Dropshipping is a popular business model for entrepreneurs who are looking to get started with an online business. The good news is that anyone can get started, and they don't need any upfront investment.
But what does dropshipping actually mean?
This article will answer this question and more! We'll discuss the process of dropshipping, its advantages, disadvantages, and some of the best tools for dropshippers. Let's dive in!
What Is A Dropshipping Business?
Dropshipping or drop shipping is a way of retailing products online where a store doesn't keep the products it sells in stock. Instead, when a store receives an order from a customer, it purchases the item from a third-party supplier and has it shipped directly to the customer's door. This process helps stores increase their profits by eliminating the need for storing and shipping goods themselves. Sometimes, suppliers agree to provide the products at a wholesale price.
Drop shipping is the act of transferring packages between locations after receiving an order without processing transactions at both locations. The term was originally coined by internet business owners who would bring boxes of inventory to public places and ship them as they came in.
Dropshipping is typically done using an e-commerce platform that allows a business to build and customize its online store. Orders are passed on from the dropshipper either manually or through custom software, typically by providing customer information such as name, address, and payment details. The items purchased will be shipped directly to the customers' doorsteps.
The Dropshipping Process Explained
The process of dropshipping is:
Is A Dropshipping Business Profitable?
Yes, dropshipping is a very profitable business. However, you need to know how to properly start a dropshipping business.
You need to:
Once you do all this correctly, you’re on your way to making dropshipping profitable for you! You’ll find more information on some of these later in the article.
How Much Profit Can Be Made In Dropshipping?
Profits in dropshipping will depend on a variety of factors, including how successful your business is and whether you're using the correct strategy. You must do some research into what kinds of products are profitable to sell and how to go about generating a following for them. Make sure to reduce fees from payment providers that charge a lot in transaction fees by choosing an alternative like Stripe.
Some stores make millions doing dropshipping and on the other hand, some stores are struggling to break even.
Is It Really Worth Doing?
Yes! Once you start dropshipping, you will quickly see that this is a good way to make extra money.
All you have to do is find a product that people want, purchase it for cheap from a website like Alibaba, create your own packaging and logo design (if necessary), shoot product photos and finally upload it onto Shopify, Instagram, or Facebook pages. You can run ads on Facebook, Instagram, or Google to advertise the product. After this, you just need to wait for orders! The results of dropshipping are generally worth the efforts
It will take time and hard work but you'll soon see how easy it is to make money on your own schedule, at home.
How Do I Choose The Best Dropshipping Supplier For My Online Stores?
If you're just starting out it's better to go with an international company that does not require a big initial investment but is also expanding abroad.
There are many factors to consider when choosing the best supplier for dropshipping. You need to be careful and read everything they give you, such as their terms of service and FAQs. The following factors will help you decide what is important:
These factors need to be analyzed before choosing the right supplier for your dropshipping business and can help you decide what kind of company will work best for both parties involved.
Alibaba is a great place to find products from China. If you're looking for something from the U.S., AliExpress also has a lot of sellers who are based there. eBay is a decent site with a wide range of products. Walmart sells products online too and is another place to save money by buying in bulk if you plan on doing dropshipping.Related reading: Ebay dropshipping
E-commerce Platforms For Dropshipping
The most common e-commerce platforms for dropshipping are:
Right Approaches To Dropshipping
Best Products For Dropshipping
The best products and niches for dropshipping generally have a WOW factor attached to them. Selling the exact product that's easily available on other e-commerce platforms might not be the best way forward. Even if you're selling common everyday products, ensure that they have a sense of ‘WOW’ that similar products on other e-commerce platforms don't.
There are a lot of products that will work for dropshipping and we have listed a few for you:
General Store Or Niche Store For Dropshipping: What Works Best?
There are both pros and cons to having a general or niche store for dropshipping.
The pros of having a general store are that it's easy to stock many different products. It's also easier to market because you can focus on broad niches instead of one niche at a time.
There are more options when it comes to products that could work. It's easier to find suppliers who will sell you a wide range of products at a reasonable price.
A downside to having a general store is that your profits per sale might be lower as you haven’t established a brand for your business and hence cannot charge high. It is also harder to stand out from the crowd.
The benefits to a niche store include high profits per sale and lower competition.
A downside is that it can be hard to find enough products in your chosen niche, especially if you're just starting. It can be more difficult to find people that are interested in buying your specific brand or product.
Having a general store might be better for some people but having more specific products that are harder to find will work best for others. It's really up to you and what kind of customers you're aiming for with your niche or target group.
Both can work if done correctly!
Tools To Get Started With Dropshipping
Best Tool To Find Dropshipping Products
There are a lot of tools you can use to find the products for your store. Apart from the obvious ones like Google and Amazon, there are a few other tools that you can use to find products.
One tool is called Jungle Scout which helps you look for profitable niches as well as specific products within those niches. This way, you won't have to go through every single product on Amazon or Google. You can use Google Trends to find out what people are searching for.
