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How to launch your Dropshipping business in 5 steps

If you want to have your own e-commerce business but do not have the budget to invest in inventory, the best formula is to start by creating a “Dropshipping Business.”

What is a dropshipping business?

It is e-commerce where you sell products to your users without having these products in your possession. That is, you do not need to invest in buying inventory or renting a warehouse, nor do you have shipping costs. The user accepts directly from your e-commerce at the store price set by the distributor/brand, while you pay the brand at the wholesale price. Once the distributor receives the user’s order in your e-commerce, he sends it directly to the user in your name (name of your business).

Using this formula, you earn the difference between the price that the user has paid as the final price of the product and the price at which you have paid that product to your distributor.

An example: A user buys a hat for 20 euros, you have paid the brand for that hat 5 euros. Your margin in this operation is 15 euros. And I say margin and not profit since at these 15 euros you have to deduct any cost associated with the sale of this product, such as advertising.

It seems like a bargain, right?

The truth is that today, there are thousands of people earning a good salary with this digital business formula.

Simplistically, all you have to do is create e-commerce and find customers. In reality, it is much more than that, but it is still worth a try if managed correctly.

Let’s see how to create a dropshipping business and what mistakes to avoid!

1- CHOOSE A RISING DROPSHIPPING MARKET NICHE:

Dropshipping businesses are on the rise; for this reason, it is increasingly important to know how to select your market niche well. It is indeed an increasingly saturated industry, but with new products launching every day, the opportunities are also endless.

PRO TIPS:

  • Pick a niche that big brands don’t dominate.
  • Include small and lightweight products in your catalog, so they are easy to ship. They always give fewer problems than very delicate products, or very large and heavy, even if you do not care for the shipping. An excellent dropshipping product should fit in a shoebox.
  • Products that can be sold all year round and not seasonal.
  • With store prices ranging between € 15 and € 200. Less than 15 will be very difficult to get a profit margin, and more than € 200 is challenging to sell.
  • Make sure there is enough demand. Analyze the products of your competition. What is selling and what is not.

2- FIND A DROPSHIPPING PROVIDER:

For most entrepreneurs starting their dropshipping business, finding a reputable supplier is the most challenging and impacts the company the most. As a “drop shipper,” your supplier is the one who will guarantee that your business works. The product is of quality, stock regularly, and that your orders are delivered on time. Without these guarantees, your business will not survive for long.

PRO TIPS:

  • Confirm that you have experience as a drop shipper.
  • Its delivery processes are fast, and it does not charge ridiculous shipping costs.
  • That has quality products.
  • Verify that they can provide references/recommendations if you ask them.
  • An excellent directory to look for drop shippers is Salehoo, with over 8,000 verified suppliers.

3- SELECT THE RIGHT SALES PLATFORM FOR YOUR BUSINESS:

You have already selected your products, and you have a supplier. Now you only need a site to start selling.

Choosing the right platform or marketplace is vital to the success of your business. And for this, the first thing is to decide if you want to sell on a consolidated platform or if you are only interested in trading in your e-commerce store. There are pros and cons to both scenarios.

PRO TIPS:

  • It’s easy to get started in a marketplace that already has enormous traffic.
  • Users trust marketplace platforms such as Amazon or eBay.
  • The competition in the market is brutal since users have many options just one click away, so you must have a sound acquisition strategy in place.
  • Remember that when calculating your margins, you must consider that marketplaces charge per transaction (sale).

4- DEFINE YOUR ACQUISITION STRATEGY:

Without customers, there is no business. And to have clients, you need to implement your acquisition strategy, with which you ensure a continuous flow of qualified traffic. And I highlight the “qualified traffic” because it is not about attracting by attracting, but about focusing on the target audience that you have the best chance of converting into a customer.

PRO TIPS:

  • Facebook ads for Dropshipping. To avoid wasting impressions and optimize your results to the maximum, define your audience very well. Designing a good lead magnet (incentive) is an excellent way to ensure clicks. But be careful that this does not raise your CAC (customer acquisition cost) through the roof and lose your entire profit margin.
  • Google ads for specific search keywords in your niche.
  • If you want results without investing in advertising, a good email marketing strategy and social media content is the most efficient way to get customers.

5- MAKE SURE YOU HAVE ALL THE ROLES OF YOUR BUSINESS IN RULE:

Last but not least, find out about the regulations on e-commerce sales in your country if you need to register as a self-employed person or not. When to file taxes. In a word, have everything to avoid unpleasant surprises such as fines, unexpected payments, and even closure of your e-commerce.

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