If you’re interested in e-commerce and becoming an online entrepreneur, then you most certainly have heard of the dropshipping industry. It’s been around for quite a while but it gained significant speed over the last couple of years. Now every other wannabe-entrepreneur out there is aiming to become a dropshipper.
Starting a dropshipping business has quickly turned into one of the most desired ways to establish an online business. But an online store based on the concept of drop shipping, whether it is built around a niche or not, is not a child’s play, even though it seems like that.
But there is one simple answer to the question of how to start a dropshipping business in 2019. And that is – with the right tools at hand!
What is Dropshipping & How Does Dropshipping Work?
The concept of dropshipping revolves around retail fulfillment. But many people have chosen to set up a dropshipping business because it does not require store owners to stack up on inventory.
As a dropshipper, you won’t be keeping products in stock. You purchase the products from a third-party vendor, also called a supplier, who takes care of packaging and shipping the order.
You will never have to handle products and the shipping process.
Here’s a brief look at how dropshipping works in its essence:
1. A customer visits your store;
2. The customer places an order on your store;
3. You manually or automatically send that order to your supplier;
4. The supplier processes that order, packages and ships it to your customer.
In other words, dropshipping is a business model that allows you to start the moment you’ve set up your website and payment processor. No need to hunt for products, to hold an inventory or invest money in something you don’t know if it will sell, just to have it at hand.
Pros and Cons of Dropshipping
Of course, like with any other business, the concept of dropshipping through an online store is not without its drawbacks. But it also has a lot of advantages that are incentives for people to choose this model of handling an online business.
Pros of Dropshipping
1. Low startup costs – eliminating the need to stock up on inventory eliminates the huge expenses that come with that. You will not pay for the products to get them, nor for a warehouse to store them in. You will need to make investments only into building a proper website. This, with website builders like Shopify and WordPress, can be really cheap.
2. No fulfillment hassle – packaging and shipping will be taken care of by the vendor and supplier you choose to dropship from. No need to bother yourself with packaging and shipping expenses.
3. Bigger ability to test products – you can always add or remove products you think might be trending at the moment, and scale your business according to what is more demanded. In platforms optimized for store-making, this can happen in mere minutes.
Dropshipping will help you forget about obsolete inventory and additional costs regarding shipping and packaging. Your only goal is to connect the customers with the vendors through building an online store.
There are numerous tools and plugins at your disposal in order to tweak and optimize your website. The only thing you’ll truly need to take care of is brand identity and marketing so that you draw visitors to your website. And also – so that you can turn them into paying customers.
Cons of Dropshipping
1. Less control over operations – both inventory and shipping depend on a third party. You need to carefully select your suppliers and vendors. If you manage to build a relationship with them based on trust and quality, you will trade confidently. The packaging and shipping procedures and times will depend entirely on them so make sure you choose reliable partners.
2. Trickier pricing – when dropshipping, especially if you’re a beginner, you will not be able to get proper discounts from the start. That will come with time and if you’re able to generate higher volumes in sales for your supplier. This leaves a smaller room for overpricing, and the lower margins might result in lower profits at the beginning.
Dropshipping has become a huge phenomenon in the modern-day online business models. This has significantly increased the quality of service, due to the intense competition. But choosing trustworthy and reliable vendors also has its challenges.
Before you proceed with choosing your vendors, though, you’ll have to figure out where and how to position yourself in the markets. Yes, there are online dropshipping stores that have proven themselves capable of generating huge profits by providing a huge spectrum of products. But there is also undeniable evidence that niche stores generate better results.
If you’ve weighed the pros and cons of dropshipping and are still ready to jump head-on, start with defining your niche. This is the first step towards finding high-yielding products to dropship.
How to Find Profitable and High-Demand Products to Dropship?
Before you get to choosing products to sell, you have to decide what is going to be your niche. You might find it unnecessary, but there are good reasons to define a niche for your online store.
What is a niche?
A niche is a segment, defined in a broader market. A niche market can be broad but it can also be extremely specialized. It all depends on your preferences and what customers you’d like to target.
Niche markets are known to be quite profitable for several reasons. Their nature – to be a targeted narrow market segment, makes them significantly easier to exploit. This is due to the simple fact that you’re going to focus on something specific rather than the mass market.
If you go on and read my dropshipping niche lesson, you will gain valuable additional insights and a pro tip – don’t dive into a niche that deals with sizes, like clothes and shoes. If you do that, you risk damages from returns.
