Running a profitable online store can be straightforward and rewarding.<\/p>\r\n
If you\u2019re exploring the idea and wondered how to start dropshipping, you\u2019re in the right place.<\/p>\r\n
Whether you\u2019re new to eCommerce or an experienced entrepreneur looking to diversify your current business model, this guide will help you every step of the way. We\u2019ll cover the essentials you need to start and grow a thriving dropshipping business.<\/p>\r\n
Learn how to find trusted drop shipping suppliers, select the best eCommerce platform to sell with and design an online store set up for success.<\/p>\r\n
<\/p>\r\n\r\n\r\n\r\n
Dropshipping is a business model where you sell products online without holding inventory. It is one of the most popular business models in the eCommerce world, but with so many definitions out there, it can be confusing to pin down exactly what it involves.<\/p>\r\n\r\n\r\n\r\n
Here\u2019s the truth, and nothing but the truth:<\/p>\r\n\r\n\r\n\r\n
At its core, dropshipping is a retail fulfillment method where online retailers don\u2019t handle inventory or shopping directly. Ecommerce stores using the dropshipping model act as intermediaries.<\/p>\r\n
They collect customer orders and pass the order details to dropshipping suppliers<\/a><\/span> or manufacturers, who then ship the products directly to customers. <\/p>\r\n Dropshipping is like running an online store without ever touching the products<\/strong>. Here\u2019s how it works:<\/p>\r\n This business model allows online retail stores to operate without needing physical stock, making it easier to scale and reach a global audience.<\/p>\r\n <\/p>\r\n\r\n\r\n\r\n If you don\u2019t have to buy hundreds or thousands of products to sell upfront, you don\u2019t need big startup capital. You only pay for products to sell when the customers have ordered them.<\/p>\r\n\r\n\r\n\r\n And since you don\u2019t have to warehouse those products either, you\u2019re avoiding warehouse costs.<\/p>\r\n\r\n\r\n\r\n Finally, it\u2019s much easier to have a digital storefront than renting out a brick and mortar store.<\/p>\r\n\r\n\r\n\r\n You can run your entire drop ship business from home.<\/p>\r\n\r\n\r\n\r\n If you decide overnight that you no longer want to stock one product but opt for another, you can do it.<\/p>\r\n\r\n\r\n\r\n If you decide to move across the world, you can. Your business won\u2019t suffer for it.<\/p>\r\n\r\n\r\n\r\n You can choose your own hours, strategies, and plans. And with today\u2019s automation technology, you can almost passively run your dropshipping business.<\/p>\r\n\r\n\r\n\r\n If you want to scale your business, all you need to do is invest in marketing and sales.<\/p>\r\n\r\n\r\n\r\n And because you can do the majority of work on your own, you don\u2019t have to hire people, rent a bigger store, or pay for more warehouse room.<\/p>\r\n\r\n\r\n\r\n You just need to set up an ad or two.<\/p>\r\n\r\n\r\n\r\n You don\u2019t have to have an MBA to start or run a dropshipping business.<\/p>\r\n\r\n\r\n\r\n You can find everything you need online and get started in a few days.<\/p>\r\n\r\n\r\n\r\n After all, you don\u2019t have to worry about anything except for selling your products. Stocking, shipping\u2026 All of that is someone else\u2019s worry.<\/p>\r\n\r\n\r\n\r\n You just process the payments and take your cut.<\/p>\r\n\r\n\r\n\r\n Now, dropshipping has plenty of advantages but there are a few disadvantages:<\/p>\r\n\r\n\r\n\r\n Depending on which products you sell online, your margins could be slim.<\/p>\r\n\r\n\r\n\r\n However, dropshipping is a game of quantity. If you take $1 from every sale, you\u2019ll have $100 if 100 people buy a product.<\/p>\r\n\r\n\r\n\r\n It\u2019s the compound effect.<\/p>\r\n\r\n\r\n\r\n Additionally, you can stock a variety of products and items to sell. You don\u2019t have to stick to one niche or one type of inventory for dropshipping.<\/p>\r\n\r\n\r\n\r\n For example, if you sell dog grooming kits, you could also sell leashes, dog toys, and much more.<\/p>\r\n\r\n\r\n\r\n You could face a few problems with shipping if a customer orders two products from two different wholesalers or dropshippers. You\u2019ll need to calculate the shipping costs for each.<\/p>\r\n\r\n\r\n\r\n Inventory management<\/a> can get complicated if you\u2019re working with multiple dropshippers, as their inventory changes often.\u00a0<\/p>\r\n\r\n\r\n\r\n A good workaround is getting a tool that integrates the suppliers\u2019 quantity information with your sales systems so you can automatically mark which products are out of stock.<\/p>\r\n\r\n\r\n\r\n Finally, you\u2019ll be responsible for any supplier errors, which is why it\u2019s always good to work with reputable suppliers.<\/p>\r\n\r\n\r\n\r\n We\u2019ll show you how to find them later on in the guide.<\/p>\r\n\r\n\r\n\r\n When you start your eCommerce business with a dropship inventory model, you\u2019ll often encounter some of these terms:<\/p>\r\n\r\n\r\n\r\n Even though it isn\u2019t hard to start a dropshipping business, there are a few things you should pay particular attention to:<\/p>\r\n\r\n\r\n\r\n Every professional manufacturer or distributor will ask you for proof that you\u2019re a real retailer before they consider doing business with you.<\/p>\r\n\r\n\r\n\r\n They\u2019ve spent a lot of time negotiating with people who ultimately decided that dropshipping isn\u2019t for them, so nowadays you won\u2019t get further than a quick reply unless you can prove you\u2019ve established a business.