There are several reasons why most people will not start a business, and one of these reasons is the level of risk involved when building a business.
To be honest with, every business has its own risk, and the inability of business owners not to be able to manage these risk properly has caused many businesses to fail.
Can I introduce you to a business model that has risk, but this time these risks are very minimal, and can be managed without any hassle, this business model is very easy to start, and does not require too much of principles; anyone can start this business right from the comfort of their home, and even till keep their 9-5 jobs if they really want. Dear readers, this business model is called Dropshipping.
What Is Dropshipping?
Dropshipping is a business model that allows an individual to sell products without holding any inventory. You don’t need to have those products in stock before you start selling.
When a customer buys a product from a dropshipping store, a third-party supplier ships it straight to them. The buyer pays the retail price you set, you pay the suppliers’ wholesale price, and the rest is interest. You never have to manage products or buy inventory.
Dropshipping is very minimum when it comes to risk, it has been given the title of the most flexible business model of the 21st century.
To sell products, you need to register an account with a supplier and showcase those products via an online platform for your buyers to see.
Why You Should Start A Dropshipping Business.
For wholesale buyers, performance and comfort in ordering and shipping products to their buyers is a principal factor in finding business owners to partner with. That is why it is necessary to take note of the advantages of dropshipping.
Proposing dropshipping to wholesale customers will give you an edge over businesses that do not. As stated earlier, drop shipping has become one of the most lucrative and risk-minimal business in the 21st century.
1. Low startup cost.
It demands a lot of capital to stock a warehouse. You can eradicate the risk of going into deficit to start your business by using dropshipping.
Instead of buying a huge inventory and hoping that it sells, you can start a dropshipping business with blank inventory and immediately start making money.
2. You Don’t Worry About Delivery.
Order accomplishment usually requires you to a warehouse, organize, track, label, pick and pack, and ship your stock.
Dropshipping lets a 3rd party take care of all of that. Your only job in this system is to make sure they get your customer orders. Everything else will be handled by the supplier.
3. You Don’t Worry About Customer Service.
When starting a dropshipping business, you don’t have to worry about customer service because everything is handled by the initial supplier which is intended to save you time and energy.
4. Dropshipping Offers Flexibility.
In dropshipping business Wholesale merchants can run the business anywhere and anytime as long as they have an Internet connection.
With the Internet, shoppers can quickly communicate with manufacturers or store owners at the same time with customers.
It gives flexibility to suppliers since they can partner with many wholesale suppliers and sell more products to their customers. Manufacturers also get more flexibility since there is more product flow.
How To Start a Dropshipping Business.
Let’s say that you have made up your mind and you want to start dropshipping products and start making money from it, there are numerous ways to do this, but in this section, I am going to be walking you through these steps one after the other.
1. Choose a Dropshipping Business Niche.
Choosing a product niche allows you to research the best selling product. You don’t want to start a dropshipping business with zero knowledge of what the market is like, you will end up recording loss, imagine someone creating a dropshipping business to sell typewriters, how many people do you see today use or demand for typewriters, I know you can now see where I am coming from.
There are many ways to decide on a dropshipping business niche, and most of these tactics include doing keyword research online to see how many people are actually searching for the product.
One way to get this information is to use keyword research tools like Google keyword planner, Google search engine, and even Google trends.
Here is an example below of the average online search for sunglasses.
You can see that the term sunglasses have a fluctuating online search, with this information, you can decide if this business is going to make you tons of money or not.
I wrote a comprehensive guide to help you get started with keyword research, click the link below to read that article.
2. Do competitor research.
The next step in getting your dropshipping business up and running is to recognise your competitors and know-how they work. Competitors hold great hints to success and can help you develop a stronger marketing plan for your dropshipping business.
Another great thing about competitor research is to be on the bright side when it comes to the order of things and stores pricing which is essential for any business to thrive and make sales.
Some ways to go about your competitor research include;
1. Running a comprehensive Google search to see how many online stores are doing the same business as you.
2. Browse social media like Facebook and watch out for paid ads that are in your business niche.
3. Subscribe to competitors’ email lists if they have one.
Learn everything you can about your top competitors: their website, prices, marketing methods, product descriptions, reputation. You can eventually pick it up from there, and eventually build a great business.
3. Choose a dropshipping supplier.
Now here comes the main part of your dropshipping business which is choosing a dropshipping supplier.
Choosing a dropshipping supplier is a significant step toward creating a thriving dropshipping business. Without suppliers, a dropshipping business would not have any products to ship to consumers and, therefore, cease to exist.
At this point, you vetted what products you want to sell and know they can be thriving. Now you want to make sure you find a dropshipping supplier that gives you the best service you need to grow.
When choosing a dropshipping supplier you should consider so many important factors which include, delivery, pricing and efficiency.
One of the popular places where most dropshipping get their products includes; Alibaba, Aliexpress, 1688.com, Taobao and many others.
The win here is Alibaba.com, I wrote a comprehensive guide about starting an Alibaba business on this blog, click the link to get started.
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4. Build your eCommerce store.
Now is time for things to become a reality, and finally, you started that dropshipping business that you dreamed about all these years.
At this time you need to build a website to display your inventory. The type of website needed in this case is not just a business website but something more dynamic and multi-functional, and in this case, it is called an eCommerce website.
An eCommerce store does the hassle of online product listing and hosting, and even collecting payment is carried out for you by an eCommerce store.
