Setting up Dropshipping is one of the easiest ways to make money online in 2020.
The growth of Amazon, eBay, Etsy, Shopify and other online markets and platforms means anyone can start an online store for just $ 20.
But with the barrier of entry so low, dropshipping has increased over the past decade, which means that many markets are highly competitive.
If you are thinking of starting a Dropship business – whether as a crowd or leaving a full-time job – you can save time and set yourself up for success by following the simple steps outlined below.
But first, what is a dropshipping job?
A dropshipping business can sell goods to customers without any inventory. The buyer buys the item from your store at the retail price. Then pass the order on to your reseller, who is paying the wholesale price. Once your supplier receives an order, the item ships to the customer directly under your business name while earning a profit margin. All you have to do is set up a retail website, find customers and handle customer support.
Thousands of people around the world who make five, six, and seven digits from shipping with a drop and save without reason why you would do the same.
In this complete sender shipping guide, we will show you how to get started with the drop shipping business in 5 easy steps:
- Choosing a profitable drop niche in 2020
- Finding reliable ship suppliers
- Obtaining a sales tax ID
- Choosing the right sales platform for your business
- Implement customer acquisition strategy
What is dropshipping?
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Understanding how the dropshipping business model works is important because it is quite different from traditional retail and e-commerce.
Here’s the official definition:
Dropshipping is a supply chain management method in which the merchant does not keep the goods in stock but instead transfers customer orders and shipment information to either the manufacturer, other seller or wholesaler, who then supplies the goods directly to the buyer.
How dropshipping works
In simple terms, dropshipping works this way:
- The buyer buys the item from your store at the retail price
- The order is forwarded to your supplier (you pay the wholesale price)
- The supplier ships the item to the customer directly under your company name
This means that you – Droppers – have to buy and store supplies, which saves you having to invest a lot of money upfront.
This also eliminates the risk of wholesale buying and not being able to sell all the products, leaving you out of pocket.
This is why dropshipping is so popular – it requires minimal investment, but brings similar benefits to traditional retail models.
Number Release Statistics: Are numbers being added?
The rebellion over dropshipping means that some people are skeptical of it as a viable business model and careful about diving.
There is limited data on specific Dropshipping, but this information should give you peace of mind (and, hopefully, a sense of excitement).
- 22-33% online companies have adopted dropshipping as their core business model.
- Dropshipping accounts 34% products sold on Amazon in 2011 delivered $ 14.2 billion of shipped products from just one online marketplace.
- Average earnings of the manufacturer 18:33% more than a manufacturer using traditional retail models.
- Global ecommerce sales were at $ 2.3 trillion, Projections show growth up to $ 4.48 trillion to 2021
- 84% Internet marketers say that establishing positive relationships with drug suppliers is the first barrier to starting an online business.
Google Trends data also shows a significant increase in dropshipping interest in recent years.
What you need to get started with dropshipping
Aside from a positive attitude, good work ethic, and genuine motivation to be committed to your new business venture, there are only a few basics to start a business with Dropshipping.
- Product for sale
- Supplier of this product
- A platform where it can be sold
- Sales Tax ID
Explore them in more detail.
How to Get Started with Dropshipping in 2020
Step 1: Select a niche drop
Niche is a market segment. For example, bluetooth speakers are a popular niche in the home audio market. You can even say that external, waterproof bluetooth speakers are sub-niche niche bluetooth speakers. You get the idea. The more specific your niche is, the better.
Choosing a niche is the first step to launching Dropshipping. The rise in popularity of dropshipping means that it is increasingly difficult to find niches that are already saturated. But new products and niches are emerging every week, so the possibilities are almost endless.
A common misconception about dropshipping is that you can be successful and profit in any niche, but it’s just not true. If you choose a niche that is already saturated with sellers or dominated by major brands, you will face a futile battle with your new job.
Here are some guidelines to help you choose the niche niche that will make you money online in 2020:
Dropshipping products that work well on Amazon and eBay
While it is possible to throw everything from toothpicks to kitchen sinks, some products are more suitable for crushing than others.
The perfect dropshipping product is mainly:
- Not dominated by major brands: What is the first company that comes to your mind when you think of the word ‘smartphone’? Apple, probably. Or Samsung? These major brands are launching the smartphone market and it will be difficult for any business to compete for a slice of that cake. A good dropshipping product dominates the main brand, so you can have a better chance of capturing a chunk of the market.
