How to Start Dropshipping Business – 8-Step Guide
Dropshipping is an online business that started in 2012. It started gaining popularity in the Indian market, mostly among youngsters. But, very few know how to start dropshipping business and grow.
Dropshipping is a success but what scared most people was its profit margins, which are too low, estimated to be around 10% or even less. We realize there is a gap in the market where people are not confident enough to start their own dropshipping business, and we want you to know how you can help.
Did you know that the Indian eCommerce market is expected to reach $200 billion by 2030 and even further in the coming years? This indicates that a dropshipping business’s potential base will be profitable.
What is dropshipping?
The business doesn’t keep the products it sells in stock in this order fulfillment method. Instead, when an order is received, the dropshipping platform, in partnership with the retailer, ensures the products end up with the customer. In this business model, the merchant is the middleman between the seller and the customer.
Whether leasing warehouse space, managing supply chains, or taking stock of the inventor, all these processes are streamlined and conveniently pre-managed so that merchants can start selling their products.
How does dropshipping work?
How to start dropshipping business in this competitive world; where it involves a customer-facing store and the supplier. Well, it is simple.
The dropshipping business consists of 4 major steps:
- First, the customer browses your online store, comes across your social media channels, and decides to purchase an item. They complete the checkout process from here, providing their shipping information and payment details.
- The second step is when the retailer, in this case, you, verifies the payment details and checks for stock availability with the supplier. After confirming, you package the order details for the supplier.
- Once the supplier receives your orders, they locate the product in the nearby warehouse, perform quality checks, and carefully package the order to the customer.
- After this, the customer learns about the order delivery and the tracking information. In a certain period, the customer receives the order.
Note: The dropshipping platform takes care of the need to source, maintain inventory, and ensure the product reaches the buyer.
How to start dropshipping for free - Requirements
Today, everybody wants to start their own business, and dropshipping is a way to go for you, even without money. It may sound overwhelming, but only if you know how to start.
Here are the 3 significant things that you need to start your dropshipping business today:
- Basic tech laptop: You don’t need a fancy laptop, a computer setup, or expensive equipment. All you need is a basic laptop to manage your online store, create marketing materials and social media posts, manage the systems, and process orders.
- Stable internet connection: You don’t need to pay heavy bills for an expensive Internet connection; a normal, stable connection is enough for managing your store, uploading product listings, and communicating with customers and supplies.
- Strong market research: The key to a successful online dropshipping business is to find trending products and identify those that can be sold to the masses. You should also look for a market with low competition that aligns with your interests and knowledge.
Note: Starting a dropshipping business might not be completely free, but it can be started with a small investment. If you wish to provide premium services to your customers, you shouldn’t mind paying a small fee because dropshipping is a successful business.
Pros and Cons of Dropshipping
Pros of Dropshipping
This unique supply chain method that helps retailers run their business without keeping stock has many benefits associated with it, which are as follows:
- Low Investment: The necessity of maintaining inventory is removed, and the cost of renting and running a warehouse, paying staff for running and maintaining it, sourcing materials, and delivery are all taken care of by the supplier. The retailer only needs to ensure the customer’s needs are well cared for.
- Simple and Convenient: The retailer is not managing an actual physical store, eliminating the complicated storage process of tracking inventory, monitoring stock levels, and ensuring swift and reliable delivery. Now, the retailer can solely focus on marketing and scaling the business.
- Flexibility: Starting a business removes the restrictions of running a full-fledged retail business. This creates flexibility in how you run your business and gives you freedom regarding your location and the product you want to sell. You only need an internet connection and the ability to market your product.
4. Major Focus Marketing: Once you have your dropshipping business set up, with the inventory management and other systems in place, you can dedicate more time and resources to marketing your store and attracting customers.
- Passive Income Potential: It’s already known that a college-going student can also start their own dropshipping business; with minimal effort, you can generate revenue as a passive income.
Cons of Dropshipping
Along with the advantages of dropshipping, there are reasonable disadvantages as well, even though your choice of product, marketing platform, and supplier is on point which is as follows:
1. Zero control: Dropshipping eliminates inventory management, but what about your control over overstocking and shipping timing? Unfortunately, you do not have any control over that, so playing smart with this business is the only option.
2. Highly Competitive: Although starting your own dropshipping business is recommended, you should know that there’s fierce competition in many niches. To stand out, you need to have a solid marketing plan and unique product offerings
3. Low-Profit Margins: Dropshipping is challenging to profit from, mainly due to competition and per-unit product costs. To make profits, you’ll need to focus on three things: the right pricing strategies, high sales volume, and managing operational costs.
But don’t worry; starting your dropshipping business will not be that difficult. In the next section, you’ll learn how to start your dropshipping business.
How to start dropshipping business - 8 step guide
1. Figure out the right niche for you - Choosing the business idea that works for you
The first step in how to start dropshipping business is to determine your target consumers, what they want, and in what price range they want it. This requires rigorous market research and an intuitive understanding of your target demographic’s needs.
