How to Start a Dropshipping Business – An Ultimate Dropshipping Guide
Are you willing to know about how to start a dropshipping business?
All right, fine!
From our social channel, we have been receiving various queries that relate to the topic from ‘what is dropshipping’ to ‘how to earn a million dollars from dropshipping’.
But, first of all, I want to address those who don’t consider dropshipping as profitable and keep asking the same question,
Is Dropshipping Worth it?
Here are some facts about dropshipping to answer this question
As of 2017, 23% online sellers adopted the dropshipping model and made $85.1 billion in sales. Moreover, the business model is growing by 17% every year.
The manufacturers who dropship earn 18.88% more than traditional sellers.
Frankly speaking, it is one of the few businesses in the current era that you can start with minimal investment and low risk.
Now coming to all the queries from ambitious young entrepreneurs, who want to be a part of ecommerce circuit and have doubts about what is dropshipping and how does it work.
All those people who have a mild idea about the business model or want to scale to their dropshipping business.
This post is all for you all and answers to all the questions about dropshipping.
Are you excited?
So am I.
Here is what you are going to learn in next 20 minutes.
- 1- What is dropshipping
- 2- Pros and Cons of dropshipping
- 3- How to Start a dropshipping business
- 4- How to Write a Dropshipping Business Plan
- 5- How to do keyword research?
- 6- How to build an ecommerce website for a dropshipping business
- 7- How to Find Dropshipping Business Supplier
- 8- Aliexpress Suppliers
- 9- Importing from Aliexpress supplier via Oberlo
- 10- What are the best dropshipping niches?
- 11- 6 Best Profitable Niche for dropshipping
- 12- How to find the bestselling product for dropshipping
- 13- How to market dropship products?
- 14- How much you can earn from dropshipping
- 15- How to Start Dropshipping on Amazon
- 16- What is Private Label dropshipping?
- 17- What is Aliexpress dropshipping?
- 18- Dropshipping FAQs
So let’s start with the basics.
What is Dropshipping?
Dropshipping is an e-commerce business model where a seller can operate an online retail store without keeping or owning any inventory.
Yeah, that’s true! NO inventory!
So how does dropshipping work?
You can sell without any inventory.
Still not clear
Ok, here is how dropshipping works, pay attention.
Imagine you set up an ecommerce store and consider it as a showroom.
Find a supplier who took the images of their products.
Post those images on your store as your product.
A customer comes to your store, likes the product, adds the item to his cart, buys the product, and pays you the amount.
But you don’t have the product.
Your supplier has the items.
Here’s the trick!
Once you receive the order, you send the order details to the supplier.
Your supplier then directly ships the product to your customer.
So, the customer gets the product, but how do you earn from dropshipping?
Customer pays you, not your supplier. You then pay your supplier.
You can charge any amount from your customer and pay supplier his price.
The remaining amount is your pure profits.
Did you get it? Great!
Pros and Cons of Dropshipping
Every coin has two sides; similar goes with dropshipping.
I am trying to be super honest to tell you about the pros and cons of dropshipping.
So, let start with the pros of dropshipping,
Easy to setup and low startup cost
Every ecommerce entrepreneur knows how easy it gets when you do not have to take care of your warehouse or inventory.
82% of businesses fail due to cash flow issues. Dropshipping does not require much investment to start and need only a few things to setup such as:
- Ecommerce Platform e.g., Shopify or WooCommerce (website and hosting)
- Laptop and internet connection
That’s it! These are the mundane things you need to start a dropshipping business.
Sell from anywhere
Portability in a business is the biggest advantage of dropshipping. You do not need to stick to one place to operate your dropshipping store, you can manage it from anywhere on the globe. All you need is an internet connection and a device (mobile or laptop) to run your business.
Another advantage of dropshipping is that it opens the cross-border opportunities.
You can sell globally where shipping is allowed and find your niche and target them without any restrictions.
Easy to handle (Automation)
One of the reasons that makes dropshipping easier to handle is the ability to automate your operations.
Apps like Oberlo makes it a lot easier to import product details on your Shopify store from supplier’s store (Aliexpress).
It automates the process and allows you to keep your focus on marketing to increase your consumer base.
Also, you do not have to handle any inventory or own a warehouse to keep your stocks, which is a great relief.
You are the boss
Become your own boss!
Imagine how cool it is to work from anywhere, work on your passion, and don’t have to report to anyone else other than yourself.
