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Everyone wants to start a side hustle today. In fact, according to statistics, as many as 44 million Americans have a sideline. And this is where the dropshipping game comes into play.

If you want to earn a decent passive income by running your own ecommerce store, but are suspicious of complexities like inventory, shipping and record keeping, then Dropshipping is the perfect option.

However, if done properly, drophipping can help you make a lot of money.

In this definitive dropshipping guide, we cover everything that is, how to get started, how to start a successful dropshipping business.

Let’s start.

Content

What is dropshipping?

Dropshipping has been around for a while. However, contrary to popular belief, it is not a fast-enriching scheme.

This is basically a retail fulfillment method where the store does not own or maintain inventory. Instead, you purchase the item from a third-party source and ship it to the customer.

You do not have to handle the product yourself or worry about the shipping process.

One of the biggest differences between a regular e-commerce or brick-and-mortar store and a drug delivery store is that the person selling the product does not handle inventory.

Consider Best Buy, one of the largest electronics retailers in the US. Suppose a customer enters Best Buy, buys a new smart TV, pays the bill and exits. Essentially, Best Buy must store a smart TV in its retail location so that the buyer can see it and make a purchase.

They also have to display the TV, set up their store so that it can be displayed, make payment counters for the consumer to make payment, keep packaging material on the payment counter, ship the TV from storage, and so on.

Dropshipping is different here.

In the case of drop shipping, retail does not store the TV at all. Instead, when an online order for a TV is processed on their website, the dropshipper automatically notifies the wholesale supplier that ships the TV at the customer’s doorstep.

Here’s a simple one an analysis of how dropshipping works:

Dropshipping business model

Since you don’t need a lot of money or resources to get started with dropshipping, its popularity is on the rise. More and more merchants are jumping on the belt.

And it makes great business sense: you don’t have to store supplies, you don’t have to hold supplies and you don’t have to worry about packing and shipping. You get someone to do all these things for you, while making a decent profit.

Take a look at these statistics:

  • In 2016-2017, about 23% of all online sales, which is $ 85.1 billion, were made through dropshipping.
  • In fact, even Amazon generated 34% of its total dropshipping sales back in 2011. The numbers only increased every year.
  • And it is a very lucrative medium of running a business. The study proves that manufacturers who do business with retailers end up earning 18.33% more profit than those who rely on more conventional channels.

As the internet reaches millions of households worldwide, drugstore sellers can quickly expand their reach and subsequently increase their income.

Simply put, here are the exact steps to buy Dropshipp:

  • Market your products online through product catalogs
  • Attract online shoppers to make online purchases
  • Seller forwards the item list to the respective manufacturer / wholesaler / distributor, along with buyer details such as name and address
  • The manufacturer / wholesaler concerned supplies the buyer with a list of items (under the name of the drug dealer).

Dropshipping requires great trust and long-term partnership between multiple stakeholders such as retailers, suppliers, distributors and manufacturers.

Ready to start dropping? Start with Shopify’s 14-day free trial.

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Pros for Dropshipping.

The biggest reason why drophipping has proven to be a lucrative business opportunity is that it does not have a major barrier to entry.

Anyone with a small investment can start their own dropshipping business.

The following are some of the benefits of starting a business on Dropshipp:

1. Minimum startup costs.

Unlike brick-and-mortar stores or a regular e-commerce store, you do not need physical storage to store materials. You only need to pay for the domain and hosting plan of your Dropshipping site.

You do not have to worry about losing revenue or retaining excess inventory.

You do not have to manage or worry about delivery costs or delivery times.

2. Minimum order fulfillment costs.

Since you are not responsible for purchasing, packing and shipping the product, you do not have to worry about the extra cost throughout the process. You simply pass the request on to a wholesaler or import products with a company like AliExpress and you’re ready.

They will be responsible for moving the product along the supply chain. All you have to do is ensure that the customer has received the product or not.

3. Low risk and flexibility.

If inventory handling does not naturally result in minimal risk. On top of that, you can offer a much more comprehensive selection of products, along with great upside potential.

If you cannot increase or profit from your Dropship business, you can cancel at any time without any monetary loss.

