Dropshipping business model is undoubtedly one of the best business models anyone can start. It’s one of the easiest ways to generate money online, even in 2020. Suppose you’re thinking about how to dropship, perhaps as a side business or your full-time business. You can save yourself time, effort, and even resources and build yourself for success by following the 3 simple steps analyzed below.
BTW: If you want to create a dropshipping store by yourself, look at this tutorial: how to launch a dropshipping site quickly?
- Why Do You Need to Start Dropshipping Now? Statistics Don’t Lie!
- How to Start a Dropshipping Business in 2020
- Established Online Marketplace
- Online Marketplaces Ideal for Starting a Dropshipping Business
- Building Your Online Store
- Paid (Fast) Advertising Methods
- Free (Slow) Advertising Methods
- FAQs
1. Why Do You Need to Start Dropshipping Now? Statistics Don’t Lie!
When it comes to starting a dropshipping business, a lot of people become skeptical about diving in. They are unsure if it will work for them and perhaps, the hype around it isn’t real. Guess you feel the same way?
Don’t fret! There are good statistics that will possibly excite you and make you know the hype is real.
- Dropshippers earn 50% more profit when compared to take sellers who keep their own inventory.
- The number of recorded online buyers moved from 1.32 billion in 2014 to 1.79 billion in 2018, and then to 2.05 billion buyers online in 2020. Speculations have it that it might hit 2.14 billion in 2021.
- According to Amazon, over 50% of sales recorded on Amazon come from third-party sellers, and about 34% of these are dropshippers.
- An average eBay dropshipper handles about 969 monthly orders on the average. The top 10% dropshippers on eBay make an average of $12,706 monthly.
(source: https://torchbankz.com/dropshipping-statistics/)
2. How to Start a Dropshipping Business in 2020
Step 1 – Choose a dropshipping niche
It takes more than getting a store to join and succeed in dropshipping business. You need to have a segment of the market where you dominate. You can even go sub-niche to sell just one or two products only.
Choosing a niche is as important as your success in dropshipping. In fact, it’s one of the first steps to take. Some are saturated but still generate huge profits for entrepreneurs. New products and niches emerge often, and you have endless opportunities.
For people who are still trying to master how to dropship, it could be somewhat difficult to find a niche. We understand this and have carefully handpicked 31 best dropshipping niches that are still valid in 2020. You can pick one or more and go in fully.
Best Dropshipping Product List – Topnotch Analytics
For people looking to start a dropship business, it could be quite confusing choosing the products to start with. Our Analytics tool eliminates the stress of searching for products to sell. It’s an ideal product research tool for ecommerce store owners, beginners, and existing dropshippers.
With this, you can sort for the best dropshipping products that have impressive daily sales on AliExpress. Classified into various categories, you’re sure to find hot selling and profitable products in your niche.
Step 2 – Finding a Dropship Supplier
If you want to start a dropship business, you need a reliable supplier. Apparently, this seems to be one of the hardest things to do in your journey to dropshipping success.
According to industry research, 84% of online sellers find that establishing a dropship supplier or wholesaler relationship is the #1 roadblock to starting a dropshipping business.
(source: Drop Ship Directory.” Gogo Dropship. n.d. Web. 17. Oct. 2014)
Your success largely depends on your supplier because they call the shots when it comes to order fulfillment and some part of the customer experience. They keep your product in stock and determine the quality of the products your customers receive.
With the right information on how to find and choose quality suppliers, you’re sure to work with a reliable supplier and grow your business. Remember, not everyone that claims to be a supplier can actually help you grow.
Step 3 – Choosing a Selling Platform
At this point, you’ve made a decision about the product to sell and must have chosen a supplier. It’s time to seek a place to start selling.
If you’re starting a dropshipping business, you need to choose the right platform to sell. So, the big question becomes, which platform is ideal for you?
You’d have to choose to start an independent store or sell on an established platform. Let’s take a look at the pros and cons of these options.
3. Established Online Marketplace
Pros
- Easy account setup process
- Customers trust these well-established platforms
- Lets you generate significant revenue
- Characterized by high traffic
Cons
- You pay for every sale made
- Higher level of competition with other sellers on the platform
- A variety of options for prospects
- Limited control
4. Online Marketplaces Ideal for Starting a Dropshipping Business
eBay – This online platform for dropshipping business has over 170 million active users. It charges listing fees and sale fees, which are often below 10%.
Amazon – This is one of the most popular online marketplaces, with about 300 million active users. In 2016, over 100,000 sellers generated more than 100,000 on this platform. It has varied fees, but sellers are generally expected to pay about 15% of their sales to the platform. Amazon offers Amazon Prime and Fulfillment by Amazon as additional services. However we don’t recommend to dropship on Amazon.