Dropshipping is the most comprehensive gateway to become a sole entrepreneur.
Dropshipping can start with little investment and low entry barriers that means a lot of competition.
With growing competition, there is an increasing difficulty in having an exclusive deal with the suppliers.
That means you will find a higher competition in the market you want to penetrate. Competitors might be selling the same product that you are selling in low competitive prices.
No control on supply chain
In dropshipping business – you do not have the inventory – so do not have control over the fulfillment process and inventory issues.
You are totally at the mercy of your supplier to handle delays and return policies.
Communication channel issue
Because you are in a loop of communication between your customer and supplier, it becomes difficult to maintain clarity between different communication channels.
If one communication slows down, it will affect all other communication channels and resulted in solution delays.
Need a lot of research to find the right niche
The success in dropshipping is highly dependent on how long it takes to find your winning product.
You have all the niches open in front of you but it takes a lot of research to find out your target market and testing a lot of product to find your winning item.
Well, the idea of listing down the pros and cons is to give you a clear picture of dropshipping. However, it depends on how well you can avail the benefits from pros and what plans you have to deal with the cons.
How to Start a Dropshipping Business
I hope the concept of dropshipping is clear by now.
Now comes the fun part! Here I am going to tell you about how to start a dropshipping business in 4 simple steps.
Step – 1 Research for Niche/Product
Primarily, you must know the niche you want to sell.
There are many ways to find the right niche and they range from finding trending products to getting into any very specific niche that has rare products.
Before setting up a store, get an idea about the products you want to sell. Choose a specific item and test your product in that particular niche, and eventually, you will find your winning product.
To get some ideas about niches, download this guide for FREE – 725 Evergreen and Profitable Niches.
To select a product for dropshipping do check out this guide ‘how to search for a dropshipping product on Aliexpress.
You can use a variety of data analysis tools to search for products to sell on your online store,
- Google Trends
- Google Keyword Planner
- Manual products research on ecommerce marketplace (Aliexpress, Amazon, eBay etc.)
- Use a supplier directory e.g. Oberlo
Step – 2 Setup an Ecommerce Store
For dropshipping business, Shopify is considered the best and easy to use platform for the new entrepreneur, or those who want to set an ecommerce store without getting into the hassle of coding and programming.
Those who are not familiar with ecommerce platform – these are the platforms that provide you the storefront of your online business.
Similarly, Shopify is an ecommerce platform that helps to create and customize the ecommerce store.
You can use Shopify Apps and themes to customize your store.
Shopify is a cloud-based and hosted platform that means you can operate Shopify from anywhere in the world with just an internet connection.
To use Shopify, you need to buy its plans. Its basic plan starts from $29/month, which is excellent for the dropshipping business.
Shopify also offers a lite plan that allows you to display your products on Facebook and sell to your customer via Facebook by using the shop section.
In this scenario, you can start directly on Facebook with the help of Shopify or use any existing website and integrate it with Shopify lite.
You can select either of the plans as both are amazing for dropshipping business.
Step 3 – Look Out for Verified Supplier
In dropshipping model, supplier is the ultimate king that has the power to make or break your business.
Finding a supplier can be a tough task if you do not know the pattern where to begin.
To do in-depth searches of supplier, do check out the list of suppliers for a dropshipping business for different niches.
Here is the list of some general dropshipping suppliers,
- Aliexpress ( Free to sign-up)
- DropshipDirect ( Free to sign-up)
- Wholesale Central ( Free to sign-up)
- Salehoo ($67/month)
- Worldwide Brands ($249 one-time fee)
- Doba ($29/month)
- Wholesale2B ($24.99)
In dropshipping business, the best way to keep control you need to have two to three suppliers in your link that sells the same kind of products. This will help you to stay in the safe zone in the time of trouble.
For the beginners, the most sought after dropshipper website is Aliexpress, which is free and easy to find the relevant supplier.
In Aliexpress dropshipping, you can find multiple suppliers and can check their credibility with the reviews.
I would suggest using verified supplier of Oberlo, however, from 15th July 2019 Oberlo supplier will be removed. So that’s not an option now.
You also have other options where you can do manual supplier research on your own such as:
- Google Search
- Subscribing to Supplier Directories
- Contacting Manufacturers directly
Step 4 – Marketing and Promotion
Organic traffic is significant for any website and business, but it takes a lot of time to reach the audience with SEO.