For added flexibility in the business, you can easily collaborate with multiple wholesalers, distributors and suppliers.

So that you do not have to pay in advance for product supplies, you always have money in your hands.

4. Turns easier.

You have the ability to easily change your niche and move to another product in case your current domain area fails.

Dropshipping allows you to smoothly facilitate the sale and cross-selling of products.

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Against dropshipping.

No business model has its fair share of disadvantages. And the drophipping model is no exception.

The following are some of the common disadvantages of dropshipping models:

1. Excessive reliance on your partners.

Since you don’t physically have the product, you always have to trust your partners to hold supplies and hope they don’t run out.

2. Small order delivery control.

Since you do not have any product in stock, the onus is entirely on your partners to deliver the product by the appointed time. If they do not deliver the product on time, customer satisfaction decreases, which will eventually damage your business. That’s why effective partners are key to running a successful business.

3. Impaired customer service.

With Dropship, you are not responsible for the entire supply chain process, including packaging, storage, shipping, etc. Everything is taken care of by your partners. As a result, if they make a mistake, and they refuse to correct it, you will not be able to answer them. You are now on your own to find a dissatisfied customer.

4. The lack of a brand.

Because you sell other wholesalers on your site, your brand image may suffer. To mitigate this, make sure that the wholesaler allows you to insert branded packaging materials after shipment. That way, even if the product comes from another brand, the unboxing experience ensures that the customer remembers who you are.

5. Lower profit margins.

There is less profit compared to producing your own products. In fact, some dropshippers simply shut down their business because of inadequate profit margins. If you want to make the same profit as a traditional retail salon, you will need to sell a lot more products at a high price.

Generally, you can expect a margin of 20-30% and a conversion rate of 2-3%. These metrics may change depending on the industry and the situation.

Depending on your average profit margin and conversion rate, you can estimate your profit using this equation:

(Turnover x 0.02) x (Average Order Value x 0.2) = Profit

These are the pros and cons, in a nutshell.

Advantages and disadvantages of delivery

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Who is Dropshipping for?

Dropshipping is the ideal way to get into the business world for entrepreneurs and beginners who enjoy small budgets and those who don’t want to invest their money.

Earlier, a large amount of money was needed to start a business. People usually get parents to lend them capital or work overtime to make money. In fact, Jeff Bezos started Amazon by borrowing money from his parents, and we all know how it worked out for him.

The point is, without start-up capital, a big obstacle is starting a business.

But now, with the advent of digitalization and social media, starting an online business is easier than it has ever been at any point in history.

Still, dropping a model is a slow road to success and making huge profits. Simply put, it is a game of patient man

Great for:

  • Complete entrepreneurs
  • People looking at sustainable growth
  • Professionals interested in their own retail business
  • People savvy in marketing that can drive significant web traffic

Devastating it is the perfect business model for the following group of people:

1. Entrepreneurs at entry level.

Dropshipping is a great business model to get you started with the world of business and learn the tricks of the trade for the first time. Entry-level entrepreneurs are likely to succeed several times as they try to understand new concepts in business.

However, since there aren’t many roles in the Dropship business, they can afford to fail.

For example, you could run an e-commerce site that sells cheap t-shirts to test marketing accessories. With such a low barrier to entry, it is a great practice for beginners to get started.

2. Multi-niche product sellers.

If you sell a wide variety of products, dropshipping is a great option for you. In such a scenario, holding stocks and stocks of a wide range of products becomes very costly and may not be sustainable in the long run.

This is true, especially if you plan to sell a range of products in Target or Walmart. If you opt for the Dropshipping model, in this case you can save a lot of money by eliminating the need to maintain stock, stock and sell stock or stock.

3. Budget Entrepreneurs.

It’s easy – you want to make money, but you don’t have the money to invest now. Obviously renting a warehouse or retail outlet is expensive, since you have a very budget.

In this case, dropshipping is the perfect model. Without first investing in supplies, brokers or warehouses, you can start a business of delivering a ship at virtually zero cost.

4. Retailers seeking validation.

Consider this scenario:

You have a product that you can sell, but you are not sure if it will work in the market. Creating a warehouse and renting space for it does not seem wise at the moment. First of all, you need to test the waters.