<\/p>\r\n\r\n\r\n\r\n Additionally, once you get the ball rolling, you won\u2019t have the time to think about defining your legal structure.<\/p>\r\n\r\n\r\n\r\n When you\u2019ve committed to starting a dropshipping business, the first thing you need to do is set up a business entity.<\/p>\r\n\r\n\r\n\r\n The majority of dropshipping entrepreneurs and internet business owners in the US use one of the following two business structures:<\/p>\r\n\r\n\r\n\r\n Sole proprietorship \u2013 The simplest business structure with a minimal amount of paperwork. However, when you set up a sole proprietorship, you are your business. You only file your own taxes. The main downside of this is that you guarantee for your business with your personal assets.<\/p>\r\n\r\n\r\n\r\n Limited Liability Company (LLC) \u2013 A LLC is the best way to protect your assets. For all intents and purposes, a LLC is treated as a separate entity, which means you get a lot more liability protection. You will have to pay additional taxes and fees, and the LLC will be subject to different filing requirements.<\/p>\r\n\r\n\r\n\r\n Even though dropshipping is one of the most affordable, cost-effective ways to start a profitable internet business, that doesn\u2019t mean it comes without costs.<\/p>\r\n\r\n\r\n\r\n The first thing you\u2019re going to need to start a dropshipping business is an online store.<\/p>\r\n\r\n\r\n\r\n Now, you could opt for a platform like Shopify or Wix<\/a>, but you\u2019ll still face some costs.<\/p>\r\n\r\n\r\n\r\n Some platforms charge per sale, while others charge a flat fee.<\/p>\r\n\r\n\r\n\r\n If you want a separate website, you\u2019ll also have to handle hosting costs. You\u2019ll need a domain in any case. Fortunately, the whole store setup won\u2019t cost you more than $100-200.<\/p>\r\n\r\n\r\n\r\n Finally, depending on the type of legal structure you choose, you may have to pay set-up fees and\/or any business licenses you may need.<\/p>\r\n\r\n\r\n\r\n It\u2019s best to consult a lawyer for a detailed breakdown.<\/p>\r\n\r\n\r\n\r\n The majority of your investments will go toward marketing your dropshipping business.<\/p>\r\n\r\n\r\n\r\n You can create estimates of the costs, although you will only know the real figure once you start selling.<\/p>\r\n\r\n\r\n\r\n Even though you can absolutely run a profitable dropshipping store without ever touching the products you sell, that doesn\u2019t mean you should.<\/p>\r\n\r\n\r\n\r\n It\u2019s always a good idea to order product samples so you know what kind of quality your customers can expect from your products.<\/p>\r\n\r\n\r\n\r\n This can also greatly inform your pricing structure.<\/p>\r\n\r\n\r\n\r\n As you scale your online business, you\u2019re going to need bigger plans for eCommerce and wholesale platforms, as well as a few enhancements of your store.<\/p>\r\n\r\n\r\n\r\n Of course, that depends on the platform you choose so keep reading to find out what the best ones are.<\/p>\r\n\r\n\r\n\r\n Software has come very far.<\/p>\r\n\r\n\r\n\r\n And instead of having to spend hours upon hours on manually setting up your dropshipping website, you can do everything with a few clicks if you opt for one of the most popular ecommerce platforms today.<\/p>\r\n\r\n\r\n\r\n We\u2019ll show you a quick breakdown of each, as well as their pricing structure.<\/p>\r\n\r\n\r\n\r\n Shopify<\/a> is one of the most widely used platforms for dropshipping and eCommerce.\u00a0<\/p>\r\n\r\n\r\n\r\n It\u2019s simple, and it\u2019s affordable.<\/p>\r\n\r\n\r\n\r\n It has integrations for most major dropshipping integrations (including Modalyst<\/a>) so you can automate the majority of tasks.<\/p>\r\n\r\n\r\n\r\n You don\u2019t have to manually send orders to your manufacturer as the integration takes care of that.<\/p>\r\n\r\n\r\n\r\n And you\u2019re only a few clicks away from importing products from the dropshippers’ profiles.<\/p>\r\n\r\n\r\n\r\n Additionally, Shopify also has features for:<\/p>\r\n\r\n\r\n\r\n Some add-ons aren\u2019t free (for example, bulk sale processing), but they\u2019re well worth the money ($10-$50).<\/p>\r\n\r\n\r\n\r\n You can also set up manual or automatic collections, which is a good idea if you\u2019re selling different products.<\/p>\r\n\r\n\r\n\r\n Finally, Shopify also has handy SEO features (e.g. meta descriptions) to help you reach more people with your store and Shopify Lite which lets you sell through Facebook Messenger.<\/p>\r\n\r\n\r\n\r\n Shopify comes with a 14-day free trial, after which you can choose one of the following plans:<\/p>\r\n\r\n\r\n\r\n 1. $29\/month plan \u2013 This plan comes with an additional 2.9% + 30\u00a2 online credit card fee per each sale, which is something you may want to calculate into your net profit calculations.\u00a0<\/p>\r\n\r\n\r\n\r\n 2. $79\/month plan \u2013 This plan comes with gift cards enabled, as well as professional reports. The online credit card fee is lower – 2.6% + 30\u00a2.<\/p>\r\n\r\n\r\n\r\n 3. $299\/month plan \u2013 Finally, Shopify\u2019s most expensive plan comes with a great dropshipping features: third-party calculated shipping rates. Additionally, this plan includes only 2.4% + 30\u00a2 online credit card fees.<\/p>\r\n\r\n\r\n\r\n Millions of people around the world use Wix<\/a> to power their websites and eCommerce stores.<\/p>\r\n\r\n\r\n\r\n Wix is used by over 180 million people across 190 different countries.<\/p>\r\n\r\n\r\n\r\n It\u2019s an affordable, easy and hassle-free way of creating your own website in a matter of minutes.