How Dropshipping Works: Step By Step

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How Dropshipping Works: Step by Step

Dropshipping has taken the world of internet business by storm. This business model has certainly created a ding among the young enterprisers, particularly the millennials and entrepreneurs from the Z Generation.

Dropshipping does not require a company to store products in stock. It works as an order fulfillment method. The reason for its popularity is its convenience — the store can sell the items, give the sales order to the supplier, and then the supplier will ship this order to the buyer.

This is how it works. A buyer orders items from your business. You then pass that order information to your drop-shipper. On the receipt of the order, the drop-shipper will charge you a price for the product. The price should include the dropshipping fee and it is usually given to you at a wholesale price. Then the drop-shipper will send the package directly to your buyer. You don’t have to store it or painstakingly package and ship it yourself.

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Table of Contents

On the surface, it looks like easy money but as they say, beware of the terms “easy money” and/or “get rich quick”. There’s no such thing. No business is far from easy. You got to break some sweat in making any business work. And any business is rewarding if you do it the right way and employ time tested methods. The same thing goes with dropshipping. You can establish a successful business even with a shoestring budget with the dropshipping business as long as you do things the right way. For all we know, you can even butt heads with the retail biggies! So, are you ready to roll up your sleeves?

The first thing you need to do is choose your niche. The rule of thumb here is the same as in all businesses and ventures — go for something that you really like and are passionate about. Also, anchor your eye on the products that are available for this type of business — this is very crucial.

Your range of products must zero in on a niche in order to make it easier to market. Other factors you need to take into consideration are the shipping costs. If the shipping fee is too costly, this is a big let down for buyers. Find products that are not too pricey to ship, so you can have the option to cover the shipping cost. Free shipping is definitely attractive to customers. It’s also best to choose a niche that will give you attractive profit gains.

This may sound like a no-brainer — but it’s better to aim for higher-priced items. You’ll be spending the same amount of time and effort selling lower-priced products, then you might as well go for the costlier ones as they will give you more profit at the same amount of time.

Check out some commonly searched terms related to the niche that you’re eyeing on. You can do this in Google’s Keyword Planner. If no one is searching for the item you’re planning to sell, then drop the idea. Look for products that are in high demand, which pose a sign that they are good for business. Don’t waste your time on something that people are not looking for.

Look for items that are appealing to those moneyed buyers who love to go into online retail therapy. Chances are you’ll get several instant sales. And who doesn’t want that?

However, make sure you don’t sell items that are readily found in a corner. Otherwise, the buyer would rather just get it from there instead of ordering from you. Eventually, you can make your own label and sell the products with your own brand name.

Now that you have identified your niche, the next step is to ensure that you have a supplier. This is very crucial in any business. The top tycoons always say something to this effect— lack of supply is careless irresponsibility. So find a good and reliable supplier.

Make sure that you can communicate with them fast and easy. And at the same time, there should be no language barrier. Most suppliers are located abroad so make sure that they can communicate with you well and vice versa. Needless to say, look for suppliers with inexpensive but good quality products. And that takes careful examination or due diligence on your part.

The next step after finding your niche and supplier is to build your business website. It doesn’t have to be fancy so you won’t have to spend on web designers for now. Worry about those things when you’re well-established and when income is steadily coming. Also, don’t be afraid if you’re not tech-savvy, there are a lot of e-commerce platforms to choose from — they are easy to navigate, understand and operate.

After setting up a site, it’s time to come up with a game plan for customer acquisition. Customers are the bloodline in your dropshipping business. In fact, they’re the bloodline in any business. So it’s best to come up with ideas on how to attract potential buyers. You may use business options through social media channels.

The Facebook ad campaign can actually help you promote your products to a specific target market — more often than not, this is one of the best ways to acquire customers. In the future, you can look up digital marketing and SEOs so you can use them to influence your actual customers.

Finally, examine and know how to optimize your dropshipping business. You can do this by tracking all data from the analytics guide of Facebook and Google. Be diligent in testing golden opportunities out there and learn the ropes of how ad campaigns work.

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