People who are familiar with the E-commerce world must have heard about dropshipping at some point in their lives. For the uninitiated, dropshipping refers to the fulfilment of an online order where the store does not have to stock the product. Instead, the product is purchased from a third party and gets shipped to the customer. By doing this, the seller can avoid the hassle of storing stock inventory in a physical place. Dropshipping is a great way to sell goods online.
Benefits of Dropshipping
There are various benefits to choosing to start a business using the dropshipping model. It is a profitable business for aspiring entrepreneurs as it lets you study and understand the market and the products that are in demand.
Needs very little investment
- You save a significant amount on capital expenditure to start selling online as you don’t own the inventory of goods
- It is quite simple to launch an e-commerce store without spending a lot of money
- There’s quite a big risk involved if you start a traditional business, but, that’s not the case with dropshipping
Fairly quick and easy process
It is quite easy to get started in the dropshipping business as you do not have to deal with the physical inventory of products.
- You need to worry less about maintaining a warehouse and the overhead expenditure
- Save yourself from the trouble of packing and shipping every single order
- Managing returns from customers is not a complicated process
Less operating expense
- Since you do not have to manage a warehouse and inventory, your operating expense is low
- Most of the dropshipping businesses are run by people in their homes, which means you just need a laptop with a stable internet connection and a small technology-related recurring expense
- With no stocking of goods in a warehouse, you save on the cost of paying employees’ salaries
How do I become a Dropshipper?
We have looked at what exactly dropshipping means and its various benefits. Now let’s try and understand the process involved in setting-up your own dropshipping business:
Find your Niche:
The first and most important part is to find out what is it that you’re looking to sell online. In simpler words, find out your niche. It should be something that interests you or something inspirational. You can look for ideas on social media or even brainstorm with friends and peers. Another way is to look out for relevant social media communities and groups.
Define your Target Audience:
Once you’ve narrowed down your chosen niche, the next step is to define your target audience. It is important to understand who will most likely be buying your products. When you spend time focusing on your promotional efforts on people who would buy from you, there is a high probability of converting those people into real buyers. Try and get into details such as who would be your ideal customer, their age groups, their average spending propensity, their geographic location, their marital status, etc. This process is known as creating a buyer persona.
Find Genuine Suppliers:
After identifying and defining your target audience, you should start looking for suppliers. There are many online vendors out there in the market yet, choosing the right one can take some time and effort. When going through various e-commerce platforms, how will you look for genuine suppliers? The key is to scour through popular products sold by each supplier. Check the percentage of positive reviews, the feedback received from other buyers, how long have they been selling on that platform, etc. This will help you in establishing the credibility of the supplier.
Online Presence:
There are various ways to sell products online like having a blog or through social media channels. But if you want to master the craft of dropshipping, you need to have a specialised website. A professional website inspires more trust and confidence than selling products through social media. Running a website will give you a sense of satisfaction as you don’t have to worry about following somebody else’s orders. It makes you feel independent as you are solely responsible for the growth of your online store. Also, it is easy to use the right keywords and plugins for your website which leads to better discoverability on search engines.
Dropshipping is a tried and tested, a successful business model that is being used by many people all over the world. With the right product mix, the right target audience, a pulse on the market, and some technological know-how, you can set this up by yourself. Yet, as easy as it may sound, it does have its challenges. So do not consider this as a quick get-rich scheme. Just like a regular business, you will have to invest considerable time and energy in building the business. You might even end up spending 60-70 hours a week setting up and managing the show hence tread cautiously.