With Dropshipping, you can get the confirmation you need at no initial cost. If the answer to your product proves positive, you have won and you can now launch the product widely. If it’s negative, at least in the end you won’t make big losses.

In any case, you will gain enough experience and may succeed in your journey.

5. Side Hustlers.

If you are looking for passive income or want it make money online then dropshipping is a great option for you. You do not have to lift your finger or store products. Dropshipping is a great way to sell products without storing inventory and earning passive income for years to come.

A beginner may face some challenges at first, such as selling products, reaching out to potential suppliers, etc. However, once they get the ropes to work, drophipping can turn out to be quite lucrative.

Ready to start dropping? Start with Shopify’s 14-day free trial.

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Finding Dropshipping Products For Sale.

Dropshipping is a pretty simple and straightforward business model. With the right partnerships, products and a little patience, anyone can launch it and reach the zenith of success.

However, the US index of any Dropshipping company is ultimately the ‘product’ you sell and the value it offers in return.

Choosing the right niche will help you tremendously. This will help you determine your brand vote and will ultimately help you reach out to a specific group of customers, such as tech enthusiasts, bodybuilders, etc.

Here’s an example of a Dropshipping store that sells Bluetooth speakers:

An example of a dropshipping store

Here a list of some of the most up-to-date dropshipping niche ideas for you to try in 2020:

  • Tech Niche Ideas: Wi-Fi 6 products, wireless technology, Wear & Accessories, 360 degree cameras & accessories & VR devices
  • Niche Ideas: Smart home appliances, tourist equipment, home garden tools, swimwear and water bottles
  • Niche Ideas: Rattan Bags, Buckles & Hair Clips, Metallic Apparel, Women’s Panties & Lace Apparel

In addition, you need a proven set of criteria to determine the type of product you want to sell, including:

1. Prices.

When you buy products, a huge part of your success and profits will depend on retail and wholesale prices.

A low price may increase sales, but the profit margin will not be large. A high price, on the other hand, will deter most buyers from buying, but the margin will be higher. Therefore, it is crucial to strike a balance between prices as you progress.

2. Size.

Size and weight can manipulate and affect product prices more than you anticipate.

A larger and heavier product will order:

  • Higher packaging costs
  • Higher shipping costs
  • Cost Management (sometimes)

It makes sense to at least start with smaller products and agree on a lower margin. This will at least help you avoid the extra costs you are likely to have with larger and heavier shipments.

3. cross-selling and selling.

It is better to choose a niche that will help you cross-sell and up-sell your products.

Check out some of the key benefits of cross-selling and cross-selling:

The benefits of cross-sell & up-sell

Both of these techniques not only help you sell more, they also help you earn more revenue and increase your margin at no extra cost.

A great example of cross selling would be selling shoes with shoes or selling mobile phones with custom, specific phone covers.

An example of elevated sales might be the Dollar Shave Club campaigns, which draw you in with the appearance of shaving for $ 1 and then displaying pricing options on their website.

Their point of sale? Excellent value!

Both sales and cross-selling can help you earn great profits and achieve your business excellence.

4. Reproducibility.

It makes sense that you sell products that have a moderate shelf life. Low durability products need to be replaced, and with luck, more customer orders can get in the way.

It’s like comparing a toothpaste to a refrigerator. Although you will need a new bottle of toothpaste every other week (low durability), you probably won’t replace your refrigerator in the next decade or you will (high durability).

It’s all about playing in the margins, and it’s up to you to decide what type of product you want to sell.

5. Rough shopping.

Rough shopping is a product that the consumer does not want to buy, but must do so because their options are limited. For example, products like hospital insurance, medical supplies, tires, refrigerants, and motor oil are all rough purchases. Nobody wants to buy them, but due to difficult circumstances they have to.

If you sell products like tires and refrigerants, orders can be between and between, and point of sale can also become a problem for you.

You should be careful while selling these products. They are not wholesale either and the margins are very low.

With rude purchases, it becomes challenging to maintain yourself over a long period, so you may want to avoid such products at the beginning of your drophipping venture.

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Common dropshipping errors to avoid.

As lucrative as it may be, dropshippers are starting to expect too much from dropshipping right from the start.