Choosing a Dropshipping Business Niche
To be able to choose the products you’ll offer on your online store, you need a clear idea of what your niche market is going to be. But first, you have to distinguish the two types of niche markets you can position yourself into.
1. Evergreen Niche Markets – these niche markets offer products that have a steady demand over time. Due to the steady demand, you can expect regular purchases of such evergreen products. This will help you keep your store up and running for a longer period, relying on a constant group of products. The downside is that such evergreen products are usually mass-marketed, can be found easily, and this will force you to give them lower prices, thus yielding lower profits.
2. Trending Niche Markets – these niche markets appear around products that become instant hits, soon after their first appearance before the public. Such was the case with the fidget spinner, for example. Trending products burn brightly and quickly, so you can’t expect a steady flow of demands over time. A store around such a niche usually has a shorter lifespan, but the rewards it yields are significantly higher.
To choose your niche, you can use various tools and resources. Google Trends is the most common of them all, even though the information from them can only serve as a basic guideline.
Software solutions like NicheScraper, for example, can give you more insights into the markets. But there are a couple of additional techniques you can utilize and apply to make a decision.
The process of defining your niche might take some time. But this is the only right place to start if you want your store to have a future and customers.
Open your senses to the world!
Often times, defining your product niche can be based on your interests, on what you see and hear from the people that surround you, as well as what gets the most exposure on social media. Influencers can light the way for you if you don’t have many ideas.
Picking Products to Dropship
Once you’ve decided on your niche, the only thing left is to select the products from it that you are going to offer to your store’s visitors.
There are a couple of important moments you should take into consideration when moving forward with picking products to dropship.
Simply picking up the products is not enough.
Keep in mind
When it comes to dropshipping, you will notice that many people supply the same goods, just at different prices. That’s due to the mass-production nature of the dropshipping business. If you jump to the first product you see, you might miss on something better in terms of price, shipping times, and customer service.
To pick the right products means to pick the right vendors. And here’s how you can ensure your choice is correct:
1. Use tools like DropshipMe – such tools for research can help you discover the hot and trending products in a given niche, along with the trusted vendors that supply them.
2. Consider ratings – to ensure your vendor is reliable, consider their rating. Best case scenario, choose those suppliers that have an overall quality rating of Above Average. These ratings are available in the vendor’s profile on the platform you’re going to dropship from.
3. Consider the number of purchases – of course, people often buy the products you’re about to dropship directly from the suppliers, whenever they are able to find them. The number of direct orders and the product rating are a good indication of whether people are satisfied with what they got and how fast it arrived.
Which solution you will be using depends entirely on your preferences.
For some of the specific platforms, you can use dedicated tools optimized to synchronize with them. For example:
- Working with WordPress – use WooCommerce and AliDropship to gain valuable insights into vendors and their quality and reliability;
- Working with Shopify – use Dropified combined with Shopify’s Oberlo to confirm you’re choosing trustworthy vendors and suppliers with good products.
Competitor Product Research
This is where things might get messy, but you have to commit if you want results. Your immediate competitors can be your most insightful source of information when it comes to dropshipping the correct products.
Such a competitive analysis lies at the foundation of market research. You don’t have to be a pro at market research, but even the most basic of analyses can greatly optimize your work as a store owner:
1. Look for popular competitors in your niche;
2. Explore their product lists and find what they are pushing the most;
3. Don’t fret about pricing wars but do take note of their prices;
You don’t need a thorough list of competitors beforehand. A simple Google image search will help you discover other dropshippers that offer the same products, and even the source-vendors that supply them. Factor in your analysis how you can compete price-wise.
But do not spend a whole day researching competitors. This is something that should happen quickly, once you’ve determined what types of products you would like to feature on your store. Adjustment can be made quickly afterward, with various price-reduction tools and tactics to stay competitive.
Since you cannot accurately guess which are the vendors used by your competitors, you should be sure of the quality of your own. Customer care and service, speed of shipping, replacements, and other vital services will depend entirely on them. If you are convinced of the quality of your partners, you will be able to stay competitive on that front as well.
Finding the Right Dropshipping Suppliers
As we discussed, the quality of the vendors you choose is of the utmost importance. But the number of vendors out there might prove a challenge for you.
When you can choose from dozens of suppliers providing the same thing, it’s easy to make a mistake. That’s why finding dropshipping companies and suppliers should be a process you carry out carefully.
How to Find Dropshipping Suppliers
The places where you can find dropshipping suppliers are such tools that unite various marketplaces and allow you access to the information available.
