The COVID-19 pandemic has accelerated digitization and boosted eCommerce. Due to the containment measures, consumers move online to make purchases to maintain social distancing. In this article, you’ll learn how to start dropshipping store from scratch.
The change in behavior and activities of people worldwide is well understood by the fact that in a recent survey conducted by YouGov, 82 percent of people in Hong Kong reportedly avoided crowded places in March. This sudden change in public activity is very disappointing for the retail sector but a piece of good news for the eCommerce industry.
After the availability of vaccines for the general public, the world is coming back to old normal, and economies are slowly reopening, but health and safety concerns are still in place. Industry analysts predict that the online shopping trend will remain active.
It is the perfect opportunity to launch your eCommerce dropshipping business with minimum investments and no inventory or logistics. Moreover, you can handle it effectively without leaving the comfort and safety of your home.
An eCommerce store with a dropshipping model will allow you to start your business without spending a fortune on inventory, and eradicate the risks associated with large stocks, thereby giving you the freedom to test out different products and ideas in your target market.
Since you are not involved in the supply chain, dropshipping will let you focus on more active areas like marketing and growing your business.
Dropshipping doesn’t know continents and borders. It will allow you to source products from anywhere in the world and engage customers across the globe. This attribute will enable you to sustain rapid growth and improve the scalability of your business. Another benefit of the dropshipping business is it doesn’t demand your full-time attention. You can continue to handle it in parallel with any other full-time job.
What is Dropshipping?
Dropshipping is a kind of retail fulfillment that allows you to sell products without managing your inventory. You remain in touch with dropshipping suppliers and source products to sell on your eCommerce platform. Customers visit your online store, make an order, then forward the order info to the supplier, and the supplier fulfills the order.
Unlike traditional online retail businesses, dropshipping releases the burden of fulfilling orders. It allows you to skip the stress and cost of manufacturing products, managing inventory, and shipping to customers. So what’s left behind for you as a dropshipper? You’ll select products, handle marketing campaigns and provide customer service.
How Dropshipping Works
Here’s the fundamental workflow of dropshipping:
- Choose products. Source the desired item/product from independent suppliers or link yourself with a dropshipping marketplace.
- Import items to the online store and set prices. You can enjoy full control over your listings and profit margins.
- Accept customer orders. Shoppers search for the items they want to purchase by checking out and paying on your eCommerce site.
- Forward customer orders to the supplier. Provide the order and shipping detail to the supplier. Then, pay the dropshipping supplier on behalf of your customer.
- Ship and fulfill orders through the supplier. Your supplier ships each order directly to your customers. You can enjoy transparency by getting a tracking number so you can update your customers accordingly. The white label shipping option provided by a supplier allows you to use your branding on the packaging.
Advantages and Disadvantages of Dropshipping
To decide whether dropshipping works for your business or not? Here are some factors that you need to consider:
Why you should start Dropshipping – Advantages
- You can easily start an online store with readily available inventory, as Dropshipping makes filling your storefront easy and handy. You just have to select products, add a payment method, and set up your online eCommerce platform.
- You can easily expand the domain of products that you offer. You don’t need to restrict the number of products you sell. The lack of storage space or what you can manufacture are the areas you don’t need to worry about.
- You can easily dodge upfront inventory costs, whereas dropshipping suppliers handle production and storage costs. It allows you to focus your budget and efforts on core eCommerce aspects like website and marketing.
- You can operate your business from anywhere in the world. You just need a sufficient WiFi connection. You can make sales while resting in the resorts of Maldives or from the beaches of Thailand.
- You can enjoy utmost independence by testing products and quickly adjust your inventory as per the latest trends without any hustle or physical effort. Sourcing products from suppliers make your inventory flexible. For instance, if a specific item is not selling, you can easily switch to another item or product.
Why you should not choose to Dropship – Disadvantages
- You don’t have full control over the quality of a product. In the case of working with independent suppliers, it’s harder to tackle this issue. To ensure suppliers’ reliability, always choose to source from authentic dropshipping marketplaces such as Modalyst or Spocket.
- Customer service tends to be more technical. If you lack knowledge and experience with the products you sell, questions pop up that you don’t know what and how to answer. To curb this issue, ensure rich communication with your suppliers.
- You’ll need to deal with returns & exchanges and handle the refund process independently, depending on your suppliers.
- Shipping costs depend on the supplier’s location, not yours. The further your customers live from where the orders are dispatched, the higher the shipping cost will be. But you can turn this problem into an opportunity. For instance, if you’re located in Europe and your supplier is in the U.S., you can engage U.S based customers by offering less shipping rates.
