Start a Dropshipping Business

Want to start a dropshipping business today? Running your own business can be very satisfying, but getting there is a challenge. Finding the right opportunity can be a minefield, filled with scams and too-good-to-be-true schemes that just don’t work. The reality is that launching a work-at-home business is more realistic now than it has ever been, due to the availability of Web 2.0 technologies. Online commerce today is widely accepted and growing, and consumers are generally willing and anxious to shop online. Doing so is secure, convenient, and usually brings better bargains than trips to the department store or shopping mall.

Building an online store seems to be one of the easiest ways to get started. But to make it work, you have to cut through the hype. There are plenty of articles, ebooks, seminars and workshops that promise quick riches, and the ability to start an online company that “makes money while you sleep.” What they don’t tell you, is that while your business may indeed be making money for you while you sleep, you’ll still have to devote plenty of time to making it work while you’re awake. Like any business, selling online or dropshipping takes time. You need to devote time to marketing and promoting your business, administering the site, processing your paperwork, and experimenting with different product mixes.

Start a Dropshipping Business - Dropshipping versus direct sourcing

The first part of building an online store is finding something to sell. There are two ways to go about this: You can go directly to the source and buy your products directly, or you can use the services of a dropshipper. Let’s take a look at the relative advantages of each approach:

• Direct sourcing. Sourcing directly gives you more control over your product’s supply line, and since you’re working directly with manufacturers and distributors, you’ll probably get a better price. This approach however, does take more work, and it takes time to build up a network of connections. If you’re a world traveler (or want to be), buying direct from the source in places like China, Vietnam or Thailand can be great fun, and you’ll get the absolute best prices—but of course, the latter approach does require careful attention to overseas shipping, customs requirements, and some foreign language skills.

• Dropshipping. With a dropshipping arrangement, your administrative workload is going to be reduced. You take in orders, the dropshipper fulfills them. Your wholesale cost is likely to be somewhat higher than if you were to source direct, but if you look at the big picture, you’re paying extra to have the dropshipper handle those tasks for you—and it can be well worth the extra few cents per item if your time is limited. If you’re just getting started in the world of online commerce, dropshipping is a great way to “test the waters” and develop your online marketing skills. If you have limited space, dropshipping is advantageous as well, since you don’t have to warehouse product—and your living room won’t become cluttered with boxes of unsold kitchen gadgets. And the biggest advantage of all—you don’t have to buy large quantities of product ahead of time that you’re not sure will sell. You simply take orders, and pay the dropshipper for each one as it comes in.

Start a Dropshipping Business - Finding a dropshipper

You’ll find hundreds of dropshipping companies all clamoring for your business, so it’s important to compare and contrast. Some dropshippers charge a fee to join. This isn’t necessarily a bad thing, and depending on the services they offer, the range of products, and the wholesale price they offer, the fee may be well worthwhile—so don’t discount it. Before finding a dropshipper, decide what you want to sell. Different dropshippers may specialize in different areas. A dropshipper that has a huge catalog isn’t always the best one for you—find one that offers a good selection of products that match the theme of your store.

Also when selecting a dropshipper, find out details such as return policies, volume discounts, and shipping costs. Shipping costs will be passed on to your customer, and you don’t want to soak them on the packaging!

Start a Dropshipping Business - Setting up your online store

One of the best things about dropshipping is that you have access to potentially thousands of products. But for some, this is also the biggest downfall. There is a temptation for a beginner to simply want to put as much as possible in the online store—but more products doesn’t necessarily mean more sales. The most successful online stores, unless you’re JC Penney or Wal-Mart, tend to be niche-oriented. Nobody knows who you are yet, but you’ll attract more attention if you have a specialty area. If you sell everything from soup to nuts and carburetors for Studebakers, you’re just another face in the crowd. But if you have a shop that specializes in one particular area of interest, you’ll get attention a lot quicker, and you’ll turn more visitors into buyers. The reason for this is simple marketing—if you appeal to your audience’s own interests, they will feel more comfortable buying from you.

Start a Dropshipping Business - Promoting your online store

Ready-made online catalog templates make it easy to just drop in your product list, connect the e-commerce engine and upload it to the server. It’s very possible to get a store online in just a few hours. But, that doesn’t mean you start making money today. Until you start promoting your store, it’s just hanging in cyberspace and nobody knows it’s there. Start with the low-hanging fruit, hand out fliers to your friends and family then move on to online promotion, search engine optimization, and pay-per-click advertising campaigns.

Start a Dropshipping Business - Expanding your online store

The most successful online stores have niche appeal. Rather than trying to sell everything under the sun, just try to sell everything related to a particular niche area. You can expand however, into running multiple online stores, with each one catering to a different unique audience. An “online superstore” has a lower chance of success—but you can still expand by creating a half dozen separate online specialty stores.

As your success continues, you may want to expand into other areas, not only by opening up multiple online shops, but also by contracting with multiple drop shippers to take advantage of a broader product selection. Keep your options open—and as you learn the ropes, you may also wish to mix dropshipping with direct sourcing once you get a better feel for what’s in demand.

Ready to start a dropshipping business today? It wont be easy but as long as your steps are small until you can walk, you are sure to accomplish your goals.