Solutions like SaleHoo, DropshipMe and WorldWide Brands can help you gain access to market research made by professionals. You can base your decisions on your assumptions or rely on their results and discoveries as market analysts.
But just getting yourself an app or a plug-in to guide you will hardly be enough to equip your online business with desired suppliers.
How to Select Trustworthy AliExpress Suppliers
You have to be patient when it comes to choosing the most proper dropshipping suppliers. Most of them are based in non-English speaking countries like China, which for a matter of fact, is the biggest source of dropshippers on a global scale.
But the language barrier is not going to be your only concern in the process. Here’s how to carry out this very important aspect of setting up your online store in order to be confident in the quality of your suppliers.
1. Be thorough when researching – decide which option suits you best, whether you’ll be dropshipping from a domestic vendor or overseas, if domestic suppliers are available.
Look at their ratings, customers’ feedback, and product reviews to get a better idea of the quality of the services they provide. Take it a step further – contact the suppliers you’ve chosen to see how quick are they to respond.
This is the first step toward creating a healthy and lasting relationship with your supplier. If they fail to reply in due time, this should immediately alert you something is not right.
2. Consider your options – now that you have a pre-selection of vendors, you can order the product as a sample. That can tell you how good the service is and what is the quality of the products.
You will know whether the vendor puts their business card or other promotional materials pointing to the fact that the product comes, in fact, from China. In other words, you will be your first customer and will receive the experience they are going to.
3. Choose what’s best for you – don’t seemly search for negative reviews, bad feedback for products, poor vendors’ ratings. Make sure the way the vendor is willing to do business answers your needs and requirements. That’s why don’t hesitate to contact the suppliers and establish a good and strong relationship.
If you manage to drive sales with huge volumes to the vendor, they might be willing to give you additional discounts and better services for your end clients, if you’ve managed to build a good business bond with them.
Will my Customers Know That the Products are Dropshipped?
It is only natural to be concerned about this. Given that the shipping is not going to be under your control, some things might go wrong. And you don’t want that, as it might hurt your brand name. And of course, you wouldn’t want your customers to know you ship from the other side of the world with no quality control.
This is where knowing your suppliers can do wonders for you. As an owner of a dropshipping business, you manually or with some sort of tailor-made automation will fulfill purchases through your vendor. Whenever you do that, just leave your supplier a note that you are a dropshipper and the purchased product is going to a third-party.
Include a polite notice to avoid adding business cards, promotional materials or anything else that might give out the origin country of the product in question. Of course, this is the case when you wish to keep your customers outside of the loop and do not inform them that you’re dropshipping the products from a vendor.
That’s why a good business relationship with suppliers is so important. When you have it, they will never disregard your notices, and you will never find yourself in an uncomfortable situation for having to explain where the products come from.
Tools like WooCommerce and AliDropship, for WordPress, are great for finding verified vendors that are used to providing their products for dropshipping. The same goes for the Shopify platform and apps.
If you cannot access these resources due to using another platform for building your online store, you can still rely on directories like the already mentioned SaleHoo and WorldWide Brands to find your suppliers.
Most of these directories operate based on extensive market research and compile vendors and information for the benefit of its users. It is quite possible that you find your trustworthy suppliers there.
Dealing With Delivery Times
Given that your products will ship to your customers from halfway across the world, delivery times will greatly vary. But there are solutions you can use that will not make your product too costly. For example:
ePacket Delivery – some vendors use this functionality to offer free shipping to a predetermined list of countries you can easily inform yourself on.
AliExpress Premium Shipping – if your suppliers are listed on AliExpress, you can also rely on this type of shipping. It is usually faster and more reliable than standard shipping.
Shipping costs will usually vary from supplier to supplier, but they are close to each other. Very few are the exceptions of extremely expensive deliveries.
It is good to decide beforehand which are going to be the leading countries for your business. Where do your most desired customers live? That way, you can see the shipping costs for the various vendors for each country. Usually, shipping costs will also be influenced by the size of the packages and their weight, which are specified on the product pages of your supplier.
Keep in mind that shipping times exclude the time required for the purchase to be processed. In the spirit of transparency, warn your customers of that. The processing time for most vendors is usually between 24 hours and 4 days, depending on how busy they are.
How do Dropship Suppliers Handle Returns?
Returns might be tricky when it comes to dropshipping. That’s why my advice for you was to not dropship items with sizes that might need to be replaced due to differences. If you decide to do that, the procedure for returns should be your top priority.
You will be required to have a return merchandise authorization from the vendor, that will be of great use for your customer to ship the product back to the supplier. You can either refund the customer immediately or wait for the vendor to refund you.