Getting your own eCommerce store is cheap and does not need much technical know-how which makes it very easy for a computer illiterate to develop his/her own eCommerce website.
All you need to start an eCommerce store is an eCommerce software, a domain name and a web host.
I wrote a comprehensive article to help you get started, click the link to get started.
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5. Choose A Payment Gateway.
At this point, you want to devise the best possible means to collect payment from you end customers. This is where the use of a payment gateway comes in place.
A payment gateway allows you to collect payment from customers who purchase something from your website. With a payment gateway in place, you don’t need to worry about payment collection and verification because everything is handled by the software.
Payment can be withdrawn to your local bank account and used to process other things needed.
There are so many payment gateways out there, most are restricted to a specific region while most of them are available for use worldwide.
I wrote a comprehensive guide to help you choose the best payment gateway out there, click the link to the article to get started.
How To Promote Your Dropshipping Business.
You already have a dropshipping business and Yipe!!!, you are now happy. The whole thing does not stop there as more work needs to be done to ensure that you make money. One important thing that should not be ignored is marketing.
You need to be able to attract people to use your online store, and there is no other way to accomplish this than marketing.
There are many ways to promote your dropshipping store but in this section, I am going to be listing a very few of them.
1. Content Marketing.
Content marketing is a marketing strategy centred on creating and sharing helpful, important, and regular content to draw and retain a precisely defined audience, and, eventually, to drive profitable customer action by optimizing for search engine optimization.
Content marketing is slow at first, of your website does has not developed the necessary qualities to rank on the search engine, you can find yourself having to wait for months before you start to see search results, but on the long-term content marketing can help you generate potential customers that will eventually become active buyers.
Start a blog about your dropshipping niche and create content that inspires and educates your target audience. You could also begin a YouTube channel, design infographics, or start a podcast to help get the word out about your brand.
To start utilizing content marketing, you need to have a basic understanding of how search engine optimization works.
I wrote a comprehensive guide to help you get started with understanding the very basic of search engine optimization, click the link to get started.
2. Facebook Ads.
Facebook is the largest social media on earth with over 3 Billion worldwide users and 2.7 Billion active users every month.
Facebook has also extended its tentacles by owning other huge communities such as Instagram, Messenger and Whatsapp, the good news is that all of these platforms are synchronized into one to make businesses easily transactable.
Facebook ads can help you reach out to a definite audience with just a little budget on Ads.
I wrote a comprehensive guide on how to get started using Facebook ads, click the link to the article to get started.
3. Search Engine Advertising (Google Ads).
Google Ads is an online advertising program created by Google, where advertisers request to present brief advertisements, service offerings, product listings, or videos to web users using the Google search engine.
It can place ads both in the results of search engines like Google Search and on non-search websites, mobile apps, and videos. Search engine ads are also another means to promote your content search and also your search engine rank.
with Google Ads, you can get the highest place on the search rank and generate more potential customers.
Google ads are as potent, with an ROI like that of social media platforms like Facebook, Twitter and Instagram. With Google ads, you are likely to get potential and strategic clients that want to buy from you.
I wrote a comprehensive guide that can help you optimize your Google ad campaign, click the link to the article below.
4. Email Marketing.
Email Marketing can also amplify your marketing, but it works more effectively when you already have a list hanging out somewhere.
Maybe you don’t have a list, you can always create one, by sending tons of traffic to a custom landing page anytime. I wrote an article on how you can amplify your email marketing effort.
5. Influence Marketing.
Influence marketing is a kind of social media marketing that leverages support and product placement from influencers, people and organizations who have a portrayed authority level of experience or social influence in their field.
Influencer marketing works because of the huge amount of trust that social influencers have built up with their following.
Influence marketing is rapidly growing now in this age because of the huge engagement created all over social media platforms like Facebook, Twitter and Instagram.
When choosing an influencer, you should check out profiles of influencers that are dominant in your location of operation.
The bottom line is that you should not endorse an influencer designed for the American audience for a Nigerian market.
Frequently Asked Questions About Dropshipping.
Just in case you still have more questions that need answers about how this business works. In this section, I am going to be telling answering some very few questions bothering your mind.
1. How much can you make as a Dropshipping Business?
Many dropshipping business owners earn up to $100,000 per year with a thriving dropshipping store. It also depends on how effective your marketing strategy is.
2. How hard is it to start a dropshipping business?
Starting a dropshipping business can be extremely competitive. Because you can begin a dropshipping business for free, you may face a lot of companies who are marketing a specific product at similar prices.
3. Is dropshipping really profitable?
Yes, dropshipping can be a profitable business model for merchants because you are not responsible for shipping or manufacturing.
It’s a low-risk business model that does not acquire huge costs like a wholesaler would normally have and you can earn a large profit margin with the right suppliers.
Whether you are a fresh entrepreneur or an eCommerce expert, a dropshipping enterprise is a great low-risk, low-cost way to start selling online.
With the rise in third-party apps and marketing automation tools, it’s no longer a strain to run your business online.
Dropshipping comes with its own drawback most of which includes;
1. Less Control Over Order Fulfillment and Lead Times, which can eventually piss off your customers.
2. Poor Customer Service. If your supplier delivers products late, destroys them, delivers the incorrect items, or otherwise screws up your customer’s order, the customer will take it out on you, and you get to take all the blame.