Is dropshipping a profitable business model today? What are dropshipping gurus hiding from us? What are the exact steps to succeed with a dropshipping business?
Dropshipping is a retail sourcing method in which the store does not have the products it sells in stock. Instead, when the store sells a product, it buys the item from a third party who ships it directly to the customer. Its peculiarity? The merchant never sees or touches the product.
Dropshipping-based business models have become surprisingly popular in recent times as internet marketing skills are becoming more and more affordable.
Dropshipping has several advantages: you can sell without storing or handling the items you sell and you can start a profitable business with a limited investment.
An ecommerce that operates under the dropshipping model directly buys the items sold by an external supplier or manufacturer, who then places the order. Thus, in addition to reducing the costs of each operation, it also frees up resources to focus on customer acquisition.
To start a competitive business with a limited budget, just follow the five steps below. Although you can start this type of business from home And without much funding, it is true that you will have to put in a great deal of hard work.
How to start a dropshipping business today
Pick a dropshipping niche
A niche is a very specific market segment. For example, cordless vacuum cleaners are a very popular niche in the home cleaning market. But cordless robot vacuum cleaners that also have a deposit and no bag are a micro-niche.
In order to start a profitable business, and specifically one based on dropshipping, it is essential to find a profitable market niche. You have to know that in recent times, business models based on duropshipping have become enormously popular, so you will have to strive to find a niche without saturating it. The good news is that new products appear every so often and, with them, new markets that can translate into very attractive business opportunities.
Although technically it is possible to succeed with any dropshipping niche, the reality is that if you opt for one with high competition and dominated by the main brands, to see results your efforts will have to be infinitely greater.
Features of dropshipping products that sell well on Amazon and eBay
- Without dominating by major brands, easier to compete.
- Small and light, size of a shoe box and weight less than 2 kg.
- Non-seasonal, products that are in demand all year round.
- € 12-180 retail, the height of e-commerce
Find a dropshipping provider
Locating a reputable supplier is often the hardest part for many aspiring ecommerce professionals when starting their dropshipping business.
You need a trusted provider to help you:
- Keep the product in stock.
- Maintain product quality.
- Ensure that orders are shipped to customers.
If you are going to start a dropshipping business, be clear about the following: your supplier is your main business partner.
A reliable supplier has to be legitimate, experienced, not charge abusive fees, offer fast shipping, have quality products, and offer referrals when requested.
There are two recommended ways to find reliable dropshipping providers:
- Find suppliers online by simply Googling "dropshipping suppliers" and analyzing the results, or searching for products on websites such as Alibaba.com or Aliexpress.com.
- Use a wholesale directory where you can contact suppliers in a few clicks that guarantee their ability to offer impeccable services.
Choose a sales platform
After making it clear what product you are going to sell and you have found a supplier to facilitate it, it is time to start selling it to generate income.
For this, it is essential to choose a sales platform that translates your business into success. For this you have two options:
Choose an established platform or start your own independent store.
Pros and cons of selling on a marketplace
Especially at the beginning, most dropshippers go for a solidly established online marketplace, like Amazon or eBay, but what are its advantages and disadvantages?
- It's easy to set up an account to start selling.
- They already attract large amounts of traffic.
- Consumers trust these platforms.
- You can make a significant amount of money with them.
- They will charge you a fee for each sale.
- You have limited control over branding, customer service, etc.
- Fierce competition with sellers of the same platform.
- Consumers have an abundance of choices.
Create your own electronic sales platform
Many dropshipping professionals decide to create their own online store. This decision involves a larger initial investment, but it is the best long-term option. You may use many online tools like WordPress or Shopify very easy to start.
- You have absolute control (brand, design, templates, etc.).
- You build your business independent of a third party platform.
- There are no commissions and the profit margins are higher.
- No direct competition from other sellers on the same platform.
- You need to configure and design your own store (web hosting, domain, etc.).
- You lose guaranteed traffic from established platforms.
- Positioning in Google requires time and investment in SEO and marketing.
Starting your own store is a good option if you have the resources (time and money) that allow you to invest in your business in the long term.
Implement a customer acquisition strategy
Attracting customers to your online store is the next step after setting up your dropshipping sales platform. Now is the time to develop your customer acquisition strategy.
The art of persuasion is basic when it comes to acquiring new clients for a business. It is what is known as marketing and advertising, and you have at your disposal two strategies that can help you get new customers:
Paid results: Facebook Ads, Google Ads, influencer marketing
Paid results are fast and based on the use of the big social media platforms. They are extraordinary places to advertise your products and reach a large audience. This is how these services make money.
Among the advantages of these platforms we find that:
- It is easy to get started.
- You control how much you invest each day.
- You can segment demographically and highly specific.
- It can give quick results.
- Helps increase brand awareness.
- Ads and posts can go viral.
On the other hand, influencer marketing has become in recent years the great ally of retail brands that want to boost their customer acquisition. Consider influencer marketing strategies if you are in a modern niche.
Organic Results: Blog or Forum Marketing, Content Marketing, Social Media Marketing, Email Marketing
This process is slow, as it requires you to locate blogs or forums related to your solution and actively participate in them, so that you position yourself as an authority on the subject to include a link that potentially increases traffic and the acquisition of new customers.
Content marketing is mainly based on a blog for your store, a YouTube channel, posts on Instagram or Twitter ... and aims to build an audience by creating and distributing valuable content, less explicit than advertising and with the intention of serving to your audiences.
Given the difficulty of reaching reach in some sectors, it is also you can create and share high-quality content on social media channels towards those audiences that can later become clients.
For its part, email list building is still one of the star ways to get new customers. To do this, you have to get contact information for your audience, such as their email addresses in exchange for an offer or gift. When you get a solid list of emails, you can reach out to each of your contacts to persuade with your sale.
Analyze and optimize your dropshipping business
From here you will have to keep track of each metric that helps you further boost your business. You can use Google Analytics and Facebook conversion pixels to track every conversion, find out where the customer originated from and what route they took within your website to end up for sale. This helps you scale what works, and pivot what doesn't.
Establishing and forgetting is something that does not work either in advertising or in marketing. It's all about experimenting with new opportunities, and making adjustments to current campaigns. So you can know what to optimize or how to change the business investment.