The term “dropshipping” has gotten a bad rap in recent years,
On one end of the argument, you have those who believe dropshipping can make you a millionaire, and if you aren’t making 100 grand in passive income every month from your private jet, you are a loser.
Spoiler alert: 99.99% of these claims are false or misleading, and 0.01% only make this amount through selling courses on becoming a dropshipping millionaire. It’s a vicious cycle.
And on the other end, you have those that believe dropshipping is a scam and it’s impossible to make money due to an oversaturated market.
But which side is right?
We decided to set the record straight.
Here, we will talk about what dropshipping is (and isn’t), why it’s so popular, and how to start a dropshipping business on the right foot, giving yourself the best chance of success.
What Is Dropshipping?
Dropshipping is like being a magical middle-person in the world of shopping.
You pick awesome products from suppliers, but instead of stuffing your closet or spending thousands on warehouse space, they stay with the suppliers until someone buys them from your online store.
When that happens, the supplier handles the packing and sends the goods directly to the buyer while you dance around celebrating your genius.
It’s like running a store without the storage stress.
Don’t Skip: What Can I Sell Online To Make Money (20 Profitable Business Ideas)
Why Is Dropshipping So Popular?
Now, let’s look at why dropshipping is such a popular online business model that many people attempt. One quick look at Google shows you just how popular it is, with over 13 million search results for “How to Start a Dropshipping Business.”
And while some may say that it’s too late to get on the dropshipping train, as the global dropshipping market hit a $225.99 billion market value in 2022, experts predict that will continue to rise as much as 23.4% by the end of 2030.
Low entry fees
One of the main attractions of dropshipping for many is the lack of investment required to get started. It requires minimal capital to get going, and you don’t need to spend any money purchasing or storing inventory.
This opens the opportunity to almost anyone, whereas other ecommerce businesses require much more investment upfront.
Low risk and easy start
Aside from low upfront costs, dropshipping is also very easy to start, and the risk is much lower than setting up your own ecommerce business.
You don’t sell the products you are listing? No big deal; you aren’t holding the stock.
Do you need to create a storefront online? Also not a problem. There many different templated websites available at a low monthly fee without requiring coding experience.
Scalability and flexibility
If you manage to generate interest in your products and cultivate a steady flow of traffic to your website, it is quick and easy to scale up your brand without dealing with the complexities of inventory management.
A potential global reach
When setting up an online business, your target audience expands dramatically. Rather than relying on local people making the trip into the city (yes, some people really do still shop offline!), find your store, and purchase from you, you have the power to sell worldwide, greatly opening up your opportunities.
How to Pick the Right Dropshipping Products
So, what makes a successful dropshipping business? Well, many aspects, but the most important is choosing the right products. Without well-chosen products, your marketing efforts and the leads you generate will be wasted.
Here’s how to pick the perfect products for your online store.
Market research
Before you dive straight in and start listing those really cool hats and beanies on your online store, it’s worth doing your due diligence, analyzing current trends, consumer preferences, and market demand to identify products with high potential.
Do people still even wear hats?
Of course they do, but you get the point.
Do people like bobble hats? Is there a market for female five-panel caps? These are all questions to answer before you get started.
Remember to be open during your research phase. Sometimes, the products that don’t seem exciting to you are actual best-sellers. Don’t get into dropshipping unless you’re willing to sell something abnormal, like old-timey bowler hats.
Pick your niche
Next, it’s time to select your niche and go all in. Focus on a specific niche or target audience to stand out and build a dedicated customer base.
For example, sustainability and fashion are having a real moment right now, and it’s a trend that is likely to only increase in popularity as we become more aware that the world is burning around us.
Sustainability also brings with it the idea of high-quality materials and slightly higher prices, which can come in handy for our next point…
Is it profitable?
Is it going to make you the big bucks?
Sure, you’re probably not going to start making $100,000 a month from your dropshipping business, but no one is out here trying to make a loss!
Calculate potential profit margins by considering product costs, shipping fees, and selling prices to ensure profitability while also being mindful of your niche and ethical practices.
What is the competition doing?
Sadly, if you do opt to start a dropshipping business based on sustainable headwear, you will not be alone.
But rather than ignoring those other pesky hat salespeople, evaluate the level of competition to gauge market saturation and identify gaps.
If there are too many brands in the market, you may have to doth your cap, take your hat off to them, and pick another niche.
Supplier reputation
If you’re a happy chappy and there’s space for your cappies, then it’s time to find the perfect dropship supplier for your new brand. Research suppliers’ track records, customer reviews, and shipping times to ensure reliable and timely fulfillment.
While you aren’t holding the stock, you will be left holding the bag if products don’t arrive on time, and bad reviews can cripple your brand before it even gets going.
Scalability and seasonality
Finally, consider how scalable and seasonal your product choice is. Continuing with our sustainable hats and caps brand (Greeny Beanies has a nice ring to it!), certain types of hats will be more popular than others in different seasons, but you can still experience consistent year-round sales.
Where to Launch Your Dropshipping Business
Now that you appreciate just how much potential a successful dropshipping business has let’s look at your website options.
Shopify
One of the most popular options for creating a dropshipping business is Shopify, a versatile and user-friendly e-commerce platform with a wide range of features and integrations for dropshipping.
Shopify is extremely user-friendly and relatively cheap, and the addition of features such as built-in email marketing is useful for brand awareness.
WooCommerce (WordPress)
Another option available to you is WooCommerce, a powerful plugin for WordPress that transforms your website into an ecommerce store with dropshipping capabilities. Not only that, but
WordPress is a great platform for any content marketing strategy and can greatly help your SEO efforts, increasing organic traffic.
BigCommerce
Like Shopify, BigCommerce is an all-in-one platform offering built-in tools for dropshipping, inventory management, and marketing tools to help you get your brand off the ground.
There are also hundreds of website templates to choose from, helping you easily create a professional website.
eBay
An oldy but goody, eBay is an established online marketplace where you can set up a dropshipping business through its seller platform. It has a powerful and loyal built-in audience, so once you do manage to break into the market, you will find a niche customer base quickly beginning to develop.
Amazon
An article on dropshipping wouldn’t be complete without mentioning Big Jeff and his monster of a monopoly, Amazon. A widely recognized online marketplace with a seller platform suitable for starting a dropshipping business, you might expect to see Amazon as the number one option on this list, but it isn’t for a couple of reasons.
For starters, it is a heavily saturated market and one that is hard to get your name out there on unless you have a unique product to sell. Secondly, dropshipping is “technically” against the terms and conditions, so your business can disappear in a minute if you get caught.
Keep Learning: How to Find a Manufacturer That Won’t Burn You
Source the Best Dropshipping Products
Don’t leave your dropshipping ecommerce business to chance. Check out our free product sourcing training to ensure you pick the perfect product and dropshipping supplier to set yourself up for success.
The post How to Start a Dropshipping Business (and Actually Be Successful) appeared first on Foundr.
