How To Start A Dropshipping Business

How to Start a Dropshipping Business

The estimated value of the global dropshipping market was around 128.6 billion US dollars in 2020. And it’s projected to reach 476.1 billion dollars by the year 2026.

Many budding entrepreneurs dream of running their own eCommerce business.

But they often run into problems like:

  • Having no products to sell.
  • Not having a full 40-hour week to manage their business.
  • Low investment capital.

These problems certainly didn’t stop e-commerce giants like Gymshark from making a name for themself in this market. So don’t let it stop you either.

All major dropshipping businesses built empires based on aggressive marketing strategies. And they all started by selling products that weren’t their own.

Online purchasing is the new norm, and you can take advantage by starting your own dropshipping business.


What is Dropshipping? 

Dropshipping is a business model where you can run a successful online business without owning any of the products yourself. Once you receive an order for a product, your supplier will ship it from their warehouse directly to your customer’s address.

The cool part about dropshipping is that your supplier takes care of the storing, packaging, and shipping.

But that doesn’t mean you can sit back and watch the money roll in without any hard work. You’ll still need to create a brand, find winning products, and more which we’ll cover later.

Now, let’s look at how this business model works.


How Does the Dropshipping Model Work? 

The dropshipping business model revolves around three key players:

  • the manufacturer or supplier who creates, warehouses, and ships the products
  • the retailer (you) who chooses, markets, and sells the products
  • the customer who eventually buys the product from the retailer but receives them directly from the supplier or manufacturer.


Let’s look at how these three roles operate within a dropshipping business:

  • Manufacturer: A manufacturer is responsible for creating the products, warehousing the inventory, and shipping the products to the customers. They’re also responsible for replacing any defective products and restocking. They sell these products to retailers at wholesale prices.
  • Retailer: The retailer (You) sells the manufacturer’s products on their website and under their own brand name. The retailer is responsible for picking the products and marketing them. The retailer also decides the product’s actual price and the shipping costs for the customer.
  • Customer: The customer simply buys the product from the retailer. If there are any questions or issues, they will contact the retailer.


Essential Steps to Starting Your Dropshipping Business

Dropshipping is attractive to many beginning entrepreneurs since it’s relatively low risk. You won’t have to worry about hefty startup costs, buying and storing inventory or shipping products.

All you need to do is ensure your marketing is attracting the right customers to your online store.

Here are the basic steps to setting up your dropshipping business:


1. Choose a Niche 

Before you begin selling, you have to decide what to sell first. Most people will tell you to go with your passion. But the truth is, you also need to be aware of what is trending and profitable.

Here are some tools and tips you can use to determine which niche you should choose:

  • Google Trends: Check out Google Trends to see which niches are trending. But beware that even though a niche is trending upwards doesn’t mean it will have enough searches—or stay that way forever.
  • Order Volume: Pay close attention to a product’s order volume. This should give you a good idea of which products sell more than others. Just don’t rule out any products due to low order volume as they may be the next big thing.
  • Competitor Websites: Take a look at your competitors’ websites. They often organize product categories based on the trending items. This can also give you an insight into what products are selling most.


2. Do a Competitive Analysis

Now that you’ve decided what you’re going to sell. It is time you looked into who your competitors are. What are they selling, and how are they selling it?


Here are a few ways to do this:

  • Online Search: Search for the product in Google and see which websites appear on top of the search. These are your top online competitors in your location. If you’re selling the product in a different location, use tools like Ahrefs or SEMrush to find competitors in that location.
  • Alexa or SimilarWeb: Use these two websites to search for competitors that aren’t ranking on Google. These websites will list the competitors for you and give you information on product lists, website traffic, and social media handles.
  • Social Media: You can search for your competitors on social media as well. This will give you a better idea of their messaging and how they interact with their customers.


3. Find a Supplier

Now that the groundwork is done, it is time to find a supplier for your business. The supplier is the one who will warehouse and ship the product on your behalf.


Here is how you can do this:

  • Find: The best way to do this is to locate suppliers on AliExpress. Search for the product you want to sell and look at the list of suppliers. You can see the reviews and ratings of each supplier against their listing and use that for your decision.
  • Shortlist and Interview: Shortlist the top five to six suppliers. After shortlisting, it’s time to contact these suppliers and interview them. Ask them a few basic questions about the quality and origin of their product. This will allow you to narrow down your list.
  • Sample and Finalize: When you’ve reduced your list to three to four potential suppliers, you can now ask them to send samples to compare. You should compare shipping costs, packaging and product quality. Keep in mind what your customers want in a product before making a decision.


4. Build Your Online Store

There are quite a few steps involved in developing an e-commerce website but these are the major ones:

  • Get a domain name: You will need to get a domain name that matches your business’s name. It’s best to get a .com domain as that’s what most consumers are familiar with. You can also add your niche as a keyword in your domain name to help you rank higher in search engines.
  • Get an e-commerce platform: You can choose any platform of your choice, e.g. WooCommerce, PrestaShop or Shopify.
  • Choose a theme: Choose the design theme you want to go with. There are free and paid ones available for all e-commerce platforms.
  •  Build the store: The final step is to build the store and add your products and pricing.


5. Market Your Business

Now that the infrastructure is set up, it is time to let the world know that you are open for business.


To get the word out there, you can use techniques like:

  • Search Engine Optimization
  • Social media marketing
  • Email marketing
  • Influencer marketing
  • Affiliate marketing

Apart from these organic channels, you will also need to set aside a budget for online paid ads to give the business an initial boost.

If you’re creating a global business, localization is critical for customer experience. Localization molds your messaging according to the local customs of your audience, making rapport building easier.

If the product is sold in their language and relates to their customs, it will help them feel more connected to your business and encourage them to buy.

You have the option to localize the website yourself but that can get complicated. Instead, you can use a reputable online localization service to convert your message into the local language of your customers.


6. Optimize Your Business

Once the business is relatively stable, the optimizing stage begins.

Look at reports and analyze which marketing channels and strategies are performing better than others. Check out different audience segments, locations, and customer journeys to determine which are performing the best.

To help, you should use the right reporting tools like Google Analytics and social media insights.

This step is crucial as it will allow you to expand your business and generate more revenue consistently.


Is Starting a Dropshipping Business Really Worth It? 

If done correctly, a dropshipping business can be a profitable venture. We’ve provided you with the basic steps to starting your dropshipping business.

Overall, the key is to choose a popular product and sell it with your unique messaging, making it stand out in a market full of similar products. More often than not, marketing is what differentiates a successful dropshipping business from an unsuccessful one.


Remember, the best way to learn how to establish a successful dropshipping business is to take the leap of faith and execute the first step—knowledge will only take you so far, and that’s why DayBPO has the best professionals to help you expand your business globally.

What are you waiting for? Give us a call today at 1-800-215-9761 or via email: [email protected]