You might not want your customers to return products directly to the supplier, especially if you don’t want them to know you are dropshipping their goods from China, for example. In that case, you have to turn into the middleman in the process – you receive the return and proceed further with your supplier. But in that case, you will definitely have to refund the customer before you get a refund from the vendor.
Building a Dropshipping Business Online Store
Showcasing your business does not happen only through marketing. You need to have a presentable but also a responsive website, that will provide your visitors with a pleasant experience. There are platform builders that have been created specifically for the purpose of enabling people to create online stores.
There are several platforms you can use to create your store. Some have more advantages than others. You can also try and dropship without an actual website and a store. Let’s consider the possible ways.
Dropshipping on Amazon and eBay
It’s quite understandable how alluring is the idea of being able to cooperate with the two biggest shopping sites out there. That’s why many people have tried to dropship using their platforms.
The main incentive for that stems from the fact that you don’t need to do much. Here’s how you turn into a dropshipper on Amazon and eBay:
1. Create your account and add to it from the list of existing products;
2. That’s it.
In other words, turning to dropshipping on Amazon and eBay does not require lots of efforts on your part. You get the traffic that comes to the two websites. Everything is taken care of by their own customer service. Fulfillment is carried out by their own fulfillment centers.
It is possible. But it also comes with lots of disadvantages, especially in regard to providing your customers with good user experience. You give up all control over your brand, identity as a seller, and engagement with customers. Including information about sales that the websites will use to their own benefit and not yours.
That’s why, if you are ambitious and want to truly grow as a dropshipper online, it is much more reasonable to build your store using an ecommerce builder.
Choosing the Right Ecommerce Store Builder
There is a significant number of online store building solutions, but it is clear to the dropshipping community that there are a couple of really good ones. Ones that have been optimized for the sole purpose of enabling people to create an online store and start their online business, be it dropshipping or otherwise.
Let’s take a look at the most user-friendly and popular ecommerce building platforms so that you can get a grasp of what to expect from this industry.
This is by far the most popular ecommerce store builder out there. Launched with the sole purpose of enabling you, Shopify gives you all the tools you need in their store-building environment. Meaning, by using it, you spare yourself the need to hire a professional developer.
Here are some of its highlights:
- Fully customizable design with user-friendly features;
- Free trial – 14 days of use without paying;
- Fully compatible with social media.
Overview of Shopify
Ever since Shopify launched in 2004, there’s been a major growth in the world of online businesses. It almost feels like everyone has a store today. The popularity of Shopify is determined by the fact it factors out all the complexities involved in building a store. It has been designed with the thought of small and medium businesses in mind, and it seems to be achieving its purpose.
As you already know, you don’t need the help of a developer to create an appealing online store with great user experience. There are more than a hundred templates for you to choose from to use as your store theme. Most of them are free, but there are also quite premium ones which are paid.
With Shopify, if you want to avoid everything code-related, you can achieve that. The best part is that if you want to tweak and change something, you can still do that because you gain access to the theme’s code.
You can customize every aspect of your store whether on your own with the provided features or with the help of a developer through the theme’s code.
- Hundreds of templates & designs;
- Easy payment integrations & multiple options;
- Included blogging capabilities;
- In-house hosting & website security.
- Some additional apps might be expensive;
- Can’t be very creative with blogging.
For these reasons, and much more, people have turned more than once to the capabilities of Shopify. Trusted it with their store, and many people are profiting from taking this step.
WooCommerce is the main competitor of Shopify you can find. This is a tool that makes your WordPress website store-optimized. If you prefer working with the WordPress platform, you can easily adjust your website and turn it into an online store using the capabilities of WooCommerce.
Here are some of its highlights:
- Simple to integrate and use;
- Ideal for small and medium business;
- Gives professional look & feel to your website.
Overview of WooCommerce
This is an open-source plugin designed for WordPress users. It has been created with the idea of enabling small and medium-sized merchants to showcase and sell their products online. It is also one of the most popular ways for people to start dropshipping.
When you build your website with WordPress and host it, you get access to numerous free and premium themes for it. These themes are usually highly customizable with a drag-and-drop principle.
If you have a developer at hand, he can easily tweak and adjust the code of your chosen theme, to add more features and capabilities, so that you are happy with the final result. Due to the highly customizable nature of WordPress, you can expect the same if you apply the WooCommerce plugin to it to make a store.
- Highly customizable;
- Integrate an unlimited number of products;
- Allows easy migration from another platform;
- Easy to track inventory, set up payments, and shipping;
- An unlimited number of free apps and plugins.
