Address
Dubai, UAE
Work Hours
Monday to Friday: 9AM - 6PM
Weekend: 10AM - 5PM
New to dropshipping? You can start dropshipping quickly, easily, and profitably with the help of this beginner’s guide. Learn the procedures, advantages, and best practices that can assist in starting a dropshipping business or expanding your online store.
It’s likely that you’ve heard of the dropshipping process because online shopping has become the standard. For the aspiring eCommerce business owner looking to enter this industry, dropshipping is an online business model that can yield high returns.
Dropshipping is a business that can be started with little initial capital and work. You can scale your business once you start to experience success by devoting more resources to advertising and brand development.
But how does the dropshipping process work and why should you pick this strategy to fulfill your entrepreneurial dream?
Dropshipping is a form of order fulfillment that does not require you (the dropshipper) to maintain product inventory. You’ll only need to concentrate on promoting the products in your online store and creating a unique shopping experience for your customers.
When your customer makes a purchase on your online store, it automatically forwards the purchase order to your chosen dropshipping supplier or manufacturer, who will then prepare and ship the product directly to your customer.
Here are the dropshipping model’s four straightforward steps:
Since you are essentially a middleman and are not required to handle the dropshipping products, there is no requirement to open a brick-and-mortar store, which means lower initial investments and a sustainable online business option you can build from a simple laptop.
Before we go through the steps of building your own dropshipping business, it’s critical to understand both the disadvantages and benefits of this business model before beginning. Once you have a firm grasp on these, you will be better equipped to handle any challenge that comes your way.
Dropshipping business model eliminates the following concerns:
Dropshipping is an extremely alluring business model for those just starting out with an online store or for those looking to diversify their current product offerings due to all the advantages we’ve already mentioned.
Dropshipping does, however, have drawbacks, just like any business model. The general rule is that flexibility and ease of use cost money.
Here are a few challenges to consider in having a dropshipping online store.
Although a dropshipping supplier is frequently the product’s manufacturer, some wholesalers also provide dropshipping services for goods they buy from the manufacturer. As a result, your potential profit will be constrained since the wholesaler will increase the manufacturer’s unit cost with a profit margin.
You might receive a discount of less than 20% when purchasing from wholesalers and manufacturers.
If your small business is just getting started, your established competitors will be able to undercut your prices because they have the resources you lack. Then why would they buy from you when they could purchase the same item for less somewhere else?
Giving up complete control of inventory management to a supplier can also entail having complete faith in their monitoring and communication of inventory levels for the products you sell online.
It can be aggravating for everyone involved if a customer orders a product that isn’t in stock. When entering into a partnership, it is best to talk about inventory management and establish a process for returns or exchanges.
You need to work with a reputable dropshipping supplier because happy customers are essential to running a successful business. When an incorrect shipment occurs, dropshippers are essentially helpless; all they can do is wait and hope the supplier takes care of the issues while reassuring the customer about something beyond their control.
Additionally, there is a communication lag as the dropshipper switches between the customer and the supplier. All communication is halted, and the issues take longer to resolve if someone delays a response.
You must work with an on-demand supplier if you want to drop ship private label products or goods that bear your company’s branding on the labels and packaging. If your product can’t differentiate itself from the competition in the market, you’ll probably have to compete on price.
Even when your company requests product changes from a supplier, the supplier still retains the greatest degree of control over the final product. A minimum order quantity is typically necessary for any product modifications or additions in order to make the manufacturer’s business viable and profitable.
Although suppliers may permit some minor product customization, this customization’s scope is very constrained. Your product will be functionally identical to the many other dropshipping business partners of the supplier unless you are generating enough revenue for them.
When dropshippers give up this direct control over quality assurance, manufacturers may be prone to lowering their standards, which leads to an increase in defective goods. Due to the almost certain increase in returns, this could endanger your business.
Decide who your target market is.