<\/p>\r\n\r\n\r\n\r\n Wix and Modalyst just launched an dropshipping app on Wix<\/a>. It is available in the Wix App Market or directly on Modalyst. Even though the dropshipping app is still relatively new to the market, it already has some positive reviews. We encourage you to check it out!<\/p>\r\n\r\n\r\n\r\n Wix<\/a> is super easy to customize.<\/p>\r\n\r\n\r\n\r\n Just have a look at these top Wix websites<\/a>. They’re simply beautiful and optimized for eCommerce to jumpstart your Wix dropshipping experience.<\/p>\r\n\r\n\r\n\r\n You can do pretty much everything just by dragging and dropping features and widgets you want to see. If you want to manually add code, that\u2019s possible, as well.<\/p>\r\n\r\n\r\n\r\n You can choose between a few product listing templates, as well as:<\/p>\r\n\r\n\r\n\r\n Wix does come with a free plan but if you really want to accept payments, you\u2019re going to need one of the following premium plans<\/a>:<\/p>\r\n\r\n\r\n\r\n 1. $17\/month plan – You\u2019ll be able to accept payments, and Wix won\u2019t charge a commission other platforms typically charge.<\/p>\r\n\r\n\r\n\r\n 2. $25\/month plan \u2013 You get up to 35GB of storage, as well as a logo.<\/p>\r\n\r\n\r\n\r\n 3. $35\/month plan \u2013 50GB storage, and priority support.<\/p>\r\n\r\n\r\n\r\n Even though it\u2019s not mentioned as often as Shopify or Wix, BigCommerce<\/a> is a pretty powerful ecommerce platform for dropshipping websites. It supports integrations for dropshipping companies. Modalyst was actually one of their first integrations for dropshipping.<\/p>\r\n\r\n\r\n\r\n Learn more about the dropshipping with Modalyst and BigCommerce<\/a> here.<\/p>\r\n\r\n\r\n\r\n It\u2019s a full-fledged content management system, created specifically for eCommerce.<\/p>\r\n\r\n\r\n\r\n And while dropshipping technically falls under that domain, it\u2019s not always easy to find a platform that\u2019s going to allow you to automate 99% of your dropshipping work.<\/p>\r\n\r\n\r\n\r\n Fortunately, BigCommerce has great features<\/a>.<\/p>\r\n\r\n\r\n\r\n It offers app integrations with major dropshipping companies, as well as other apps that simplify order fulfillment and inventory management.<\/p>\r\n\r\n\r\n\r\n BigCommerce also supports multi-channel retailing.<\/p>\r\n\r\n\r\n\r\n And because of their partnerships with Facebook, Amazon, Google, PayPal and Square, BigCommerce users get to experience new sales features first.<\/p>\r\n\r\n\r\n\r\n And if you want to convert visitors without giving them huge discounts, BigCommerce has features for that!<\/p>\r\n\r\n\r\n\r\n All in all, it\u2019s a powerful platform to fuel your drop shipping business. Especially if you plan on growing it.<\/p>\r\n\r\n\r\n\r\n BigCommerce comes with a 15-day free trial.<\/p>\r\n\r\n\r\n\r\n 1. $30\/month plan \u2013 Unlimited storage, but few marketing features. You can also have only $50k in annual sales before you have to upgrade. No transaction fees if you use payment gateways. If you process credit card payments, the fee is 2.9% + $0.30\u00a2 per transaction.<\/p>\r\n\r\n\r\n\r\n 2. $72\/month plan \u2013 Marketing features like customer groups and abandoned cart saver are available with this plan. You can process up to $150k annually before you need to upgrade and the transaction fee for credit card payments is 2.5% + $0.30\u00a2.<\/p>\r\n\r\n\r\n\r\n 3. $225\/month plan \u2013 Google review integration, custom SSL certificate, up to $400k in annual sales, and a 2.2% + $0.30\u00a2 credit card fee.<\/p>\r\n\r\n\r\n\r\n If you don\u2019t want to set up your dropshipping store on any of the major platforms, you could always get a custom website and then add payment and marketing integrations.<\/p>\r\n\r\n\r\n\r\n For example, if you have a WordPress website, you can get a WooCommerce plugin that will allow you to process payments without switching to an entirely different eCommerce platform.<\/p>\r\n\r\n\r\n\r\n It\u2019s all a matter of what you need. However, going with an out of the box solution or cloud hosted platform is usually simpler and more affordable.<\/p>\r\n\r\n\r\n\r\n When you\u2019ve decided on a dropshipping platform, you\u2019re going to need the main thing: products to sell online.<\/p>\r\n\r\n\r\n\r\n Now, as an online store, you\u2019re not going to have or store any dropship products on your own.<\/p>\r\n\r\n\r\n\r\n And that\u2019s exactly why you need to make sure you\u2019re working with reliable dropshippers<\/a> who aren\u2019t going to botch up orders and ruin your business\u2019 reputation.<\/p>\r\n\r\n\r\n\r\n As a rule of thumb, manufacturers don\u2019t know the first thing about marketing.<\/p>\r\n\r\n\r\n\r\n Let\u2019s be real: if they\u2019re still in business without marketing knowledge, that means their products are definitely something special.<\/p>\r\n\r\n\r\n\r\n However, that means it may be harder to find them.<\/p>\r\n\r\n\r\n\r\n It\u2019s usually easier to find wholesale distributors but as always, be careful. There are plenty of middlemen presenting themselves as dropshippers so you could lose out on profits by accepting their price.<\/p>\r\n\r\n\r\n\r\n In addition to directly getting in touch with manufacturers and asking them about distributors, you can also find suppliers by:<\/p>\r\n\r\n\r\n\r\n Dropshipping platforms like Modalyst<\/a>, Oberlo<\/a> and AliExpress<\/a> are a treasure trove of all kinds of dropshipping suppliers<\/a> (manufacturers, distributors, middlemen).<\/p>\r\n\r\n\r\n\r\n If you want to sell imported products, you can also find exporters and importers.