Etsy – It’s said that Etsy has about 2 million active users out of 54 million members. Women tend to dominate this platform, and they focus mainly on arts, homeware, crafts, and handmade goods.
5. Building Your Online Store
A lot of people who look forward to starting a dropshipping business build their open online store. This is really a good way to go as it gives you even more control over your business. If you really care about building a long term business online, then you need your own store. The best part? You don’t need to break the bank to create your own online store.
You can set up a very responsive WordPress/WooCommerce store for your AliExpress or eBay dropshipping. We have separate plugin for each platform (Ali2Woo and eBay2Woo). Both plugins let you import products to your store with a few clicks, customize your store and automate several time-consuming activities.
There is even more. You could order for a dropshipping store for as low as $299 and have a responsive and ready-to-use store developed for you.
Creating your own online store to start a dropship business lets you build a business that doesn’t depend on a third-party platform. You get to enjoy higher profit margins with no fees, as well as zero completion from sellers on the same online platform.
Implementing a Customer Acquisition Strategy
Apparently, you need customers to start making money. Now, you have a platform and need marketing ideas for your dropshipping business. This is where you need to implement a customer acquisition strategy.
Customer persuasion entails persuasion; it often shows as marketing and advertising. It doesn’t have to be expensive. You could choose fast (paid) methods or take the slow (free) ways to generate traffic and gain new customers.
6. Paid (Fast) Advertising Methods
Facebook Ads
Facebook is undoubted, the largest social media platform with a pool of active users. You can pay to advertise your offerings here and gain new customers. With Facebook ads, you can target your audience, boost posts, and control the amount you spend daily. Of course, there are several other effective Facebook marketing alternatives.
Google Ads for eCommerce
Google is one of the trendiest search engines. Of course, virtually everyone who is about to get started with dropshipping wants to rank on the first search engine result page. This has been profitable for a long time, and was one of the best marketing tricks in past years that still works. You can make this happen by buying ads for your online store to rank on specific keywords.
With Google Ads, you can gain more exposure while targeting specific demographics. Here, you can control a lot of factors that determine your conversion.
Social Media Influencer Marketing
This is one of the effective marketing tricks for better ecommerce sales. If you already get first sales and you’re in a trendy niche, then this is an ideal marketing option for you. Take, for instance, if you sell a new and engaging style of trousers, you could contact an Instagram model to share a post of him wearing a pair of these trousers, tagging your business. Just a post from a model with a good number of active followers can bring in new traffic and sales. It’s good to note that the cost of influencer marketing varies depending on how famous an influencer is.
7. Free (Slow) Advertising Methods
Content Marketing
This could be a blog, trendy Instagram Post, a Tweet, or even a YouTube channel. It basically entails creating content your audience finds valuable. This engages them and possibly turns some into customers. It’s not really a straight-up advert but serves more value to your prospects.
Forum or Blog Marketing
In this method, you need to find forums or blogs related to your niche or offer and participate actively. You could start a thread or spark up discussions while positioning yourself as an authority in your industry. While doing these, you can add a link back to your site. If your discussions and threads are valuable, prospects can visit your site to learn more and possibly buy.
Email Marketing
Building an email list is necessary for ecommerce. You need to find a way to capture your prospects’ email addresses so you can follow them up afterward and make them buy. It could be a mild request to sign up just before they check out, or by creating a free offer that requires them to punch in their email address.
Social Media Marketing
As much as it seems harder by day to achieve decent organic reach on social media, it’s still much possible. Create and share valuable content on your social media to build a good number of followers. Over time, you can turn them into customers.
8. FAQs
How do I obtain a Tax ID in Africa?
You’ll need VAT, which is Tax ID equivalent in Africa. However, it would be great if you consult with a local accountant for proper details and guide.
Can I pay my supplier from the money I received from my buyer?
You have to forward orders to suppliers and pay for the products to be packaged and shipped to your buyers.
Can I start dropshipping with my WordPress site?
Yes, you can build your store on a WordPress site with Ali2Woo Plugin. This is a premium plugin that lets you automate many dropshipping processes. You can get it here.
I don’t seem to understand Amazon’s rule prohibiting purchasing products from another online retailer and having that retailer ship directly to customers. Can you explain it?
Every online marketplace has its rules. Amazon doesn’t allow your dropshipper to ship buyer’s products under Amazon’s name. They maintain that all transactions between you and your customers shouldn’t give out any third party transactions.
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