Dropshipping Tips for Starters
- August 16, 2022
Dropshipping Tips for Starters. Are you seriously thinking of starting your own online business? Or you just want to earn some extra income, but have no idea where to start. In this article we will present a business model that can be very interesting for you, because it is relatively simple to manage, does not require a large financial investment and represents a low risk of loss. We refer to Dropshipping. Here we will tell you what this model consists of and we will give you several Dropshipping Tips for Starters.
What is Dropshipping?
Dropshipping is a business model that you can use to manage your store without the need to carry inventory. Once you’ve made a sale, your supplier will ship the products from their warehouse, directly to your customer’s doorstep. In other words, the manufacturer of the product creates, packages and ships the product to your customer for you and using your brand, for this reason Dropshipping is a low maintenance business model.
Did you know that online sales currently exceed 3.5 billion dollars each year worldwide; and as many as 33% of the entire eCommerce industry uses dropshipping as a primary model of commerce. And that this sales method is not something new, since some Zappos companies began using it in 1999. And even other large stores such as Amazon and Sears have also used this business model for a long time. As you can tell, online businesses are becoming more common and little by little they are replacing traditional businesses.
How does Dropshipping work?
Next, we will present the general process that this business model follows so that you have a clearer idea of how it works.
- As a Dropshipping entrepreneur, the first thing you should do is create an online store, in which you will show all the products you want to sell. That is, your website.
- When a person likes one of your products and decides to make a purchase, you will charge directly for that sale, even if you do not have the product in your stock.
- Once the sale is made, you have the obligation to complete the order. You must send an order to your supplier with all the specifications of the product and complete information of your client; This step is very important, because in this way you guarantee that your client receives what he bought.You also have to keep in mind that at the time you make the order for your supplier you must pay the cost of said product.
- Once you make the payment and send the order, a process begins whereby the supplier is responsible for sending the product to the buyer
- The key to this business is that the final sale price is higher than the price offered by your supplier. And that margin of difference will be the benefit that remains for you. For example, let’s imagine that your supplier sells a product for 15 dollars, so you are going to offer it in your store for 25 dollars, when a customer buys that product in your store you will receive a payment for those 25 dollars, but you are only going to Pay your supplier $15 to ship the product to your customer, and you’re left with a $10 profit.
Why should you adopt the Dropshipping model?
There are different reasons why Dropshipping becomes an excellent option for people who are about to start an online business for the first time, here we will mention some of them.
- Low risk: because you only pay for the goods that you have managed to sell to customers. This is a great advantage because you do not have to make an initial investment to have an inventory and you do not invest in operating expenses such as a warehouse, personnel to manage it, etc.
- Low cost: Since most of the products come from China, the cost of the products is generally quite low, and therefore, you can price your products at market value and run a profitable business.
- Easy to start: you can start selling the same day you sign up. Products can be imported quickly, and since you don’t have inventory, you can start promoting them right away.
- Automated business: there are currently various free and paid tools (plugins) that make it easier for you to import products directly from suppliers to your store. And it helps you manage any changes in inventory or prices, so there are no discrepancies between what is shown in the online store and the actual characteristics of the item in the market.
Dropshipping Tips for Starters
Now that you know what Dropshipping is, how it works and what are the benefits of venturing into this business model; The time has come to give you some tips that we consider essential for your online business to be successful, do not stop reading this article.
Focus your attention on Marketing.
Because this business model works almost in an almost automated way, you do not need to invest a lot of time in its operation. However, you need to spend more time learning how to master banner ads, increase visitor traffic to your store, and get those visitors to buy one of your products.
Ads and search engine optimization can help drive more traffic to your store. It is important that you keep in mind that most e-commerce stores manage to sell their products only between 1 and 2% of the visits that come to their store. This means that for every hundred people who visit your site, only one or two of them will make a purchase, so if only ninety people come to your online store, it is statistically impossible for you to make a sale.
SEO is a good idea to attract traffic with little financial investment.
One way you can get traffic quickly and easily is to pay for advertising and that can help you generate sales faster. However, advertising can be expensive and many of the entrepreneurs do not have the financial resources to invest in large campaigns.
Therefore, an alternative you can use is SEO, this method can help you drive sales in the long run by allowing you to rank high in search. SEO is blog content creation and product page optimization can help you build a search audience with minimal ad spend and keep acquisition costs low.
Create an amazing offer.
An important tip for dropshipping is to create an attractive offer; If you present the right product with the right offer, people who visit your store will be more likely to decide to buy one of your products. Package deals can also work very well. When creating a bundle deal, focus on selling more of the same product. For example, if you sell pet toys, your package will include more pet toys.
Avoid setting low prices on your products.