<\/p>\r\n\r\n\r\n\r\n The majority of dropshipping solutions offer integrations with eCommerce platforms, as well, so you can fully automate your operations.<\/p>\r\n\r\n\r\n\r\n Some dropship manufacturers are extremely hard to find.<\/p>\r\n\r\n\r\n\r\n They\u2019re usually buried on the twentieth page of Google so you\u2019re going to need patience and the right keywords to find them.<\/p>\r\n\r\n\r\n\r\n If you\u2019re looking to import a product, try using Google Translate and searching with native language keywords.<\/p>\r\n\r\n\r\n\r\n You\u2019ll usually have to pay for access to directories and going to trade shows, but ordering from the competition can be a good trick if your competition has a significantly lower price.<\/p>\r\n\r\n\r\n\r\n Modalyst is one of the most powerful dropshipping platforms<\/a>.<\/p>\r\n\r\n\r\n\r\n If you sign up for it, you won\u2019t just get access to millions of trending products to sell online. You\u2019ll also be able to integrate the products with your store, syncing all product data and orders.<\/p>\r\n\r\n\r\n\r\n Everything is streamlined so you can focus on the important things \u2013 marketing and selling the best products.<\/p>\r\n\r\n\r\n\r\n Product sourcing is fast and easy on Modalyst.<\/p>\r\n\r\n\r\n\r\n It only takes one-click to add a product to your store, and Modalyst takes care of everything else.<\/p>\r\n\r\n\r\n\r\n Modalyst handpicks the dropshippers on their platform, and these dropshippers are primarily from the USA. Having US dropshipping suppliers is especially important since these vendors offer so many benefits that Chinese wholesalers or foreign dropshippers do not.<\/p>\r\n\r\n\r\n\r\n Modalyst products are different from what you can find on AliExpress and Oberlo. The focus is placed on the quality of the product and how fast it ships. Modalyst believes that these attributes will keep your customers coming back from more.<\/p>\r\n\r\n\r\n\r\n You can also find plenty of niche products to sell online in the Modalyst marketplace. Access to these niche items means you don\u2019t have to struggle for profits in a highly-saturated industry.<\/p>\r\n\r\n\r\n\r\n Other Modalyst features for dropshipping<\/a> that will help you earn more:<\/p>\r\n\r\n\r\n\r\n The conventional formula most online entrepreneurs use to find suppliers is as follows: find cheap products from Chinese dropshippers and sell the products for massive profits.<\/p>\r\n\r\n\r\n\r\n This formula still works today. However, it\u2019s becoming less effective and less profitable as more and more online shops use the same product sourcing strategy.\u00a0<\/p>\r\n\r\n\r\n\r\n While more Chinese products flood the market, the more competitive pricing becomes, making it more difficult to reap a profit on the sale of an item and differentiate your business from others.<\/p>\r\n\r\n\r\n\r\n This is not necessarily a bad thing, though. It has helped create interest in a new market: USA dropshipping suppliers.<\/p>\r\n\r\n\r\n\r\n One way that you can differentiate your online shop is by working with suppliers who are based in the United States.<\/p>\r\n\r\n\r\n\r\n You don\u2019t have to be located in the US for this to be a viable option.<\/p>\r\n\r\n\r\n\r\n So long as you have a strong customer base in the USA, or you\u2019re looking to break into the American market, then using US dropshippers makes a lot of sense.<\/p>\r\n\r\n\r\n\r\n There are thousands of wholesalers and manufacturers in the United States.<\/p>\r\n\r\n\r\n\r\n While partnering with American dropshippers is compelling, you still have to do your due diligence.<\/p>\r\n\r\n\r\n\r\n A dropshipping company in the USA isn\u2019t automatically qualified just because they are based in the United States. These dropshipping companies need to be vetted, just like any other supplier you want to work with.<\/p>\r\n\r\n\r\n\r\n You should follow the same process that you would when vetting any supplier. After all, your supplier is one of your most important business partners. You want to choose the best one.<\/p>\r\n\r\n\r\n\r\n 1. Hobby Plan – Free \u2013 Up to 25 products, 5% transaction fee<\/p>\r\n\r\n\r\n\r\n 2. Start-Up Plan – $35\/month \u2013 250 product limit, 5% transaction fee<\/p>\r\n\r\n\r\n\r\n 3. Pro Plan – $90\/month \u2013 Unlimited product limit, 5% transaction fee<\/p>\r\n\r\n\r\n\r\n Sign up for Modalyst here.<\/a><\/p>\r\n\r\n\r\n\r\n In addition to finding the best dropship wholesale suppliers in the first place, you also have to be careful when choosing them.<\/p>\r\n\r\n\r\n\r\n You\u2019ll usually spot a scam if:<\/p>\r\n\r\n\r\n\r\n However, legit suppliers do work on certain principles:<\/p>\r\n\r\n\r\n\r\n And when it comes to dropshipping, the reliability of your suppliers is everything.<\/p>\r\n\r\n\r\n\r\n That\u2019s why you should make sure that your suppliers are:<\/p>\r\n\r\n\r\n\r\n Errors can always happen and in a business where so much of your revenue depends on the suppliers, you want professionals capable of resolving problems. Not amateurs who will say they can\u2019t help you.<\/p>\r\n\r\n\r\n\r\n As with anything related to your business: be professional and clear about what you want.<\/p>\r\n\r\n\r\n\r\n This is especially important if you have a special request that they don\u2019t normally fulfill.<\/p>\r\n\r\n\r\n\r\n Keep in mind that many suppliers will ask you for proof of business, as they\u2019ve communicated with a lot of reluctant online stores who ended up forgoing the idea.