Dropshipping 101 : Must Read it Before You Start Drop Shipping

Dropshipping is a great way to make serious amount of money online. It doesn’t require a lot of capital to get started and even around $100 would do the job.

Not sure what is drop shipping? Dropshipping is basically a method where you sell items, but don’t manage any kind of bulk stock. Still you are getting wholesale price from your supplier. It could be anything, from a small pen to a large plasma TV.

How it works? let’s elaborate it. You start an online store of shoes and list a couple of shoes at the price at $29 each. A person visits your online store and buy through your online store and pays you money. As soon as you receive money, you pay that money to the supplier and ask the supplier to deliver the shoes. You pay supplier a price of let’s say $23 including all the charges and save an amazing $6 without having anything in stock. This method of selling products is called drop shipping.

Why should you go for dropshipping?

Dropshipping is an amazing way to make stable income, specially if you don’t have a lot to invest in. There are many advantages of dropshipping when we compare it to traditional retailing and eCommerce.

  1. You are not managing any kind of stock, so you don’t need a large investment to get into dropshipping business.
  2. You can offer as many products as you want and can test new products without any risk.
  3. You don’t need to count your inventory, as you are not managing it.
  4. There isn’t big risk involved.
  5. Managing the whole business becomes much easier and hassle free.

How traditional eCommerce still provide advantages?

When there are benefits, there are obviously some drawbacks behind every option, so is the case with dropshipping business. Following are some of the drawbacks if you go for dropshipping.

  1. When you are dropshipping, many other competitors maybe dropshipping the same product from the same supplier, so it may become extremely difficult to differentiate yourself.
  2. You are completely relying on your supplier, if they make a mess of anything, it will certainly mess your business.
  3. In most cases you pay higher to your dropshipping supplier, when we compare it to the price you will pay if would have managed inventory.
  4. You give up the control over packaging

If you have large investment to spend and are ready to take big risks, you can choose the alternative route. But if it’s not the case, I would suggest you to go for dropshipping, as it’s very convenient, risk-free and needs very low investment.

How Much Does it Cost to Start DropShipping Business?

Cost of dropshipping business vary, depending upon the choices you make. You can simply start selling through a facebook page or alternatively you can create your own website. In case you choose to sell through a facebook page, you are only going to pay for the marketing. But if you are looking to create your own website for dropshipping, prices may vary. You can create your own website through services such as Shopify where you pay a monthly fee ( starting from $29 ) or can hire a freelancer or agency to create a unique, self hosted website for you.

Initial cost of self hosted website could be much higher, but you gets more flexibility in terms of design and features and you will have more control over your website. On the other hand, managing a self hosted website could be a pretty tough task, specially if you are not a tech guy. You will need to manage security, speed and various other technical aspects of website. Cost of self hosted website could be around $199 ( Setup fee ) + $9 per month ( For hosting etc ) or could be higher if you choose to go for the better.

How Much Can I Earn from DropShipping Buisness?

Like a physical retail store or traditional eCommerce site, potential completely vary. It completely depends upon how you market your products, type of products you sell and many other factors. Here is what people say about their earning through dropshipping.

“I started a dropshipping business with exactly zero cash and grew it to a $4.5M business within 3 years. – Maximum Godin”

He further claimed that he could have done it much earlier, if would have done it right.

Similarly here is what another person say about earning from dropshipping business.

I did make £50,000 to £100,000+ ($170,000 Profits US Dollars) in profits a year dropshipping on ebay. It took me about 3 Years to get to that level. –  Christropher Scuillo

These are just couple of examples on how much people make through this business. Some people make way more than that, and others struggle to even make pennies through this business. So we can conclude, it isn’t extremely easy to make money through dropshipping business, but if you do it right and things go in your way, you can make hefty amount, doing this business.

Where to Get Website, Logo etc?

You can hire a freelancer from Fiverr.com , Upwork.com or any other agency to design the logo and other related stuff for your dropshipping business. If you go for Shopify , you don’t need to hire someone to create the website for you, or you can hire any freelancer or agency to create one for you. Upwork would be the best place to find a quality developer to develop a dropshipping website for your new business, but initial costs could certainly be much higher.

How to Find Suppliers?

Having good suppliers could make or break your business, so I would advice to choose them wisely. You can find some great suppliers through google or even can find better suppliers locally. Here is the criteria for choosing better suppliers.

  1. Supplier must be reliable and must have good reputation
  2. Ensure your selected supplier is offering best rates
  3. Supplier must be quicker in delivering project and ensure he doesn’t charge too much delivery charges

These are some of my points, when I look for a supplier for dropshipping, you can make your own criteria according to your business strategy.

Please click here for a list of some of the best suppliers on internet.

How to Market DropShipping Business?

No matter how good are your deals and how awesome is interface of your website, nothing matters if you are not marketing well. Marketing is the actual deal breaker and doing it well can help you make massive profits, even if you are lagging in something else.

Marketing dropshipping business is not much different from the way you can market your typical eCommerce business. In fact, most of the time your customers won’t know if you are dropshipping or managing inventory.

Following are some of the methods you can use to market your dropshipping business.

(i) Social Media

How many times do you come across some clothes for sale while browsing your facebook feed? if you are using Facebook regularly, chances are you might have came across many times. It’s even very likely that most of the readers of this article must have made at least one purchase through Facebook, Twitter or other social networks.

Social media is one of the most powerful medium to market products, specially the B2C ones. Almost each and every person is using social media these days, making it easier to target your audience through these channels.

Social media comes very handy when marketing dropshipping products. If you have a very active page with large fan base, it could make the whole job much easier. But even if you don’t have a very active page, still you can generate handsome amount of sales through paid marketing.

(ii) SEO

If you know SEO or can somehow manage to rank higher in search engines for specific search queries, you can easily grab some sales. Well, ranking high on search engines is not a child’s play, it takes patience, skills and lot of hardwork, before you actually can gain something back from it. But once you start ranking higher on search engines, you can just sit back and watch your sales grow.

(iii) Content Marketing

Basically in content marketing, you create useful content for target audience and attract their attention through those contents. Contents could be anything like articles, infographics, videos, ebooks or anything useful for your target audience.

You can spread these contents through slideshare, youtube, facebook etc and attract your target audience towards your site.

(iv) Ads

This is a big expensive way, but a much quicker way to generate some sales. You basically pay per click to search engines or place ads on various websites to attract target audience.

I usually don’t recommend paying for expensive ads in dropshipping business, until you are actually aware of making best out of it.

These are just a few ways to market dropshipping business. You can use any of the method people use for eCommerce business to market your dropshipping business.

It was a pretty basic guide to give you general idea of whether to get into dropshipping business or not. If you are very serious about this business, I would recommend you to read following ebooks. I will soon publish some in depth articles about it so make sure to subscribe to our mailing list so you don’t miss an update.

The ultimate dropshipping guide by Neo Monefa

Dropshipping Guide by Alexander

Did you liked this article? want to add something? please let me know in comments.

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