- Not suitable for bigger businesses;
- Hard to choose a good hosting option.
For anyone who’s looking for an alternative to Shopify, the combination between WordPress and WooCommerce can give you a serious edge when you’re starting your dropshipping business.
BigCommerce is also a big name in the ecommerce builders’ competition for your attention. It is one of the go-to choices people make when they decide to open their own online store. Whether it would be for showcasing your own products or for dropshipping purposes, if your business is growing and has potential, this is where you could start.
- Competitive subscriptions & various features;
- No need for third-party apps;
- Minimizes the need to migrate to a scalable platform later on.
BigCommerce has very user-friendly capabilities when it comes to building your storefront. It has been developed for people with limited knowledge in coding so that they are not restrained by the need for a developer.
A main drawback of the BigCommerce platform is the lack of variety. Some of its themes have not been optimized to be responsive and user-friendly. And as good as they might look, they are not the best for clients. This is the builder’s main disadvantage compared to its immediate competitors.
But if you have a developer at hand, there will be very little that can stop you to give your store the look and feel you want for it.
- Wide choice of payment options integration;
- Mobile-store optimization & support;
- 24/7 customer support service;
- SEO & site-speed optimization.
- Limited customization options;
- Annual sales maximum.
All in all, BigCommerce has grown to be one of the most preferred platforms for ecommerce store building out there. It is packed with features and definitely has its advantages if you’re looking for an alternative to the biggest names in the industry.
If you’ve decided to dabble with dropshipping, this obviously means you wish to avoid all the hassle of holding inventories, packaging, and shipping. But most of all – browsing wholesalers for products and setting up your product lists.
But what is the essence of this automation process? Automation stands for:
- predetermined rules for searching for products from trustworthy vendors;
- one-click integration of products into your store;
- product customization – editing pictures & descriptions, adding variants, etc.
- automated pricing adjustments;
- automated order-fulfillment.
All of these things can prove to be a hassle if you don’t have the right tools at hand. That’s why there are automation programs that can help you achieve all that and with ease.
Shopify & Oberlo
If you’re going to open your store on the Shopify platform, you can use all of the capabilities provided by their in-house solution called Oberlo. It allows you to automate the whole process from adding your products to fulfilling orders.
It is one of the biggest advantages of Shopify. Oberlo also offers you an insight into which are the most reliable and verified vendors they have in their database. That way, you won’t be wasting time considering the risks of importing products from various vendors.
WooCommerce & AliDropship
If you decide to open your store with a WordPress foundation, you have one leading course of action. And that is combining WooCommerce with the AliDropship plugin. It has been specifically developed for dropshippers.
Its functionalities are very close to those of Oberlo. AliDropship provides you an insight into trustworthy vendors, allows you one-click operations, and makes the whole dropshipping experience hassle-free.
Virtual assistants are not recommended when it comes to selecting and importing your products. But the word of freelancing is wide and rich in people you can hire to carry out your purchases. As you remember, it is often required of you to manually go the supplier and make the purchase that has been made on your online dropshipping store.
This can be a real bother, especially if your store makes huge volumes in sales. So go out there and pick up a trustworthy person to be your virtual assistant and carry out these tedious tasks.
Marketing Your Dropshipping Business
Now that your store is up and running, the last thing you need is to drive traffic to it and convert visitors into customers. But it’s not just about paid advertising we’re talking about here. Actually, paid advertising should be only an element of your marketing strategy.
There are a couple of big marketing tactics you can use in order to generate profits – email marketing, influencers, and push notifications.
- Email marketing – still the most efficient marketing tool that converts the most. Create a stunning newsletter to announce promotions and give incentives to your subscribers and visitors. Autoresponder platforms like AWeber provide you with all the tools you need to build email lists and engage them through quality emails.
- Push notifications – the most direct way to constantly engage with your customers. If they allow your website to push notifications to them, you can reach them at any moment throughout the day, even if they are not currently browsing your website. Just make sure you don’t overdo it!
- Influencer marketing – go to social media and announce your presence. Use your friends and acquaintances to distribute word of your launch. Contact people who use products similar to the ones in your list. Offer samples, organize a rep-search and get them to collaborate with you, to become a voice for your brands.
It might sound like a real puzzle. But having an online dropshipping business is actually quite intuitive. Once you get the proper insights and acquire the right tool for the job, the world of e-commerce will be at your feet. All that is required of you is patience and a knack for learning new things and expanding your marketing horizons.