<\/p>\r\n\r\n\r\n\r\n While you will often communicate with dropshipping wholesale suppliers through platforms (especially if you use Modalyst) and email, don\u2019t be afraid to get in touch with them by phone. Especially if they\u2019re smaller suppliers of niche products.<\/p>\r\n\r\n\r\n\r\n It always pays to be polite and undemanding. Don\u2019t ask for discounts from the get-go as the dropshipper has no idea if you\u2019re serious at the moment.<\/p>\r\n\r\n\r\n\r\n However, as you build your relationship with the suppliers, they\u2019ll be more likely to grant your requests and help you out in any way they can.<\/p>\r\n\r\n\r\n\r\n Additionally, double-check the shipping time. It should be like the dropshipping company claims.<\/p>\r\n\r\n\r\n\r\n If they claim that the product will be with you within a week and it arrives a month later, steer clear. Speed is a priority.<\/p>\r\n\r\n\r\n\r\n Your first option is paying suppliers by credit card. Some wholesale platforms also offer options of processing payments for you.<\/p>\r\n\r\n\r\n\r\n The other, different type of payment is net terms.<\/p>\r\n\r\n\r\n\r\n This is a form of delayed payment. For example, you purchase a product and the supplier gives you a certain timeframe in which you have to pay them for that product.<\/p>\r\n\r\n\r\n\r\n If the supplier offers this option, they may ask you for credit references because they\u2019re essentially trusting your word that you\u2019ll pay them.<\/p>\r\n\r\n\r\n\r\n Your dropshipping products are, quite literally, your bread and butter.<\/p>\r\n\r\n\r\n\r\n And if you\u2019re not going into business with a clear, validated idea of what you want to sell online, you\u2019re going to need to conduct extensive research.<\/p>\r\n\r\n\r\n\r\n Fortunately, even if a product doesn\u2019t sell, you won\u2019t be losing much but time. That\u2019s the charm of starting a dropshipping business!<\/p>\r\n\r\n\r\n\r\n However, selecting a good product<\/a> is the best way to start earning as soon as possible.<\/p>\r\n\r\n\r\n\r\n Market research is a must before you start any kind of business, but even more so when you start a website for dropshipping.<\/p>\r\n\r\n\r\n\r\n If a product isn\u2019t in demand, you\u2019ll have a very hard time selling it. You\u2019ll incur marketing costs without ever getting your return on investment.<\/p>\r\n\r\n\r\n\r\n Now, the trick is in actually performing market research.<\/p>\r\n\r\n\r\n\r\n First comes ideation.<\/p>\r\n\r\n\r\n\r\n In order to get inspired, you can turn to social media and sites like Wish and Amazon. If you already have a product idea, it\u2019s time to validate it.<\/p>\r\n\r\n\r\n\r\n The simplest way to do it is with Google.<\/p>\r\n\r\n\r\n\r\n You can use the oldest trick in the SEO book, the Google Keyword Planner<\/a>.<\/p>\r\n\r\n\r\n\r\n It\u2019ll show you the monthly search volume and competition for a certain keyword. Just make sure you focus on the right location, and don\u2019t forget about long-tail keywords and synonyms.<\/p>\r\n\r\n\r\n\r\n You can also use Google Trends<\/a> to evaluate interest over time and the seasonality of a product.<\/p>\r\n\r\n\r\n\r\n For example, a new product might have appeared on the market two months ago, and now the demand for it is steadily growing. It could be a great opportunity for your dropshipping business.<\/p>\r\n\r\n\r\n\r\n At this point, you should also stake out the competition.<\/p>\r\n\r\n\r\n\r\n First, you should define the volume of the competition.<\/p>\r\n\r\n\r\n\r\n How big is the market? Plenty of competitors could undercut your ability to run a profitable business. Too few competitors may mean a niche that looks profitable but isn\u2019t.<\/p>\r\n\r\n\r\n\r\n At the same time, evaluate your competitors\u2019 pricing.<\/p>\r\n\r\n\r\n\r\n As a rule of thumb, the best way to start a dropship business is by offering something at a reduced price.However, it can be a race to the bottom if you can\u2019t get decent margins.<\/p>\r\n\r\n\r\n\r\n Here\u2019s the thing \u2013 running a successful eCommerce store for dropshipping isn\u2019t nuclear physics. There are a few formulas that always work:<\/p>\r\n\r\n\r\n\r\n If you can offer people something at a reduced price (while still getting decent profit margins), they will buy.<\/p>\r\n\r\n\r\n\r\n However, the scenarios in which this doesn\u2019t mean a race to the bottom is very rare. You\u2019re competing with small businesses and huge corporations alike. Amazon carries pretty much every product. Plus, once you start lowering the price, so will everyone else.<\/p>\r\n\r\n\r\n\r\n Even if they\u2019re not making money.<\/p>\r\n\r\n\r\n\r\n This is where it really pays off to dig deep, all the way to page 57 of Google.<\/p>\r\n\r\n\r\n\r\n If you can find a manufacturer you can strike an exclusive deal with, a manufacturer who produces something customers sorely need but can\u2019t get, you\u2019ll be golden.<\/p>\r\n\r\n\r\n\r\n The most realistic scenario is to drop ship a product that\u2019s not easily available in a certain area or country.<\/p>\r\n\r\n\r\n\r\n Offering high-quality products is one of the most long-term sustainable ways to run a profitable online business.<\/p>\r\n\r\n\r\n\r\n The quality of your products will be there for you even when you can\u2019t reduce the price to match your competitors.<\/p>\r\n\r\n\r\n\r\n And it will make people refer their friends to you, giving you more customers and profits.<\/p>\r\n\r\n\r\n\r\n Information is the key to success.