Dropshipping is an extremely popular business model for new entrepreneurs, especially gen Zers and millennials, due to internet marketing skills far outweighing financial capacity. Since you don’t need to store or manage the products you are selling, it’s possible to start a drop shipping company with limited funds.
An ecommerce website that operates a drop shipping model orders the products it sells from a third-party supplier or seller, who then fulfills the order. This not only reduces operating expenses, but it also frees up the resources to concentrate more of the attention on customer acquisition.
If you are ready to start a company that can compete with retail giants, and do so on a small budget, then follow the six steps below. Although it doesn’t take a lot of startup funds to launch a drop shipping company, it does require an enormous amount of hard work.
1. Pick a niche.
The niche you pick needs to be laser-focused and something you are truly interested in. A product selection that isn’t oriented would be difficult to market. Unless you aren’t enthusiastic about the niche you pick, you will be more prone to become discouraged, because it takes a lot of work to successfully scale a drop shipping business. Here are some points to remember when choosing your niche: Seek attractive money. When you are running a drop shipping business model, the attention is on promotion and consumer acquisition, and the amount of work needed to sell a $20 item is exactly the same as it would be to sell a $1,500 item. Select a market of higher-priced goods.
Low shipping costs are very significant. And if the retailer or distributor manages delivery, it can serve as a consumer repellent if the prices are too high. Find something that is inexpensive to ship, as it also offers you the option of giving your customers free shipping and accepting this expense as a business charge to gain greater sales.
Make sure that the company attracts disposable income buyers. You want the highest conversion rate possible when concentrating on driving traffic to your website, since most visitors will never return. The goods you sell will trigger sales of motivation and draw those who are willing to make a purchase on the spot.
Make sure people look for your company actively. Use the Google Keyword Planner and Patterns to scan for such can scan words for your future niche. When no one looks for what you intend on offering, you’re dead in the water before you even start.
Create your own brand. Your drop shipping business would have more interest if you can rebrand everything you sell and sell it for yourself. Look for a product or line that can be branded white and sell with custom packaging and branding as your own brand.
Offer anything locally not readily available. Choose something your client can’t find on the street. This makes your potential customer more attractive.
Related: 8 reasons a good personal brand would benefit you 2. 2. Conduct market analysis. Execute market analysis.
Remember that you will compete with other shipments and retail giants like Walmart and Amazon. In this situation, several potential shippers are incorrect, as they are looking for a commodity that has little to no competition. This is a sign that there is no market for that drug.
There are many reasons why a company might not be profitable, including high shipping costs, problem suppliers and distributors or low profit margins. Look for affordable goods because this is a sign of high demand and a sustainable business model.
3. Secure a provider.
Partnerships with the wrong provider may destroy your company, so it is vital not to rush this move forward. Conduct due diligence properly. Most drop shipping suppliers are located abroad, making communication extremely important, both as regards response speed and understanding. If you’re not 100 percent confident of a potential supplier’s communication abilities, proceed and continue your search.
Alibaba has been one of the biggest online platforms for finding and contacting potential suppliers and manufacturers. Make sure that you ask several questions and know what their production capabilities are as your business develops exponentially. You want to be sure that they can scale with you.
Seek to learn from other business people who have taken this route in the past. There are a range of sources of information available, ranging from business and technology forums to drop delivery. This is a common topic that can help you avoid costly supplier errors.
Related: Company Start With (Almost) No Money 4. Create your website for ecommerce.
The easiest way to launch a website promoting the business model of drop shipping is to use a simple electronic commerce application like Shopify. You don’t need a technology background to get up and running and there are plenty of applications to improve sales.
Even if you have a big budget to employ a web design and development company to build a customized solution, it is much wiser to use one of the plug-and-play solutions, especially at the beginning. Once you have developed yourself and the revenue arrives, you can explore more website modifications.
5. Build a customer buying program.
Having a great product and a website is great, but without customers looking to buy, you don’t have a business. There are several ways to attract potential buyers, but the most effective option is to launch a Facebook ad campaign.
It allows you to produce early sales and profits that can lead to rapid scaling. Facebook lets you directly put your deal before a very targeted audience. It allows you to compete directly with the biggest brands and retailers.
You must always think long term, so the design of the search engine and e-mail marketing should be a priority. Collect emails from the beginning and build automatic email sequences providing discounts and special offers. This is an simple way of building on your current customer base and increasing profits without extra advertisement and marketing expenses.
Related: Do you need an idea for a business? There are 55 6 of them here. Analysis and optimisation.
You must monitor all available data and metrics for your company to expand. It includes traffic from Google Analytics and pixel data from Facebook if this is your major customer acquisition platform. When you can monitor every conversion — understanding where the customer came from and the route they took on your website which ultimately led to a sale — you can scale what works and remove what does not.
You will never have an advertisement or marketing strategy that is set and forgotten. You must continuously test new opportunities and refine existing strategies to figure out when to maximize or change campaign spending.