- Small and light: It is a general rule that a good bottle delivery product can be fitted into a shoe box and weigh less than 2 kg (4.4 lb), which is a weight limit for ePacket. This will save you an extra amount of shipping.
- Off-season: Ideally, when you start out, you want to avoid products that are only in demand once a year. For example, selling something you only spend on the beach during the summer or Christmas decorations really limits your sales power during the off-season. Choose products that look for products throughout the year.
- Retail between $ 15 and $ 200: This price range is known as the “sweet spot” of e-commerce. Anything cheaper than $ 15, not making a big margin, and anything over $ 200 will be hard to sell en masse. While there are plenty of exceptions to this rule, following it will make it easier for you to begin your Dropship journey.
Brainstorm business ideas
Now that you know the criteria for a good niche of dropshipping, you can start narrowing down product ideas for your ecommerce business.
You should keep in mind to imagine at least 10-20 product ideas, then use the guidelines above to remove or remove them from the list.
When you are done with this process, you may only have a few ideas for products that you think are viable. If you do not have one, then you must restart the process.
If you have at least one solid product idea at this stage, you’re ready to move on to the next level.
Use SaleHoo Labs to research the market
SaleHoo Labs is a powerful market research tool for dropshippers and e-commerce store owners. It provides you with valuable information on tens of thousands of products in 25 categories, such as:
- How much competition is there for each product, based on the number of people who sell it on Amazon and eBay
- The average retail price per product is sold online
- Sales rate of each product
- List of trusted product suppliers you can contact immediately
This can help give you product ideas and save you the time you need to manually research the market.
How to outperform and sell out your competition
If you want to stand out with the thousands of others who are considering launching dropshipping in 2020, there are a few tricks up your sleeve.
You need to find a way to be better and smarter than your competition to be more efficient and get more sales from them.
How do you do it? In the same way that championship sports teams like the Philadelphia Eagles or Golden State Warriors prepare each week – by studying the competition.
- Determine your competition: Start by finding the best sellers in your niche on Amazon and eBay. Also consider how many sellers there are in the niche.
- Analyze their product listings: How do they set up their product lists? What are their photos? What kind of sales copy do they use? Find ways to improve yours. You may recognize unique selling points that you can use or other enhancements that will make your product listings more attractive to potential customers.
- Read customer reviews: Take some time to scroll through the top best sellers in your niche. Take into account what your customers liked and complained about so you can improve your access to customer service.
When starting a dropshipping business, you should absorb as much information from as many sources as possible. Product listings and best seller reviews in your niche are perfect places to look for ideas to improve on your competition.
The first step to starting a dropshipping business is choosing a niche. To restart the restriction:
- Choose an easy-to-buy product / niche
- Make sure they are sufficient for your products
- Research your competition to give yourself an edge
See this guide for more information on deciding what to sell online
For product ideas that will make money online, see this post
Step 2: Find your boat supplier
For many ecommerce entrepreneurs, finding a trusted supplier is the hardest part of starting a business with Dropshipping.
You trust your suppliers to keep your product in stock, maintain product quality and ensure timely delivery of orders to customers. As a ship supplier, the supplier is your most important business partner.
What to Ask a Ship Supplier
A good aircraft supplier should:
- Actually be crushing: Not all product vendors offer dropshipping as a service. Some are simply wholesalers or manufacturers. Before making contact, make sure the crusher supplier.
- Have experience (+ helpful staff): You want a supplier who has years of experience with dropshipping. Suppliers take great responsibility with drophipping, so you want to make sure you can count on them at all times. A good sign is if a sales rep comes in contact, it seems helpful and well informed. If you suspect relationships are not experienced, go elsewhere.
- Don’t charge large order fees: It is therefore perfectly normal for Dropshi suppliers to charge a small fee for their services. Finally, stay in stock and arrange packing and shipping for you. These fees should only be a few dollars (usually $ 2- $ 5). If the supplier charges more than that, you should let them go.
- Enable fast delivery: Most boat suppliers are in China, so expect more overnight deliveries. However, you want to make sure that your customers get their products as quickly as possible. Check their delivery times to the countries you service. One or two weeks is acceptable for dropshipping. Longer than this could result in negative customer feedback.