So, for initial sales, you need paid traffic, which I also recommend.
Marketing and promotion in dropshipping business are not about making sales; it is more about finding that one winning product which could help you to earn hundreds and thousands of dollars.
Search Engine Marketing and Facebook Marketing both are essential in dropshipping.
However, Facebook marketing is more likely to get you fruitful results as it gives you the audience insights, and with detailed targeting, you can easily retarget the audience who can become your potential customer.
Check out this Facebook Ads Guide to make your Facebook ad flawless.
It takes on an average of testing at least 20 products to get that one winning product for your dropshipping store. So keep testing.
These are the steps, which you have to go through to start a dropshipping business.
How to Write a Dropshipping Business Plan
You know how to start a dropshipping business, now you need a business plan to follow.
But first, understand what a business plan is.
What is a Business Plan?
Business Plan is an instructional document in which you outline your goals and the strategies to achieve those goals.
It is a guide that you use to start, running, and growing your business.
In the business plan, the primary focus goes on the capital and the productive usage of that capital to get a positive ROI (Return on Investment).
However, in the dropshipping business, the capital has not had much of a significance.
To create a dropshipping business, you may need to ask the following questions to yourself that includes why, what, and how.
- Why do you want to start a dropshipping business?
- What skills do you possess to scale up this business?
- How can you establish a successful dropshipping business?
A traditional business plan contains several steps that include an executive summary, company description, marketing analysis, product & services, marketing, and funding request.
In dropshipping business, you are most likely to start as a solopreneur or in partnership with a couple of friends.
Therefore, you need some of the steps to follow the traditional business plan.
The drop shipping business is wholly based on physical product selling, here you would mention the plans for selling trending products and how would the products provide value to your customer who would like to pay for it.
Besides, you should also describe the unique selling point of your product, pricing strategy to outrank your competition, production, supplies, and delivery process as well as profit margin expectation.
By getting all these answers, you would have a better visualization of your dropshipping business.
Research and learn about your target consumer base that could become your potential buyer.
Dropshipping business requires a study of projected growth of the products.
To do so, you can use Facebook detailed targeting and Facebook audience insights to estimate the size and potential of your target audience on the largest social media platform.
You can also search on ecommerce marketplaces (such as Amazon, Aliexpress, etc.) to look out for the best-selling product and most sought after categories.
Google trends is also an amazing tool to see how often people search for the product that you are offering. You can see the graph of the trend of up to the last 15 years.
Marketing and Sales
In this section, you will tell your plans on how will you reach and sell your product to your target market.
Show your strategies of advertisement you are planning to use that you will use to target your audience that includes SEM (Search engine marketing), social media marketing (Facebook & Instagram ads) and email marketing.
The simplest way to strategize your advertising is to do a Google search of your competitors business, go through their website, social media channels, and their marketing strategy for their products.
To search for competitors operation you can use some paid source such as Jungle Scout – To understand how it works check out the detail Jungle Scout Review.
Study the competitor’s approaches and take inspiration to make your advertisement plans.
As I said before that in dropshipping business, you probably started your business as solopreneur or in a partnership with your friends.
You should keep the past education, skill, and experience into consideration of yours and your partners that would help to run your business successfully.
You need to assign relevant experience and skills of yourself and your associates in the right places to make full use out of the expertise.
To distribute the workload you might need to hire a VA (Virtual Assistant) to respond on email and handle customer queries.
That’s it, these were the steps that are required in making a dropshipping business plan.
It does not require much capital and fund that you cannot arrange on your own.
You are the boss of this business, so you only need to have a financial projection for yourself.
How to Do Keyword Research?
Keyword research is the most crucial part of online selling.
You have to know what terms your potential customers are typing to get to your product.
However, free keyword tool is also available that do pretty amazing jobs for newbie entrepreneur.
A free extension helps to tell about the search volume of a particular keyword.
How to use it
Go to keywordeverywhere.com and click “Install to Chrome” or Install to Firefox”
It depends on what browser you use.
Click any one of them you will get the option to install the extension.
The extension will be installed in your browser then you will have to enter your email to get the free API key.
Open your email, click to API link, and copy the API.
Now click the extension, go to settings, enter API and click ‘validate’.
Now you can use keyword everywhere extension.
Let say, you are selling mobile accessories and searching for the keyword, “Mobile holder”
You can see the volume of this keyword is 14,800/per month which is great numbers.