<\/p>\r\n\r\n\r\n\r\n Plenty of businesses sell products, but only some of them are able to inform their customers about which products are best suited to their needs.<\/p>\r\n\r\n\r\n\r\n This is especially true for complicated products. For example, products with a lot of components or products that aren\u2019t universal fit.<\/p>\r\n\r\n\r\n\r\n If you don\u2019t have competition but there is a demand in the market, you can swoop in and satisfy it. However, keep in mind that this is only short-term success. As soon as potential competitors see you\u2019re running a profitable business, they\u2019ll do the same thing, too.<\/p>\r\n\r\n\r\n\r\n The money is in the niche \u2013 or so they say.<\/p>\r\n\r\n\r\n\r\n Generally, the narrower you can go with your target audience, the better. This is as true in sales as it is in marketing.<\/p>\r\n\r\n\r\n\r\n When you run a generalized dropshipping store, you\u2019ll be able to serve all kinds of people. However, ultimately you may serve no one.<\/p>\r\n\r\n\r\n\r\n Conversely, if you run a dropshipping website that offers products specific to a niche<\/a>, you\u2019ll be able to personalize more and target people more accurately.<\/p>\r\n\r\n\r\n\r\n For example, when you sell generic clothes, you\u2019ll be targeting humans. That\u2019s all you know about them.<\/p>\r\n\r\n\r\n\r\n But if you sell baby-proofing systems, you\u2019ll know exactly who you\u2019re targeting: new parents. You\u2019ll know what they\u2019re motivated by, and you can easily understand why and when they\u2019ll buy your products.<\/p>\r\n\r\n\r\n\r\n If you are also interested in your niche, that\u2019s even better!<\/p>\r\n\r\n\r\n\r\n In the beginning, it\u2019s much easier to stick by what you know. You\u2019ll know how to serve your customers better.<\/p>\r\n\r\n\r\n\r\n To sum it all up, the ideal dropship product is a product that\u2019s in high demand, but there\u2019s not a lot of competition (or there is competition but there\u2019s not enough supply). And its wholesale price (pre-order fees and operating costs included) is low enough to give you a decent profit margin.<\/p>\r\n\r\n\r\n\r\n As a rule of thumb, try to price your product at or below $200.<\/p>\r\n\r\n\r\n\r\n This is especially beneficial if you\u2019re starting out.<\/p>\r\n\r\n\r\n\r\n You\u2019ll need time to build your credibility, and people are more willing to make spur-of-the-moment purchases of products that are not more expensive than $200. Everything above that will require some convincing (and time).<\/p>\r\n\r\n\r\n\r\n You should also keep an eye on MAP (minimum advertised price). If the manufacturer doesn\u2019t let you set a price that\u2019s lower than their limit, you should factor that into your calculations.<\/p>\r\n\r\n\r\n\r\n Finally, be aware of how the size of the product can affect delivery to the locations you\u2019re targeting.<\/p>\r\n\r\n\r\n\r\n Pricing changes depending on the size, so factor that into your margin calculations to know exactly how much revenue you can expect per product.<\/p>\r\n\r\n\r\n\r\n Once you\u2019ve set everything up, it\u2019s time to actually run the business and make it as lucrative as possible.<\/p>\r\n\r\n\r\n\r\n So, what can you expect to happen once a customer clicks on \u201cOrder\u201d?<\/p>\r\n\r\n\r\n\r\n The main prerequisite for this is to know (or automatically update) if the products you\u2019re advertising are available at the moment.<\/p>\r\n\r\n\r\n\r\n The majority of dropshipping platforms integrate with wholesale platforms like Modalyst<\/a> to make sure all of your listings are up to date.<\/p>\r\n\r\n\r\n\r\n If they\u2019re not, your system will process an invalid order for the customer. You\u2019ll need to either notify them that the product is not in stock, or issue them a refund.<\/p>\r\n\r\n\r\n\r\n You want to avoid that at all costs.<\/p>\r\n\r\n\r\n\r\n If you\u2019re doing it manually, it\u2019s going to get tedious and nerve-wracking soon. However, you can use integrations with dropship platforms like Modalyst<\/a> to streamline the process.<\/p>\r\n\r\n\r\n\r\n As soon as the customer places an order and pays for it, your system will \u201cping\u201d the supplier\u2019s system and the order will be processed on their end, as well.<\/p>\r\n\r\n\r\n\r\n Once they receive the order, the suppliers will ship the product to the customer.<\/p>\r\n\r\n\r\n\r\n Again, it\u2019s good to know how much time it\u2019ll take them to process the order. If it\u2019s shipped within one day, that\u2019s perfect. But if your customers have to wait a week for the order to ship in the first place (and the supplier is thousands of miles away from them), it could become a nightmare.<\/p>\r\n\r\n\r\n\r\n It\u2019s important for you to know that your business will be handling all customer communication.<\/p>\r\n\r\n\r\n\r\n Essentially, they shouldn\u2019t be aware that you\u2019re a dropshipping business at all. Your process shouldn\u2019t show it.<\/p>\r\n\r\n\r\n\r\n You\u2019ll notify them about the processing of their order, about the shipment, and about tracking codes and everything else.<\/p>\r\n\r\n\r\n\r\n Similarly, if something goes wrong, you\u2019ll be the one who has to handle it so make sure you have reliable suppliers.<\/p>\r\n\r\n\r\n\r\n Even though you don\u2019t have physical inventory, you have digital inventory.<\/p>\r\n\r\n\r\n\r\n And when it comes to any kind of sales, the most important rule is: never go out of stock.<\/p>\r\n\r\n\r\n\r\n You should always have backup dropship wholesale suppliers in case your main suppliers go out of stock.