Dropshipping is a business model that is becoming more and more popular for entrepreneurs nowadays. It is because of the fact that it saves a lot of time and energy for you as a business owner.
Dropshipping is a method of order fulfillment completion that enables online sellers to contract with a supplier or other outside entity to acquire, store, and transport their items. Basically, you as a seller will need a store where you sell products that wholesalers are going to take care of, from the products themselves up to the packaging and the shipping.
That is what makes it a business model that grows even more today. Even though it sounds easy and perfect, you shouldn’t forget that you still need to exert effort one way or another.
The players in the Dropshipping Business
So there are three players in the dropshipping business model. First is the seller (you), then the manufacturers and the wholesalers.
Seller (You)
You are why the dropshipping process begins. You are the person listed as selling the product to the final customer, often known as the seller of record. As the seller, you will determine the selling price, report the transaction as revenue, and take on the burden of paying the applicable sales tax. You are the seller of record because you own the goods before they are sent to the consumer, even if a third party inventories and transports the goods.
Manufacturer
Products are created by manufacturers and sold to distributors and retailers. Although you can buy products directly from manufacturers, the large minimum orders they may have may make it difficult to launch or grow your firm. Some producers might provide dropshipping assistance.
Wholesaler
Wholesalers typically purchase goods from producers and resell them to retailers at a small profit.
They perform the role of mediators; typically, they don’t sell to customers directly but they might offer dropshipping services to retailers.
There are 7 stages in which this business model works.
- The seller chose the drop shipper
- Customers place an order
- The seller receives the order
- Customers will receive an order confirmation
- The seller sends the order of the customer to the dropshipper
- The drop shippers ship the order
- The customer receives the order
But before explaining how all of these work, you just need to learn the three most important steps first before starting dropshipping business.
Things to do before starting a Dropshipping business:
1. Make your business legal and legitimate.
This should be your first step. You need to set it up and make sure it follows your local city’s tax regulations, set up an account for it and register it. This step is important because it helps to avoid conflict in the future.
And to have no problems in terms of legalities in your business in the future if you take care of this area first.
2. Finding the Products you want to sell
In starting a dropshipping business, you can’t just choose any product you think looks cute or something that you think someone will buy. It doesn’t work that way. In this step, you have to be very careful and do a lot of research in order to find the best products for you to sell in your store and have good results.
Here are the things you need to think about when finding products to sell:
Narrow Your Market
This one is very important for a dropshipping business or any business in general. Because this helps to lessen the competition. When the products you want to sell are more specific and are narrowed down for a niche market, then it will get fewer competitors. Here is an example, which of these two products do you think has more sellers that sell it? The “Hair Gel for Curly Hair” or the “Hair Gel” That is the power of a narrow market. When you are finding the products you want to sell in your store, you want to see that it actually has fewer competitors in the market and it is more specific.
That way you will have more chances of getting sales!
Marketing Possibilities
This one is also very important when finding the product you want to sell. When you are looking for it, think about ways how you can market that product to your target market. If you can’t think of ways, it will surely affect your business.
So as a seller it is important that you are thinking about marketing as early as canvassing for the products you want to sell. And the best way to do this is to get products that you are interested in. Let’s say you want to sell gym equipment in your store, and you do not know anything about it. How will you properly market it in a way that targets your market?
Make sure that when you choose a product, let’s say even when you do not know much about it, when you think of it and look at it you can see how you are going to market it at your store. If you can’t think of ways, that is not the product for you!
“What about some?”
Have you ever experienced ordering in a fast food restaurant and then the crew asked you if you want to have some fries with it or some sundae with the things you just ordered?
If you have that is what this one means. This effect is something that is famous in fast food chains.
So for example, you are selling eyelashes. Of course, glue and a lash applicator for a lower price than the main product which is the eyelashes will sound good right?
This effect will help you gain more sales! But keep in mind that it must be relevant to the main product that the customer ordered. You can’t sell them eyelashes and ask them if they want car parts with them.
Accessibility
You should not choose products that people from your city or place can easily access. Because what’s the point if they can do that? Why would they buy from you if they can get it at their local grocery store or hardware or market?
You find products that you can sell that are not accessible locally. So that they will have something to patronize and help you build big customer loyalty.
If they can buy those shirts in local physical places? Do not sell them.
