There are so many generic lists online about drop shipping:
- Start a drop shipping business with no money
- How to open a drop shipping business in 1 day
- Start an online store with no skills?!
The truth is, drop shipping is not that easy and simple.
If you really have $0 to put into this, you don’t even have a domain to start with. Having only one day to set up the entire business? You must be willing to spend more than just 1 day to prepare for your business launch, right?
And if you have no skills? So you should start learning today. In this blog post, we’ll shine some light on the necessary steps on how to build a drop shipping business from the ground up:
- Choosing deep niche products that you can sell with big margins
- Finding suppliers with high quality products
- Setting up a beautifully designed website
But first, let’s talk about some big bonuses it has to offer.
The Benefits of Drop Shipping
The biggest advantage of the drop ship model is that you don’t need to own any stock. Instead, you sell virtual inventory that being stored and shipped directly from suppliers to customers.
No buckets of money needed. You only pay for the stock you sell, so the risk of spending a lot of money on unsold stock is zero!
A wide range of products offer. With drop shipping, you can expand your catalog with little effort. This is a huge bonus because broad product selection is one of the key factors that influences customers’ purchasing decision.
Time saving is key. Dropshipping can free your mind from warehousing, shipping and fulfillment. The supplier takes care of the practical operations for you. Your only job is to focus on the things that will have a greater impact on your bottom line: how to promote your online store and generate more sales.
One more bonus: Studies have shown that high shipping fee is the number one factor driving shopping cart abandonment. With drop shipping, the shipping cost is low because suppliers can often negotiate better shipping rates due to the extremely high volume of orders they send each day.
How to start a drop shipping business
Step 1 – Choosing deep niche products that you can sell with big margins
Why do you need a niche?
The answer is simple: You can’t expect to become a successful drop shipping entrepreneur by competing with eCommerce giants like Amazon or Alibaba. Your best chance for success is to focus on selling deep niche products.
But among millions of different products available, how do you choose which ones to sell?
There are 2 ways to start brainstorming and researching. Let’s think about:
What are the top selling products on big marketplaces?
What are some unique products that are starting to go viral?
Do you know where the squishy phone cases trend comes from?
The next thing to consider is the price range of those products.
If the price is too low (less than $10), it will be impossible to reach the positive Return On Investment (ROI). Because you still need to cover some kind of expenses such as supplier fees or marketing fees, which we’re going to talk about later on this blog post.
If the price is too high ($1,000+), it’s hard for customers to buy without consideration, there is a chance that they will want to speak with someone over the phone or through website live chat prior to purchasing. This customer support requires your time to take care of or additional cost for hiring at least one staff to do the job for you.
So what is the good price range?
The ideal sweet pot is from $20 to $200 – It’s not only big enough to create the decent per-order profit, but also small enough that most customers won’t need to personally speak with someone before the sale.
Don’t follow your passion
You read it right.
You’ve undoubtedly heard the mantra: “Just follow your passion”. But it’s an awful advice when it comes to choosing the best products to sell online.
The mistake that new drop shipping store owners often make is focusing their passion on the products they sell instead of making their businesses profitable.
It doesn’t matter if you sell a product you have passion with or not, the thing is, if that product brings money in, you’ll soon become passionate about it.
Don’t spend too much time on brainstorming and finding the PERFECT products to sell.
In fact, you’ll end up wasting your time on common goods that are way too saturated or brilliant ideas that have zero demand.
You still have a lot to do then. So stop thinking and let’s move to the next important part.
Step 2 – Finding drop shipping suppliers with high quality products
This is one of the most important decisions you’ll make. If your suppliers mess up, it’s your responsibility to make it up to your customers, not theirs.
So make sure you choose wisely.
Contact the Manufacturers
If you know the exact product you want to drop ship, the best approach is to call the manufacturer directly and ask if they have a drop shipping program for you.
If yes, this is an ideal scenario because you cut out all the middlemen and get the best possible pricing!