In the expectation of quick results, they end up making a lot of common mistakes.

Here are some common crushing errors to avoid:

1. Too much dependence on suppliers.

Too much reliance on a supplier is not healthy for a sustainable business. Be sure to set clear standards and highlight the consequences of any breach. It is important to keep sellers on their toes so they can stretch their best foot forward.

Better yet, don’t rely on one seller. For example – if you only have one seller, they could stop dealing with you at once or they could raise prices anywhere. In such a scenario, you would have no choice but to meet their requirements.

A relaxed and indifferent supplier attitude is very damaging to the business and more often than not comes from overconfidence.

2. Wanting easy money.

There is no free lunch in this world

Similarly, to expect easy money with little effort is something that doesn’t really work in the real world, especially since Dropshipping.

While you may enjoy certain advantages in Dropshipp over traditional retail, you will still have to face the challenge of intense competition.

For obvious reasons, a lot of online marketers are opting for a dropshipping model. Your condolences, on your part, may result in the loss of customers from the competition.

Therefore, not expecting easy money, you should focus on how to create value through your dropshipping business and implement it professionally.

3. Limited visibility (not investing in promotional activities).

Dropshipping, like any other business, requires enough promotion to be able to reach your target audience.

To reach customers and increase sales, the first thing you need is visibility. Therefore, you should invest in promotional activities and an image-building exercise.

You don’t want your audience to forget about your brand, so it’s crucial to aggressively market yourself. As they say, ‘Out of sight, out of mind. “ Your main challenge will be to occupy the mind space of your customers.

Try typing your name and address on the product packaging or insert the latest product portfolio inside the packaging for advertising. It is also a great idea to keep track of your Thank You note or ask them about their shopping experience.

Take this For example, a “Thank you” email

Email Marketing: Thanks Email

This follow-up email (with an additional discount coupon) has a long-lasting appeal to your customers and shows them how much you care about their experience.

4. Compromised order details.

You must desperately avoid compromising your order details. If you fail to satisfy your customers with the service and inadvertently retrieve order details, chances are they will never do business with you again. In addition, there is a good chance that they will give you bad reviews, which will again discourage many potential buyers.

The Walker study predicted that by 2020, user experience will overcome prices and products as key brand differentiators.

Some things that can affect the user experience are:

  • Shipping to the wrong address
  • Wrong product packaging
  • Incorrect product delivery
  • Properly shipped product but incorrect quantity
  • Product specifications do not match the order
  • Broken or counterfeit product

Dropshipping seller must provide timely and accurate order information. Otherwise, dissatisfied customers will simply switch to rival companies which will result in your loss of revenue.

5. Selling copyrighted / trademarked goods.

It is best to avoid the sale of trademarked and copyrighted goods without prior approval, albeit without malicious intent.

This could unexpectedly get you involved in a trademark infringement, which can be very time consuming and expensive.

Selling merchandise with brand logos like Giorgio Armani clothing, Nike shoes or Rolex watches without approval can result in a lawsuit or even suspend your boat business.

Avoid this mistake by selling white labeled products that can be easily overwritten and resold under your business umbrella without the hassle of legal cases.

You can check out this guide to learn more about white products and how the whole concept works.

6. Not establishing a proper return policy.

If you do not secure a reservation for a refund, things can get messy with your customers.

With so much variety in the market, a customer may want to buy something else, even after ordering a particular product. Immediately after an order is declined, returned, or refunded, Dropshipping merchants should start working and offer a quick refund.

A quick and fast collection of products sold and a full refund is what can set you apart from your peers in the market.

It is also important to add appropriate instructions on the site on how to return the product and collect the refund.

Many shipping companies make the mistake of not taking this process seriously, causing a lot of pain and trouble for customers. Avoiding this by providing proper return rules can help you run your Dropship business smoothly.

Ready to launch Shopify? Start with Shopify’s 14-day free trial.

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Finding the Right Delivery Supplier.

It is unnecessary for suppliers to be one of the essential carts in your dropshipping model.

