Dropshipping business plan should begin with an assessment of the competitive environment and demand for the goods you plan to sell online. You should make a thorough analysis of the top search engines, online directories, as well as competitors’ advertising. PPC advertising will help you determine how busy your product niche is. Enter the name of the product into the search engine and see how many ads. If several stores are competing with each other for the same product item at once, this is a bad sign. You will need to pay much more to attract customers than in a free market.
Developing a dropshipping business plan, you should take into account:
- Necessary equipment. This expense item includes the purchase of computers, printers, phones.
- Website of the dropshipping store. Here you should consider the cost of maintaining your dropshipping store. For example, if you rent a ready-made platform for the store, you have to make monthly payments. The cost depends on the functionality of the platform.
- Dropshipping store advertising. It is one of the most important parts of the dropshipping business. You can go bankrupt on advertising, or you can go in the big plus. If you do not understand online advertising, then hire consultants who can explain everything to you, and even better – customize the advertising company.
- Profitability of sales. The final price of goods in your dropshipping store should include your profit, ads costs, website support, shipping, etc. All your costs should be included in the price of each product.
So, what you should do to start a dropshipping business?
1. Dropshipping business: choose a niche
As in any business, you should start with the analysis and choice of niche. There are many options. Here are the following dropshipping business ideas:
- Clothing – those that are easier to pick up without trying on.
- Accessories and jewelry – scarves, purses, hats, jewelry, socks.
- Goods for home and interior – dishes, home textiles, decorative items.
- Cosmetics – most often care products. For example, natural stone face rollers for the face and body, Korean cosmetics, washing brushes are very popular now.
- Children’s clothes and toys, especially educational toys.
- “Smart gadgets” – watches, headphones, robotic vacuums, humidifiers, etc.
To understand what’s best to sell, study the markets – what’s popular now on the biggest sites like Alibaba, Amazon, eBay? Look at what products are the most popular now, and will remain relevant for at least a few months. Of course, you can sell anything – but it’s better to choose goods that are:
- Not fragile (easy to pack and ship).
- Not seasonal (until you get the hang of it, the excitement will subside, and you’ll need to switch to other products).
- Not heavy and small (so you don’t have to spend money on shipping).
- Easy to pick up without trying on or take as a gift.
This will ensure you have fewer returns, rejections, and customer complaints.
2. Dropshipping business: choose a supplier
Once you’ve selected the items you’ll be selling, decide on a supplier (maybe even more than one). To understand who you need, answer the following questions:
- What scheme would you like to work under – receiving a full upfront payment from the customer and transferring funds to the manufacturer or waiting for a profit after the goods are delivered?
- Are your products returnable or exchangeable?
- What are the most convenient speed and methods of delivery for the area where your customers live?
By answering these questions, you will understand what kind of supplier you need.
3. Dropshipping business: create a website
When the top dropshipping products are chosen, the supplier is found, and the determination to start selling is almost overwhelming, the dropshipper faces one more necessity – a website on which the product will be promoted and sold. With our Ali2Woo plugin, you can easily develop your WordPress dropshipping website.