In the years since then, I've learned that there's value not in just selling products, but also in selling the online store. Once the e-commerce store shows consistent income, I sell the company. But it's a strange phenomenon--I'm not actually selling any inventory. Basically, I'm selling a pre-made website and the inside scoop on how to operate a drop-ship business.
If you've ever dreamed of having passive income or creating a side hustle without any startup cost, here's how you can start your own drop-ship e-commerce store. There's a lot of competition when you're selling products online. And you're probably never going to outrank the big box stores in search engines for popular products like baby strollers or TVs. You also won't be able to beat their prices. It's important to find a niche market. Whether you sell purple pens or you offer monkey-themed furniture, specialize in something. Choose products you're interested in learning about, talking about, and writing about because you're going to need plenty of knowledge about the products you're selling.
The joy of a drop-ship business is that it doesn't require any inventory. The wholesaler ships direct to the customer at whatever markup you choose. But, it's important to find a reputable wholesale company who keeps products in stock and ships orders to customers on time. Your business will only be as good as the wholesale company you choose so do plenty of research to find one that suits your needs.
Buy your domain name and create your website. Although you can hire someone to do it for you, learning how to build your own website is best. You may need to make changes to your website down the road on short notice if your wholesaler runs out of stock on an item or you want to run a sale on a moment's notice because a current event puts your product in the news. And you'll save a lot of money and hassle if you can make those changes yourself. Your wholesaler will most likely supply you with images of your products. Create detailed product descriptions so buyers know exactly what they're purchasing.
The more accurate your description, the fewer returns you'll have. Your shopping plays a big role in how many sales you'll actually get. A cluttered cart with too many options isn't good for sales. While there are some good free shopping carts, most of them have limitations. Some only allow you to list a certain number of products and others don't allow for coupon codes. When it comes time to actually send out the product and fulfill it, this is where the drop shipper takes over. The drop-ship company has the inventory in its warehouse.
You send your dropshipper the orders that come in, paying the wholesale price for each order.
This can be done by email, submitted online, or through a spreadsheet file—it depends on the drop shipper. In many cases, this process can be fully automated taking you out of the equation and saving you time so you can focus more on the marketing of your business and less on the operations of your business. The dropshipping company puts the order together and ships it directly to your customer, without including any pricing details or information about the supplier, so that the customer thinks the package came directly from you.
Drop-ship companies do charge a fee for this service. However, you can still make a profit as a drop shipping business, despite the thinner margins.
If you want to increase your profits you can raise your prices—at least as much as your market will bear. You can also sell more volume. And you can always contact your drop shipper to negotiate a lower handling fee. Another strategy is you can do what's referred to as white labeling or private labeling the products you sell, meaning you put your own name or brand on them so that you can distinguish yourself from all the competitors selling the exact same thing. This allows you to avoid competing just on price.
6 Steps to Building a Successful Online Drop Shipping Business
You are only paying these fees if you actually sell a product. In the best-case scenario, the niche you specialize in should also match one of your personal interests.
If you have a passion for a certain market or type of product, that enthusiasm will make your marketing efforts, and by extension your business, stronger. Not only that, but you'll actually enjoy what you're doing which will make your work feel more enjoyable. Fortunately, there are drop shipping companies that work with just about every market, niche, and type of product. This includes baby items, yoga clothes, electronics, clothing, art, books, beauty supplies, supplements, home and garden items and more. A great place to check for hot niches is big online e-commerce platforms like Amazon.
Whatever items are on the bestseller lists there could be a great fit for a drop shipping business. But also keep an eye on trends you see on Facebook and other social networks. Also, look for products that are in the news, and listen to the products your friends and family are talking about.
1. Choose a niche product.
During the holiday season, football season, back-to-school and other special times of the year, related products can do very well. A big mistake a lot of people make when starting any type of business, dropshipping included, is that if they see other people doing it they think it's too competitive and they can't make any money in it. Nothing could be further from the truth. It's important to see how easy it is to order the product, how long it takes to ship, and how the drop shipper deals with any returns or problems.
Ask potential drop shippers how they will notify you of their in-stock levels for each product. If you sell an item to a customer but the drop shipper has gone out of stock, this can cause a huge dilemma for you and create angry customers. This will also give you the chance to also see the quality of the product.
The supplier will have their products listed, the more you sell eventually it will become a lot cheaper for you. You then set a markup on that figure to determine the selling price for your products.
The Easy Way to Start a Dropshipping Business
You make a profit on what you sell after taking out advertising cost and the product cost. Among the variety of ecommerce platforms online, Shopify continues to be one of the most popular platforms for creating a dropshipping store. Shopify have great pricing plans that make it affordable to use. The first step to creating a dropshipping business is to decide on a niche. If only people are interested in denim jeans, jackets, and other items from your store, then you might have trouble selling anything. Always choose a niche that not only aligns with your interests but, also makes sense demand-wise.
This video should help you find products to sell. Related: Why Is Dropshipping Popular?
The next screen will ask you to enter a business address. Enter your office address or home address. The website address of your backend will have this format: your-store-name. Here, you can do a number of things such as add products, design your website, or set up a domain, among other things. I recommend using Oberlo to import products. Related: What Is Drop Surfing? Click Install app in the downright corner to move ahead.
What Is Dropshipping?
The best product descriptions are a mix of personality and technical details like the height and size of the product. These act as labels for the items, allowing you to categorize them with ease. You also get an option to set up a collection, which is a product group that enables your customers to discover items according to their category, type and more. Shopify offers a variety of paid and free Shopify themes that you can use to enhance your store's appeal. Depending on your budget, you can pick one of their free themes or visit the Shopify Theme Store to buy a premium one.
If your theme has an option to add a header, you can upload a custom logo there. Since Shopify and potential customers have no clue what your store is about, you need to build pages that will help educate everyone about your business.
How to Start a Dropshipping Business: A Step-by-Step Guide
Most online stores want people to browse there About Us page and product collections first. Whatever the case might be, Shopify has great payment features that you can use to receive money directly through the platform. Activate the ones you find suitable and provide additional details like your bank account number to ensure the money arrives in the right place. Related: Is Dropshipping Dead?