This product will be the foundation of your retail business, so spending ample time deciding the niche is the primary task before starting this business.
As dropshipping requires significantly low investment and time, you can change the kind of product you’re selling later on. You should be passionate about choosing the right niche in dropshipping, and you should do proper market research to find what intrigues the masses. It should also have less competition so that it’s easier to stand out.
2. Sourcing your product from suitable suppliers
To ensure that the customer delivers good-quality products, the retailer that is you needs to ensure that he is sourcing his material from the right place. So, first things first, you’ll need to research the product and check out multiple distributors to never go ahead with the wrong one only to realize later that it was not an ideal choice.
The decision to choose and source your product has to be very smart. Provided the fact that finding good-quality products for the right price can help you earn trust in your brand.
3. Choosing the right e-commerce platform
There are multiple dropshipping platforms nowadays, but finding the right one that caters to your needs is essential for your business’s longevity and smooth sailing. But why is choosing the right platform important in the first place?
Choose a well-known and credible platform, read reviews, reach out to your network, and communicate your expectations correctly with the dropshipping platform. Some of the popular eCommerce platforms you can use are Shopify and WooCommerce. They are easy-to-use and highly-rated platforms.
4. Building a website that attracts customers
The official website you will build will be your online store. The more attractive, user-friendly, easy-to-navigate, and authentic, the more customers you will attract. Adding different sections, like blogs, newsletters, etc., is one way your website can interact with your customers.
Figuring out the basics, like the domain name, the website structure, and the design at the start will make setting up the business much more hassle-free. To sum it up, building a website that works in your favor in the long term is important.
5. Setting sensible prices for your products
The price you set for your products should emerge from researching your industry competitors. One thing you need to make sure of is that the costs are realistic and not too inflated compared to the quality of the product.
First, setting sensible prices for your products is recommended to gain more attention from your customers and focus on marketing your business. Later on, as you scale and get a position of authority on your social channels, it is recommended that prices be increased.
6. Registering your business
Taking care of the legality of the business is essential to start any form of business. Before starting the business, find out if you require a business license, and check for the laws regarding dropshipping businesses in your locality.
Setting up a legal entity is important for any business, but why is there particularity for the dropshipping business? It is mainly for legal protection, giving you limited liability and tax benefits. Another reason why it is important is because of brand building and growth potential.
7. Marketing effectively & Tracking and evaluating Key Performance Indicators (KPIs)
After all the above steps, this part is crucial and plays the biggest role. You market your business through omnichannel or one or two social platforms to start with. This also includes evaluating KPIs, which is short for one gauge of how well your business is hitting its performance targets.
Other KPIs rarely talked about but are important are total sales, average order value, customer lifetime value, website traffic, conversation rate, profit margins, and others.
8. Keeping up with the industry trends
For any business to be successful, it’s important to keep up with industry trends. One way to do this is to sign up for Google Trends, look at your competitor’s social media channels and competitor posts, get ideas from Pinterest Trend, check top publications, listen to eCommerce podcasts, join Dropshipping communities, supplier communication, supplier newsletter, and updates.
Why is Printchester the right choice for your online dropshipping business?
Unlike any other white-labeled dropshipping business, Printchester provides a vast catalog of customizable, high-quality print-on-demand products, from t-shirts, hoodies, joggers and sweatshirts. Our user-friendly platform also allows seamless integration with your store and on-time delivery, leaving you to focus on your marketing and scaling your business.
Let me tell you why Printchester is the best choice for your online dropshipping business today.
- Brand Uniqueness: No dropshipping partner can match our customizable products, and you can choose from a variety of designs.
2. User-friendly: With Printcheter, you experience seamless integration. It has a smooth workflow and a user-friendly platform and simplifies your order processing and management, which helps you save valuable time and effort.
3. Scalable: Once you set up all the processes and systems, you only need to focus on marketing and growth – creating winning marketing campaigns and scaling your dropshipping business.
4.Quality is our priority: One last thing you should know about partnering with Printchester is that we prioritize quality printing and materials, ensuring that your customers receive exceptional attention.
Conclusion
For anybody who wishes to start their own business in 2024, Dropshipping is a cost-effective way to get into an e-commerce business. However, challenges like low profit margins and fierce competition will always exist. Make sure to choose your niche carefully, considering your customers’ engagement.
Frequently Asked Questions
Dropshipping is a lucrative eCommerce business that anybody can start from home for free. It’s a method wherein your online store helps customers place an order, and you forward their information to a third-party supplier. Now, this supplier packages and ships the products directly to the customer.
The best part of your online dropshipping business is that it eliminates needing you to hold inventory. The supplier is like your mother. It stores, packages, and ships products safely to your customers.
Due to high demand, many suppliers are available in the market. You can find them by researching online directories or contacting manufacturers directly to find highly rated suppliers with quality products.
There are many e-commerce platforms suitable for Dropshipping. Still, the top-rated and heavily used platforms are Shopify and WooCommerce.They are widely used because of their user-friendly interfaces and integrations.