You can also join Facebook groups where suppliers will post their inventory so when they upload a new batch of products, it's something worth checking out
Best Tool To Find Dropshipping Suppliers
There are many ways that you can get in touch with potential suppliers for your store.
You could try using Alibaba which is a good place to start since they have lots of dropshippers there. You might be able to find suppliers on social media too so remember to try that as well.If you just want something simple then check out Oberlo or AliDropship which are free and easy to use!
Best Tool To Automate Your Store
Many things can be automated in your store and the best options for automation depend on what kind of products you're selling.
For example, if you sell beauty or health & wellness related products then automation tools like Oberlo could come in handy since it's designed to help automate things like product images and descriptions for certain items.
If you don't want to go with something like this though, Shopify has some good automation tools too.
Using this automation, you can automatically create new products when you upload a CSV file of all your inventory with their Inventory Management app. Another automation feature allows you to use the abandoned cart feature to send out emails to people who abandon their carts after adding items.
Best Tool For Customer Support
No one tool will be the best since it depends on what kind of store you're running.
For example, if you're selling clothes then Facebook Messenger is a good way to go since it's fairly simple and easy for customers.You can also integrate other live chat apps into your store. For example, you can integrate Intercom to Shopify.
Best Tool For Analytics
Google Analytics is great and free to use. It is by far the best analytics tool. You can set up goals, and event tracking. So it's worth checking out! Shopify has a lot of good features too and is great if you don't want to use a third-party tool. You can also choose to setup Google Analytics for your shopify store
Best Tool For Creating A Blog
Looking to create a blog to write about the products you’re selling? There are lots of tools that you can use to create and manage your own blog. WordPress is the most popular option but it's not really built for e-commerce - unless you use WooCommerce with it.
On Shopify, you can create your own pages and put them under the blog section. Though Shopify might not be the best place to host eCommerce blogs, if a site is not heavy on SEO for generating sales, Shopify can work well.
Best Tool To Automate Emails
There's a lot of good options out there and Shopify has some automation features which are great if you're just getting started with dropshipping. If you want something more advanced though, we suggest using Mailchimp as it's fairly easy to use and has good features for email automation.
Best Tool To Create A Logo
There are lots of options out there but you could try Fiverr to get something created quickly and easily. If you want more control over your design though, Shopify has some free templates available or if you already have an idea for what kind of logo you'd like, Canva is great too!
Best Tool For SEO
We suggest using Shopify or Optimize Press - both are great for SEO since they have built-in features like on-page optimization and meta tags so they'll help rank your store.
Best Tool For Abandoned Cart Recovery
Shoplo has a good feature that lets you send out emails to people who abandon their carts and it's worth checking out! A store created on Shopify will also come with features for recovering abandoned carts.
Best Tool To Help With Pricing
Shopify has some great features which will help if you want to set up pricing rules for your store. For more advanced features like product sourcing or bulk discounts, Oberlo is a great option.
Dropshipping As A Side Hustle
Working as a dropshipper is a good side hustle because you can make good money and not have to work that much once you have systems in place.
Dropshipping is also accessible as you do not need any experience at all, just access to the internet and products! Not only this but it’s good because there aren’t many risks involved in dropshipping, allowing anyone who has some extra cash to invest in the process to be able to do it.
Most people look at drop shipping as a get-rich-quick scheme which is not the case.
Advantages And Disadvantages Of Dropshipping
Here's a list of the most basic advantages of dropshipping:
Here's a list of disadvantages:
These are just a few of the disadvantages, but there are ways around them.
Dropshipping businesses work well when done correctly, but it can be very risky if you are not careful with your choices. You should do some research before starting so that you know what the best dropshipping companies are and how they work.
What Dropshipping Means - FAQs
Dropshipping is generally legal in almost all countries. However, its legality varies from country to country, as well as state to state. In the United States, most states do not require businesses that solely use drop shipping models to register with them under specific regulations for remote sellers. However, some states require registration if a company sells tangible goods within the state's borders.
Dropshipping is neither too easy nor difficult. All it takes to get started is having an internet connection and a supplier that you can work with! It's easy to get started because you don't need any inventory, and there are no overhead costs. On the other hand, it can be hard to find multiple suppliers who offer high-quality products.
There are a lot of factors that will determine how long it takes to make money with dropshipping. The first factor is the amount of time and effort you invest into your business, and the second is the type of product you're selling. If you put in a lot of work and sell high-ticket items, then it could take as little as three months to turn an initial investment into profit. But if you don't want to put in much work or sell low-ticket items, it could take a long time to make it a successful business!
Dropshipping is a popular e-commerce business model, but it can be tricky to succeed in this industry. The key to success with dropshipping is understanding the advantages and disadvantages of this method of online retailing so that you can have a successful venture. If you feel dropshipping is your game to try, it’s time to put the above guide into practice and get started now!
If the lack of control over product quality, supplier reliability, and ship times is something that bothers you, consider other ecommerce business models like reverse dropshipping. Knowing what is reverse dropshipping and how it works might give you the insights you need to find a business model that is a better fit for your ecommerce goals.