If the manufacturer does not provide a drop shipping program in place, they are most likely working with some wholesalers instead. Then ask for a list of their wholesale distributors. You can contact these wholesalers to see if they drop ship and inquire about setting up an account.
AliExpress drop shipping is one of the most popular drop ship models for eCommerce entrepreneurs.
Most sellers on AliExpress are overseas manufacturers, their prices are very competitive. You can pay for products at wholesale prices and have them shipped directly to your customers.
Although AliExpress is taking care of verifying suppliers itself, you still be very careful when selecting your drop shipping supplier.
Here are our tips:
Avoid suppliers with brand products. Known luxury brands on AliExpress are very rare. So stay away from any suppliers selling brand products to avoid reselling fakes and knockoffs.
Order sample to test products’ quality. Making a small test order is a great way to determine the quality of supplier’s products as well as ensure they’re not a fraud.
If you order only one sample, you can’t cover the general quality of their products. So the best result comes from an order of 3-5 samples from each supplier.
Use Drop shipping Directories
A directory is a database of certified wholesalers that’s organized by product type, market or niche. You can easily find the wholesalers contact or detail of products listed in their database.
Here’s the best thing…
You don’t have to waste a lot of time on considering which wholesaler is legit. Directories employ screening process to ensure the suppliers listed on the list are only genuine wholesalers.
However, most directories are running for profit so you’ll be charged a fee for access to their directory. That said, if you’re short on time and willing to spend the money, directories can be very helpful to save your time and effort.
There are a number of different supplier directories, and a comprehensive review of all of them is beyond the scope of this guide.
Instead, we’ve highlighted some of the most well-known supplier directories online here:
Focused on fashion and home goods
2% of each sale
Before negotiating a deal with suppliers, make sure you ask:
- What shipping methods do you offer? And the cost of each method.
- What is the warranty policy for the products?
- How about your return and replacement policy?
Step 3 – Setting up the website
Some shipping directories will offer upsell services. It can be access to online courses, exclusive information, or even online store.
Salehoo offers a basic online store with 15 pre-designed templates. DropshipDesign gives you a pre-loaded website with over 1,000,000 products.
However, there are more options for you out there which are much better than that. Here’re two eCommerce platforms we’d like to recommend:
Shopify has done everything they can to make setting up and running an eCommerce website for you. They handle all the hosting, security, and credit card processing to give you more time to focus on promoting their website.
This also means customizing your online store will be somewhat limited due to the platform’s availability.
Good news is…
With over 1,400 apps on Shopify App Store, you’ve got a lot of options when it comes to increasing sales and extending the functionalities of your online store. You can see the list of best Shopify apps here for references.
Shopify starts at the lowest Basic plan of $29/month, with a 15-day free trial for you to start literally at no cost.
WooCommerce is a powerful eCommerce toolkit for the webmaster.
As an open source software, WooCommerce is well known for allowing you freely modify the site. There are no limitations even in controlling your site’s data, which is a big bonus compared with Shopify.
However, WooCommerce is designed for small businesses, so stores with large-volume products can be difficult to manage.
Though the plugin is free, you will need paid licenses and external essential plugins to power up your store to be fully functional and ready for growth.
If you want to get started as quick as possible, choose Shopify. The platform provides almost everything you need to open an online store.
If you are a tech savvy and want a full control over the site, choose WooCommerce. You’ll never regret it.
And if you want to know about other eCommerce platforms? Read this article.
What’s the next step?
You know how to start a drop shipping business in 3 simple steps, now how to get your first sales is the next challenge to combat!
To make this challenge easier and success more achievable, we built this complete guide on How To Sell Online with actionable tactics and strategies for you to follow:
You’ve done the very first step on the journey to becoming a successful drop shipping entrepreneur.
So what’s next?
It’s time to take action and put what you learned into practice. Remember, once you start, there’s only one way to go, and that’s forward.