In addition, you can see the CPC (Cost per click) rate, which means how much advertisers are bidding for this keyword.
Other than that, you can also see the related keyword along with their search volume and CPC rate.
By scrolling down, you can also see more keyword related to your keyword.
It is a free keyword research tool by Neil Patel – Digital marketing influencer.
Go to Ubeersuggest and write the keyword in the search bar.
You will have a complete report of search volume, SEO difficulty, paid difficulty and CPC rate.
You can also keyword ideas that are similar or related keyword that your customer is searching.
As you can see, it gave me 92 keyword ideas that have more search volume.
How to Build an Ecommerce Website for a Dropshipping Business
To make an ecommerce website for your dropshipping business you need to select an ecommerce platform to set up your dropshipping store.
Dropshipping is relatively easy to set up than an ecommerce store as you do not have to maintain or store your inventory and warehouse. Nonetheless, some hurdles are always present that comes as counterproductive elements for dropshipping business.
So before selecting an ecommerce platform, you have to consider certain factors before choosing an ecommerce platform. They include,
- Easy to use platform
- Supportive plugins for a dropship store
- Tools and apps to scale up the dropshipping store
- 24/7 support
Keeping the criteria as mentioned above in mind for dropshipping business, the best ecommerce platform present is Shopify.
Check out the step by step detailed instructional guide of Shopify Dropshipping here.
Although you can also choose WooCommerce, it is an excellent platform for dropshipping.
Shopify provides all necessary elements, tools, and apps to make a prolific ecommerce store. And most importantly it is easy to use.
Shopify App Oberlo helps you to find the best supplier from Aliexpress and import products to your dropshipping store.
Free and paid Shopify themes to help to build up your dropshipping store without any hassle and technical expertise.
Here is how you can build your dropshipping store website on Shopify in four simple steps.
1. Start 14 days free trial and create your Shopify store
You can set up your Shopify by taking a 14-days free trial on Shopify.
Its user-friendly interface that any newbie can easily understand helps you customize the store as per your preference.
2. Install Oberlo App or Chrome extension to import product in your Shopify store
Just go the Shopify App store (Shopify dashboard > Apps > App Store) and search Oberlo and click install.
With the Oberlo App, you can search for the product and with just one click, you can import the product in your product list.
Moreover, you can add the product with Oberlo Chrome Extension that is much easier.
For that, you need to have the Google Chrome browser for that.
Go to Chrome web store > search Oberlo > click add to chrome.
That’s it. The Oberlo extension has been installed.
Now go to Aliexpress.com search product you want to sell in your store and clicked Oberlo extension > Import product.
I searched for this Avengers hoodie on Aliexpress, clicked Oberlo extension, and imported it on my Shopify store.
See how simple was that.
3. Add a domain name
In Shopify store, you will have to buy a domain name to make your dropshipping name look credible. Otherwise, your store domain will look like this – yourstore.myshopify.com
Go to Shopify dashboard > Online store > Domain > Buy a new domain
You can also add any current existing domain if you already have one or you could buy a domain name from godaddy.com and add in your existing domain.
Or else, you can buy a domain from Shopify.
Click ‘buy a new domain name.’ Write a domain name you want; it will give you the suggestion that is available or not.
Click ‘buy’ you will have to enter your bank account information for payment.
4. Buy Shopify plans to live your store
Now you have setup your store, you are only one step away from making your store live.
You will have to buy a plan of Shopify to live your store.
Shopify offers three plans, for the newbies, I recommend to take a basic plan for $29/month it provides the entire essential tools for a dropshipping business.
Shopify is the platform that provides free training and resources that is necessary to start an ecommerce store.
How to Find Dropshipping Business Supplier
In a dropshipping business, finding the best supplier is half-the-job-done.
You do not have any control over the supply and shipment of the product, so you need to choose the best supplier for your dropshipping business and have smooth business operations.
Choosing the Chinese supplier is the best option to get excellent quality products at low prices.
Once you find out your niche, it is the time to find suppliers. Finding the right suppliers for dropshipping business is easier-said-than-done.
Fortunately, with Aliexpress, it has become much more comfortable.
Aliexpress has hundreds and thousands of supplier that you can say as a reliable supplier based on the rating given by their clients.
The rating of Aliexpress suppliers is based on three parameters:
- Right Item delivery
- Good communication to take care of the issues with clients
- On-time shipment
Surprisingly, these are the necessary quality on which you validate a supplier for dropshipping business.
