One of the hardest things when trying to start your own business is to find initial capital. If you’re dealing with a traditional form of business, you’ll have to pay a rent, pay for equipment, hire staff, etc. All this makes entrepreneurship inaccessible for a lot of people. But fast growing ecommerce sector opens new opportunities.
In 2018, online sales worldwide increased by 18% year-on-year and reached $2.86 trillion. With ecommerce getting more popular, even those with little savings can try their hand at new forms of business. Drop shipping is one of them.
Here we will talk about what it is and how to start a drop shipping business with no or little experience in ecommerce.What is drop shipping?
Drop shipping is a type of ecommerce business based on reselling products via a web store. In traditional commerce, you purchase goods from a supplier and then sell them to customers using whatever promotion methods available. The profit comes from the difference between the supplier’s price and your price. However, this scheme has a number of flaws you’ll have to deal with:
● Products purchased from a supplier need to be stored somewhere – either at home or at a rented warehouse depending on the number and size of goods.
● You have to buy goods in advance, but there’s no guarantee you’ll be able to sell all of them.
● Along with actual selling, you’ll also have to take care of shipping issues.
In dropshipping model, the retailer partners with a supplier and sells their goods on a web store. However, you do not buy products until you get an actual order. When you do, you contact the supplier, purchase the required product, and the supplier sends it directly to the customer.
In other words, if you start a drop shipping business, you can enjoy the following advantages:
● No need to store products.
● No need to purchase goods in advance and no risk of being unable to sell them, except for possible refunds.
● No need to worry about shipping issues as it’s the responsibility of the supplier.
● Doesn’t require a large start-up budget.
● You can test different products without having to buy a lot of them in advance and thus choose the most profitable options.
Despite these advantages, drop shipping also has a number of drawbacks such as little control over the quality of goods and order fulfillment as it’s your supplier’s or manufacturer’s responsibility. However, drop shipping remains one of the most convenient types of ecommerce business for beginners, and about 22-33% of online retailers use this model.How to start your drop shipping business
1. Find a niche
Like in any other kind of business, you need to find a niche that will bring you the highest revenues possible. However, there’s a trick to it.
Since you’ll have to make a web store to start drop shipping, everything there and beyond will derive from your niche. Let’s assume you want to sell stuff for outdoor activities and camping. Would you make your web store bright and colorful with teddy bears all around? Or would you prefer something simple and strict with picturesque landscapes perhaps?
The theme of your store defines how your shop looks, how it communicates with customers and how you promote your goods. Remember that you’ll have to devote hours and days to this theme, and the best you can do is choose something you really enjoy and know very well. It’ll give a good motivation to keep going despite any obstacles.
Check out these niche ideas for starting a dropshipping business in 2019.
2. Choose suppliers
It is possible to partner with specific companies which agree to distribute their goods via drop shipping model. On the other hand, you can dropship products from popular online retail platforms such as Amazon, eBay, Etsy, AliExpress and others.
The latter is especially convenient for beginners as this Asian retail giant has millions of goods in every imaginable category and offers low prices. AliExpress’ suppliers can ship products to almost any country worldwide and often have free shipment options, which your future customers will certainly appreciate.3. Make a web store
To make a web store, you’ll need to buy a domain name and hosting. Try using GoDaddy to find a domain name appropriate for your store. Ideally, it should coincide with the name of the store, reflect your niche and look short, clear and easy to remember.
For example, animeport.com is a good name, while @n!me24-fanshop is a bad one. Also pay attention to how the name can be misread: therapistinabox.com can look like ‘the rapist in a box’.
After that, you’ll need to create an actual website. Today even a beginner can use various free solutions based on WordPress to make their own site. If you don’t feel confident enough, you can buy a ready business from someone else or order a custom-made website for money.
When done, use this checklist to define if you’re ready to launch your business.4. Promotion
Now you can really start a drop shipping business by promoting your shop through a variety of channels.
● The most popular way to attract customers is to use social media. But the choice depends on the type of content you use. Facebook is your best tool here as it can distribute any kind of content and offers powerful advertising. Instagram is good for showing visual content be it photo or video. Twitter allows you to share short messages, updates and links.
● Content marketing must become an important promotion tool in your hands. Learn how to create good content. The key here is not to make a typical advertising. You should give your audience useful materials that help them solve problems.
● Keep your customers updated by sending them regular emails. But do not turn them into spamming. Email marketing is used to share useful content.
● Do not neglect search engine optimization (SEO) as it’s the basics of any online business promotion.
If you’re not sure how to start your drop shipping business, try different methods and tools. In a while, you’ll know what works best for you and appeals to your target audience.