When starting an online store, the entrepreneur has three ways to sell goods:
- Set up their own production, storage, and shipping.
- Buy goods from other companies in bulk and resell them.
- To deal only with the sale while functions of storage and delivery give to the supplier.
In the latter case, the online store serves as a shop window of goods and is not tied to the warehouse. This method of trade is called dropshipping and there are a lot of people interested in how dropshipping works.
How to start dropshipping and find suppliers?
Here are the instructions to help you start a dropshipping commercial trading business:
Step 1: Identify a niche
The first step in starting a dropshipping business is to find a niche for your online store.
Then move on to formulating standards for the future supplier: what margin is acceptable for the business, what region of delivery you are interested in, what conditions for returning the order will suit you. Based on these criteria, start the search for a partner.
Step 2: Find a supplier
Choose suppliers according to the terms they offer to online stores. Pay attention to the following points:
- How the payment for orders will be implemented, whether there are additional payments (shipping fees, advance payment for goods).
- Is your supplier a manufacturer or another intermediary. In the second case, there is a risk of additional markup on goods.
- Are there possibilities for branded packaging of deliveries so that customers receive parcels on behalf of the online store.
- Whether supplier understands how dropshipping works.
Step 3: Create an online store
A website for a dropshipping company is a business card and a showcase for sales. If at the start there are no resources to create a full-fledged online store, you can use our plugin for AliExpress or for eBay to create your own dropshipping store. Don’t forget to specify the cost, taking into account your markup.
Step 4: Start promoting your online store
An important task for profit is to attract customers to the site. Run advertising on all available promotion channels. Keep in mind the low-margin products to determine the marketing budget.
Step 5: Track delivery and analyze results
If everything is done correctly, after a while the online store will have its first orders. They will have to be promptly transferred to the supplier, track the status of delivery. It’s also worth analyzing customer feedback and trying to optimize processes if necessary.
Tips for beginners in dropshipping
Service and customer care are one of the main challenges facing the dropshipping business. When products are made and delivered by a manufacturer, it is difficult to control the process and make promises to customers. Here are a few tips to help smooth out the difficulties of dealing with suppliers:
- Discuss ways to solve problems and how to interact with the supplier before you even sign a contract.
- Establish a clear timeframe for solving disputes: how long will it take for the supplier to respond to the online store, and for the buyer to receive feedback on the status of the order.
- Find replacement suppliers so that in the event of problems, you won’t have to depend on one partner.
If you want to have a dropshipping online store, you can use our plugin.