What is Dropshipping?

Dropshipping is when a third party (most likely the manufacturer or wholesaler) ships the products directly to your customers.

To put it simply, in dropshipping you sell products that you don’t own and don’t stock. The orders are sent from your store to a supplier who packages these goods and ships them to your customer on your behalf. This means that you never see or touch the products that you sell, but that doesn’t make dropshipping any less profitable or manageable.

How to Start dropshipping in 2022?

You can get started with dropshipping by following these steps:

1. Choose a dropshipping niche:

As with any business, it’s important to choose a niche that you enjoy.

If you’re passionate about your niche, it will be easier to spend time researching your competitors and searching for new products to sell. If you hate the niche, this is going to become much harder.

Think about what you’d like to sell. You may have a passion for a particular hobby or interest, if so, this would be a great place to start!

You’ll need to do some market research as well. You want to make sure there are enough people interested in buying the products you want to sell before you commit time and money into setting up your dropshipping store.

2. Select a dropshipping supplier

While there are different definitions and ways to execute a drop shipping plan, the basic idea is that you partner with a supplier who will ship products directly to your customer instead of shipping products to you first and then shipping them to your customer. This reduces additional overhead costs such as warehouse space and time. However, it is extremely important for a business owner to find the best suppliers for their business and keep these partners satisfied.

The great news is that there are many suppliers out there, offering a wide variety of products. And with new ones launching all the time, you’ll never be stuck for a choice.

But how do you find dropshipping suppliers? And how do you know which ones are reputable?

It’s important to make sure you select a drop shipper who is dependable and reliable. You want to make sure that they can handle the number of orders you are sending them and also fulfill orders in a timely manner.

The best way to find and choose the right drop shipper is to use an online marketplace that specializes in dropshipping. Some of the reputed websites include AliExpress, Zappos, and Salehoo.

There are also independent directories other than marketplaces like Worldwide Brands which provides you a list of verified vendors for almost all products in existence. One added advantage is that Worldwide Brands usually vet vendors and you will know exactly whether the vendor you’re dealing with is a wholesaler, manufacturer, or just a trader in their respective profile.

3. Create a professional website

The two most popular platforms for creating a dropshipping website are WordPress and Shopify. Both of these platforms are powerful and versatile, but they require different setups and different costs. Choosing which one is right for you depends on your needs, preferences, skillset, and budget.

First, let’s see what WordPress has to offer:

The most common plugin for WordPress sites is WooCommerce, which lets you sell both physical and digital products on your site.

WordPress is one of the most popular content management systems (CMS) for creating websites. According to recent research, WordPress is being used by more than 43% of all internet websites. If you’re planning to start a dropshipping business and want to save money on hosting fees, then your best bet would be to use WordPress.

WordPress is an ideal choice for dropshipping because it gives you the freedom to customize the look of your site. You don’t need to be limited by the themes that come with WordPress, because there are scores of free themes available online.

In addition to the easy customization, WordPress is easy to use and has a huge community of users who are willing to help out. There are lots of tutorials, forums, and FAQs on how to use WordPress that can answer any questions you have.

WordPress is open-source, so it is free to use. All you have to pay for is WordPress hosting, which comes to around $50 a year plus a domain which is usually $10.

Shopify on the other hand:

Shopify is a hosted eCommerce platform that allows users to set up their own online store to sell their products. It provides you with everything you need to create an online store and manage it with ease. Shopify is really easy to use and can be set up in just a few clicks.

You don’t need to know any coding or web development skills to use Shopify, just like WordPress.

You can run your Shopify store from any device. It’s also easy to add and edit content, making it easier for you to make changes as needed.

Shopify is a fully hosted platform, which means that the company takes care of all the technical aspects of running your store. Usually, a domain and hosting are included with Shopify’s package.

Shopify plans start as low as $29 a month, which is approximately $348 to start your site, in contrast to WordPress which costs approximately $60 to get your ball rolling.

The bottom line is that both Shopify and WordPress can be effective platforms for dropshipping, but they each have their own pros and cons. The right choice will depend on your specific needs.

4. Set up a payment gateway

Now that you have a working website powered by either WordPress or Shopify, now you have to accept payments on your website.

The payment gateway processes the credit card transaction. It authorizes the payment and sends the funds to your account.

Without a payment gateway, you can’t process credit cards.

You need a payment gateway if you want to accept credit cards online.

While the list of payment gateways available for use is huge, there are a few that shine above the rest for eCommerce. Below we’ve listed some of our favorite options.

PayPal

This is one of the most popular payment options around the world and is used by millions of small and large businesses alike. It’s a quick and easy checkout option for customers, and also offers fraud protection to help you feel secure accepting credit card information online with this gateway. PayPal can be integrated with WooCommerce, Shopify, Bigcommerce, Magento, and many other platforms.

Authorize.net

Authorize.net is a widely used payment gateway that allows businesses to accept credit card payments online and in person. The service offers 24/7 customer support in case something goes wrong, and has a fairly simple setup process. Authorize can be integrated with WooCommerce, Shopify, Magento, Bigcommerce, and more platforms.

Stripe

Stripe is one of the most popular payment gateways due in part to its ease of use and overall reliability. Stripe allows you to accept credit card payments online in an intuitive way that makes it easy for customers to use at checkout (it’s used by companies like Kickstarter).

5. Time to market!

When it comes to your business, you want to make sure that you are reaching out to as many people as possible. In order to do that, you need to make sure that you have a way of advertising and marketing. When it comes to marketing, there are a few different options. You could go with traditional marketing options like television commercials and radio ads, or you could go with something new like digital advertising.

Digital marketing is important in today’s world because it allows businesses the opportunity to reach a wider audience. If you are running a business then chances are you already know how important advertising is. The more people that know about your business, the more likely they will be to buy from you or at least consider buying from you in the future. That is why it is so important for businesses to advertise using all different types of media, including digital marketing.