So, to select a supplier from Aliexpress do check out their rating.
You need to evaluate the rating on these bases,
- Supplier should have an experience of at least 3+ years.
- Good feedback on the product you plan to dropship
- The supplier should have an overall rating of 90+.
These steps must fulfill to assure the smooth run of your dropshipping business.
If you still cannot find a supplier as per your preference then do check out the list of best suppliers from different niches.
If you set up your store on Shopify and importing your product from Oberlo it becomes so much easier to import the product from Aliexpress.
Importing from Aliexpress supplier via Oberlo
When you supply the products from Aliexpress, there are higher chances that the supplier put its logo or branding on the items that are delivered to your customers.
By reaching out to Aliexpress supplier via Oberlo, you can send a personal note to the supplier stating that you are a dropshipper so send the product to the customer without its branding, logo or offers.
Oberlo Verified Supplier
I would have suggested the verified supplier of Oberlo however, from 15th July 2019 Oberlo supplier will be removed. So that’s not an option now.
What are the Best Dropshipping Niches?
Before selecting to penetrate into any niche, keep these in mind when searching for your dropshipping products,
- The product should be lightweight.
- Avoid dropship electronic or mechanical products.
- The product should not easily breakable.
- Should not be too expensive range between 5 – 40 USD.
- Product should have an impulse buying feature.
By keeping all these factors in mind here is a list of some best dropshipping niches and the trending products in those niches.
6 Best Profitable Niche for Dropshipping
Men & Women Clothing
Clothing is one of the most profitable and evergreen niches in the dropshipping industry.
The profit margins are high, the shipment is cheap, and it has an impulse buying feature.
I recommend you to target men and women clothing as a separate niche to get more in-depth targeting. However, fashion has become androgynous (unisex) and you get more chances to sell clothes that are unisex in nature such as Blazer and Cardigan.
In this niche, you also have the opportunity to create sub-niches fall under men and women clothing such as,
- Inner wear (shapewear, compression wear)
- Athletic wear
- Casual clothing (T-shirts)
- Coats and Blazers
- Formal clothing
Automobile accessories are a different beast. They are the things that ease the driving experience and help in the maintenance of automobiles.
Here is the list of some trending automobile accessories in 2019 that you can quickly sell on your dropshipping store and make excellent profits:
- Car mobile holder
- Car diffuser
- Windshield repair kit
- Car wrap sheet roll
- Dent repair tool
Accessories (Jewelry & Watches)
Accessories are an evergreen niche in the dropshipping industry.
The niche contains products that you can easily buy cheaply from suppliers and sell them 5x the actual price.
Here are some sub-niches under accessories category that can become a game-changing product for your dropshipping store:
- Enamel pins
- Locket, rings, and bracelets
- Sports watches
- Wallets & belts
- Mugs, cups, and glasses
Home & Kitchen Appliances
By 2023, user penetration in the home appliance is expected to grow up to 32.4% in the UK alone. And that’s only the UK. Home and kitchen appliances have high penetration in other nations and it shows the niches potential.
It shows how much people are looking for home appliances and similar product. Two primary reasons that online buyer look for home appliances are:
- These products can easily gain trust
- Hard to find in brick-and-mortar stores
That’s why buyers quickly purchase them once they see them listed online.
Here is a list of some of sub-niches in home appliances that could become a winning product for your dropshipping store.
- Bar Stools
- Pillows & Cushions
- Fancy chairs
- Steel Pan & Woks
Beauty & Healthcare Products
You can get a lot of profitable products from beauty and healthcare niche. It has many branches that have higher profits with lesser shipping and selling issues.
People are always concerned about their health and beauty, which leads them to search for products that can cure their health issue and groom their personality.
Here are some of sub-niches and product ideas that you can dropship very easily:
- Feminine care & Hygiene products (such as tooth floss, facial tissues)
- Natural healthy oil & ointments (avocado oil)
- Makeup products
Bags & Shoes
Bags and shoes niche has a universal appeal that is never going to end soon. Bags and shoes also have an impulse buying nature which is aids in their promotion.
You do not have to put much effort to entice the online buyer to purchase these products.
Here is a list of some sub-niches and product ideas:
- Traveling backpacks
- Hiking shoes
- Formal shoes
- School & college bags
- Casual shoes
Want to know more about the profitable niche?