Demand
It is also very important to look for the demand of the niche market you will enter. Say you will enter the food industry, and study if the food you will sell has a high or low demand. And there are a lot of sellers who sell the same thing you are planning to sell and if they already do, what can you do to make the customers pick you amongst all the competitors in the market?
If you plan to sell makeup, and everyone is selling lip glosses and other makeup products, you might want to think about another product. Unless you will have something extremely unique you would like to offer to the market that will make you get noticed by the buyers. It can be the price of your product, the quality, an excellent claim of the product and etc. It really depends on you.
The smaller, the faster, the better
It is a no-brainer that bigger products are harder to work with. For example, if you sell gym equipment and you just had a treadmill order from your store, it may ship way longer. Do not misunderstand this point, this doesn’t mean you should choose only small products. Of course, what’s best for you is decided by you. But it is just a tip that smaller products are best to handle and might always come earlier or on time for the customers.
If they will be willing to wait, what is 3 to 4 days more of waiting if the product is worth the wait?
Where should I look for products?
There are many places where you will be able to find products that you might want to sell in your store. First, you can always search on Google. The auto-suggest feature in this platform will help you know what actually the people are looking for.
Let’s say you are thinking about selling organic shampoos. You type “organic shampoo” and then get ideas on the ones that will appear on the suggested. That way you will know more about what the people are looking for and will give you an idea of what is good to sell.
Another way is to go to Amazon or eBay or Alibaba and look for products there.
But one of the best things you can do is to go to keyword research tools and do keyword research.
The following are the worldwide known keyword research materials that will definitely help you:
- Ahrefs
- SEMrush
- Ubersuggest
- Google Keyword Planner
- SECockpit
- Keywords Everywhere
- Moz
- KeywordTool.io
- KWFinder
- Wordstream
This will help you know what products people look for. And in this doing this one, you MUST target the longtail keywords, and that will be explained why in a while. Take note of the word “longtail keywords” and “keywords” because this will definitely help you big time and is a game changer in your starting!
3. Choosing your Dropshipper
In choosing the best dropshipping suppliers for your business, you have to be very careful and observant.
You have to check the legitimacy of the suppliers by paying attention when speaking with them before even making a transaction. Does the representative know what he or she is talking about?
Are they knowledgeable enough in answering your questions about their products? Do they screen who they sell to, or just sell to everybody? Because a legitimate wholesaler will not sell to buyers who are not proven business owners and will need documents that will prove that you have a business. Thus legalization is step one.
Here are some well-known dropshipping suppliers. But you can also look for suppliers that are selling near your target location on Google.
- AliExpress
- SaleHoo
- Worldwide Brands
- Megagoods
- Doba
- Wholesale Central
- Wholesale2B
- Sunrise Wholesale
- Inventory Source
- National Dropshippers
You might have to go scavenging for the suppliers in your target location or depending on your location, but that is fine. Do not look solely at their website, because most wholesalers do not pay attention to marketing and online presence.
Now, it’s time to know how the business model works!
How Dropshipping works
1. The seller chose the drop shipper
In this step, you need to ask questions to your chosen supplier. Here are the questions you need to ask:
- Do you offer dropshipping? (of course, if the answer is no, then that supplier is definitely not for you)
- Are you able to customize it?
- Can you print the package with the logo of my company?
- How quickly will the item be delivered?
- How can I transmit the orders to you?
- What is your procedure for orders that are broken or missing?
- How much per order of the product do I want to sell?
- Do you produce your own supplies?
And the answers to these questions should be enough for you to determine if you have chosen a good dropshipping supplier for you. Remember to always be observant with their responses because you will know if they’re legit according to the responses of their representative. And if they sell to the public, they are most likely retailers and not wholesalers.
2. Customers place an order
And of course, your customers will place orders in your eCommerce store. And that is where you display the products you sell. Basically, it is an online store, where your drive traffic to get sales. And that is the place where your customers place orders.
You will know right after this section how to build your eCommerce store for your dropshipping business.
3. Seller receives the order
Now, you receive the orders. You will check the orders and scan them, checking if there are no issues.
4. Customers will receive an order confirmation
Then you will give the customers a confirmation that their order has been placed and that you are working on it to get shipped to them.
5. Seller sends the order of the customer to the dropshipper
You will then send the order to the dropshipper and they will work on it.
6. The dropshippers ship the order
And then, they will take care of the products, packaging, and shipping.
