How to start a dropshipping business

How to start a dropshipping business

Have you ever thought about what dropshipping business is or why you should consider dropshipping? Well, to begin, Dropshipping is a way to sell products and it is a much more cost-effective business venture when compared to wholesale and retail. A lot of sellers prefer dropshipping when compared to wholesale and retail because they don’t need to have items in stock before they can earn money.

Dropshipping is a very lucrative business venture. It is a bold step into entrepreneurship, as you will be able to sell different items to customers, set your prices, and market your business. Below, you will learn how to start a successful dropshipping business.

What is dropshipping?

Dropshipping is an alternative to retail business, wherein a seller delivers a product to the customer without necessarily having that product in stock.

How does dropshipping work?

• A seller promotes a particular product
• An interested buyer places an order
• The seller asks for an upfront fee (like 30%)
• The buyer sends 30% of the price
• Seller adds his/her own money to the upfront fee
• The total amount will be sent to a wholesaler that has the item in stock
• The wholesaler will deliver the product to the customer
• After receiving the product, the buyer will send the remaining money to the seller

Easy, yeah? That’s how dropshipping works in a nutshell.

Can dropshipping work anywhere?

Yes, it can. Dropshipping is a popular business among youths. You won’t literally be doing anything stressful, as you will be outsourcing the inventory and logistics to a third party rather than doing it yourself.

Instead of managing your inventory and warehousing, you will place an order only after a customer requests a specific item.

Which business is better? Dropshipping vs wholesale:

It all depends on how you view it. It also depends on the amount of startup capital that you have.

A wholesale business is a great option if you have the capital and investors, as well as a registered business.

Dropshipping is a great option if you have a small business and a budget of less than $100.

This is because your stock will be available for purchase only after the customer has paid an upfront fee and booked. Your customer can be a final consumer or another retailer.

Is dropshipping worth it?

This is a question we can’t directly provide an answer to. However, we will list the advantages and disadvantages of the dropshipping business. This will help you in making the best decision.

Advantages of dropshipping

1. Dropshipping is a business that requires very little capital investment, unlike its retail and wholesale counterparts. You can start with as little as $50, it all depends on the type and quantity of products you’d like to dropship.

2. It’s a great avenue to make passive income

3. It’s quick and easy to start

4. You can work with multiple suppliers (wholesalers), and offer many products to your customers.

5. You can run your business from the convenience of your own home.

6. The logistics and shipping will be handled by your supplier. You only need to convince potential customers to purchase the product, place an order, and then send it to your supplier.

7. Lastly, you don’t have to buy or update your stock until a buyer places an order i.e You don’t have to worry about having a physical stock of products before you can sell something.

Disadvantages of dropshipping

1. Your customers are your responsibility and not the supplier. All eyes will be on you if there is a problem with the product.

2. If a product is delivered later than the due date, your customers might be angry at you. They might think you are a fraudster and it could affect your credibility until the day the product is delivered.

3. Since you are not physically in possession, it is impossible to know and do anything about the product’s quality. The best you can do is to find a trustworthy supplier.

4. Dropshipping is usually less profitable when compared to wholesale businesses. However dropshipping is almost free to start, so this is not a problem.

What do you need to start a dropshipping business?

1. A good business idea: A good business idea is the key to starting a successful dropshipping business. Ask yourself, What would you like to sell? You can go further to carve out a niche for yourself and determine the category of products you’d like to sell

2. Choose a good supplier; one that is trustworthy, reliable, and sells at a reasonable price so you can make a profit.

3. Create your online store: Get high-quality photos of the products from the supplier and upload them. Make sure to verify if the items are still available!

4. Open a business account: This will make your business more financially sound. To ensure proper financial management, you can put restrictions on your account.

Some Dropshipping Niches Ideas

• Men’s Clothing & Accessories Dropshipping Niches
• Women’s Fashion & Accessories Dropshipping Niches
• Hair Extensions and Wigs
• Phone Accessories Dropshipping Niches
• Health & Wellness Dropshipping Niches
• Kids & Babies Dropshipping Niches
• Home & Kitchen Dropshipping Niches
• Home and Pets
• Cars and Motorbikes
• Electronics

How to start your dropshipping business

1. Decide which product(s) to sell

This is your first dropshipping business. Many people who are new to the business are fond of selling anything which can lead to low sales.

Dropshipping is just like any other business. It is important to conduct market research and product research frequently. You can make use of tools such as Google Trends as well as social media platforms like Instagram and TikTok.

2. Find a trustworthy and reliable supplier

The supplier has the most important role to play in any dropshipping business, as they are the manufacturer or wholesaler of the item you wish to dropship. 

The suppliers also have an impact on the product’s quality, which will in turn affect the satisfaction of your customers. A supplier’s rating and reviews can help you identify a reliable one. It is also important to find out if they are willing to handle the logistics of delivery.

Most eCommerce platforms display this information on the profile of each supplier. Shopify, AliExpress, and Amazon all offer great suppliers.

3. Select a platform to sell your product

You need a platform to run your dropshipping business where you can upload the products you wish to sell. To create an online shop, you can use Shopify or WordPress.

You can sell online using sites such as Amazon, Jumia, Konga, Jiji, and many others.

NB: You can be on more than one platform, just ensure you check them frequently to know if a buyer placed an order.

4. Promote your business

Dropshipping is a business that requires you to be proactive. It is not enough to just sit back and hope buyers will find you. You have to approach them thus promoting your business.

To promote your products, you can use social media platforms such as Facebook, Instagram, and TikTok. You can also go further to post them on your WhatsApp status, however, sales will be restricted to your contact list.

5. Plan how your payments will be done

Dropshipping is a business where you send and receive money at regular intervals. The number of sales will determine the frequency. It’s therefore important to have a reliable system of payment that you can use to pay suppliers and receive payments from customers.

Below are the best payment options available to drop shippers. These can be used to settle all payments within and outside your locality.

• Stripe
• PayPal
• Paystack

Conclusion

Dropshipping can be a profitable venture for anyone looking to invest in it. You must ensure that all transactions are completed to the best of your ability. To stay informed about market trends, make sure you have enough information about your suppliers.

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