Download this FREE eBook of 725 most profitable ecommerce niches.
How to find the bestselling product for dropshipping
The success of dropshipping business is highly dependent on finding a profitable and bestselling product to sell.
There are multiple ways, paid and unpaid, to find out the best-selling products to sell online.
However, I will tell you a simplest and free way to find out bestselling product of your niche in 4 steps.
Step –1 Find product on Amazon Best Seller
Go to Amazon bestseller you will find the list of bestselling product on Amazon in every category.
This list is updated on an hourly basis.
Amazon is the biggest ecommerce marketplace and the product that is selling well here has higher chances of becoming the bestseller product of your store.
For example, my niche is baby care product, so I go to find the bestselling item of the baby product on Amazon.
I found out this carrot shaped baby teether ii the bestselling item list.
Step – 2 Find the Product on Aliexpress
After that, I went to Aliexpress to find the same item see if I can sell it in profitable rates.
Here I found my product in cheap price on Aliexpress. It means I can have a decent profit margin on this item.
Step – 3 Search the Term on Google Trend
Now I want to know this product’s worldwide trend to know how much people are searching for this product.
The worldwide trend is showing an upward trend for the baby teether that means it is the trending product right now.
I scrolled down to see the region where this product is the hottest right.
So I figured that I should target Singapore, Philippines, Australia, and Malaysia to sell this product.
Step – 4 Check the search volume on Google
As I have taught you earlier how to use keyword everywhere to know the search volume of any keyword.
Now, just write this keyword on Google and turn on the keyword everywhere extension to know the search volume.
The search volume for this keyword is 3900 that is very impressive.
This simple research suggested me that I should be selling ‘baby teether’ in my store and it could bestseller product of my dropshipping store.
I hope now you understand how to find the bestselling product.
To learn more tricks of finding the bestselling product do check out this post, ‘15 Killer Hacks to Find Bestselling Products.’
How to Market Dropship Products?
Marketing is an essential part to earn profits from your dropshipping business.
In dropshipping, it is all about finding that one product in your niche that helps you to earn hundreds and thousands of dollars or even a million dollars in some cases.
To do so, you need consistent testing of products to find your winning combination.
Sell Products with Facebook Ads
Run individual ads on all the products in your list and check out their response.
On average, it takes 20 products to find a winning item.
Once you run your ad of products, start retargeting by making custom audience – target those audiences who have interacted on your ad – there is a high chance to convert these people to your potential customer.
The product that gets more responses in terms of like, comments or views has higher chances to become your winning product.
So, this was the trick to find your winning products, nonetheless, to make initial sales of products, you need to check out the following strategies.
I am taking some insights from the researched post on our channel that defines strategies to get the first sale in the ecommerce business, here are some takeaways.
Reach Out Relevant Influencer
Instagram helps in an excellent way for micro and macro influencers to create a huge fan following.
You need to find out a relevant influencer that can review products of your niche, give a shout-out on their Instagram stories, or offer discount vouchers of your products.
Maybe big influencer does not agree on your terms unless you pay their fees.
However, you can use a couple of micro-influencers by giving them some free sample of your products.
Check out this video to find a reliable and relevant Instagram influencer:
Ask Your Friends to Make a Purchase
You need initial traffic on your website. The best way to do this is by asking your friends and family to make purchases on your online store and write some reviews about the product, hence promoting word-of-mouth marketing.
You can also provide them some free products in exchange for asking them to share your product links to their connections.
Offer Discounts and Coupons
Offering discount vouchers is the most conventional way of marketing yet the most effective way to make your first sale.
You can set some conditions on discount offers.
For example, invite three people to the store by your reference and get 50% discount on your purchase.
Sell in Ecommerce Marketplaces
Start selling your products on multiple marketplaces such as Amazon and Ebay.
In these marketplaces, there are higher chances to target the customer who is searching for products that you are selling.
Also, you can run ads to show your ad on the top search for a particular keyword to increases the chances of sales.
Ranking on the top will increase your chances to make your first sales quicker.
How Much You Can Earn From Dropshipping
What if I tell, you can earn over a million dollar from the dropshipping business.
I am not kidding, you can actually earn in a six figures revenue form dropshipping with right targeting and finding the right niche.
I have gone through the interview the multimillionaire dropshipper Fred Lam who earn millions in a year just by identifying his winning products.