How to Start Dropshipping
By now, you have a general idea and insight about what dropshipping is. Let’s discuss how you can make it work for you in the more efficient way possible.
Create Your Online Store
Start your dropshipping business with an eCommerce website maker. With online site makers like Wix and Shopify, you can choose from various customizable online store templates. Then, register a unique domain for your site so customers can find you online.
Choose Products to Sell
With hundreds of categories and millions of products to choose from, it can be challenging to filter out your offerings.
Check out this article for tips on choosing products to dropship.
With niche products, you can sell more effectively to specific audiences. Specific doesn’t necessarily mean small; your niche market can be anything from mountaineers and travelers to the millennial who loves to play games at home. Use tools like Google Trends and Amazon’s bestseller lists to take a deep insight into your customer’s interests and buying patterns. See what they want to buy, find a supplier, and get selling.
Tending products are best in terms of earning you more profit. Shift your research to find upcoming products. Since you are dropshipping, you don’t need to worry about overstocking your inventory. If a trend shifts, you can change your suppliers or products as well.
Find a Supplier
Finding independent dropshipping suppliers requires in-depth research and more time. If you’d like to connect with independent sourcing, search for suppliers on Google. But even after choosing the suppliers who seem reliable, having positive reviews, it remains risky to some extent or degree.
To make the process hustle-free and widen your product choices, always try to source through a dropshipping marketplace. A dropshipping market allows you to connect to millions of products from authentic wholesalers.
Alternatively, you can choose to sell your own branded products via print-on-demand services. Print on demand is a type of dropshipping where the supplier handles order fulfillment and shipping, and the supplier also puts your custom logo or brand title on the packaging.
Add Products to Your Online Store
Customize the product listings on your site. Make product pages with product details, high-quality images, and videos that match your product.
Next, set your pricing and shipping rules. Must put your profit margin on the table by setting up your prices after taking wholesale and shipping costs into account. Try to find a grey line that increases your revenue while keeping your products under an affordable price range.
Engagement is the key; the more interactive your online platform is, the more time customers spend on your site, making them more likely to buy more. Think like shoppers and view your online store from your customer’s viewpoint to better understand their experience. Improve categorization and layout using filters, categories, and collections for your products.
Promote Your Business
Once you start importing dropshipping items to your storefront, it’s time to initiate a marketing campaign. Boost the reach of your business with a marketing plan that best suits your targeted market or customers.
Focus on these five marketing channels
- Branding: Use a consistent and catchy color scheme to develop your brand identity. Create a clear and memorable logo, write a slogan or title in a language that’s personal and makes relevant to your brand, and makes sense to your shoppers.
- SEO (Search Engine Optimization): Effective SEO makes it easier for customers to find you on Google. Achieve this milestone by using relevant keywords for your business and using key phrases in your site pages and blog content.
- Email Marketing: Attract your subscribers by offering exclusive discounts. Set up an automated email service and remind shoppers what they left in their carts to improve engagement.
- Social Media Marketing: Run marketing campaigns on social media platforms. Upload posts, tips, product photos, and promotional clips to engage your audience.
- Paid Ads: Boost your reach with targeted ad campaigns on Facebook, Instagram, YouTube, and search engines.
Getting Started with Dropshipping
As we have discussed earlier, the order info is forwarded to the supplier once you receive an order. You pay the supplier for the items. Then, the supplier packages and ships the order directly to your customer. This is what dropshipping is all about.
Many suppliers use white label packaging, which means that the product packaging lacks the supplier’s branding. This is ideal for you as your customers won’t confuse you with the supplier. Some dropshipping suppliers will allow you to place your branding on the packaging.
Branded packaging boosts trust, appears professional, and helps consumers remember your services.
Myth vs. Reality
Question over Legitimacy
Dropshipping is a fully legal practice. You are selling products with the suppliers’ permission. Ensure honest marketing campaigns and abide by online sales tax laws and other regulations.
Profit vs. Loss
As a dropshipper, you need to maintain a balance between your Investment and revenue. Take into account the wholesale prices of the products as well as your marketing efforts. Price your products so that you are generating more RoI while keeping your costs affordable and reasonable.
The key to a smart dropshipping profit margin is aggressive pricing. Undoubtedly, you are eager to cover your investment and boost revenue but keep in mind the competition you can give your rivals by holding your price reasonable is of great importance. Maintain a balance in profit margin that can win you more customers.
Three main cost drivers must be taken into account while starting a dropshipping business. Every online platform or site maker costs you a slightly different amount than its counterpart. For instance, let’s take a case with Wix. Wix eCommerce platform plan costs around $17-$35 per month.
