What is Dropshipping? How to start a Dropshipping business? – Index of contents
- What is Dropshipping?
- What qualities must a dropshipper have?
- How dropshipping works
- How to start a dropshipping activity
- Choose products
- How to find manufacturers
- Advantages of dropshipping
What is Dropshipping?
The dropshipping activity allows you to sell a product without physically having it in your hands.
Once a customer buys any kind of goods, in fact, it is sent directly from the manufacturer.
Following this model, you can focus exclusively on your online store and product advertising.
The greatest energy will be focused on identifying potential customers who surf the web.
So let’s analyze how a transaction takes place using this business method.
When a dropshipper contacts a manufacturer, in most cases he can choose to adopt the entire catalog or focus only on certain types of goods.
Of course, the choice of products to negotiate is very important and attention should be paid to a number of features such as:
Often low ticket products have such small margins that they are not very attractive for business people.
Working with dopshipping, this handicap is felt less, even if it remains something to evaluate carefully.
It is essential because, as we will see later, the return of an item for customer dissatisfaction is one of the few weak points of this business model.
A parameter to take into account because a buyer is not willing to wait biblical times to get his goods.
If you want to “duel” with very strong competitors under this point of strength (see Amazon) it is good to take it into account.
What qualities must a dropshipper have?
Apart from having a minimum of business instinct, this business model is suitable for virtually everyone.
It is a business suitable for novices, as the relatively low cost to start the business and the minimal risks make dropshipping a great way to take your first steps in online sales.
Precisely for the reasons already mentioned, even those who have little money to invest can find in this business model fertile ground to earn money.
Finally, another reason that allows dropshipping to be so interesting is that it allows (given the derisory costs) to become familiar with a particular niche, to study the merits, the defects, but above all the potential.
Knowledge of marketing (at least the basics) and how online advertising works are the cornerstone of success in this area.
In fact, it must be taken into consideration that, in most cases, these are products that are not unique and that are also sold elsewhere.
In this sense it is good to have knowledge in the field of:
To position your e-Commerce to get more visibility on search engines, link building is absolutely essential
(if you haven’t done it yet take a look at our blogging resources section, you can find plugins able to create quality backlink with a simple click).
Lately the most used strategy to sell your products in dropshipping is to use Influencers that sponsor your e-commerce…
Through this strategy you can reach thousands (if not MILLION) of potential customers in a few days.
Google AdWords and Facebook Ads
To be able to carry out paid advertising, optimizing costs;
Social Media Marketing
You can also push your products on Facebook, Instagram and other social networks.
Knowing these sectors, it is already possible to deduce (depending on the type of product treated) which could be the preferred channel.
In case of doubt, however, it is possible to allocate a reduced budget for all possible routes in order to test which are the best solutions.
If you are not particularly familiar with these issues, you should hire people to deal with them. In this case, however, as is easy to understand, the costs will be much higher.
How dropshipping works
When a customer purchases a product, the dropshipper receives the money and turns the order directly to the manufacturer.
This prepares the goods, taking care of the packaging and possibly using the dropshipper’s logo, then sending the package directly to the customer.
Once the transaction is completed, the dropshipping activity makes an invoice to the final customer, while the manufacturer will make it directly to the dropshipper.
In all this operation the customer will never know that the goods have been sent to him by a third party.
The procedure described above can be manual or automated.
In this sense, the dropshipper may have the responsibility to act as a real intermediary from the producer to the consumer,
or it may make use of platforms that make all phases of the operation automatic.
The manual system can be more suitable for those who want to always have the situation under control, since in this way the dropshipper can monitor all incoming and executed orders.
However, it must be said that, especially for e-Commerce with many transactions, it can be very difficult to follow every single operation.
In this sense, managing orders in an automated way is not only a recommended choice but almost indispensable.
How to start a dropshipping activity
Even if once this activity is started it is quite easy to manage, some premises must be made.
It is essential to have a VAT number and the services of an excellent commercialist.
The second step is to decide which type of platform to use. In this sense, there are several options.
Start with WordPress
It is the most popular CMS in the world, a platform initially designed for blogs and informative sites that, during the last few years, has gradually conquered the e-Commerce area.
Thanks to the many plugins available in fact, you can transform a WordPress site into any type of platform.
If you want to use the CMS in question to create an e-Commerce, the most popular solution is the WooCommerce extension.
This plugin is highly customizable and allows the seller, or the webmaster in charge of creating and managing the site, to fully customize their digital store.
Of course, to do this, you need to know in depth both WordPress and WooCommerce below you will find interesting guides:
It is not a prefabricated service and, precisely for this reason, it needs more time to be followed and modified according to your needs.
It should also be taken into account that the money saved with Shopify can be invested in marketing.
Not having the support of a platform that can already boast many customers, you have to build your visibility from scratch.