7. The customer receives the order
Finally, the customer receives the order. Best if on time, safe, and with no issues with the products and the packaging.
So that is how the business model works, basically, you are the bridge between the customer.
How does the pricing work?
In terms of pricing, you need to be wise and make sure that you find a supplier with quality products.
So the pricing works this way, let’s say you found a wholesaler that sells bike helmets for $15 dollars each wholesale including the shipping. Now, you can put it in your eCommerce store for $45 with free shipping!
The best thing about dropshipping is that you only pay when you get an order, but you still get the product at the wholesale price!
It saves you a lot of time and energy compared to when you will take care of your products, make them, put them in packaging, and ship them.
Dropshipping saves you from all this trouble, but you still earn money. It also saves you from wasting money when you actually buy wholesale and have no buyers, but this one you only pay when you get orders and you send it to them.
Building your eCommerce store
Your eCommerce store and its importance have been mentioned so many times above. This is how to build one for your business!
First, look for the best eCommerce platforms for you where you will build your eCommerce store.
Here are the famous eCommerce platforms and why you should choose among them:
Shopify
The greatest eCommerce platform overall, according to experts, is Shopify. It has many capabilities, is simple to use, and includes built-in SEO tools that will assist you to be discovered by clients. Additionally, Shopify offers customer support around-the-clock in events you need it.
Wix
If you want to sell a small number of things, Wix is a fantastic choice. It has functionalities like customer reviews and discounts that can assist increase sales and is simple to use. If you ever need help, Wix offers customer service that is available around the clock.
Zyro
Zyro is a great choice if you’re seeking the best value at an online retailer. For less than a third of the price of many other channels, you can set up a fully functional storefront for just $9 a month. And Zyro makes it simple to get started by offering a wide variety of layouts and themes for your dropshipping business.
Squarespace
Squarespace is a wonderful choice if you want to dominate a specific market. It provides lovely themes that are ideal for building a high-end online business. Additionally, Squarespace interacts with Shopify so you may benefit from its robust eCommerce capabilities.
BigCommerce
BigCommerce is an excellent choice if you have a sizable inventory. To help turn visitors into buyers, it provides product filtering and cart recovery. BigCommerce connects with both Amazon and eBay to help you access a wider audience of potential clients.
Bluehost
If your website existing runs on WordPress, Bluehost is a wonderful choice for integrating eCommerce functionality. With features like automated shipping computations and promotional codes, it works easily with WordPress. In addition, Bluehost offers round-the-clock customer service in case you want help.
Designing Your eCommerce Store
All you need is a business email address to sign up. Sign Up via your business email, address, and fill up according to all the details such as the name of your business, location, country, and payment system with Shopify and etc.
After that you will need to perform a few verification steps through your email, just follow the ticks that will appear as needed.
The fun part is to design your Shopify after signing in and setting up your account.
It is very important to work on your eCommerce store because that one is your job. And you have to concentrate on this one and design it professionally but still appealing to the customers. Do not worry, it is not that hard. The time and energy that dropshipping business model saves you should be poured into work on your eCommerce store.
Take your time to look over Shopify’s themes after signing into your account. It is mentioned on the left under “Online Store” in the corner.
Consider the message you want your site to convey as you examine each choice.
Do you desire it to be lighthearted and enjoyable?
Dramatic and competent looking?
Stylish and contemporary?
There are countless topics from which to select.
Several categories, paid and free, color scheme, etc.
After settling on a general look, you may begin limiting your options.
Next, pay special attention to how each subject is organized.
Does it have enough room for all you want to include in it?
Is it simple to use?
Does it come with all the essential parts, such as a form to take emails and social network integration?
To understand what you’re getting, carefully read the theme’s description.
Finally, believe in your instincts. Follow your gut when you find a topic that feels perfect! Simply click “Add to theme library” and then select the new theme you selected earlier under the “Themes” tab. Then click “Publish” in the upper right corner.
Smash! You currently have a theme in your eCommerce store, you now have an identity!
Challenge
Time for a task! Yes, that is right. After reading everything, it is your time to do the application. Here are the following tasks for you under this article. You must:
- Sign Up for an eCommerce platform
- Find products to sell (at least 5) by doing all the steps above
- Look for at least 5 dropshipping suppliers and inquire about all of them using the questions above
- And lastly, design your eCommerce store for a free theme
Enjoy exploring! Make sure to apply the tips above!
