Dropshipping is one of the simplest ways to make money online. With it, you can source products from a third-party manufacturer or wholesaler and sell them as your own on your online store.
The supplier will take care of the inventory and logistics so you can focus on growing your brand and marketing the business.
This is a win-win situation for both retailers and suppliers as they can focus on just the business process. They are experts in how retailers can nurture customer relationships and suppliers maintain inventory and ship products. Dropshipping is used globally by both wholesalers and manufacturers to sell their products.
Follow these seven steps to creating a successful dropshipping business:
- Choose a business niche. Figure out what products to sell and what market to focus on.
- Find a dropshipping supplier. Pick a trustworthy supplier that provides products in your niche.
- Design the brand identity. Create a name, logo, and color palette that suits your business and target audience.
- Build an online store. Choose a hosting provider and a platform to make your website with – WordPress or website builder.
- Register the business. Decide on a legal business structure and get the necessary licenses to run your online store.
- Take care of the finances. Set up a business bank account and factor in the taxes and fees you should pay when deciding on pricing.
- Promote the online store. Drive traffic and sales to your website with SEO, ads, social media, and more.
Advantages of Dropshipping
Lower startup costs:
As a dropshipping business, you do not need to invest much in leasing a store, stocking inventory or paying staff. All you need is an online shop front where you can direct the customers and sell your products. This online shop could be your own website or on popular e-commerce platforms such as Amazon, Shopify or Squarespace.
Easy to start
Running an ecommerce business becomes much easier when you don’t have to procure, maintain and supply products. You can set up an online shop in as little as 15 minutes. Setting up the background processes such as accepting orders, processing orders, forwarding to the supplier and accepting and making payments may take a couple of days more. But when you compare it with starting a physical retail store, it is much easier to start dropshipping operations.
No inventory management
With dropshipping, you do not need to worry about maintaining inventory, handling shipping and returns, etc.
Flexibility in business operations
Since your complete operations are online, you can set it up from anywhere. All you need is a laptop and a good internet connection.
Flexibility in product offerings
As you are not maintaining the inventory yourself, it is much easier to diversify into other products depending upon demand.
Since the only thing you are doing is advertising and accepting orders, scaling up the operations is much easier. All you need is a robust platform that can handle traffic and accept orders. It’s the supplier who needs to worry about handling shipping and returns, so take care to choose a supplier who can quickly scale up as your business grows.