Understanding your target market can help you make better decisions about what new products to sell, what sales channels to concentrate on, how to market your brand, and much more.
It can be helpful to ask yourself the following questions as you define your target market:
Identify a profitable niche.
Check the best-sellers or top-ranked products people are buying on giant eCommerce platforms like Amazon, Etsy, eBay, and Alibaba.
Identify profitable niches using free tools like Google’s keyword planner. With Google’s keyword planner tool at your disposal, there is no end to the number of lucrative niches you could discover. Google processes billions of searches every day.
Use Google Trends to track consumer interest over time and access a wealth of data about the products they are looking for.
Know the rules and regulations that apply.
You should research the numerous legal issues in your city, state, country, and any regions where you may be selling products. Corporate structure, taxes, permits, and licenses are a few of these concerns that need to be considered.
It’s crucial for a small business that is just starting out to analyze its competitors. Consider the fact that you are trying to enter a market where some major players are already capturing the market share while no one has ever heard of you. Ask yourself:
Keep an eye on the products and marketing tactics of your rivals by checking them out on various online platforms. Don’t forget to search for negative reviews for their establishment and the particular products they sell. Look at the complaints being made, and make sure to record each one.
By doing so, you’ll always have the advantage of knowing exactly who you’re up against and how to strengthen your store by directly providing what your rivals can’t.
Once you have chosen your target market and the products in which you plan to sell, begin the process of choosing dropshipping suppliers. The success of your online business depends on your ability to choose a reliable supplier.
But before you enter into any partnership and sign a dropshipping agreement contract, take the time to assess potential dropshipping suppliers and rank them according to the following standards:
When looking for suppliers and dropshipping companies, use directories like SaleHoo, Megagoods, Wholesale Central, and AliExpress to find potential partners and begin the selection process. Finding suppliers who are worthwhile to work with requires a lengthy and time-consuming process, but it is in your best interest to do so.
The question you need to ask yourself before proceeding with this step is “Will you be creating your own website, or relying on an eCommerce platform?”
Check out the comparison below and decide what suits you best.
Build Using a Dropshipping Platform | Custom-Built a Website Using Plugins | |
Example Options | Shopify, BigCommerce, Shift4Shop, Magento, Volusion, Prestashop | Woocommerce, Ecwid, WP eCommerce, WP EasyCart |
Pros | You are aware of the exact monthly payment you will make. Thousands of apps are available to expand your store. Hosting and security are both taken care of by platforms. Launching your store takes less time. | It offers total control and customization of the dropshipping process for your online store. A sizable selection of pre-designed shop styles and themes that look professional. You have the choice to sell anything; it’s not limited to physical goods. The plugin is free and easy to install. |
Cons | You don’t have as much control over your store. One of the main excuses people give for not using dropshipping platforms is cost. As you scale the store, your required monthly payment will also rise. Only upgraded and higher plans have access to many features. | For users with little experience, initial setup may be considered a hassle. There is a slight learning curve with WordPress. You must pay for hosting, an SSL certificate, a domain, and other services on third-party websites in order to operate your e-commerce stores. Unlike platforms, there is no centralized support. You are forced to handle everything, including hosting, security, maintenance, and backups. |
Best For | Anybody who needs to launch a website quickly and has little technical expertise. Those who are looking for modern templates that are simple to modify. Those who favor having things like security handled for them and 24/7 support | Anyone wishing to launch a passion project that calls for a great deal of customization. Anyone who is technically skilled and desires more control over the design and hosting of their store. Anyone looking to create a large-scale online store selling across many countries |
So, if you’re new to the dropshipping model and are looking for a quick and simple way to launch your online store and sell products, a ready-made eCommerce platform is unquestionably the solution.
However, if you’re an ambitious business owner seeking long-term originality and customization freedom, having a custom-built online store is a fantastic option.
You can increase your chances of success by conducting preliminary testing on your website. You must observe your store’s entire workflow.