You need to rely on suppliers for various functions, such as:

  • Product assembly (exact specifications)
  • Delivery transportation transportation without any hassle
  • Effective handling and shipping of goods

All you have to do is transfer your order, customer information, and product requirements to suppliers. Thereafter, suppliers must complete the entire basis.

This is why it is crucial for your business to partner with the right supplier.

So what should you look for when working with suppliers? There are basically four things:

1. Find a supplier that is technically good.

Nowadays, a supplier who is good at technology is no longer an advantage, but a prerequisite for an excellent business model.

When selecting suppliers, it is crucial to have a good knowledge of all the technologies needed to monitor the entire cycle.

2. The supplier should be correct.

Timely delivery of the product is extremely important for the drug store. On top of that, it works well for your business if you manage to deliver products within 1-2 business days.

With too much competition in the market, you have no room to let go and you always have to put your best foot forward. Your customer will not think twice before moving on to their competitors if it takes you a long time to come up with products.

Therefore, precision is one of the important decision-making factors when selecting a supplier. You can even try test orders to check if the vendor is fast or not.

3. Find a supplier with an experienced and dynamic team.

As you will not be the one delivering the last kilometer, you need to ensure that those who succeed in displaying a positive image of your business.

An experienced supplier who has a dynamic and efficient team of sales reps and executives is likely to know all the minutiae of Dropshipp’s business. If you manage to partner with such a vendor, you already have a great platform for success.

4. The ideal supplier should focus on quality.

Like retail and the traditional e-commerce business, dropshipping also depends on the quality of the product. Therefore, it is an important feature that should be considered when evaluating a product supplier.

Suppose there are three suppliers between the same product.

There are no significant differences in prices and delivery times.

So who should you choose?

Of course, the supplier that provides the best quality.

Of course, customers want value in exchange for their money.

Therefore, it is best to always look for a reputed supplier who is unlikely to compromise quality.

A supplier who values ​​and focuses on quality can ensure:

  • The rate of return of goods is low
  • The number of canceled orders is small
  • Customer satisfaction is great
  • Client Life Value (CLV) is high

Now the question is – there are probably thousands of such suppliers in the business world, so how do you identify the best fit?

You can use the various Dropship directories available on the Internet that provide a credible database of vendors that often organize niches.

World brands are a great example of a Dropshipping catalog.

World brands: Delivery Supplier Directory

One of the best things about world brands is that it ensures that every supplier or wholesaler represented is legal.

Once you contact suppliers from online directories, it’s easy to evaluate suppliers. Simply ask them a few test questions and evaluate their answers to determine whether or not they meet your expectations.

Here are some prominent questions you might want to ask:

  • What is the return policy, if any?
  • How much price fluctuation can be expected?
  • Are there product warranty periods?
  • What is the free shipping clause?
  • What level of product customization can you expect?
  • What are the pricing conditions? Are price conditions negotiable?

Only after the answers are aligned with your expectations and vision for the future of the business should you take the negotiations to a new level.

Although you are imposing yourself on the ideal partner, it is also important not to become prey to crafty artists.

You must ensure that you connect with a legal vendor.

There are many false vendor indicators that can help you spot one easily.

In the first place, they should get the details of their registered address, talk to industry players and look at online reviews.

All this relatively easily allows even a new shipping company to separate legitimate suppliers from unscrupulous and corrupt ones.

It is very important to maneuver your way out of these pitfalls, because not only can they have a long-term impact on your business, but they can also irreversibly damage your brand image in the market.

Ready to start dropping? Start with Shopify’s 14-day free trial.

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How do you run your own dropshipping business?

You have done extensive research to get your Dropship business started. From finding the right product to partnering with the right supplier, you are now focused on starting your business.

It is finally time to start a dropshipping shop.

However, you will soon find that starting a business and starting one are a very different ball game.

Over time, you have to worry about issues like marketing, SEO, visibility, product quality, returns and exchanges, customer support and more.

Let’s break them down here:

1. Marketing your Dropshipping Store.

With a lot of competition out there, the need for effective marketing is very urgent.

Instead of waiting for your target audience to find you a dropshipping store, it’s better to place your product in front of them.

You need to thoroughly research the domain of the domain you are trying to cater to and segment the population based on behavior, psychography, geography and demographics.