It is common for entrepreneurs to decide to set very low prices on their products (almost equal to the price offered by the supplier) thinking that this way they will guarantee higher sales. However, this can be a death trap.
It is true that you pay the supplier for the product once the customer paid for it, and for that reason you think it is a good idea to sell your products at a low price; but you should consider the operating costs of your online store, such as hosting, internet connection, marketing, etc. So your small profit margin will be diluted in these expenses and in the end you will be left empty handed.
Therefore, do not lower your prices. As long as your prices are fair and within market value, you should maintain a profitable price.
Make sure to optimize your website.
One of the most important dropshipping tips is to make sure your website is customer friendly. The home page must be interesting, with images that capture the attention of visitors and decide to stay longer to browse your store.
It is also important that your products have them by categories, this makes it much easier for people to find the products they want to buy. If you have all the products in a single category, it is very likely that people will get desperate from seeing too many products and end up leaving your site without buying something.
Another important point that you must take into account is the ease for people to buy in your store. You have to be willing to accept different payment methods (bank cards, Paypal, transfers, etc.), if you decide to use a single payment method, it is very likely that many people will be discouraged and not make the purchase.
General VS Niche Store
If your goal in creating a store is just to experiment and find the right niche, create a general store.
If you have already researched or validated your business idea, you should work on building a specialty store. A specialty store allows you to easily find the right audience for your products.
Prepare for challenges and changes.
While a Dropshipping business is easy to start and great for new entrepreneurs, but it is still a business in the end. Therefore, you are going to experience challenges and obstacles that will require you to find a way to overcome adversity.
A change or a challenge are not good or bad, they are a requirement if you want your business to last for many years. You will need to have the intuition to know when to take action in your business to ensure its continued growth.
Stay active every day
Running a business requires daily effort. You don’t need to spend eight hours a day working on your business, but you should spend at least an hour a day on your store as your sales increase. Every day, you’ll need to process orders so that products reach your customers promptly. You’ll also need to respond to customer inquiries within 24 hours (ideally less). Marketing efforts will also need to be done every day.
Twenty-five products are enough to launch your store.
A very common mistake that people who start with this business model make is importing too many products to our store. We have the false belief that the more products we offer to customers, the more sales we will make; but this is not so, quite the contrary. It can be counterproductive to have too many products. because customers can feel overwhelmed by so many options and prefer to leave the store without making a purchase.
Also, the more products you have, the more work you do because you have to edit the descriptions of each product and editing 25 products is not the same as editing 300 to 400 products, it becomes an extremely tiring task. Finally, do not forget that the more products you have in your store, you must have contact with many more suppliers and this can cause operational and logistics problems. For this reason, the ideal is to start your store with 25 products and once you have mastered the operation of your store, gradually increase the number of products.
Request product samples
Another good piece of advice we can give you is to ask your suppliers for samples. This will allow you to take better photos of the products you will offer; You will also be much more precise when writing product descriptions. And you will even have better material for your advertising campaigns.
In addition, you will get to know your supplier better, you will be able to verify delivery times, how the product arrives at your door, if they meet their conditions, and in this way you make sure that these suppliers are trustworthy.
Other relevant Dropshipping Tips for Starters
How can you choose your Dropshipping niche? If you are still thinking about the best niche to start your Dropshipping business, here are some tools that will help you identify which niche may have the greatest sales potential.
- Google Trends. It is ideal to know if the popularity of a niche over time. However, by itself it is not enough to determine if a business is viable or not. Some niches may be on an upward trend, and may not have enough search volume to warrant profitability.
- Google Keyword Planner. It helps you see the competitiveness of keywords within your niche. However, with the free version, you will see that the ranges are very wide, so consider paying for this or other SEO tools.
- Browse popular websites within your niche, this can help you understand what trends you should currently include in your store and see what products are selling best
- Check the volume of orders. Search for products based on their order volume to find out how popular a product is. But don’t rule out a dropshipping business just because their order volume isn’t very high, it could just be that they are newer products.
Now that you know what Dropshipping is and how it works, you are better prepared to decide if this option is the most convenient for you.
We believe that this business model is very useful for entrepreneurs who are about to join digital commerce and do not have a large budget to invest in their store, because it represents a low risk of loss.
But, you have to keep in mind that no business is perfect, like any alternative, this implies that you invest time in learning how the whole process works, developing sales strategies, looking for the best products and suppliers, knowing your competition.
In addition, you have to be prepared to face new challenges and challenges every day. However, once you understand and master the entire mechanism of Dropshipping, you will realize that it is a model that can give you great financial and professional satisfaction. So do not give up and strive every day to achieve your goals. These were the give you several Dropshipping Tips for Starters.