- Have quality products (+ product photos): You should always look for samples of quality testing products before submitting them to the supplier. The supplier should ideally have high quality images that you can use in your product listings.
- Make recommendations on request: A good supplier should be ready to connect with companies that can check their service. Ideally, you want word-of-mouth recommendations, but if that is not possible, you can change your mind based on online customer reviews (although be aware that online reviews can be manipulated).
Where to find reliable suppliers
There are basically two ways to find good boat suppliers. You can search online manually or use a wholesale directory like SaleHoo.
- Finding a Vendor Online: You can simply enter your product plus a “vendor” into Google and see what’s coming. Or you can search for your product on sites like Alibaba.com or Aliexpress.com. Many Chinese-based suppliers use these websites to sell their products.
- Using the wholesale directory: This can save you a lot of time and help you avoid e-commerce fraud. SaleHoo has over 8000 vendors that have been vetted and verified. You can reach them in just a few clicks and have confidence in their ability to provide good service.
Questions to ask vendors before doing business with them
Take a closer look at how to find drug suppliers
Find a US Ship Supplier for your Online Store
Step 3: Get your sales tax ID
If you set up your business in the United States or Canada, then you most likely need a sales tax ID (also known as a retail or reseller license, tax code, resale number, resale certificate, or vendor license).
Sales tax is a tax levied on all sales of physical goods to consumers and typically amounts to about 6-9% of the sales price. Most states require you to have a tax code, but there are exceptions, including Alaska Delaware, Montana, New Hampshire and Oregon.
Click on your country to find the right sales tax information for you,
and register for your license.
A cost standard for businesses to pass that cost on to consumers by adding it to the retail price.
Applying for a tax code is easy and inexpensive. You can do this by visiting your local office or online – just Google “[your state] + Sales tax ID “.
To obtain a sales tax ID, you may need to be a business entity, company, or sole proprietorship (which applies to many domestic online businesses) and have a federal tax code.
While it is important to collect the correct amount of sales tax (otherwise they are always responsible for the difference), not all eBay sellers require a tax code.
Accordingly, some wholesale suppliers require you to have them before doing business with you.
Related: What is an EIN number?
Step 4: Choose a sales platform
We have decided on a product and saved a lined supplier – now you need a place to start selling and making money.
Choosing the right sales platform or online marketplace is crucial to the success of your business – but which platform is best for you?
You have to decide between selling on a standard platform or starting your own independent online store.
You have looked at the pros and cons of different sales platforms and online markets.
The most popular internet markets
Most dropshippers use a well-established online marketplace, such as Amazon or eBay, especially at launch. Why?
- Simply set up an account and start selling
- Already attracting huge amounts of traffic (leads)
- Consumers trust these platforms
- Through them you can make significant money
However, they may be as follows:
- You will be charged a fee for each sale
- You have limited control (branding, customer service, product photography, etc.)
- You are in direct competition with sellers on the same platform
- Consumers have a huge selection in one place
However, here are some of the most popular online markets for Dropshipping companies.
- Amazon: The most famous of the online markets, Amazon said it has 300 million active users. In 2016, more than 100,000 sellers made more than $ 100,000 on Amazon. Amazon offers additional services such as Amazon fulfillment and Amazon Prime. Fees vary widely, but it is estimated that most sellers will pay Amazon about 15% of their sales price. It uses the popular Dropshippers option.
- eBay: EBay says there are 171 million active users with about one billion products listed in 190 different markets. EBay listing fees (but offering a limited number of free listings) and selling fees, which are generally less than 10%. eBay has an auction option and also acts as a standard online retail platform.
- Etsy: Etsy is said to have 54 million active members, about 2 million active sellers and about 32 million active buyers. It is extremely popular with women (84% of salespeople are women). Etsy has established itself as a more trendy online marketplace with an emphasis on arts, crafts, home accessories and handmade items.
For a full list of alternative ecommerce platforms, see this post.
Creating your own online store
A lot of Dropshippers are moving through the launch of their own online store. Although it requires more upfront investment, this really is the best option for earning and building a business Internet in the long run. There are many online tools, such as Shopify and SaleHoo stores, that make it easy to get started.