Once you have identified the correct segment, you need to jointly target the population and perform various activities, such as:

  • Customer Engagement
  • Brand building
  • Building pictures
  • Creating and highlighting product values

You can use an abundance of channels to market your dealership, including:

2. Inventory maintenance.

Although Dropship’s business model does not require inventory storage, it is a good practice to keep a record of vendor supplies as you will sell their products under the brand name.

The good news is that there are a number of advanced inventory management software and multiple warehouse repositories available on the Internet to help you easily manage and track your inventory.

Let’s take an example Ecomdash.

Ecomdash Multi Warehouse Dropshipping Software Tool

They have revolutionized the dropshippers automation software market with multiple order fulfillment centers.

Keeping track of your inventory helps you:

  • Avoid unpleasant surprises after the buyer has placed an order (this could have been avoided if information was out of stock)
  • Helps you re-order on time
  • Helps improve bidirectional communication with the customer (improves user experience)

3. Provide impressive customer support.

A 2014 study by Gartner found that by 2019, 50% of all organizations would compete in customer service.

With the rise in global income and great competition in all forms of business, there has been a standardization in terms of the products and services they provide.

One of the various factors is expected to be excellent customer support.

Some of the common platforms you can use to provide outstanding customer service are:

  • Phone
  • Social media platforms
  • E-mail
  • Live conversations

24/7 assistance is also an aspect that you should consider as your business matures.

4. Product Exchange And Refund Policy.

Your exchange and refund policy is a glaring touchpoint of the dropshipping business that can make or break your business.

With the popularity of social media, communication is no longer a challenge. However, in the case of online retailing, positive word-of-mouth marketing can do wonders for your business, but negative word-of-mouth can prove to be detrimental.

If you want to earn the goodwill of your customer, then make sure to take prompt action any time a customer requests for product exchange or refund.

Handling customer complaints and product exchange and refund policies reflect the culture of the company and how much they prioritize their customers.

Providing a high level of satisfaction to customers here can result in improved Customer Lifetime Value (CLV) as well as the generation of new customers.

Here’s an example from the return and refund policy of Gymshark.

Dropshipping store: Gymshark Return Policy

As you can see, the return policy makes it effortless for the customer to return the wrong product.

However, refunding dropshipped products is a bit different than a traditional ecommerce site.

Here, you’ll have to collaborate with the supplier to successfully collect the product from the customer and then issue an exchange or refund.

These points are by no means a comprehensive insight into what you must do to run a dropshipping business. But following them will help you tremendously in setting up and running your dropshipping business.

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How to Grow Your Dropshipping Business?

Keep one thing in mind — the dropshipping model is a slow business model.

Expectations of a very steep growth and large profit margins in a short span of time are unrealistic. Instead, the business model requires long-term investment for it to grow into a profit-generating entity.

But that doesn’t mean you should let up on all the impressive work you’ve done over the days. Now, you need to focus on scaling up and growing the business.

Taking the following measures can help you grow your dropshipping business:

1. Use Multiple Channels.

It’s never a good idea to place all your eggs in a single basket. Thus, it makes sense to take advantage of the multiple channels available to you, including Amazon, Alibaba, eBay, and more.

This way, the number of customers you can reach out to increases exponentially. Catering to such a broad audience is impossible if you use only one channel.

However, when you are using multiple channels, you must ensure your top-selling products are always stocked and ready for shipment. Otherwise, if you sell the same product on different online stores, and the number of purchases is very high, the product can quite easily run out of stock. Out of stock products give rise to backorders and may cause a significant delay in delivery. This may create a negative customer experience.

Once you’ve ensured that you are stocked-up, you can even target audience globally.

2. Build Your Dropshipping Store.

While using multiple channels can definitely help with the profit margin, it’s also essential to build your own dropshipping store to enhance your brand image.

Building your dropshipping store has many benefits attached to it, like:

  • Greater control over website’s user-interface
  • Greater control over products, stocking, and marketing
  • Better decision making when it comes to discounts and bundled sales
  • Control brand positioning and brand imagery

Having your own store also means you don’t have to pay a commission to online stores to showcase your products. As a result, the profit margin per product increases, ultimately translating into higher revenue.