<\/p>\r\n\r\n\r\n\r\n And in order to stay updated on their inventory levels, you can use Modalyst<\/a> and integrate it with your drop shipping website.<\/p>\r\n\r\n\r\n\r\n You should also understand the dropshippers’ stock rates for the products you want to sell online. Do they carry it consistently, or do they only carry it periodically?<\/p>\r\n\r\n\r\n\r\n And if you ever get into an \u201cout of stock\u201d situation: don\u2019t panic. Instead, get in touch with the customer and offer them something in return.<\/p>\r\n\r\n\r\n\r\n Try to preserve the relationship as much as possible.<\/p>\r\n\r\n\r\n\r\n In most cases, customers won\u2019t mind if you offer them a better substitute, and you\u2019ll save your face.<\/p>\r\n\r\n\r\n\r\n Now, you definitely want to have multiple dropshipping suppliers \u2013 even if they\u2019re just backup ones.<\/p>\r\n\r\n\r\n\r\n But as you scale, you\u2019ll need multiple suppliers because of a variety of reasons:<\/p>\r\n\r\n\r\n\r\n And so on.<\/p>\r\n\r\n\r\n\r\n And in order to avoid having to manually route orders or risk routing orders to the wrong supplier, you can automate the process.<\/p>\r\n\r\n\r\n\r\n For example, if you\u2019re selling to customers in both Canada and Belgium, and you have suppliers from the US and the Netherlands, you\u2019ll want to route Canadian orders to the US supplier, and Belgian orders to the supplier from the Netherlands.<\/p>\r\n\r\n\r\n\r\n You can execute the same method for other types of orders, as well.<\/p>\r\n\r\n\r\n\r\n And it\u2019s completely fine to play favorites \u2013 route the majority of your orders to your preferred supplier and keep everyone else on the back burner.<\/p>\r\n\r\n\r\n\r\n Since running a store with dropship products doesn\u2019t cost a lot in overhead and operating costs, marketing is where you should focus the majority of your investment.<\/p>\r\n\r\n\r\n\r\n This is much simpler if you\u2019re selling niche dropshipping products.<\/p>\r\n\r\n\r\n\r\n You can create buyer personas<\/a> for your customers and define what drives them to buy, and which channels they use to get informed.<\/p>\r\n\r\n\r\n\r\n You should never go in blind.<\/p>\r\n\r\n\r\n\r\n The majority of people with the intent to buy will Google what they\u2019re interested in. And since more people click on organic results than paid ads, you should really focus on improving your SEO.<\/p>\r\n\r\n\r\n\r\n You can use paid social media advertising, but know that you may not always reach the people who are ready to buy.<\/p>\r\n\r\n\r\n\r\n It\u2019s a long-term advertising strategy.<\/p>\r\n\r\n\r\n\r\n For immediate results, go with Google Ads.<\/p>\r\n\r\n\r\n\r\n While we all talk about ads the most, you can get plenty of business from referrals of satisfied customers.<\/p>\r\n\r\n\r\n\r\n Your goal should be to retain customers and maximize their value. The majority of eCommerce platforms offer up-sell and cross-sell add-ons that will help you sell more products to the same people, or sell complementary products.<\/p>\r\n\r\n\r\n\r\n You should also invest in email marketing to reactivate the people who have already bought from you.<\/p>\r\n\r\n\r\n\r\n After all, 40% of a store\u2019s revenue<\/a> comes from repeat customers.<\/p>\r\n\r\n\r\n\r\n Finally, just because you\u2019re drop shipping doesn\u2019t mean you don\u2019t have to handle customer support.<\/p>\r\n\r\n\r\n\r\n You\u2019re marketing your online shop like a business, and you should communicate with your customers just like a business does.<\/p>\r\n\r\n\r\n\r\n Now, when everything\u2019s going great, you can focus on improving the customer experience.<\/p>\r\n\r\n\r\n\r\n However, when things go wrong, you may wonder if it\u2019s worth it.<\/p>\r\n\r\n\r\n\r\n It is.<\/p>\r\n\r\n\r\n\r\n The trick is in staying cool and handling the situation wisely.<\/p>\r\n\r\n\r\n\r\n You can use ZenDesk<\/a>, Help Scout<\/a> or any of the other tools that allow you to help your customers by phone, email or live chat.<\/p>\r\n\r\n\r\n\r\n Every dropshipping supplier has a different way of processing returns and as an online store, you have to keep both them and the end customer happy.<\/p>\r\n\r\n\r\n\r\n Make sure you\u2019ve defined the process with the dropship wholesaler so you know what to expect.<\/p>\r\n\r\n\r\n\r\n For example, some vendors charge a restocking fee.<\/p>\r\n\r\n\r\n\r\n In some cases, it may not even be profitable to return a product for a few dollars in credit (or no one at all) + shipping fees. It\u2019s much better to send the customer a new product if their previous one wasn\u2019t functioning properly.<\/p>\r\n\r\n\r\n\r\n Sometimes, a customer may just forget that they ordered something. However, chargebacks are typically caused by fraudulent situations.<\/p>\r\n\r\n\r\n\r\n This is why it\u2019s good to have an ATS (Address Tracking System) that verifies that the address provided is the address on the payment file.<\/p>\r\n\r\n\r\n\r\n If you\u2019re wondering how to get your eCommerce website off the ground as soon as possible (and make it profitable even sooner), here\u2019s what the majority of successful ecommerce businesses recommend:<\/p>\r\n\r\n\r\n\r\n If you\u2019re in it for the long run, it pays to specialize and build your credibility.<\/p>\r\n\r\n\r\n\r\n Things can always happen. You can run out of stock, someone may leave a negative review, and it\u2019s all completely natural. However, once you\u2019ve built up a reputation, you and your customers won\u2019t even notice it.