With e-commerce sales forming 20.8% of global retail sales, more and more entrepreneurs who are looking forward to building a profitable business are entering the e-commerce market.
However, it’s only when they take the initial steps that they realize the hidden concepts of designing, warehousing, shipping, manufacturing, and packaging that come along with the job description.
If you’re someone who wants to start an e-commerce business without the burden of the above-mentioned logistics, then dropshipping is the best option for your entrepreneurial expedition.
Sounds like your cup of tea? If yes, here’s your guide to what is dropshipping and how you can establish a strong business in 2024. So, let’s get started!
What is Dropshipping?
Dropshipping is an e-commerce model where you partner with third-party suppliers from manufacturers, retailers, and wholesalers to sell products online.
Here, your main job as the dropshipper is to focus on marketing and operating your e-commerce store while your supplier manages inventory and shipping items to your customers.
How Does it Work?
Here’s a breakdown of how a dropshipping business works :
● Your customers will purchase their desired products through your online store at your specified retail price.
● You will now forward the order with its shipping details and customer information to the supplier. Depending on the terms of the agreement between you and the supplier, you will pay the wholesale price of that specific product(s) and keep the remaining amount as your profit.
For instance, if a customer checks out with an item priced at $150 from your store but the wholesale price is $80. You will pay $80 to your supplier and keep the remaining $70 as your revenue.
● The supplier will handle the logistics of the order, even quality issues or returns, and ensure timely deliveries to your customers.
How to Start a Dropshipping Business?
Select a Niche
There are certain broad niches like fashion, beauty, fragrances, tech, and jewelry that attract sales all year round. However, with dropshipping businesses making up 30% of all online stores, tough competition in these niches is expected.
Therefore, choosing a more specific niche from these broad categories is essential for a profitable dropshipping business. Entrepreneur Tim Kock, for instance, made $7,000 in 2 months by starting a watch business.
Similarly, Meowingtons, another dropshipping store, is a highly successful business in the pet industry, catering specifically to cat owners.
In conclusion, focusing on popular categories within large segments can be an excellent strategy for your dropshipping career.
On the other hand, if you decide to target a generalized market sector like clothing or beauty, keep including trending products in your product catalog to remain relevant to your customers and satisfy their changing preferences successfully.
Find a Supplier You Can Trust
Supplier-dropshipper trust isn’t just limited to trusting your supplier with timely deliveries. It also means finding a trustworthy supplier who will regularly update their inventory with trending products in your desired niche.
With these two factors checked out from your list, it’s time to cross-check other considerations. These include reviews, experience, ratings, minimum order quantities, and shipping rates.
These characteristics not only give you a clear idea of how dependable your supplier is but also enable you to determine your profit margins.
Set Up Your Online Store
With the two main variables of your dropshipping business settled it’s time to set up your online store. For this, you have two options: you can either run your store on an existing e-commerce platform or create your own website.
Having your website is clearly the better option, as it gives you full control over creating and customizing your brand (mentioned below) without the need to pay a platform fee.
Here are a few pointers you need to keep in mind when setting up a website for your online store:
1. User experience – Web pages that take forever to load can ruin your customers' shopping experience, making them quick to turn to another seller.
2. Product descriptions – Mention all the specifications, uses, and options available for the products available in your catalog to simplify your audience’s browsing.
3. Contact information – In case of any delays or queries, customers can easily get in touch with you and be assured that their purchased items will soon be in their hands.
4. Mobile optimization – With mobile purchases forming the largest chunk of online sales, if your store isn’t optimized for smartphones, you’re losing out on a majority of your customers.
Create a Brand Identity
As discussed earlier, the increasing amount of dropshipping businesses indicates intense competition, making it hard for newcomers to compete with the existing giants in their niches.
Imagine a sheet of paper with black dots where each dot looks exactly like the other. That’s how your dropshipping business looks to customers among the crowd of other dropshipping stores on the web.
In this case, you can count on branding to captivate your target audience. Some elements of branding include:
● Mentioning the unique proposition of your business in your marketing campaigns.
● Coming up with a business name that becomes synonymous with your product category for your customers
● Pick a memorable color palette
● Choose fonts that are distinct yet easy-to-read
● Design an attention-grabbing logo
Optimize For Success
At the end of the day, when you’ve completed all the steps mentioned above, it’s time to sit down and monitor the results of your hard work.
This will help you understand that some tactics are simply more successful in attracting customers than others. Simultaneously, you’ll also find that some products sell faster than others in your lineup.
This way, you can see what works best for your customers and what doesn’t, ultimately allowing you to cut costs on efforts that fail to bring the desired results and invest them in more profitable campaigns or products.
A dropshipping business may be the easiest type of e-commerce business you can start today. However, no initiative can reach the finish line without your hard work and efforts.
Finding a supplier with whom you can work in absolute harmony is key to a dropshipping venture. While you spend your valuable time branding and marketing your offerings, your supplier handles everything from shipping to returns.
If you’re unsure about where to find a partner who will take your dropshipping business to unimaginable success, Doba is an option worth considering. With Doba dropshipping, the world of e-commerce becomes your playground, giving you ample room to create your online empire.
Try Doba today, risk-free, without missing out on a quality experience!