How To Start Dropshipping Business In 2020?

Are you starting a new Dropshipping business?

Time for a short story. I started a dropshipping store five years back.

Guess what? It failed terribly. I was in a $2000 debt to my father.

But I didn’t lose hope. For my failed dropshipping store, I saw a few sales.

People are buying stuff online; this system is working.

Hurray! (being optimistic)

I started it again and failed again. At last, my 3rd dropshipping store succeeded. 

In this article, I’ll share my experiences and the pros and cons of dropshipping. I will guide to starter perfect dropshipping business in 2020.

Don’t go anywhere!


What is dropshipping? How does it work?

Dropshipping is one of the methods in an eCommerce business. It’s a fulfilling retail method where the store doesn’t need to keep the stock. When customer orders from your online store, you purchase from the third party supplier, then the supplier ships the product directly to the customer. 

The difference between typical retail stores and the dropshipping store is, you don't have to keep the stock with you.

I bet you get a great idea about dropshipping.

How does it work?

Step 1: Customer places the order on your site ( Ex: Customer ordered $30 product)

Step 2: Your store sends an order automatically to the supplier (ex: Actual cost of the product $10)

Step 3: Your dropshipping supplier prepares the order

Step 4: Supplier ships directly to the customer.

Step 5: You’ll keep the profit (i.e., $20)

Dropshipping involves no risk and easy to start.

Pros

  • Easy to start: Yes, you don’t need to find a place for warehouses or hire people to pick the products. You have to send the customer’s addresses to your suppliers. They will take of everything.
  • Little overhead cost: You don’t need tons of money or people to start dropshipping. You can begin with less than $500 (This is an estimated budget). 
  • Easy to scale: When you find a winning product, you can scale it quickly. Up your budgets, get more profit.

Cons

  • Inventory issues: You don't have to keep the stock an advantage, but you'll sometimes face many inventory issues. The solution is to find new suppliers for backup.
  • Customer Support: You need to deal with inventory, returns, refunds, and questions about the product.
  • Low-profit margin: You might think you can sell your products for high profits. That’s true. But there are many overhead costs like marketing costs, platform costs, and freelancer costs (If you hire anyone). Dropshipping is a low-profit margins game (unless you sell high ticket products).
  • High Competition: You heard the dropshipping business is easy to start. That’s the reason this business is highly competitive.

Steps to start Dropshipping

Niche Selection

When I started dropshipping, I begin with a general store. I probably think I can build another Amazon.

It is a terrible mistake. I prefer a niche store because I got to succeed in a niche store.

Niche selection

I recommend you to select a niche which is drop shippable.

Dropshippable means choosing a product that is good for dropshipping.

Don't rush this process. A lot of people have a hard time in the niche selection process.

Do your research select a Good niche.

Good niche variables

  • Products which are unique (can’t found in general stores) 
  • Products which have a lot of varieties
  • Products which have a lot of designs
  • Products which solves a problem or consists wow factor

Bad niche variables:

  • Products that people connect emotionally
  • Products that too personalized
  • Products can easily found in local stores

Market Research

Market research is necessary and essential to start any online business. You will validate your selection of products that are good or bad.

It saves a lot of time and money if you select the wrong niche.

Ok well. How to do market research?

There are many free tools on the Internet. You can validate your selection.

  • Google keyword planner: Signup for a Google Ads account (It's free).You'll get this free tool. Type the main keyword on GKP (Google Keyword Planner). You'll see how many people are searching for that keyword. In case you see no results, that's not a good sign.
  • Google TrendsThis why I love google. They give lots of free tools. Do the same process on this website. You'll see the graph. If the spike goes up, it is a profitable niche. If the spike goes down, you might think another niche. If the spike goes up and down like a mountain, it is the seasonal niche. It is also a bad sign.
Google Trends
  • Social Media: Using social media is another way to validate your niche. You might see product videos, recent posts, and their engagement, whether people like those products or not.
  • Groups and Pages: Join in dropshipping groups and follow related pages to discover trending products and niches that are perfect for dropshipping.


Create Your Own Online Store

You can create your own online store or sell on marketplaces like Amazon, eBay, Etsy, etc..

Many drop shippers start their business by creating their own online store. It gives more control and easy to scale up.

The pros of marketplaces are people trust brands like Amazon. Cons: Highly competitive, high capital required.

  • I recommend you create your own online store using Shopify.
dropshipping example

Get Suppliers

Finding suppliers is a piece of cake.

There are thousands of places to find suppliers. Some of them are:

  1. Aliexpress
  2. Oberlo
  3. Salehoo
  4. Printful
  5. Worldwide brands


Build a relationship with the suppliers, test ordering to yourself, calculate the shipping times. 

List out the best suppliers, contact them, and grow your dropshipping business. 

Optimize for Conversions

What is conversion?

Conversion is a metric that measures our goal.

Conversion could be a sale, Email signup, Add to cart, etc. Usually, it is an online sale for eCommerce.

You have to optimize your website to get more conversions.

These factors will increase conversions on your site:

  • High-Quality photos
  • Product descriptionSite speed
  • Customer reviews
  • Site speed
  • Chat support
  • Smooth Navigation
  • One-click checkout process 

There are so many factors you can test everything. Find which one is working for you. Always test new things.

Drive Traffic

Yes, you set up your website, found suppliers, and optimized your site for conversions. 

Now what?

Send people to your website.

How to do that?

You can drive traffic for free and paid.

Paid Traffic

  • Facebook Ads
  • Google Ads
  • Social Media Ads
  • Influencer marketing
  • Free Traffic

  • SEO
  • Youtube
  • Social Media
  • Answering Questions
  • Creating Affiliate Program
  • Blog comments
  • If you’re loaded, paid traffic is the best option to get fast conversions.

    If you want slow and high converting traffic try free traffic methods. It takes time and effort.

    I recommend using free and paid traffic methods to grow your online store.

    Automation

    At this point, you are getting consistent sales. It’s time to automate the process.

    Save time and effort. Do what you like?

    For example, 

    I hate fulfilling orders, and I love managing my Facebook Ads account. 

    So, I automated fulfilling orders using some paid software.

    Hire people for customer support, posting on social media channels, etc.

    You can find people on Fiverr, Upwork to work you.

    Automation is also an important part of scaling your online business.

    Now, Its Your Turn

    Start your dropshipping store, find suppliers, get traffic, generate conversions, and automate the process.

    Don’t worry about failing. Just start.

    If you don’t have much capital, use free methods, take your time but always learn.

    Comment below If you have any questions and subscribe to my newsletter. Never miss any updates about online business.

    Happy Hustling!

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