Dropshipping is a form of ecommerce and one of the easiest ways to make money online. You don’t need any large investments, special skill sets, or even any physical store to place your inventory!
It’s a business that anyone can start and the only effort from your side is to make sure you know what audience you want to pursue.
In this article, we’ll dive deeper into learning more about how you can start your own dropshipping business this year.
1. Define your dropshipping business niche
Successfully starting a dropshipping business is all about making sure you define your target audience and business niche, making it much easier for you to take further steps and connect with people whose interests match.
Here are some general tips you can follow when it comes to defining your dropshipping business niche:
- Pay attention to the market demand: When you choose a niche, it’s always important to see if it’s in demand or not. You can use tools like Google Trends to see if people are demanding a certain product or not.
- Focus on your competitors: It’s always important to find a balance. Avoid becoming part of markets that are highly competitive. After all, it’s difficult to enter a market that has big players. Your best option is to choose a balance.
- Check how easy it’ll be to source your product: Is the product you are sourcing easy to supply or not? Keep in mind that waiting too long for a product to get shipped might not always be a great idea.
After you’ve figured out these three, it’s now time to move on to the next step.
2. Find suppliers
The backbone of a successful dropshipping business is to find suppliers that will impact your dropshipping success. There are many different areas you can search for potential suppliers and popular platforms include AliDropship, SaleHoo, Dropshipping.com, and Doba. Sprocket is another platform that offers quick supply options.
When searching for suppliers, you need to consider the following:
- The supplier’s reputation: To avoid fraud or being scammed, it’s always important to check if the supplier has a license and check on their reviews.
- Minimum order requirements: There are suppliers who will ask for minimum orders. For example, they won’t supply you any products if they are under their minimum order standards, which is a number set by them. This is actually beneficial since the supplier can offer you lower costs per item.
- Customer services: The suppliers you hire need to have reliable customer support and help in offering quick response times, especially if the customer returns a product or has any complaints about it.
- Product quality: This plays a major role in the reputation of the supplier and it’s important to compare multiple products you order from the suppliers you want to work with to see who offers top-quality.
- Order fulfillment time: How long does it take the supplier to process and deliver your orders? Prolonged order times are not a good sign so test this part out before you start shipping to customers.
After you’re done finding the right supplier for you, it’s now time to officially partner with them. For proof, you can make them sign an agreement contract where all important information is included.
3. Find a winning product
The term “find a winning product” in dropshipping is commonly used. Winning products have high demand, low competition, and strong profit potential.
You can find a winning product by following these steps:
- Solving a problem or tapping into a trend: Products that make life easier for your customer (posture correctors, kitchen gadgets, etc.)
- Trending products: Items that gain traction on social media (for example, go viral on TikTok, etc.)
- Product research tools: You can use Google Trends, AliExpress Dropshipping center, Amazon Movies & Shakes, to see which products are trending in real-time.
- Check market competition and demand: You can use Google Keyword Planner or social media platforms to see which products are being searched for the most.
- Check price & profit margins: Winning products can get you anywhere between 30-40% profit margins after cost and spendings.
Successful dropshippers don’t chase trends, but they predict them and closely analyze industry shifts.
4. Create a web store
When you start a dropshipping business, it’s always important to have your own website set up. Customers need to see the products you are offering and the product description. Some dropshipping businesses might only operate through social media channels, but websites are always the best way to showcase your products.
While there are many options available now, business owners are using AI web-building tools to build their online websites. This is because they are cost-efficient and allow you to instantly create your website in under an hour.
The tools will ask you about the industry you are in and ask for a business description. This helps them better understand what the purpose of your website is for. Long gone are the days where you had to pay a fortune and wait months for your website to get done.
5. Decide how your business structure is going to be
Clarifying the legal part of your dropshipping business is important. This includes knowing what type of business structure you fall under. There are three popular business structures that exist and it’s important to know which one you are part of:
- Sole proprietorship: All of your dropshipping income will be taxed as a personal income, but keep in mind that running a business on your own will include higher liabilities as you are responsible for everything.
- Corporation: A corporate is a separate legal entity and is owned by a group of shareholders. The good side is that you don’t have to worry about having everything on your shoulders and even if the business fails, you won’t need to worry about any obligations right after.
- Partnership: Runned by two or more people. Liabilities are shared by both parties and this means that you won’t have to worry about everything on your own.
- Limited Liability Company (LLC): This separates your business and personal assets, giving you more security from liabilities.
Defining your business structure is important and you need to do this from the very beginning to avoid any confusions. Avoid trying to change your business structure after you start your dropshipping business. This is never a good idea and can only result in more complications in the future.
6. Include essential web pages on your online store
After you create your business structure, it’s important to add basic web pages to your online store to make it look more professional and build long-term trust with your customers. This includes:
- Your refund policy: This policy makes sure that your customers are getting a refund instantly. Clear refund policies will always allow customers to trust you more and feel more comfortable shopping at your online store.
- Return policy: Return policies should be in place and quick. It strongly impacts customer loyalty in the long term and how your business is perceived in the long term.
- Terms and conditions: This page will outline the responsibilities both parties have (you and your customer) and help manage expectations and avoid any misconceptions or misunderstandings.
- Privacy policy: You need to always make sure your customers know how you handle their personal information. Global privacy policies like the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) are strict about personal data processing.
These are fundamental parts your website should include. This helps your customers understand how their sensitive information is being processed and even makes them feel more comfortable about return and refund policies.
7. Start marketing your dropshipping business
Marketing your dropshipping business is effective for increasing traffic, conversions, and building a strong brand in the long term. If you want to effectively marketing your dropshipping business, you need to follow a few simple tips:
- Leverage social media channels: You can create social media profiles on major channels like Facebook, Instagram, TikTok, and X (Twitter). Since dropshipping is such a flexible business model, you can also use video marketing to showcase your products. You can even partner with influencers in your niche to make sure everyone notices your products.
- Utilize search engine optimization (SEO): Optimize your product pages with relevant keywords, write blog posts that are related to your niche to attract organic traffic and even use SEO-friendly product descriptions.
Marketing is the backbone of a successful business and it’s always important to use all marketing channels to let people know what your dropshipping is all about and the product and services you offer.
8. Invest time in email marketing
It’s always important to invest time in email marketing since it’s the most powerful tool in a dropshipping business. Different from paid ads, email marketing helps build long-term customer relationships, increases sales and profits.
You can build up your email list by offering discounted offers and free resources. In case someone undergoes an abandoned cart, you can send out reminders and personalized product recommendations. Emails are also a great way to send out promotions and deals that include discounts and limited-time offers.
To make sure you keep your audience engaged, you can always send out automated email sequences:
- Welcome emails: Should be sent out immediately after someone signs up. This is introducing your brand and offers a discount.
- Abandoned cart emails: Recovers lost sales by reminding customers to complete their purchases.
- Post-purchase follow up: Includes thank you emails, asking for reviews, and even suggesting related products.
Email marketing has been around for quite some time and since the online world started, it has always been a main method of communication.
You are now closer than ever to starting your dropshipping business
Starting your own dropshipping business can be exciting and a profitable venture if you follow the right steps. By choosing the right niche, finding reliable suppliers, and setting up your professional store, you can succeed in the long-term.
Always remember that consistency and adaptability are the key to being successful in the dropshipping world. Stay informed about market trends, optimize your strategies, and prioritize customer satisfaction. With the right approach and dedication, your dropshipping business has the potential to thrive. Now, it’s time to take the necessary actions and turn your business idea into a reality.