The most important aspect of how to start dropshipping is understanding the nuances. Yes, you are running your own business as an entrepreneur, but you are responsible for almost everything. The first time setting up dropshipping can be challenging, but then other things take care of themselves.
So, what are the important steps on how to start a dropshipping business? Let’s find out.
What is Dropshipping?
Dropshipping is a business model where you promote products by putting them in your online store. In the dropshipping model:
- Someone else, like the supplier or manufacturer, makes it.
- A customer visits your storefront and places an order.
- The manufacturer, supplier, or dropshipper dispatches the order.
- A logistics company such as a 3PL group will take the delivery and deliver it to the customer’s doorstep.
So, as long as you have the right supplier and dispatcher, most of the fulfillment process is out of your hands. You do, though, need to be the focal point for communication if there is a delay.
Due to these accommodations, how to start dropshipping becomes a lucrative option for many people.
Assess if the Dropshipping Business Model is Right for You
There are many things that you must assess and choose when considering dropshipping as a viable business model for you. Here are a few pointers that you need to consider.
- If you like talking with people and promoting your product.
- You only want to run an online store and don’t want a physical store to run your business.
- Your marketing skills are your best trait, and you know you can sell whatever products well.
- You don’t want to invest upfront in a business and want to work with minimal cost.
Keep in mind that while there are some good accommodations for you as an entrepreneur, there are some drawbacks, too. For example, there can be higher competition as your supplier will be selling their goods as well.
Secondly, you, as a shop owner, have less control over your products as most of the shipping and other aspects are controlled by the shipper or 3PL company.
If you are satisfied with these conditions, let’s discuss the important aspects of how to start a dropshipping business.
Step 1: Find your Niche
The first step for how to start dropshipping is to choose a product from your intended niche. For example, you want to sell iPhone charging cables only in the electronics and mobile category.
Now you know that your target audience will be people who own or work with iPhones or products that use either lightning or the latest USB-C ports. So, make sure you know your product and are passionate enough to work on it.
Now, you need to market according to your niche and assess the market demand for that market. The golden rule here is that you will choose a product that will have tons of customers but low competition compared to others.
You can check higher-selling items against people selling them or use a search engine tool that tells you what keyword customers are searching for. What is the historical interest, and how much volume was the keyword searched for during particular months?
Step 2: Find Your Competitors
A few quick steps to gain access to your competitors is to:
- A good Google search with appropriate keywords.
- Use an SEO or Competitor analysis tool that can help you pick up your competitors.
- Check social media pages for your niche and specific keywords, and see which products are getting the most engagement and how well they are performing.
- Now, go to different marketplaces and see which stores are selling these items better.
Considering the same example, you need to search for “iPhone charging cable” or “[your model] charging cable.” Most businesses also include long-tail keywords to improve their search. In the examples before, you can add specific words like “[length],” accessories, etc., to make them long-tail and get more engagement.
Step 3: Find Reliable Suppliers
Now that you know your niche and have found appropriate keywords with the right competitors, it’s time to find the right source. It doesn’t matter if you source only from one or multiple sources; as long as they can manage inventory and dispatch on time, you are good.
You can search for good competitors through apps like Dropship from AliExpress, DSers app, or other global marketplaces. Make sure to check their ratings to get a better idea.
Step 4: Build your Online Store
The next natural step is to bring your product online, and the best way is to create an online store, preferably through a storefront like Shopify. You can use their store builder, choose from some of the best professionally designed templates, and customize them as you see fit.
We recommend adding not just catalog pages but also guide blogs and reviews to add more credibility. These aspects help you rank higher in search engines and reach more customers.
You can also use add-ins like DSers, AutoDS, etc. DSers are tools used to sync your products with AliExpress, while AutoDS is a good tool for more trend recognition with AI.
Step 5: Register your Business
The next step is to legalize your business and pay taxes. There are three ways to do that, each with its pros and cons.
Sole Proprietorship—Though you are wholly solely responsible for your business and don’t need complex paperwork, you have little security. In this mode, you have little protection against your assets, especially when you run into a legal problem.
Limited Liability Company LLC—It helps keep your finances separate from your dropshipping while providing better business accounting. The best part is that you get more tax benefits, saving you money. This also means that you have to file more documents, increasing your work.
C Corporation—These types of legalizations are more expensive and viable for larger businesses as they have more assets to lose. They have the highest legal protection, though, and they have double the taxation amounts.
Step 6: Marketing for your Online Store
Marketing is where you can give your business the wings it needs to fly. Following are some approaches or avenues to help you market better.
Paid Ads—You run paid or promoted ads on social media like Instagram, Facebook, TikTok, etc., which helps your business gain traction. These ads target your specific consumer.
Influencer Marketing – Collaborating with influencers helps your product reach a wider audience. It also helps your store gain more eyes and increases at least massively from the influencer’s followers.
Content Marketing—You can start blogs to create more content for your customers and rank better, such as guides and troubleshooting. It can even be instructional vlogs that help your customers use the product better.
Community Engagement—Go to forums, your social media pages, etc., and discuss your followers’ and customers’ pain points. Try to address as many as possible with a positive feedback loop to create productive engagement.
Dropship your Product Directly from China with NextSmartShip
Now that you have set up your online store and managed your potential customer engagement, you will start receiving orders. So, instead of worrying about managing logistics, get assistance from a 3PL, a third-party logistics company like NextSmartShip. Their professional logistic management tool can easily integrate with your store and provide you with a dashboard to manage all your orders easily.
So the next time you receive an order, you get the notification, and your order is ready to ship. This readiness comes from NextSmartShip already storing some of your inventory in one of their warehouses. They pick, pack, and then ship your orders to the doorstep of any customer worldwide.
Conclusion
Learning how to start a dropshipping business is the best way to become an entrepreneur and start your own business. If you know all the essential steps, you can get there in no time. That’s why we shared the key steps to kick-start your own dropshipping business with minimal investment.
The most important aspect of how to start dropshipping, is to collaborate with a 3PL like NextSmartShip and let them take care of your dropshipping. So, for a small fee and global presence, get in touch with a professional from NextSmartShip and worry about what really matters.