You can use several online websites and ecommerce store builders to create your store. Most of these builders come with attractive templates and various marketing and analytical tools to help you grow your store.

Check out my review of some of the best ecommerce platforms to choose the best option to build your dropshipping store.

3. Leverage Email Marketing.

According to email marketing statistics by Oberlo. at $32 return for every $1 invested, email marketing offers one of the highest rates of ROI.

That’s why it’s essential to focus on your email marketing strategy if you want your dropshipping business to grow.

For that, first, you need to build an email list that consists of a relevant audience. The best part about email marketing is that it gives you direct access to the leads who have willingly subscribed to receive your emails.

To build your email list, you can pique your audience’s interest by offering something valuable for free.

Take a look at my email form:

Adam Enfroy Email Opt-in Form

To encourage my readers to subscribe to my email list, I offer them a free email course upon registration.

After you build your email list, make sure to engage your audience regularly. Send out follow-up emails, offer discount coupons to give them a nudge to buy from your store, and more.

However, don’t go about flooding your subscribers’ inbox every other day. Let them know how frequently you plan to send email newsletters and then follow through the promise. A very high frequency of emailing can work against you and make customers unsubscribe.

4. Use Right Channels For Advertisements.

While proper investment is required for your business to take off, spending money in the right places is imperative for the money to pay dividends.

That’s why, before increasing your marketing budget, you should spend time doing appropriate market-research. Try to identify the advertising channels that can help you maximize customer visits on your website.

For a dropshipping business, where you lack a physical shop, it’s crucial to take advantage of online advertisement modes like pay-per-click (PPC). Running ad campaigns is easy across several social media platforms like Facebook, Instagram, and Twitter, among others.

Make sure you don’t waste your money spending it on websites that bring in low traffic.

Here’s an example of a dropshipping business done right:

Dropshipping business success case study

Ad campaign budget optimization, among other measures, worked wonders for both Andreas and Alexander. They optimized their Facebook ads in a way to receive maximum returns.

5. Use Video Advertisements.

Video marketing is the new medium of reaching out to your customers.

Here’re some statistics that will make you realize the amazing advantages of video advertisements:

  • 82% of Twitter users use video
  • More than 500 million hours of video are watched on YouTube every day
  • 33% of online activity is spent on watching videos
  • 85% of US internet audience watches online videos

Video has the power to reach a massive audience, thereby increasing your reach by many times.

Apart from advertising your products and brand, video advertisements have the power to do a lot more, such as:

  • Customer engagement
  • Making your leads click-through and arrive at your store
  • Influence your potential customers to buy your product

To reach your target audience, you can stream your video on social media platforms, YouTube, or purchase advertising space on a third-party website to increase your visibility.

Ready to start dropshipping? Get started with a 14-day free trial of Shopify.

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Examples Of Successful Dropshipping Companies.

The business landscape is littered with success stories from dropshipping companies.

Contrary to popular notion, the examples aren’t far and few in between, but quite large in number.

One of the best examples that immediately come to mind is Wayfair.

Wayfair Dropshipping Store Success Story

Started by two University graduates in 2002 in Boston, Massachusetts who didn’t have the luxury of deep pockets like their rivals, Wayfair turned out to be a huge success.

Over time, they understood the dropshipping model, and eventually started making around 25% to 35% profits year-on-year and quickly became one of the most acclaimed dropshippers.

Today, they boast of more than 10 million items in offerings, and over 14000 suppliers. In 2018, Wayfair’s revenue exceeded $5 billion.

Another example here is Justin Wong, the owner of So Aesthetic.

So Aesthetic Success Story

After trying multiple business options, Wong decided to set up a dropshipping store. He needed zero investment to start the store, and guess what? Within a month of starting, he had already made $12,000 through the business.

More and more people are now making profits using the dropshipping model.

Here are some real-life examples of many more dropshippers who’ve made a successful career out of the dropshipping business model.

Real-life Dropshippers Success Stories

Dropshipping For Beginners: FAQ.

Here are some quick answers to the most frequently asked questions:

Q1. How does the dropshipping model work?

As already mentioned, Dropshipping is a business model where you can sell your products online, without having to stock, supply, distribute, or deliver the product yourself.