- You have complete control over your branding, design, appearance, etc.
- You started building an independent third-party platform business
- No fees and higher profit margins
- There is no direct competition from other sellers on the same platform
- It costs money to set up and design your own store (web hosting, etc.).
- Miss guaranteed (customer) traffic from established platforms
- It takes time to rank on Google and they often have to invest in SEO and marketing
If you have the time and money to invest in your dropping business and plan to invest in it in the long run, then starting your own store is a good option, especially if established platforms become more saturated each year.
Step 5: Implement a Buyer’s Purchasing Strategy
Now that you have a sales platform for your Dropshipping business, you need to attract customers to your store. This is where the customer acquisition strategy comes in.
Buying customers is the art of persuasion. You can consider it advertising and marketing. Sounds expensive, doesn’t it? But it has to be. You can start the fast (paid) track or the slow (free) track to win new customers. So, look at both strategies in more detail.
Quick results (paid)
Facebook Dropshipping Ads
Facebook is the largest social media platform. Advertise a great place to advertise your products because you can reach a huge audience. This is how Facebook makes its money, so that every customer you make with this method comes at a price. Ads on Facebook are a good option for the following reasons:
- Bad easy to get started
- You control how much you spend each day
- You can target very specific demographics (location, interests, relationship status, etc.)
- It can give quick results
- Helps to increase brand awareness
- A good ad or enhanced post can go viral
For a comprehensive guide to Facebook Ads for Beginners, check out this post.
Google Ecommerce Ads
Google is the most popular search engine so far. If you have an online store, you want it listed on the first page of Google. You can achieve this organically or you can buy ads in your store to appear at the top of the page for the keywords you want to rank. Google ads are a good option for the following reasons:
- You can achieve great exposure in search results
- The world’s largest advertising platform (Google Search, Youtube, Gmail)
- You can target very specific demographics (location, language, device, etc.)
- Maximize the exposure of your high-volume keywords to your niche
Social Media Impact Marketing
Influencer marketing has become a major part of customer acquisition for retail brands in recent years. This could play an important part of any customer acquisition strategy in 2020. This can be especially effective if you are in a trending niche. For example, if she is selling a new style of bag, you can contact her Instagram model and ask her if she will share her post with the bag, tagging your business. One post can result in a bunch of new fans and customers. The price of influencer marketing depends on how popular the influencer is. Kim Kardashian’s post could cost $ 250,000, while a post with 10,000 followers could cost just a few hundred dollars.
Slow results (free)
Blog or blog marketing
This includes finding blogs or forums that are related to your product / niche and actively engaging in discussions. By positioning yourself as an authority in your niche and incorporating a link to your site, you can increase traffic and attract new customers.
This most often takes the form of a blog on your store’s website, Youtube channel, trendy Instagram posts, or humorous Twitter posts. Marketing intent involves creating valuable content that helps create an audience that you can then convert to customers. It is not as explicit as advertising and should always serve your audience more than your brand.
Social Media Marketing
Organic reach on social media is harder and harder to achieve, but it’s still possible. If you can consistently create and share great content on your social media channels, then eventually build the following that you can then turn into customers.
Creating an email list is still one of the most effective ways to attract customers. You need a way to capture email addresses, such as a sign-up request or a bid or contest that requires an email address. Once you have a decent list of email addresses, you can reach a large group of regular people for free.
As you can see, there are several strategies for attracting customers to your store. What is your preferred way of growing a new boat business?
Huzzah! We have come to an end and by now you should be on your way to starting an e-commerce drug business.
Still, the work is not done yet. You must now run the business successfully.
But worry worry! As long as you follow these few tips, we’ve had a successful ecommerce delivery business for years.
- Keep updating your website. Work on your SEO and create high quality content to drive traffic.
- Maintain your relationship with the supplier. Keep tabs on products offering and when you’re ready, look for something more (Tip: You can find SaleHoo’s Market Research Lab to find new hot products)
- Keep up to date with customer service. Answer emails and questions and update your FAQ page (if you have one)
- Stay on top of your social media. Refine your ads, run contests and promote like crazy.
We hope you liked this article on how to get started with Dropshipping. Did this encourage you to create one? Leave a comment below. And forget to share this article with your entrepreneurial friends.