Website domain costs around $5-$20, depending on your domain name. With Wix, you can enjoy a free domain for the first year when choosing a Premium Plan.
Your choices and strategy drive your marketing cost and budget. Each Wix Business and eCommerce Premium Plan possesses built-in and professional marketing tools. Additional expenditure in terms of targeted Facebook Ads can add around $80 per month.
Importance of Dropshipping in 2022
Without managing a warehouse and shipping process, as a dropshipper, you can enjoy utmost independence while taking minimal risk by making small investments. It allows you to experience new markets and product categories without any fear of losing out. If everything works fine, you can easily end up being a successful dropshipper. Be sure to do your research before selecting products entering a new market. Put your best marketing efforts in place and review the aforementioned dropshipping advantages and disadvantages.
Top eCommerce Platforms to Start Dropshipping Business
Needless to mention, Magento has emerged to be one of the most powerful eCommerce platforms for dropshipping. It has two variants: Magento 1 and Magento 2 (Highly recommended), and two editions: Magento Open Source, free, and Magento Commerce, a premium service.
Setup time and cost: As mentioned, there are two Magento editions, but the free (open source) edition has enough utilities for starting a dropshipping business. However, you are required to have detailed technical knowledge about developing a Magento dropshipping website, so that you might need to outsource the services of Magento developers. It costs you from $3,000 to 5,000 and took 1-3 months for Magento website development.
eCommerce features: No doubt, Magento provides everything a dropshipping business requires, and even more than what you need. By default, a Magento website offers you some interesting utilities like fast page load speed, easy and hurdle-free checkout, well-developed product and catalog page, built-in SEO and marketing tools, comprehensive site management tools, and high-security features.
Ease of use: The front end of Magento websites is very user-friendly and interactive. On the other hand, the back-end is very complicated for the administrators who are just dummies without any prior knowledge of web development and management. However, in a short period after using Magento websites with the assistance of comprehensive Magento user guides, the store owners started to monitor their sites effectively and easily.
Scalability: Magento is the most scalable eCommerce platform for dropshipping among all the existing models. It allows you to create a great website with a small number of products and also assists you when your business is on summits to new heights. You can add an unlimited number of products, catalogs and handle an unlimited number of orders without any lack or limitation.
Support: Due to its wide usage as an eCommerce platform, you can ask for assistance from Magento officials or Magento community forums, social media groups, or even Youtube tutorials. Other than that, if you are unable to find these sources, you can hire a trusted Magento agency to assist you with their customize support packages.
To integrate dropshipping option into a Magento website, you will need to install a third-party extension that costs you around $0 to $950.
Another renowned eCommerce platform for dropshipping is WooCommerce. It is less technical and provides you rich features at the same time.
Compared to Magento, it has less advanced eCommerce utilities due to its user-friendly outlook for beginners. However, from the developers’ perspective, this platform is difficult to customize, and most of its functionalities must be enabled by third-party plugins.
Setup time and cost: WooCommerce is a free plugin of the WordPress framework. You need to create a WordPress website first and then install the WooCommerce plugin on your store. In practice, it will take fever time to build a WooCommerce site than a Magento if you are a developer. If you lack technical expertise, you might still need the help of web developers. Besides, a WooCommerce website cost is often in the range of $1,500-3,500, but to integrate advanced features in your site, you will have to spend notable expenditure on additional plugins and customized features.
eCommerce features: Your WooCommerce website will be equipped with fundamental eCommerce utilities such as product, catalog, and inventory management, pre-installed payment methods, geo-location, shipping charges calculator, multiple shipping methods, discount and coupon codes, sales report, etc. If you want to upgrade your site, there exist more than 75,000 WooCommerce plugins for your custom needs and support.
Ease of use: Thanks to the simple and interactive user interface, WooCommerce is very easy to get your hands on. Moreover, the WooCommerce user guide is very detailed, which is a very important and helpful source for the administrators to manage their site professionally.
Scalability: WooCommerce is more suitable for small dropshipping businesses. If you are running a medium to a large eCommerce store, opt for Magento. When the number of products on your WooCommerce site increases, its performance will likely drop notably.
Support: When you encounter any problem, you can find the remedy by searching on Woo documentation or asking for Woo support.
Like Magento, to integrate the dropshipping function to a WooCommerce website, you need to deploy a third-party plugin that can cost you around $50.
The third name on the list of best dropshipping platforms is Shopify. To date, Shopify has contributed to developing around 600,000 eCommerce platforms around the globe, including dropshipping businesses. Especially, Oberlo, a dropshipping plugin that works exclusively on Shopify. Oberlo helps you search for products to sell from Oberlo Verified Suppliers, Oberlo suppliers, or AliExpress suppliers.