Dropshipping requires you to act like a mediator between the consumer and the supplier.

It’s simple! The customer puts an order at your store, then you forward that order to the supplier, and finally, the supplier delivers the order straightaway to your customer. Your role as a drop shipper is to focus on marketing and promoting the product, while the supplier fulfills the entire supply chain cycle, including maintaining the inventory, packaging, shipment, etc.

Q2. What are the benefits of dropshipping?

Dropshipping is a profitable business model. The best part is that you don’t require massive capital or spend money on things like inventory management, warehouse rent, and shop rent, among others.

You can expect a profit margin of 20-30% and a conversion rate of 2-3%. These metrics might change according to the industry and situation.

Q3. How to start a dropshipping business?

To start your dropshipping business, you can follow a step-by-step process:

  • Decide what type of product(s) you want to sell.
  • Partner with a supplier.
  • Either register with dropshipping sites like eBay or build your own website.
  • Market your dropshipping store
  • Promote using social media platforms and paid ads

Q4. What is the investment needed to start with dropshipping?

Not much since you don’t require any shop, and you won’t hold any stock, you don’t need a substantial investment at the start.

Q5. Can I sell globally?

Yes you can. The beauty of dropshipping is that since it’s online, you can target the entire global target. Your customers could be from anywhere in the world.

Q6. Can I use multiple channels for selling?

Of course, you can. In fact, it’s highly recommended to sell your products across multiple channels, such as eBay, Amazon, etc.

Q7. What is the profit margin that I can expect from dropshipping?

The margin primarily depends on the cost of the items that you sell, and the volume of items sold. However, on average, you can expect to make a profit of anywhere around 15% to 20%.

Q8. Do I need to pay taxes?

Taxes are subject to the local governance of the areas that you will deliver to. Usually, you are required to pay taxes for international delivery.

Q9. How can I promote my website?

There are several ways to promote your website. You can buy advertisements on websites, ecommerce stores, and social media platforms. You can also buy YouTube advertisements, get involved in customer engagement on social media platforms, conduct webinars, and more.

Q10. How can I select the suppliers?

While choosing your suppliers, go for someone punctual, tech-savvy, has an in-house team of experienced sales representatives, and has the reputation of providing top-notch quality products. Make sure to look at online reviews before selecting suppliers.

Q11. Should I use my own online dropshipping store, or should I rent someone else’s space?

At the start, you can rent shop space on sites like Amazon, eBay, and Alibaba. But if you are looking to scale-up and build your own brand, it’s better to have your own online store. You have greater control over the user interface and display of your products and can boost your brand image accordingly.

Q12. Should I work alone or hire assistants?

At the start, when the business is small, you can work alone. However, as the business starts to expand, it will get difficult for you to manage all aspects of the business. Keeping expansion in mind, hiring assistants for specific roles is recommended. You can hire virtual assistants from websites like Upwork, Fiverr, Guru, and more.

Executive Summary.

This article gives you an in-depth insight into the entire dropshipping business model. As outlined, it is not for someone who is looking to make money very fast and exit.

Sure, dropshipping seems like easy money. You just have to act as a link between the customer and the wholesaler/supplier, and take a cut for yourself. However, when you consider all the cons, challenges, effort, attention, and work, dropshipping doesn’t sound as easy.

You need to stick to your business plan to make it work, and then reap the benefits.

With no initial outlay, rent or cost of inventory, dropshipping can provide the perfect environment for someone to test their business acumen, try out their new products, and gauge the product viability and market scenario.

An excellent option for entry-level entrepreneurs and budget businessmen, dropshipping is also a very safe platform. Even if you fail, you don’t stand to lose a lot of money. On the other hand, the process helps you gain precious business insight and market knowledge.

I hope the article was useful and will spur you on to starting your first dropshipping business.

What type of product would you like to sell using the Dropshipping model? Let me know in the comment section below!

Ready to start dropshipping? Get started with a 14-day free trial of Shopify.

Further Reading on AdamEnfroy.com: Check out my article on the best ecommerce fulfillment companies if you’d rather hire a 3PL company to provide your ecommerce business with two-day shipping capabilities.



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