And if you’re still on the fence about starting your online business, maybe it will help to know that eCommerce sales amounted to nearly 3.5 trillion dollars worldwide in 2019. So, if global stats on eCommerce are any indication, starting an online business is an increasingly lucrative option right now.
In this article, you’ll learn how to start a dropshipping business. We’ll explain what a dropshipping business is, how to find the right dropshipping business ideas and everything else you need to know to start dropshipping.
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Dropshipping is a business model that you can use to run your store without ever holding any inventory. Once you’ve made a sale your supplier will ship your products from their warehouse, straight to your customer’s doorstep. You’ll never need to worry about storing, packaging, or shipping your products.
There are three key players in the dropshipping business model: the manufacturer, the retailer (you) and the customer.
The manufacturer’s role in a dropshipping business model includes creating products, carrying inventory, shipping products to customers on behalf of the retailer, replacing defective products, and restocking them. They sell products to the retailer at wholesale prices assuming the risk of unsold inventory.
In the dropshipping business model, the retailer (you), sell the manufacturer’s products on your website under your own brand. You’ll be responsible for choosing and marketing those products. Plus, you’ll also be responsible for their shipping costs and setting prices that make you a profit.
Lastly, in the dropshipping business model, the customer buys the products directly from you, the retailer. If questions or issues arise, they contact the retailer they bought the product from.
That’s a dropshipping FAQ we hear quite often. Dropshipping can be the most profitable business model of all, as you are not responsible for the costs of shipping and manufacturing. Because of this profits can quickly be reaped once you have found the right suppliers with Oberlo. You can calculate your profit to ensure you are on the right track to success with our dedicated Profit Margin Tool.
A dropshipping business is a low-risk business model. When it comes to startup costs, you only pay for products that you sell to paying customers. You don’t become overburdened with the cost of creating products, carrying inventory, costs of maintaining unsold inventory, and the cost of employees for packaging and shipping products. It’s a great entry into entrepreneurship as you can start your own dropshipping business by yourself during your evenings and weekends. It will require daily work when it comes to processing orders. However, most of the order processing steps are automated and require a click of a button. The dropshipping business opportunities are endless, you just need to take the first step.
Yes, you can make money through dropshipping, like many of our successful merchants continue to do. Dropshipping allows you to find products with huge profit potential and set up a business selling them. When you are motivated to sell products you are more likely to invest more time into promotion and marketing, leading to more profits from your endeavors.
Yes and no. Dropshipping is worth the time and money you invest in it. If you don’t invest time into your online business you will never reap the rewards. Dropshipping takes time as you need to set up a store, import products, decide your pricing strategy, and starting selling. Nothing can happen if you don’t put in effort.
If you don’t want to build a Shopify dropshipping business from scratch, you can easily find a dropshipping business for sale on Exchange. Exchange is a marketplace of Shopify stores for both people looking to invest in a fully-functioning business or those that want to skip the building phase and start directly with marketing. They have a great collection of online stores, including dropshipping eCommerce businesses, of varying price ranges and niches that you can choose from depending on your budget and interests. So, if you’re looking for a dropshipping business for sale, Exchange has got you covered.
When choosing to buy a store take into account the cost, the design, the age of the website, how much money it has made, popularity of niche, penalizations, and the type of business.
Truth is, what you sell matters. You should take some time to find the best dropshipping business ideas. Most people tell you to pick a niche you’re passionate about. But that’s only a half truth. It’s about a combination of profit and passion, skewed towards profit. The reality is the best dropshipping business ideas are usually the profitable ones. It’s a lot easier to be passionate when you’re actually making money.
At Oberlo, we regularly save you time by creating lists of trending products. It’s true that those tend to be the ones people gravitate to but that’s because they’re proven winners. It’s illogical to enter a niche with no competition, I learned that the hard way. Fitness, fashion, jewelry, beauty, tech, purses, and backpacks are some of the evergreen niches that we keep seeing top online stores enter and succeed in. For example, Tim Kock recently created a dropshipping case study where his pineapple business failed but his watch business made nearly $7000 in only 8 weeks, showing that your niche matters. So, spend some time looking into different dropshipping business ideas.
If you’re set on coming up with your own dropshipping business ideas instead of checking out our lists, here are a few things to keep in mind:
The most profitable dropshipping business ideas aren’t trends. Instead, they have trends within them. For example, denim apparel is a trend within the fashion niche. Artificial eyelashes is a trend within the beauty niche. Marble phone cases is a trend within the phone case niche. You’ll want to have the trends as products but not as the entire store, especially if you’re building a long-term business. So keep that in mind when you’re working on your dropshipping business plan.
Once you have decided what to sell you now need to educate yourself on who your competitors are, what they sell, and how they sell their products. There are many ways to do this.
There are a few components to building a dropshipping ecommerce business the right way. Here are a few: