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2021 Guide To Making Money With Dropshipping

January 27 2021 04:52
Winnie
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Suppose you have been thinking about starting an e-commerce business, but you don't know where to begin or what to sell. If you want to avoid investing money upfront and don't have warehouse space, then dropshipping is just what you're looking for.

To get started, you'll need just a few things: A computer, an online store, and a basic understanding of how to market and sell products online. Have what you need? Let's get started!

First, think about products you may want to potentially sell from suppliers; once decided, list the products to your store and set a price. When products sell at the retail price you selected, you get paid. The orders are then placed with suppliers at wholesale price (saving you money), and the difference is your profit! Products are directly shipped to customers with no need to worry about shipping logistics.

Now you may have this question in mind: Why wouldn't customers just buy directly from the supplier's website?

There are a few reasons for this. Let's talk about it:

  1. Reliable Suppliers: The internet is a vast place; finding reliable suppliers or any suppliers at all is difficult.

  2. Not Just A Product: When customers are buying goods, they are not just buying the products. The marketing,  positioning, trust, brand, and lifestyle represented by the product are also being consumed. Dropshipping allows you to focus on marketing the product and providing real value to the right audience.

Because dropshipping doesn't require you to house inventory in a warehouse, you are allowed more time to focus on marketing and customer satisfaction. However, that being said, there are still some potential challenges that you may run into. Although products shipped directly, finding reliable suppliers with quality products can be difficult, and ensuring that you have full visibility of your customer's fulfillment process is essential. Meaning you may end up spending time researching and negotiating with suppliers to ensure complete customer satisfaction.

Industry-known tools like Doba allow you access to millions of products in just a few clicks and provide a simplified user experience to streamline your process. Things like: dynamic auto-sync and advanced order tracking are a few of these features.

Now that we've covered the basics, let's recap a few things:

Why do people choose to run a dropshipping business?

  1. Easy to get started

    It is fast and easy to get started, and you can start with low initial costs.

  2. Start without a  business entity

    Even though it may be smart to have a business entity as your business begins to grow, you don't need an established business entity at the beginning.

  3. No inventory management

    No need to worry about managing inventory, packaging, or tracking, which means you can focus almost entirely on marketing, promotion, and product sales.

  4. Easy to access millions of products

    There are millions of products available, and you will benefit from working with dropshipping platforms since they are continually doing research to supply trending products. 

  5. You set the retail price

    Control your margins and offer strategic pricing that benefits your business the most. 

  6. Extremely easy to scale

    The drop shipping business is easy to scale up because as order volume increases, you don't have to invest as much work generally required by a traditional e-commerce business.

 

Challenges faced with dropshipping:

  1. Higher rate of potential competition

    Dropshipping is fast-growing, and the potential for competitors grows in parallel.

  2. Supplier errors

    There are supplier errors. Although it is uncommon, it happens. Inevitably, a supplier will mistakenly ship incorrect or defective products to your customers. When such things happen, don't take it personally and handle the return as a professional; either have the supplier ship a brand new product or offer a complete refund.

  3. Shipping time is  usually longer

    Since many dropshipping providers are located overseas, the shipping time is generally longer.However, being upfront and clear about shipping time frames on the product pages will alleviate this. Most customers will appreciate the clarity, mainly when you sell niche products where shipping time is less crucial.

Steps To Starting A Dropshipping Business:

  1. Build your online store on a marketplace or e-commerce platform

  2. Sign up on Doba.com or other dropshipping platforms

  3. Find products from Doba that you'd like to sell and add them to your store

  4. Send traffic to your store