Perform test orders and then wait for the products to arrive, thinking like a customer. You can also ask friends and relatives to place orders through your store. Then ask them what the ordering experience was like and how long it takes to get each order. Encourage them to make comments and suggestions to improve your online store.
Never forget that dropshippers serve as middlemen, as was stated above. They choose a variety of products and target consumers with their marketing. So, in addition to selecting suppliers, you must emphasize the value of customer experience and the products you offer.
It’s time for people to discover your online store now that you’ve created a stunning website, added fantastic dropshipping products, and secured minor details.
You’ll need to create an effective marketing strategy by utilizing all of the knowledge you gained from studying your competitors. You can start off with these suggestions:
As a dropshipper, you are giving up the responsibility for product fulfillment, so you must devote more time to customer service. It’s best to always consider customer experience and to have a clear and open line of communication for your customers to contact you.
When handling customer support inquiries, your objective is to establish trust while also making your life simpler. Among the straightforward techniques for doing this are;
Dropshipping may appear to be a simple way to break into the retail industry, but it requires time, effort, trial and error, and patience to do it well. Here are a few best practices for starting a dropshipping company that will increase your chances of success.
It is theoretically possible to start dropshipping for less than $150 by combining starter plans and free trials in the right way. However, in order to start out right, we advise setting aside at least $700. This will pay for a Shopify basic plan or the costs associated with building your own website, advertising, promotion, and order fulfillment. Actually, all that’s stopping you from opening a dropshipping store is a small investment.
When a customer buys something from your online store, they pay the retail price you have established. The wholesale price of the suppliers is what you pay, and the remaining amount is profit.
The supplier will typically invoice you for all shipping expenses that are pertinent to your business. It is up to you whether or not you decide to offer free shipping as an incentive to potential customers. The decision to pass on the cost of shipping to the customer is made by many dropshipping businesses.
It is possible to run this business using the Amazon dropshipping business model, but the margins are much thinner. Dropshipping costs can range from 10% to 15% depending on the type of product.
Many aspiring entrepreneurs never follow their dreams because they think they need an MBA or years of experience. Keep in mind that starting a dropshipping business requires no prior business experience. Though it’s not required, having some sales and marketing experience is undoubtedly beneficial.
When you, your supplier, and your customer are all spread out over different regions, returns can be a challenging process for a dropshipping business. A system to handle returns is something you will need to have in place with your supplier. It is advised that you speak with the customer directly and deal with this situation to make sure they receive the best possible service.
The manufacturer will frequently have product pictures and may be able to give you descriptions. Although they might work well as stand-ins, they will most likely need to be updated. With websites like Freelancer, Fiverr, and Upwork, it’s simple to find a freelance photographer who specializes in product photography.
Dropshipping is a perfectly acceptable method of order fulfillment, but you might encounter other legal problems depending on who your supplier is. Just keep in mind to use a contract for a dropshipping agreement to protect yourself.
Yes, once you start making sales you will need to register your business, but until you start making consistent sales there is no rush to register. Since most payment processors demand documentation demonstrating your company’s legitimacy, registering your online business is essential.
Once registered, make sure to include this information on your website to let potential customers know that you are a real, trustworthy business.
A successful dropshipping business can earn up to $100,000 in its first year of business. The size and level of competition in the niche they serve, as well as their ability to market their storefront, all play a significant role in this.
So there you have it! A thorough step-by-step guide on how to launch a successful dropshipping business has been provided, along with answers to all the fundamental questions one should have about dropshipping.
As you now fully understand, the model has some undeniable benefits but also has a number of inherent difficulties that you will need to overcome. The good news is that most of these challenges can be overcome with careful planning and thought.
Now it’s your turn to roll up your sleeves, accept the learning curve, and fully commit to dropshipping. You might start out small at first, uncertain and perhaps afraid of failing, but all prosperous business people had the same beginning. Create a strategic plan, weigh opportunities and costs, launch your venture, and realize your online business dream.