<\/p>\r\n\r\n\r\n\r\n Now, this is easiest to do if you\u2019re operating within a niche. When you\u2019re a generalist, it\u2019s easy to get lost in the crowd.<\/p>\r\n\r\n\r\n\r\n Paid ads can be great, but they\u2019re not sustainable in the long term.<\/p>\r\n\r\n\r\n\r\n If you\u2019re getting a spike of traffic when you\u2019re advertising your products, and then nothing when you stop running the ads, it\u2019s a problem.<\/p>\r\n\r\n\r\n\r\n This is why it\u2019s much better to invest in SEO for the long run, as well as email marketing, and use paid ads as a \u201cbooster\u201d to your standard methods.<\/p>\r\n\r\n\r\n\r\n People buy for the products, yes. But they also buy for the experience.<\/p>\r\n\r\n\r\n\r\n Even if you have a lot of competition and a higher price, people won\u2019t mind as long as they love the journey.<\/p>\r\n\r\n\r\n\r\n If you draw them in with useful resources, encourage them to communicate with you, and invite them to recommend your business to their friends, you won\u2019t just be a business to them.<\/p>\r\n\r\n\r\n\r\n You\u2019ll be someone they can rely on.<\/p>\r\n\r\n\r\n\r\n And that\u2019s the best way to build a profitable e-Commerce business with dropshipping.<\/p>\r\n\r\n\r\n\r\n How to Start Selling Online<\/a> by Salehoo<\/p>\r\n\r\n\r\n\r\n
This setup has 2 main<\/strong> advantages:<\/p>\r\n\r\n
How dropshipping works<\/strong><\/h2>\r\n
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The Pros of Dropshipping<\/h2>\r\n\r\n\r\n\r\n
Reduced Overhead and Startup Costs<\/h4>\r\n\r\n\r\n\r\n
Flexibility<\/h4>\r\n\r\n\r\n\r\n
Scalability<\/h4>\r\n\r\n\r\n\r\n
Simplicity<\/h4>\r\n\r\n\r\n\r\n
The Cons of Dropshipping<\/h2>\r\n\r\n\r\n\r\n
Low margins<\/h4>\r\n\r\n\r\n\r\n
Hidden costs<\/h4>\r\n\r\n\r\n\r\n
Inventory management<\/h4>\r\n\r\n\r\n\r\n
Key Terms<\/h4>\r\n\r\n\r\n\r\n
\r\n
How to Start a Dropshipping Business<\/h2>\r\n\r\n\r\n\r\n
Business Structure of Your Dropshipping Store<\/h3>\r\n\r\n\r\n\r\n
The Costs of Starting a Dropshipping Business<\/h3>\r\n\r\n\r\n\r\n
Startup costs for Dropshipping Business<\/h4>\r\n\r\n\r\n\r\n
Marketing<\/h4>\r\n\r\n\r\n\r\n
Product samples<\/h4>\r\n\r\n\r\n\r\n
Upgrades<\/h4>\r\n\r\n\r\n\r\n
Top eCommerce Platforms for Dropshipping Websites<\/h2>\r\n\r\n\r\n\r\n
Shopify for Dropshipping<\/h3>\r\n\r\n\r\n\r\n
Shopify as an eCommerce Platform<\/h4>\r\n\r\n\r\n\r\n
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Shopify Pricing<\/h4>\r\n\r\n\r\n\r\n
Wix for Dropshipping<\/h3>\r\n\r\n\r\n\r\n
Wix as an eCommerce Solution<\/h4>\r\n\r\n\r\n\r\n
\r\n
Wix Pricing<\/h4>\r\n\r\n\r\n\r\n
BigCommerce for Dropshipping<\/h3>\r\n\r\n\r\n\r\n
BigCommerce as an eCommerce platform<\/h4>\r\n\r\n\r\n\r\n
BigCommerce Pricing<\/h4>\r\n\r\n\r\n\r\n
Other Options for Setting up a Dropshipping Website<\/h3>\r\n\r\n\r\n\r\n
How to Find the Best Dropshippers<\/h2>\r\n\r\n\r\n\r\n
Methods of Finding Dropshipping Suppliers<\/h4>\r\n\r\n\r\n\r\n
Using dropshipping platforms<\/h4>\r\n\r\n\r\n\r\n
Googling your way to success<\/h4>\r\n\r\n\r\n\r\n
Trade shows, directories, and competition<\/h4>\r\n\r\n\r\n\r\n
Find Top Dropshipping Suppliers on Modalyst<\/h3>\r\n\r\n\r\n\r\n
Dropshippers in the USA<\/h4>\r\n\r\n\r\n\r\n
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Why Dropship From the US?<\/h4>\r\n\r\n\r\n\r\n
What to Look for in USA Dropshipping Suppliers<\/h4>\r\n\r\n\r\n\r\n
Modalyst Pricing for Access to US Suppliers<\/h4>\r\n\r\n\r\n\r\n
Choosing the Best Dropship Suppliers<\/h4>\r\n\r\n\r\n\r\n
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\r\n
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Communicating with Drop ship Suppliers<\/h4>\r\n\r\n\r\n\r\n
Payment<\/h4>\r\n\r\n\r\n\r\n
How to Pick the Best Dropshipping Products<\/h2>\r\n\r\n\r\n\r\n
Market Research<\/h3>\r\n\r\n\r\n\r\n
Markup Opportunities and Sales Potential<\/h3>\r\n\r\n\r\n\r\n
Reduced price<\/h4>\r\n\r\n\r\n\r\n
Exclusive access<\/h4>\r\n\r\n\r\n\r\n
Better quality<\/h4>\r\n\r\n\r\n\r\n
Offering value with your service<\/h4>\r\n\r\n\r\n\r\n
Low competition<\/h4>\r\n\r\n\r\n\r\n
Niche Products for Dropship Businesses<\/h3>\r\n\r\n\r\n\r\n
Things to Keep in Mind When Choosing Products<\/h4>\r\n\r\n\r\n\r\n
How to Run a Dropshipping Website<\/h2>\r\n\r\n\r\n\r\n
The Dropshipping Order Process<\/h3>\r\n\r\n\r\n\r\n
The customer places an order on your site.<\/h4>\r\n\r\n\r\n\r\n
Your store places an order with the supplier.<\/h4>\r\n\r\n\r\n\r\n
Supplier ships the order to the customer.<\/h4>\r\n\r\n\r\n\r\n
The customer is notified by the online store.<\/h4>\r\n\r\n\r\n\r\n
Inventory Management<\/h3>\r\n\r\n\r\n\r\n
Be Smart about Routing Orders<\/h4>\r\n\r\n\r\n\r\n
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Marketing Your Dropshipping Business<\/h4>\r\n\r\n\r\n\r\n
First, know (and understand) your target audience.<\/h5>\r\n\r\n\r\n\r\n
Second, choose your methods wisely.<\/h5>\r\n\r\n\r\n\r\n
Third, don\u2019t just attract customers \u2013 retain them.<\/h5>\r\n\r\n\r\n\r\n
Customer Support<\/h3>\r\n\r\n\r\n\r\n
First of all, you need customer support tools.<\/h5>\r\n\r\n\r\n\r\n
If you\u2019re processing returns, be aware of the process.<\/h5>\r\n\r\n\r\n\r\n
If you get a chargeback, respond to it as soon as possible with original documentation.<\/h5>\r\n\r\n\r\n\r\n
Dropshipping Best Practices<\/h2>\r\n\r\n\r\n\r\n
Find your niche and build your credibility<\/h4>\r\n\r\n\r\n\r\n
Focus on cost-effective marketing<\/h4>\r\n\r\n\r\n\r\n
Offer Excellent Customer Service<\/h4>\r\n\r\n\r\n\r\n
Additional Resources<\/h3>\r\n\r\n\r\n\r\n