Dropshipping is an upcoming entrepreneurial model especially popular among millennials and Gen Zers. It works well because of the digital marketing skills taking over the financial capacity for many. The best part of dropshipping is that you don’t have to handle the inventory or the stock. The entire business can be taken off with very little funding to start.
So, what is dropshipping?
A business with the drop-shipping model buys items it chooses to sell from a third party supplier or manufacturer. Then the manufacturer completes the order. Firstly, it cuts down your operational costs. Secondly, you can save a lot of time. Thirdly, use the time to focus on customer acquisition. Finally, take the business to the next level with a limited budget and efforts.
If you are all set to compete with the retail giants, then you can follow the tips mentioned to start your business journey. The drop shipping business model doesn’t involve a lot of funds. However, it requires immense hard work and dedication from your end.
“Dropshipping eliminates the risk of buying products that may or may not sell and brings the up-front cost of the product to zero.”
Choose a niche of your preference
The niche of your choice should be focused and bring forth something you are truly interested in. A clouded range of products will be difficult to market. You are prone to be disappointed if you are not passionate about what you sell. You will be discouraged easily and it takes a lot of dedication to scale up a dropshipping business.
Remember the following when you select your niche:
- Aim for appealing paybacks – You will put the same efforts for marketing and customer acquisition for a $20 product as well as a product costing $2000. Go for the higher end.
- Keep your shipping costs low – Even though it is your manufacturer who is handling the shipping, high shipping costs repel customers. Hence, focus on products that can be shipped at smaller rates.
- Target impulsive buyers – Firstly, focus on customers with disposable income. Secondly, look for products that attract impulsive buyers. Thirdly and most importantly, this is important to boost your traffic and improve conversion rates.
- Sell what people want – If nobody is searching for what you plan to sell, then you are dead even before you start. Identify what people are actively searching for and see if it can be your potential niche.
- Trade products that aren’t available locally – Sell something that is not available in your neighborhood. Therefore, this helps you find potential customers faster.
Research your competition before starting a dropshipping business
You will be facing competition from fellow dropshipping operators. Your business will also tackle retail mammoths like Amazon and Walmart. And this is where people go wrong with dropshipping because you go for products with zero to no competition. However, there is no competition because no one is looking for such products in the first place.
Firstly, an item might not have much competition due to high shipping costs. Secondly, there are manufacturing or supplier problems. Thirdly, there could be poor profit margins. Finally, you should look for products with good competition. It is vital because the competition is a sign that the product performs well in the market and the business will be sustainable in the long run.
Commit with a supplier
Getting in bed with the wrong supplier is the worst step to take in a dropshipping business model. Hence do not rush at this and perform proper due diligence. Initially, understand that most dropshipping suppliers are located abroad. Hence, communication is the key here.
Then, it is highly important to have the right response wavelength and capacity to understand each other’s terms. Later, ensure to ask a lot of questions to keep the trade open. Finally, grow your business exponentially by partnering with the right kind of suppliers for your products.
Set up an eCommerce website
Use eCommerce platforms like Shopify to establish a website for your dropshipping business needs. It is a faster and easier way because you don’t need a technical background for this to get it up and running. Additionally, it has a bunch of sales to improve the sales. It is better to use the plugin options rather than investing in a website development company, at least in the beginning.
However, you can explore and expand your website optimization once you are well established.
Build a customer acquisition plan
There is no business without customers. You might have the right suppliers and website in hand but what is the use of it all without any customers. Hence, you need to establish the plan in place for customer acquisition and retention. There are several ways to do it but start with a Facebook ad campaign.
Firstly, a Facebook ad campaign lets you create sales and revenue right from day 1. Secondly, it helps to fast upscaling of the business. Thirdly, Facebook places you right in front of your highly targeted audience. Finally, this gives you equal opportunities as the large retailers and offers a competitive edge.
However, as a drop shipping business, you should also think about SEO and email marketing. Collect subscribers to your email. And send across offers, discounts, and newsletters to your subscribers at regular intervals. It is an easy way to leverage your business. This also helps your business to scale up without any additional marketing. Finally, SEO ensures customer retention.
Track and optimize your dropshipping business
Make it a habit to track and analyze your data and metrics to develop your business. You can use Google analytics if that’s your main platform. Basically, when you track what makes a customer make the buying decision, you know what clicked. With this data, retain the good parts. Later eliminate others that don’t have any impact on the conversion rates.
Today, digital marketing is evolving constantly. It is important to have trial and error methods to see what works and what doesn’t. Test for new opportunities and optimize the current campaigns. Utilize the versatility of drop shipping and turn it for your profits. Work hard to upscale. Hence, reach your targets with the right strategies in place.