Here are some outtakes from his interview,
Create Connection between Product and Customer
Fred said that it is really important that your customer feels a connection with the products.
He tried to target the niche of accessories such as jewelry, watches, wallet, etc. However, the focus of Fred was to create a connection between the product and the customer.
To achieve this goal Fred aimed for narrow targeting. Here how he did it.
Fled adopted the approach flex approach – narrowing your audience. The product that helped Fred to earn a million dollars in a year was this butterfly watch.
To narrow down his target audience he targeted those who have a keen interest in butterflies after that he made it narrower by targeting those who are interested in accessories.
This step gave him the potential customer base for his store and took his store earning in five figures in just the matters of days.
Continue data analysis
He constantly emphasized in his interview to focus on data and continue to analyze. Run ads and see the result as that is an effective way you will get to know what your audience is demanding.
By continuously running ads and taking insights into your ads, you will get to know about the products that your audience like or dislike.
Start eliminating the products that receive few or inadequate responses and increases the advertisement of products with good response. That is how you will find your winning product.
Switch Targeting from Narrow to Broad
Once you find your subscriber (those who like your page, response on your post or purchase from your store), you need to find out the lookalike audience, similar to your subscriber.
Facebook ads will do the job here and it is the time to do aggressive advertisement on the lookalike audience to get three times to return on sales.
The Facebook insight will help you to pick up more winning products. An average ad price that is recommended to spend on an ad is $5 dollar a day.
In that price with the help of click, impression, CPA (cost per acquisition) and CTR (click through rate) you will easily figure out what is working and what should take off from the listing.
Going for the lookalike audience will lower your risk of ad irrelevancy; it would make sure that the right audience is watching your ad.
This approach helped Fred to earn $6 million in one year.
In our channels there is interview published of a dropshipper Mr. Dishawn Smith who earned 0 to 30K USD in 30 days in his dropshipping business.
Check out his interview to get more ideas to earn money from dropshipping.
How to Start Dropshipping on Amazon
Can I dropship on Amazon?
Yes, you can dropship on Amazon.
Amazon allows dropshipping, however, there are some policies of dos and don’ts that you need to follow if you want to dropship in their marketplace.
Here is the dropship policy of Amazon,
How to Dropship on Amazon
Create an Amazon Seller Account
To become an Amazon seller, Amazon offers two accounts; professional seller account ($39.99/month) and individual seller account ($0.99 charged per item sell).
I personally recommend selecting individual seller account first and once you pick your pace of selling on Amazon then switch your account to professional.
To become a seller, you need to register yourself with your email address on Amazon seller central.
Get product category approval
You need Amazon’s approval to sell a certain kind of product. You can view the approval requirement of each category individually.
Integrate Amazon Account to Your Ecommerce Platform
As I mentioned earlier, you can sync the dropshipping website with your store on Amazon.
How to Add Amazon Account on Shopify
Go to the left sidebar and click sale channels
Multiple options of sales channel would pop-up, come to Amazon and click it.
Then click ‘Connect to Amazon’ to continue your product listing on Amazon.
Create Product Listing on Amazon
Now your ecommerce store has been connected to Amazon. Here is what you need to do next.
Click on the Amazon sales channel link and go to Shopify left panel.
Click ‘create listing’.
Click Select Product.
Two options will pop-up.
As a dropshipper, you will click on the second option ‘This product is made by another brand.’
Now, you will be able to search for the product to become a seller for that SKU.
Once you find the product click ‘select’.
Lastly, click ‘publish’ for the process to be completed.
What is Private Label dropshipping?
Private label dropshipping is to buy goods put your brand name and resale it on profit.
In this process, the manufacturer makes the products but it is sold under sellers’ brand name.
Private label dropshipping has higher acceptance among people. Because the product that customer receives comes with the name of the seller that increase the trust of the buyer on the company.
The retailer has more control on the quality as the seller can contact the manufacturer and can tell their requirements of quality.
It is a different dropshipping model. You need a large capital to order stock, keep in your warehouse and ship it.
So, it is not exactly dropshipping.
Here is a list of good private label dropshipping suppliers,
- Dropship direct
- China brand
What is Aliexpress dropshipping?
Many people ask this question.
It is nothing new it is basically dropshipping.
You need to set up an ecommerce store like Shopify or have a store on ecommerce marketplace like Amazon.
When a customer makes a purchase from your ecommerce store or your Amazon store, you directed that order to your Aliexpress supplier.