The plugin WooCommerce is open source and therefore free.
Anyone can download and install it on their WordPress site.
It should always be taken into account however that there are costs related to domain, and hosting, in our Hosting review section we have selected the best with detailed prices for each plan,
We highly recommend SiteGround because it offers a quality and performance that are at a higher level compared to all other hosting,
also with our collaboration you can get a significant discount
Even before identifying the manufacturers, it is good to try to understand which sector to focus on.
Nowadays, generic stores (especially small and little known ones) have an easy life.
On the other hand, by specializing as much as possible, there are more opportunities to carve out a potentially profitable market sector.
How is it possible to choose your own niche?
The steps to take are different and, for those who already work in web marketing for a long time, will certainly not be new.
Some useful tips, especially for beginners, may be:
Identify departments with high search volumes and low competitiveness on search engines (tools such as Google Keyword Planner or Ubersuggest can be very useful in this sense).
- Unless there are particular needs, it is good to deal with products that are not subject to seasonality, but whose sale is constant during the 12 months of the year.
- It may be useful to use a buyer person, or a sort of prototype of a typical customer, to understand their potential behavior and act accordingly at the level of advertising, user experience and beyond.
- Avoid products that are too fragile, large, heavy or otherwise bulky. In general then, it is good to try not to treat goods that are easily subject to returns.
- Thinking exclusively about the margin and not about the quality of the product sold is a serious mistake. In addition to the problems related to returns, bad reviews and the inevitable “word of mouth” on the net can easily bring down a business.
- Especially if you import from Asia, you have to pay attention to regulations. Some products regularly manufactured in China in fact, may not comply and cause legal problems.
After this process, it is possible to narrow the scope of e-Commerce and identify a small circle of products to select.
How to find manufacturers
Even before starting your own business in this sector, it is good to understand where and how to identify any manufacturers.
The most obvious choice in this respect is Alibaba, the largest platform to discover Asian wholesale manufacturers.
In dropshipping, however, not looking around means that potential revenue is significantly limited.
In the following, therefore, we will analyze some platforms that currently constitute more than just alternatives to Alibaba and Aliexpress (which is part of the same multinational company).
Although it is little known by those who do not deal with online sales, Salehoo is a very interesting platform from several points of view.
The New Zealand platform founded in 2005 in fact, offers a series of very functional filters for those looking for products for resale.
An active community, free training courses, blogs and forums, constitute a series of rather interesting factors that push anyone involved in online sales to at least take a look at the platform.
For reliability and delivery time, Asian platforms often show some gaps.
So why not rely on suppliers with a closer location?
Spocket is an application that enables dealers to locate manufacturers and/or wholesalers based in Europe or North America.
However, this is not the only advantage of Spocket:
discounts, ease of order processing are other key features of what is offered.
For those who want to explore different markets than the Chinese one, Spocket offers a valid alternative.
Always in the perspective of alternative markets, it is good to mention Modalyst.
It is a service that acts as an intermediary between stores and distributors, with delivery times often very short.
In this sense, here you can identify dropshipping products that are particularly optimal if you turn to the American market, since Modalyst offers deliveries in record time.
The appreciable interface and the rather low commissions (5% for each sale) make this service one of the most interesting in the entire industry.
Advantages of dropshipping
What are really the reasons why this sales method is so widespread on the net? Below we will analyze the main benefits of dropshipping.
This is the main prerogative linked to this business model.
Following the dropshipping philosophy, there are no taxes, utilities and possible rent related to the storage of goods.
In addition, there are no leftovers of any kind.
An e-Commerce of this type, has no particular limits regarding the types of products that can be sold, since there is no need to accumulate the goods in order to sell them.
Reduced initial investments
When opening a physical store, there are a number of expenses that are often underestimated.
The possible renovation, the purchase of furniture and displays and many other costs that, if accumulated,
can have a significant specific weight on the pockets of the entrepreneur.
With dropshipping, as for many other types of online business, initial investments are reduced.
Contrary to what many people claim,
in reality they are not zero.
Having an e-Commerce, maintaining a hosting and a domain and carrying out advertising campaigns are in fact costs to be calculated when you want to sell online through your own digital store.
Shipments charged to the manufacturer
The dropshipper has the considerable advantage of being able to work (and earn) without having to deal with shipping.
In fact, once the order has been placed, the seller has no particular task other than to handle any returns or problems on the part of the buyer.
Possibility of working without a fixed location
With a simple smartphone, tablet or laptop, you can easily manage your dropshipping.
This translates into the opportunity to do so when you’re inside the walls at home, while traveling or, why not, by the sea.
As long as you have access to an internet network, you can carry on your business. In this sense, this type of business is completely in line with the perspective of the second job.
What is Dropshipping? How to start a Dropshipping business?
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What is Dropshipping? How to start a Dropshipping business?
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