If you have been thinking about trying out digital marketing for your business then here is why it might be a good idea for your company: It is cost-effective – One of the biggest reasons why digital marketing is so popular these days is because it is much cheaper than other forms of advertising. When you run a television commercial or an ad in the newspaper, those costs add up quickly. But with Digital marketing, you control how much you spend and you can get started with lower upfront costs than physical mediums.

Promote Your Products on Facebook and Instagram

Facebook and Instagram are the most-used social networks worldwide. They’re also useful for small businesses looking to promote their products, with 2.5 billion monthly active users between them.

Facebook is a great platform for selling products to existing customers and targeted audiences, while Instagram is perfect for engaging with users and attracting new customers.

While you can use Facebook or Instagram marketing strategies in isolation, they work best together because they allow you to provide different types of content to different audiences.

Facebook advertising is based on bids and you can bid for CPM (per 1000 impressions) based on your budget. Facebook and Instagram ads are considered the most cost-effective when compared with other online mediums.

Showcase Your Products on Google Ads

When customers search for your products online, you want to make sure your ads are at the top of the search results. Use Google Shopping to showcase your products on Google Ads across millions of sites and millions of apps, so that when people search for what they want, they can find what you have to sell.

When it comes to searching for something to buy, people often start in the same place: Google. Smart Shopping campaigns use machine learning — via Google’s automated bid strategies — to maximize conversions or sales while reaching people likely to be interested in your products. And with new features like Local Inventory Ads, you’ll be able to drive more qualified consumers into your local stores.

Smart Shopping campaigns use machine learning to help you reach relevant customers and advanced remarketing techniques to optimize bids and placements across the Display Network and Search Network.

Post Product Videos on Youtube

Product videos are a great way to earn engagement and trust with your potential customers. As of June 2018, YouTube had 1.8 billion monthly active users, who collectively watched five billion videos per day. The majority of these users were between the ages of 15 and 35, which is a key demographic for eCommerce businesses.

Most drop shippers use YouTube to share product reviews, demonstrations, and informational content.

Sharing product videos on YouTube also helps build a brand around a business’s products. These videos can be reviewed by Google and included in search results when consumers look for information about the items you sell.

As a bonus, uploading product videos to YouTube and including links back to your product’s page on your website will help improve your product’s organic ranking on Google’s search engine result pages, and bring more organic traffic.

Benefits of Dropshipping

While there are a number of pitfalls to consider, dropshipping does come with some great benefits.

Let’s take a look:

1. Low startup cost

Since you don’t need to purchase any products, the startup cost is much lower compared to a traditional brick-and-mortar business. Instead of investing in inventory, you only need enough money to build an eCommerce store and start marketing your business. It’s possible to launch a fully functional dropshipping business for less than $70.

2. No inventory costs

As someone who started my first online store without much cash, this was one of the most important benefits for me. Keeping inventory can get really expensive really fast especially if you sell products that are bulky or require special storage conditions (e.g., refrigerated storage).

3. No need to ship products

You never have to worry about packaging or shipping products because your supplier does it all for you. This means that as long as you can drive traffic and make sales your dropshipping business will run like clockwork!

4. 60%-70% profit margin

The wholesale price of most products is usually 50% of the retail price which means that after paying for the product from your supplier, advertising expenses, and other fees such as transaction fees or credit card processing fees, there is still plenty left over for profit!

5. No need to handle customer service

Most suppliers offer very good customer service so they will be happy if customers contact them with questions or problems regarding their orders. In other words, if someone contacts you with an issue regarding their order, it’s usually better for everyone involved if you forward their queries directly to your supplier (this also builds trust between yourself and your customers). I have found that suppliers are often better equipped at dealing with customers than small businesses anyway since they have more resources

Cons of Dropshipping

When you sell a product as a drop shipper, you’re relying on the supplier to send it out to your customer. If they miss that delivery date window, it reflects poorly on you, not them. In fact, your customers will look to you for their next steps if the shipment is late—an annoying part of your job that has nothing to do with the fulfillment process.

While some suppliers have streamlined shipping time frames and excellent track records in getting orders out on time (and in pristine condition), others… don’t. That’s why it’s important for dropshippers to vet multiple suppliers before settling on “the one.”

There are so many dropshipping companies out there with low prices and high-quality products that margins can be razor-thin. Margins will also depend greatly on the price point and quality of your products: If you’re selling $5 phone cases, chances are those margins aren’t going to be fantastic because most people don’t want to spend more than $10 or so for a cheap case that’ll probably break within a few months anyway.

Closing Thoughts

When people look to dropshipping as an alternative method of making a living, they tend to think of it as a safe bet. After all, the barrier to entry is low and you don’t need much capital to start up your own business. If you do some research, you’ll find plenty of success stories attesting that it can be lucrative.

But what these people don’t always realize is that there are also inherent risks that come with starting a dropshipping business. Most notable among them is the fact that you aren’t in direct control of the product quality or fulfillment process. This means that if anything happens—a supplier ships the wrong product or doesn’t ship on time—you’re responsible for making things right for the customer. And because the overhead is minimal when compared to other eCommerce businesses, many drop shippers rely on high volumes of sales rather than high profits from each sale. This makes it difficult for someone new to compete against established sellers who have already secured favorable partnerships with suppliers and the know-how to market their products effectively online.

This doesn’t mean those looking into starting a dropshipping business should avoid doing so altogether; just like any other job or venture, it comes with its pros and cons. However, before taking such an endeavor on, make sure that you understand both sides well enough so there are fewer surprises down the road.

Now, you’re already, all ready to start your Dropshipping business! Having questions? Or loved our article? then let us know in the comments below.