If you have been thinking about starting your online business and have confused hearing all about dropshipping, this post is definitely for you.
We work with a number of Shopify stores and the one thing we know about them, is that they are passionate about getting the best of products to their target markets – no matter what it takes for them to get the products in place, to start with.
But if you’re not producing your own products or merchandise, you need to reach out to the best of suppliers to curate a product range that your customers would fall in love with. That’s where most people stop dreaming about starting their own online business.
But that is exactly where dropshipping comes in.
What is dropshipping?
Dropshipping is a retail fulfillment method where the Shopify store is not required to keep the products it sells, in stock. Instead of having a warehouse to store the products it sells, it can simply purchase the item from a third party, which them ships it to the customer directly.
So basically, you get to earn a said amount of profit on the products you choose to sell on your Shopify store without actually taking the risk of keeping them in stock before driving in customers.
Pretty simple, right?
Why should you experiment with dropshipping?
Dropshipping literally has endless benefits for all those who have been wanting to set up an online store on Shopify. Here are some of them:
1. No overhead costs
You don’t have to purchase an inventory. This cuts down the cost of renting out or buying a warehouse to keep stock of products. You just need to invest in creating a Shopify store to sell your products.
2. Lower business risk
Since there is little to no pressure of inventory, you don’t lose much even if your products don’t sell for some reason.
3. Location independent
With no office, no warehouse and absolutely no employees required, you can run a successful Shopify store with dropshipping, from anywhere. All you need are the basics – a laptop and of course, a stable internet connection.
4. Wider product range
You can find products in absolutely every category or niche. Once you decide on what you want to sell, you get to choose products from thousands of suppliers and add them to your Shopify store.
5. More profits
You don’t just get to choose the products you want to add to your Shopify store, you also get to decide the price you want to sell them at. This gives you the ability to define your own margin while setting up shop.
6. No shipment hassle
When an order is placed on your dropship Shopify store, the supplier is the one who has to take care of handling the product and delivering it. So the shipment goes directly from the supplier to the customer. You get to earn the profit from the sale and focus more on developing your Shopify store.
How much revenue and profit can you earn from dropshipping?
Typically, you can make margins from 15% to 45% by using drop shipping for your Shopify store. However, the profit margins also depend on what you decide to sell. For instance, if you’re selling consumer durables or luxury items like jewelry, electronics and more, you can easily draw in a profit of 100%.
Simply put, it is all about finding the right niche and a supplier for your products, before entering the market.
Although it might take time to reach your target market. To draw in a decent amount of traffic to your Shopify store might require consistent efforts like using social media posts, social media advertising or even search ads. But once you take off, dropshipping can actually turn into a revenue generating machine for your business.
There are a number of success stories around dropshipping. But you can read our favourite one one on how much money Johnny made from dropshipping, here.
Who is dropshipping for?
To be honest, it’s for anyone who is just starting out their business online. The low risk and flexible model of dropshipping makes it easier for you to test waters before getting into a business model for good.
But where do you begin?
Dropshipping can be overwhelming for beginners. There is just so much that you can do and so many products that you can choose from, that you might go off track while starting up. Right from choosing the right supplier to the branding, it is important to keep the smallest of details in mind.
And that’s why you need to equip yourself with the right tools to make your dropshipping experiment successful.
Must-haves to get started with dropshipping and get more sales
1. Competitor analysis
Before you even think about starting your own Shopify store using dropshipping, the very first step you should take is to analyse your competition. Irrespective of the niche you choose, you should always take a look at who else is targeting a similar market as yours, what have they won so far and identify opportunities. This can also help you decide on the products you want to sell on your store.
Recommended tool: SEMrush, Talkwalker
2. Search Engine Optimization (SEO)
When there are so many drop shipping online stores getting launched across the world, it is important that you optimize all your efforts right from the beginning. Don’t just rely on paid marketing tactics to drive growth. SEO is crucial to online stores. So once you decide the niche of your store, the products you want to sell, the target market you want to sell in and other demographics, list down the keywords you will need to optimize your product listings for.
Recommended tool: Google Keyword Planner
3. eCommerce platform
To start your online store, it’s better to choose an eCommerce platform than having to develop it all from scratch. This will enable you to set up shop in no time. A good platform will enable you to create your own theme, customize product pages, list down as many products as you want to and simplify it for customers to shop from you
Recommended tool: Shopify
4. All-in-one dropshipping
Now for you to decide how you will bring in more products to your store. Ideally, you should choose a dropshipping app that integrates easily with your online store. It should enable you to choose from thousands of products from various suppliers, and be able to handle the fulfillment and shipping of orders.
Recommended tool: Dropwow, Oberlo
5. mCommerce platform
Consumers spend 90% of their time on smartphones and almost all of it is spent on using mobile apps. In fact, the eCommerce industry has seen an exponential rise in the number of consumers who choose to shop from mobile devices. That’s why you need to prepare your online store to cater to mobile consumers. And the best way to do it, is to get your own Shopify mobile app for iOS and Android devices.
Recommended tool: Plobal Apps
6. Graphic maker
To customize your online store and then start marketing products, you’re definitely going to need some eye pleasing graphics. Since we’re not really good at creating graphics ourselves, we don’t expect you to be an ace at it either and even if you are, you can’t spend all your hours on design. That’s why you need to have some easy to make graphics.
Recommended tool(s): Canva, Piktochart
Ps. You can also choose free stock images from amazing sites like Pixabay, Pexels and Unsplash.
7. Social media scheduler
Once your online store and mobile app is up, it is time to start getting users to your store. The best channel to drive more attention towards your product, is to leverage social media. Now it might seem impossible to manage social media as well when you’re just starting off. That’s why you need to choose a social media scheduler.
Recommended tool: Buffer, Hootsuite
8. Loyalty programs
When you’re making so many efforts – social media and advertisements, to draw in more people to your store, it is important to engage them from the very first visit. Reward programs are a smart way to get new customers to get more involved with your store. This could include small profitable actions for you like making a purchase to earn points that they can redeem in the next buy, sharing your products to earn credits and others.
Recommended tool: Smile.io
9. Marketing automation
Running an online store comes with one of the biggest challenges – having to stay at the top of your customers’ mind and at the same time, ensure that nobody else takes away at that attention from you. That’s where smart marketing automation comes into play. It enables you to personalize your customer’s journey right from their first store visit and then keep them engaged with regular communication across multiple touchpoints like email, SMS, etc.
Recommended tool: Omnisend
While most of the tools that we listed offer in-depth analytics, it is good to have some additional data on hand. It will help you understand what products you should sell more on your store, which you can remove from your listing, what your customers are interested in, which channel is working for you the best for marketing and more. Simply put, it will help you decide if dropshipping is actually working for you!
Recommend tool: Google Analytics
Dropshipping is the latest trend in the eCommerce. While it’s definitely a low risk model that you can experiment with at any given point, it is also important to list down your short term and long term goals clearly.
Right from the brand you want to create in the digital space to the products you want to add in the future, the market you’d like to sell your products in, etc. It’s almost like strategizing for a regular business that you have been wanting to run – of course, made a lot easier with smart tools!
Have you tried dropshipping yet?
We’d love to hear your successes and failures with the new business model!