You pay the supplier,
The supplier sends the product to your customer,
And, you receive the payment from your customer with a profit margin.
The customers do not find out about the product coming from Aliexpress. They believe it is coming from your store.
If you following this post then the idea of Aliexpress dropshipping must have been absolutely clear now.
Q:1 Is Aliexpress dropshipping dead?
No, it is not, the reason this question arises often is that dropshippers do not resolve customer queries quickly. Treat your customer with excellent services as well as maintaining a good relationship with your supplier, and you will never have any issue with your dropshipping business.
Q: 2 Is dropshipping ethical?
Yes, it is ethical. You are buying the product from the supplier and you are selling the product further for profits, which means you are paying for your merchandise.
Q: 3 Does anyone make money from Shopify dropshipping?
Just read two great success stories who earn over a million dollar from their Shopify dropshipping business.
Q: 4 Minimum how cost does it require to dropshipping?
Let’s break down the cost on a minimum level.
- Dropshipping setup cost:
Shopify minimum cost to start a store is from $29/month.
But if we go for the minimum cost, you do not need to build your ecommerce store.
You can start dropshipping from Facebook by taking Shopify lite plan which costs $9/month.
- Supplier cost:
Well, you only pay to the supplier when you receive the order from your customer.
However, the payment of your customer could take weeks to clear, so you need to have some finances in your hand to keep cash flow cycle running.
For that, $150 – 200 would be enough to pay your supplier initially then you will receive payment from your customer.
- Advertisement cost:
To make the initial sales, you will have to spend money on Facebook advertising.
This cost is significant if you are selling five units and assigning $5/day for one unit.
So, you need $25/day to run an ad for all five units. If you run an ad for ten days, that means you need $250 to run an ad for ten days.
As per our calculation, you need to have around $400 – 450 in your hand to start a dropshipping business.
Q: 5 What is the difference between dropshipping and dropsurfing?
There is relatively the same thing.
Dropsurfing is actually dropshipping; you just have multiple suppliers to get the best product.
In dropsurfing, you keep your contact with more than one supplier so you can choose the supplier as per your preference.
In simple words, if you find more than one supplier in your dropshipping business that becomes dropsurfing.
Q: 6 What are the most profitable dropshipping product?
It highly depends on what is trending. To find out the best trending products, do check out this post – 91 trending products to sell online in 2019.
Q: 7 How much money do you need to start a dropshipping business?
To start a good dropshipping business you need to have at least $500 to start and $200 – 300 for cash flow.
Q: 8 do I need an EIN for dropshipping?
Identification number (EIN), works as a security number for the business.
A business owner needs this number to file taxes, open a bank account, apply for wholesale dropshipping accounts, and much more to do anything related to your business.
So, yes, you’d better have an EIN to start a dropshipping business.
Q: 9 Do you need a business license for dropshipping?
It varies from country’s policies you sell from, but it does not require any license to start a dropshipping business.
Q: 10 Dropshipping vs affiliate, which is more profitable?
Dropshipping is much more profitable than affiliate unless you have some traffic on your website.
Let’s put it this way; your aim is to earn $10,000/month.
If you are a dropshipper, and you earn $10 in profit. To earn 10k a month, you need to make $334/day that means you need to sell at least 34 items per day.
If you are an affiliate marketer, and get a 10% commission on each sale, to earn $334/day, your customers need to purchase at least $3400 per day so can make $10,000/month.
Hence proven, dropshipping is much easier to start and more profitable business model.
In this guide, I tried to cover all the concerns regarding dropshipping – from its definition to generating revenue.
I hope you got all the answers and can easily start your dropshipping business by just following the simple steps mentioned in this guide.
Here are some points that I would like you to memorize by heart.
- Find a niche with which you are well aware and connected. So you have an idea about the trend and ups-and-downs of the market that helps you match the consumer’s intent.
- Figure out the winning products of your eStore by evaluating through advertisement data.
- Increase your store’s digital presence by joining different eCommerce marketplaces such as Amazon, eBay, Etsy, etc.
Remember these three steps at the start of the dropshipping business that would definitely give you the initial sales.
Dropshipping takes time, care, and regular testing, but the results are always fruitful if you maintain the focus.
You probably have gotten every answer of the query related to dropshipping, in case you find something missing or uncover feel free to comment down below. We are very active in the comment sections.