Look beyond the buzzword by considering these top options for how to start a dropshipping business that works.
With the dropshipping market set to grow to as much as $476.1 billion by 2026 as well as currently being used by as many as 40% of big-time retailers, it’s hardly surprising that this hot topic has become synonymous with self-made eCommerce success.
After all, this business model effectively sees you stepping into a ready-made enterprise with little more than the right connections and a savvy mind for marketing. That’s great news, but as you can probably guess from the fact that only 10-20% of dropshipping businesses actually succeed, this model isn’t quite as straightforward as we’d like to believe.
Dropshipping without a plan can prove especially problematic for your prospects and your chance at actually making a mark this way, which is why we’ve put together a complete guide about how to start a dropshipping business that works. Whether you’re looking for a side hustle or feel like taking on dropshipping as a full-time venture, keep on reading to find out everything you need to know about making that happen.
What is Dropshipping?
We’ve all heard of dropshipping, but as is often the case with these eCommerce buzzwords, few of us understand what it entails. One thing most of us do grasp, however, is the fact that dropshipping generally refers to an order fulfilment model that involves the selling of other people’s goods and services. Even better, dropshipping means that we can achieve this goal without the need for store, handling, or shipping capabilities.
So far so good, but this is where dropshipping gets a little more complicated. You see, selling another company’s stock doesn’t necessarily mean that you can just walk right into an existing market. In fact, the runaway successes that can be seen across the dropshipping scene are built on extensive market and product research, great websites, and excellent CX. Dropshipping companies that are literally going head-to-head with other platforms selling the same products especially need to perfect these focuses to get ahead and stay ahead with viable sales returns.
The Dropshipping Business Model
Dropshipping models rely on the participation of three key players – the customer, the online retailer (you), and your dropshipping supplier. As such, any dropshipping business model should begin with seeking a viable supplier. This can be achieved in two primary ways as follows –
- Using supplier databases like Dropship direct or Alibaba.
- Integrating a supplier directory like Oberlo into your store’s back end.
Once you’ve chosen your method, selecting products to display and sell through your site should be as easy as importing them with one click. After you’ve conducted all of that market research into their viability, of course! From there, dropshipping business models typically look a little like this –
- Customer purchase: A customer buys the product at the retail price you’ve set.
- Order forwarding: You forward their purchase details to the dropshipping supplier while paying their wholesale price.
- Business as normal: You can sit back and sell some more while your dropshipping supplier fulfils the order directly to your customer.
Tips To Start a Dropshipping Business From Home
While it might not necessarily be the simple sales model you were hoping for, the benefit of starting a dropshipping business from home speak for themselves. Furthermore, you can increase your chances of joining those runaway success stories by simply considering the following crucial tips for success –
1. Put a plan in place
Lacking plans and a general lacklustre dropshipping approach are perhaps the worst mistakes made in this market. To avoid these pitfalls, you need to take ample time to develop a strong dropshipping business idea and a plan that can see it through to fruition. This means picking a profitable niche, considering your pricing plans, and making sure that you know what you need to do on the marketing front.
2. Get Competitive
Dropshipping that sees you selling the exact same products as some of your competitors is even more grounded in competitive advantage than other business models. As such, a comprehensive analysis into what your competitors are doing is crucial for success. This is true both in terms of their marketing drives and with regards to their pricing models (which are easy enough to find with a quick Google search). From there, it’s worth returning to your own business model and making sure that your offerings are more tempting to a larger audience, either with price drops or winning marketing drives that get you seen far sooner.
3. Build The Best Business Store
Dropshipping might take care of the product/shipping side of things, but your online store is entirely down to you. Considering that you’re starting this business from scratch, affordable eCommerce platforms like Shopify are perhaps your best bet here and will provide you with established themes, fancy features and tools, and a drag-and-drop store you can be proud of. As business grows, it might even be worth bringing an outside web developer on board to make your site as professional as possible.
4. Keep One Eye On Marketing
Just because you don’t have to worry about product development doesn’t mean that you can sit back and let dropshipping work for itself. Success here is still dependent on hard work, only instead of making products, your earnings rest on your marketing drives. Keeping an eye on cutting-edge marketing ideas including influencer drives and social media coverage/ads is especially imperative for getting your products out there. Not to mention that, if you have the right tools to hand, the data that these platforms provide can help you to always keep marketing one step ahead by taking consumer needs into account at all times!
Dropshipping might not be the walk in the business park that certain success would have us believe, but the possibility to immediately implement a potentially profitable business in minutes still makes this a viable home business pursuit. Simply make sure you’re getting it right with these tips on how to start a dropshipping business, and with an ongoing understanding of what the dropshipping market actually entails.