A Brief Guide to Starting a Dropshipping Business

A lot of people generally say no to starting an online store because they worry about the start up costs and other fulfillment. But who says that you must purchase all the products upfront?

Make sense, right?

With the Dropshipping business model you remove the hassle of buying thousands of products upfront and managing all the fulfillment expenses yourself. Let me explain what I mean …

What is exactly is Dropshipping?

Dropshipping is the type of retail method where products are not kept in stock, but a partnership is formed with a wholesaler supplier who manages its own inventory. Then, when you receive an order on your website, you transfer it to the wholesaler, who ships the goods to the customers.

You’re playing the middle man here.

The benefits of dropshipping business now seems quite obvious. You don’t have to manage an inventory, thus no hassle. Your success in this business depends entirely on the number of orders you get. The profit you make is the difference between the wholesale price and the retail price.

The most popular way (and the least expensive) of starting a dropshipping business is through a website. More specifically – an eCommerce type of website.

It doesn’t cost much to start if you know how to do it. You just need to cover  the cost of buying a domain name and a hosting service. Also some costs that might occur after installing scripts like Woocommerce and Opencart, but most of the time the total starting cost is below $100 (again if you do it yourself with free themes).

Dropshipping Business Foundations

OK, let’s start with the basics.

The first step towards the setup is buying and registering a domain name.  Pick your name, so it can match your chosen niche for better authority.

Once you have a name and identity of the business, it’s time to host it. Make it live. For that, you need to buy a hosting plan.

There are many hosting providers and it is very important to choose a trusted and reliable hosting provider. Personally  I recommend to start with Bluehost, mainly because of 4 reasons:

  • Affordable Price
  • Perfect Support
  • FREE DOMAIN NAME
  • Free Advertising Coupons – $50 for Facebook Ads and $100 for AdWords

Click here to find out more about Bluehost

After buying the hosting service, the next step is to choose your eCommerce platform that would give your website the look of an online store.

Depending on the quantity of the products, I recommend two options here:

1. WordPress + WooCommerce – If you are comfortable working with WordPress, this is the ideal scenario for you. WooCommerce is an ecommerce plugin for WP, which gives you the full potential of an online store.

2. OpenCart Free standalone script, with plenty of options and add-ons. This platform is perfect for big online stores, with lots of products. There is a small learning curve, if you haven’t used it before.

So we know how to do the technical part.

The next step is to find wholesale dropshipping companies that you can partner up with to kick start your business.

Finding wholesale dropshipping companies

Wholesalers will be the one who have an inventory and have the products you are selling on your website, thus choosing the right and reliable wholesaler is extremely important step.

But let me warn you, searching wholesalers online will not be an easy task!

They are bad at SEO and their website won’t be popped up on the first pages of search results when you type “leather shoes wholesaler” for example.

You have to dig deeper into the search results to find these wholesalers. Once you manage to find them, make a list and contact them to discuss the different terms of the agreement. Go with the one who is more reliable of terms of shipping and refund handling.

Don’t judge a supplier by its website’s interface as these websites are generally very outdated. Another thing –  while searching for these wholesale dropshipping companies, make sure that you use other keywords like “bulk”, “supplier”, “reseller”, etc to gather relevant results.

Choosing the right dropshipping products

There are certain things that should be considered when choosing the products for your website. People generally tend to start off on a big level, selling things like expensive hardware and plasma television with an urge to make more money.

For a new business, it is a little difficult to earn the  trust of the customer for these high-ticket purchases. So my advice is start off with products that aren’t very expensive.

You can gradually increase and variate your products after you build a positive reputation among your customers.  Try specializing in a small niche so that when it comes to your field of involvement, buyers can trust you at 100%.

Main Points

  • Try making your website different from the already established ones.
  • Choose the products of your niche and find good suppliers for it.
  • Try joining discussions on online forums to get the idea of the best products in your niche.
  • Try learning from your experience, and put yourself in your perfect customer’s shoes.
  • Pick a niche that you have interest and knowledge in. Example: A book selling website is a good niche for a book lover.

And to recap, the dropshipping business is a nice way to start an online business and to increase your income. With the right product management and proper advertising,  your dropshipping business will gain its momentum.

After all, it doesn’t cost a fortune to start a drop shipping business, just some minimal investment and dedication towards it.