
To figure out who your competitors are, do a quick Google search for specific keywords related to your products. Those that show up in the first 10 spaces are your biggest competition.
Take a close look at the categories and variety of items your competitors offer. Do they have in-depth content like a blog explaining how to use their products? You could start a blog to market your products as well.
Use the data on their websites to analyze your competition. You don’t want to copy your competitors, but you should learn how to make your product, brand, and website better. You’ll find many strategies and ideas as you research your competition.