Table of content:
- What is dropshipping
- How to get started with dropshipping?
Gone are the days for traditional business models and marketing strategies. People are now shifting towards online shopping, and hence today’s entrepreneurs ideas mostly depend on digital technology.
From social media business pages to e-commerce platforms like Shopify, the plethora opportunities available to start up an all-digital business is really intriguing. The latest trend we have seen in e-commerce is dropshipping. People are all about dropshipping these days, and no one can stop boasting the cost benefits it has.
If you are an entrepreneur looking for ways to get started with an online business idea, here is a guide to dropshipping that will help you assess how good or bad it is for you.
What is dropshipping
Before we can discuss how you can set up a dropshipping business model, lets take some time to understand how it works.
To put it simply, dropshipping is a business model where you own an online store but don’t hold any inventory or products yourself. Instead, your customer uses the online store to place an order for a product you are selling, and you forward that order to a supplier (source of the product) and earn a profit from the retail price. So, you act as a bridge between seller/supplier and customer.
You are not responsible for arranging the product in any way, neither are you responsible for shipping nor delivering the product to customer. You just take orders, so you will have to make sure that all order details are correct and properly communicated to supplier. Selling price is what customers will pay, out of which you will pay the supplier the real cost or the wholesale price of the product. The left over amount will be your profit.
What will be your responsibility?
In a dropshipping business model, you will be responsible for marketing that product, forming an online store for it, collecting orders, taking care of customer support and bringing in customers for the product. There are several platforms that facilitate dropshipping businesses. Some of these include the Shopify drop shippers, which is one of the popular ones since it is the easiest to use. You can also check out WooCommerce and BigCommerce.
How to get started with dropshipping?
Moving on, if you have made your mind about starting up a dropshipping business model, here are some steps you must take to make sure you are all set for this new venture:
- Pick a product niche
Since you don’t have a physical store or a physical existence, your product is the face of your business. You cannot expect to be successful if you don’t choose the right product niche. At this point, you might have to let go of your personal interests and passions, and think objectively about the niche you want to work in. While personal knowledge or interest in a niche might help with the marketing strategy, it does not guarantee that the product has a significant demand.
Generally, you should go for products that are lightweight and have lower shipping costs. Products that don’t have large-scale brands as competitors, have a longer shelf life and are legal/easy to ship in most countries are preferable for higher chances of success. You should also make sure that your product is not seasonal, such as Christmas-relevant products or beauty products that are only needed in particular weather conditions.
- Choose a supplier
Once it is final which product you want to sell on your online store, find a reliable supplier. You need to make sure that you are relying on only one supplier, so that the product quality does not vary and you can also manage the flow better. You can expand in the future with more products and different suppliers for different products. However initially, make a strategy and only work with one. Like we said earlier, your product is the face of your business and you have to rely on your supplier for your product. Therefore, don’t compromise in finding the perfect supplier.
Some key aspects to consider when looking for a reliable supplier is to see if they have prior experience in this area. Suppliers with lower digital literacy or understanding of how shipments work and online stores work can be really difficult to tackle with. Moreover, some suppliers charge lower shipping costs than others. Your supplier should seamlessly arrangement of shipping and delivering products. You can also ask for references from past experiences the supplier has or read reviews.
- Grab the audience
As a dropshipping business model, you are responsible for marketing your product, attracting the right customers and coming up with the right marketing strategy. The first thing to do here is to identify who is your audience, and who you wish to target. Since dropshipping in online, your reach can be global. But is your product globally relevant? And do you want to target such a wide audience? Answer all these questions before you can jot down who your product is targeted towards.
Once you have finalized a customer profile or a customer persona, it’s time to get started with your marketing strategy. Decide which methods, such as content marketing or influencer marketing, you are going to use for your marketing mix. Also, pick a platform you will be running your marketing campaign on. You can choose from a wide variety, including paid video ads on YouTube, Facebook and sponsored ads on Instagram. The platform you choose for your marketing strategy will be closely linked with who you are targeting.
Before technology took over our lives, we used to see billboards, print ads and even ads on our DIRECTV services and we thought this was all technology could do. But no, technology has definitely expanded over the years, allowing us to build our businesses with advantages like zero inventory and minimal operation costs.
Make good use of fast speed internet and free guides online, and find yourself the best product niche for your dropshipping business model.