Retail store closures climbed to its highest level in 2019. While many famous brick-and-mortar retailers filed for bankruptcy last year, the rise of online retailers presents entrepreneurs with an excellent opportunity to make money online. One such emerging trend that eCommerce is quickly picking up on is Dropshipping.
What is Dropshipping?
Dropshipping is a business model in which the retailer does not keep goods in stock but instead transfers its customer’s orders and shipment details to a supplier or a wholesaler, who then ships the products directly to the customer.
The Dropshipping model centers around freeing the business owner from certain costs and activities in the process of making his eCommerce business successful.
What this means is that before any transaction between the buyer and seller gets fulfilled, a supplier exists that takes care of the warehousing, packaging, and shipping of the goods to the buyer’s location on behalf of the seller.
The overwhelming advantage of Dropshipping is that you can scale your business before you begin to take on big orders and a vast stock of goods. In other words, you can start small and grow from there.
How does Dropshipping work?
If you are an entrepreneur and looking for an online business opportunity, dropshipping is probably your best bet at this point.
As a Dropshipper, you need to own an eCommerce website and showcase your product portfolio. Buyers can then place orders after seeing the products on your site.
After the payment, the buyer’s information is sent to the supplier to package and ship to a specific address, and eventually, the order is fulfilled.
How much do I need to invest to start a Dropshipping business?
The initial capital for Dropshipping varies and depends on a lot of factors. Some of the major costs that you can’t get away with are as listed below:
Create a Logo / Brand Identity
When working on an idea of an eCommerce business, you must have an understanding of your niche. You must know what do you want to sell! Whether they are baby products, women clothing or Home Decor, each niche presents you with different Target Audience.
Once you know your target audience, it is easier for you to design your branding elements. You can use online logo makers such as Looka to get a great professional logo for your eCommerce store.
Create an online store
You need an eCommerce website to display your product portfolio. You can start with a free Sellfy, WooCommerce website. Setting up a store on WooCommerce is easy, moreover, the WordPress hosting allows you to blog about your business and products for some free advertising.
How to find dropshipping suppliers
Without Dropshipping Suppliers you can’t perform. You need to partner with some fast-shipping suppliers such as Spocket who can provide good quality products in your niche. Most of dropshipping suppliers charge a small monthly subscription fee. Spocket dropships fast shipping and good quality products with higher profit margins made in USA & EU.
Budget for Online Advertising
Online advertising is a huge deal in Dropshipping because it is a great source of online traffic. To get it right from the beginning, you have to use social media and email marketing tools to bring your buyers to your store.
Your social media marketing has to be spot on for which tools such as Brand 24, Crowdfire, SocialBee etc. can be used. An Email Marketing tool allows you to manage your subscribers, place them in tags, segment and helps you with targeting and retargeting. Tools such as Constant Contact can help a great deal with targeting and retargeting campaigns.
Mistakes to avoid
Understand your target market and niche
Before starting your store, understand that the market can be dynamic. Without a proper feasibility study and test marketing in your niche, the chances of failure increases.
Know your competition
A breakdown of what keyword and traffic source your competitors are using will give you first-hand information about what you need for your online store. Using SEO tools such as SEMrush or Mangools can be your trusted guide in improving your ranking in the search engines.
In conclusion, Dropshipping is worth it if you have the right product and marketing tools. Though, the hard work is the key!