Starting a dropshipping business is like taking your first step into the world of entrepreneurship. It’s a way to begin your own business journey. With dropshipping, you can sell products to customers, set your own prices for the products, and create your very own brand.
The interesting part is that you don’t need to buy any products upfront; you only purchase them when someone buys from you.
If you’re uncertain about starting your online business, here’s a motivating fact: By 2023, the global dropshipping market has reached to the market value of $243 billion.
This shows that starting an online business can be a really profitable choice in today’s world.
This guide will help you understand how to start a dropshipping business. We’ll explain what dropshipping means, guide you on finding the right products to sell, and provide you with all the essential information to kickstart your dropshipping journey.
What is Dropshipping?
Dropshipping is a way of doing business where a company sells things without having to keep those things in a storage place.
In this method, the business owner, also called the ‘dropshipper,’ spends most of their time on advertising and taking care of the online store.
Meanwhile, the supplier is in charge of keeping the things in stock and sending them to the customers.
Here’s how dropshipping usually works:
- A customer buys something from the dropshipper’s online store at the price shown there.
- The dropshipper then tells the supplier about the order. They might need to pay the supplier a lower price for the item, which lets them make some profit. For example, if a customer pays $100 and the item costs $70 from the supplier, the dropshipper gets to keep $30.
- The supplier takes care of the order and sends the item right to the customer’s doorstep.
- If there are any problems with the item or how it was delivered, the customer talks to the dropshipper. The dropshipper then talks to the supplier to solve the problem.
Importance of Dropshipping
Dropshipping is really valuable because it offers a smart way for people to begin their own businesses, even if they don’t have much money to start with. It means they don’t have to spend a lot on buying products before they sell them.
This makes it less risky for them. Instead of worrying about storing and shipping items, they can concentrate on selling and making their shop unique. Dropshipping also allows them to connect with customers globally and stay updated on popular trends.
In a nutshell, dropshipping is a fantastic method for new businesses to grow and develop without requiring a ton of money upfront.
How to Start Dropshipping Business in 2023?
Here’s how to start a dropshipping business in six easy steps:
Define Business Idea
First, decide on what you want to sell and who you want to sell it to. Since there are many options in drop shipping, it’s smart to begin with just a few products that you think a specific group of people will want to buy.
For example, you might decide to sell cool T-shirts to skateboarders. These T-shirts would have designs that skateboarders like and they would be good quality and style for them.
Deciding what to sell is important because it shapes your products, your website’s look, and how you’ll market them. But remember, in drop shipping, changing what you sell is quite easy and doesn’t cost much, so don’t worry too much if you want to try something different later on.
Find Source Products
Having a plan for your business is great, but it’s important to make sure you can actually get the things you want to sell.
Before you make a website, spend time looking for products. Check out different places that sell the same things to see where you can get them at the best price to sell for a profit.
Some popular places to find products are:
- Worldwide Brands
- Wholesale Central
You can also search for stuff like custom clothes, things for your home, or books that you can get printed when someone orders them. Companies that do custom clothes can put a special design on different types of clothes like T-shirts, socks, and jackets.
Choose something you really like, can make money from, and looks good in the pictures on your website.
Many of these places also give you information about what’s popular, so you can pick things that people are more likely to buy since there’s already a group of people interested in them.
Choose Your Suppliers
Once you find the things you want to sell, you need to choose the actual company that will send those things to your customers. When you’re picking a company, there are some important things to think about:
Decide if you want to sell high-quality things that might cost more, or if you want to sell cheaper stuff. This is about how you want your business to be seen. Do you want to be known for good stuff or just cheap stuff?
- Making Money
You should be able to make a fair amount of money from the things you sell. Think about how much it costs to send the stuff and other fees. Most people who do dropshipping try to make 15% to 20% profit. If you can make more, that’s even better.
The company you pick should send the things on time and not charge too much for shipping. Many companies are in other countries, so you need to decide if it’s okay for your customers to wait a bit.
Also, the company should have the stuff in stock because it’s not good if you get an order but they don’t have the stuff. You can figure out if a company is good by ordering a few things from them and seeing how it goes.
- Returning Things
It’s better if the company lets customers return things. But some companies don’t allow this, so you need to check before you decide. You also need to think about how you’ll handle returns based on what the company allows.
A lot of people who do dropshipping use online stores because they usually have a big selection of things and good companies to work with. If you have a certain thing in mind, you can also find a company that makes that thing.
This can be harder because you might need to do more work to find out who makes it, and sometimes you have to sell a certain number of things each month to work with them.
Create an Online Store
You’ll need to make a special online store to sell the things you have. An online store is a website where you can show what you’re selling in a nice way and where people can buy stuff using a virtual cart.
Making the store might be a bit tricky if you’re new to this. The reason is because there are a few different things you need to put together.
To make a website, you’ll need:
- A content management system – (CMS), such as WordPress, Shopify or Squarespace
- A domain name
- Web hosting (if using WordPress)
- Integrations with your chosen dropshippers
- A built-in payment gateway to accept online payments
The best online stores are set up to automatically send orders to the supplier. If this doesn’t happen automatically, you’ll have to manually enter orders every day, which can be a bit hard and lead to mistakes.
Many people who do dropshipping really like Shopify. It’s a top choice for building this kind of business. But there are other good options too, so it’s a good idea to learn about different ways to make online stores.
You might also think about selling your things on other websites, like Etsy, Amazon, or even social media sites like Facebook or Instagram. Selling in different places helps more people see your stuff and buy it.
Of course, this means you need to manage more than one place to sell things, so make sure you’re ready for that.
Make Your Business Official and Register it
You need to turn your business into a real company, separate from your personal stuff. This means giving it a name (usually the same as your website name) and registering it as an LLC or corporation with your state government.
The IRS will give you a special number for taxes after you apply online. You’ll use this number to open a bank account that’s linked to the way you get paid online.
This bank account will get money from sales and pay for things like hosting your website. It will also be the account that pays the company that gives you the stuff to sell.
You should also get a special tax ID for sales. Most states need you to pay tax on the things you sell. Sometimes, you’ll also have to pay tax in the states where you’re selling your stuff.
- Market Your Business
Just making a website isn’t enough – you need to let people know about it. Since your business is online, you have to do more than just tell friends and neighbors like you would with a regular store.
Join online groups related to what you’re selling and join in on conversations in a helpful way. Don’t just try to sell things; try to answer people’s questions. Become someone who knows a lot and people will notice your business.
Make special pages for your business on places like Facebook, Instagram, and TikTok. Regularly share posts about new things you have, sales, or tips about the things you’re selling.
Besides social media, you might want to spend some money on ads and promotions. You can run ads on Facebook that target certain groups of people, even with a small budget like $10 per day. This can bring more people to your online store. You could also write a blog that helps people find your store when they use search engines. Many new online stores do a bit of all these things to make sure enough people see their store and want to buy things from them
And that’s it! You now have the know-how to begin your own dropshipping business. By using the tips from this article, you’re on your way to creating your very own online store.
Keep in mind, the most effective way to learn is to take that first step and start building. Also, make sure to follow Hazehunt for more valuable insights and guidance on your journey!