Dropshipping is the exceedingly popular business model for new entrepreneurs, particularly generation Z and millennials, due to internet marketing skills being more important than financial capacity. Since you do not need to stock or handle the items you are selling, it is possible to start a dropshipping business with limited funds.
Any eCommerce website that operates a drop shipping model purchases the items to sells from a third-party supplier or a manufacturer, who then fulfills the order.
Choose a niche.
The niche you select needs to be focused on and something you are really interested in. A product range that is not focused will be hard to market. If you are not passionate about the niche you selected, you will be more apt to becoming dissuaded, because it takes a lot of work to profitably scale a dropshipping business. Here are some points to consider when selecting your niche:
Seek attractive profits.
While running a drop shipping business model, the focus is on marketing and customer acquisition, so the amount of work required to sell a $20 item is basically the same as it would be to sell a $1,500 item. Pick a niche with higher-priced products.
Low shipping costs are very vital.
Even though your supplier or manufacturer will handle the shipping, if the cost is too high, it will act as customer repellent. Get something that is economical to ship, as this also gives you the option of offering free shipping to your customers and absorbing that cost as a business expense to attract more sales.
Ensure your product appeals to buyers with disposable income.
When you are focused on driving traffic to your website, you want to experience the maximum conversion rate possible because most visitors will never tend to return. The products you are selling should spark impulse buys and appeal to those with the financial ability to make a purchase on the site.
Ensure people are keenly searching for your product.
Use Google’s Keyword Planner and Trends to check some frequent search terms related to your prospective niche.
Build your own brand.
Your drop shipping business will have more worth if you can rebrand whatever you are selling and pass it off as your own. Look for a product you can white label and sell as your own brand with custom packaging and branding.
Sell something which is not readily available locally.
Pick something your customer cannot find down the street. This way, you become more attractive to a potential customer.
Perform Competition Research
You will be competing with other drop shipping businesses alongside retail giants such as Amazon and Walmart. This is where potential drop shippers go wrong, as they look for a product that has little to no competition. That is a sign there is no demand for that specific product. Search for products that have competition, as it is a sign that there is high demand.
Secure a Supplier
Partnering with the wrong supplier can wreck your business, so it’s important that you don’t hurry this step.
Alibaba has now become one of the largest online resources to identify and communicate with potential manufacturers and suppliers. Make sure to ask a lot of questions and learn what their production abilities are if your business grows exponentially. You want to be certain they could scale with you.
There are plenty of informative sources available, from business and tech blogs to this article about dropshipping. It is a popular topic that can help you prevent costly supplier mistakes.
Develop Your Ecommerce Website
Even if you have a large budget that allows you to hire a web design and development company to create a custom solution, it is a wiser move to use one of the plug & play options, particularly in the beginning.
Create a Customer Acquisition Plan
This lets you generate sales and revenue right from the beginning, which can contribute to fast scaling. Facebook enables you to place your offer directly in front of a highly directed audience. This gives you the capability to contend with the largest brands and retailers right away.
You also must think long-term, therefore search engine optimization, and email marketing should also be a focus. Collect emails and set up automated email sequences that offer discounts and/or special offers.
Analyze & Optimize
You need to track all the data and metrics accessible to grow your business. This includes Google Analytics and Facebook conversion pixel data if that is your main customer acquisition channel. When you can track every single conversion to know where the customer originated from and what path they took on your website that eventually led towards a sale it enables you to scale what works and simply eliminate what does not. You will never have a set-and-forget advertising solution.