Setup time and cost: You are required to pay Shopify a monthly fee in exchange for its services, which range from $30 to $300 per month. Besides, you might have to buy the theme for the website. Among 100 Shopify themes to select from, only 10 of them are free. Apart from that, there is a dark side to using Shopify as it will charge you a certain amount per sale if you integrate an external payment method instead of Shopify Payments. As far as time is concerned, that is required for setting up the website; this is a main advantage of Shopify that it takes only a few hours or days to create and launch a new Shopify store.
eCommerce Features: In general, Shopify provides a variety of useful features for dropship eCommerce businesses, from theme settings, products, orders, and customer management, online payments, multiple languages and currencies, unlimited hosting, SEO, etc.
Ease of Use: If you lack technical knowledge, Shopify might be a good decision. It does not take a lot of time for you to get used to this platform. To develop a website, you just need to register by signing up, selecting a package, choosing the desired theme, and starting customizing it as per your feasibility.
Scalability: It is a highly scalable platform. You can easily scale up or down your business by choosing from a variety of packages.
Support: It offers multiple support mediums via email, phone, live chat, community forum. However, some users argue that live chat is just a chatbot service intended to collect our email information rather than helping us.
OpenCart is a free eCommerce platform for drop shipping that you must put on the table. Magento and OpenCart also share many similarities, such as free, open-source, powerful, and more appropriate for technical users than beginners. But keep in mind, the Magento community is larger and far more robust than that of OpenCart.
Setup time and cost: It is an open-source and free to deploy eCommerce platform. Additionally, you can get lifetime free support and free software updates when OpenCart is your dropshipping eCommerce platform. The major cost comes from hiring web developers to create your online store, and it will take around two months for your web development.
eCommerce Features: The utilities provided by OpenCart include unlimited products and categories, support for different currencies, integrated payment methods, a variety of shipping methods, backup tools and restore mechanisms, detailed sales reports, etc.
Ease of Use: OpenCart is preferred for those having a certain degree of web development experience and knowledge. It does not necessarily mean that OpenCart is hard for the beginner to learn how to use the platform; the user-friendly and clean interface is very helpful for front-end users.
Scalability: It is not scalable as it is more suitable for small to medium-sized businesses.
Support: To get help from OpenCart, you can create a ticket or email the support team. You can also visit the OpenCart community forum to ask other members for help.
There is a variety of OpenCart dropshipping plugins in the market, starting from $100.
Last but not the least, BigCommerce has empowered around 50,000 eCommerce websites around the globe. Like Shopify, BigCommerce provides several monthly plans, ranging from $30 to $250.
Setup time and cost: BigCommerce offers three packages, namely Standard, Plus, and Pro. Also, it provides an enterprise version with an undisclosed price. You have to connect with the BigCommerce team to discover their custom pricing. Apart from that, it is quick and easy to develop a website on the BigCommerce Platform. What you need to sign up for an account, select a theme and start customizing your store. BigCommerce offers 15 days free trial; after that, you have to buy a specific package to continue using the services.
eCommerce Features: BigCommerce provides all essential eCommerce utilities for you to start with, such as order management, products, and catalogs creation, support for multiple payment methods, marketing features, etc. It has integrated features of ShipperHQ and ShipStation for shipping services and Avalara for tax automation.
Ease of Use: It is not much complex for non-technical users. After selecting a certain theme, you can easily customize it as you wish without any technical knowledge or skill.
Scalability: Due to the availability of monthly plans, you can easily scale up your fast-growing businesses over time by opting BigCommerce platforms for dropshipping.
Like Shopify, BigCommerce provides support via email, live chat, phone, and community forum. Another way for you to seek assistance in finding the solutions is using BigCommerce Resource Center.
Keep in mind that you’ve only figured out how to start a dropshipping store; now you need to figure out on your own how to take it to the extreme summits. Owning dropshipping eCommerce business is about improving your sales, customer engagement, and, most importantly, yourself.
To run a successful dropshipping store, you’ll need to focus your marketing efforts via ads, blog creation, and attracting an audience on social media platforms. These three areas can have a potential impact on your business in the long run. Right now, you need to improve your reach and showcase your brand for everyone out there to visit and explore.
Make a bucket list of tasks that you want to accomplish with your eCommerce business, but first, start the learning process. Ensure consistency and begin by investing one hour daily to improve your dropshipping store so that you can further customize your website, explore new ways to skyrocket sales, and continue learning how to maintain consistent growth.
With hard work, dedication, and a sales push on your side; there are endless possibilities and opportunities for you to discover. Never forget why you started the dropshipping business in the first place, and let that motivation drive your determination.