Do you Know Harry Coleman?
He's among the successful dropshippers making around $10,000+ a day.
In the modern age of development, the Internet has given us enormous power to reach people in any part of the world. All you need is a small piece of technology now known as a smartphone.
Now, you're reading this blog by means of the internet. Many businesses emerged online as a result of the internet's potential reach.
They took the benefit and realised that doing business online can generate more revenue than doing business offline if done wisely.
Dropshipping as a business model is such a game changer in this online business world.
TABLE OF CONTENTS
Here's the in-depth article to make you understand each and every aspect of dropshipping in detail and how you can dropship with the implementation of the steps taken by one of the most successful dropshippers.
So Before You Blink, Let's Dive in
What is Dropshipping Business Model and How does it Work?
Dropshipping is a form of retail business in which you list a bunch of selected products from existing brands or from a supplier in your virtual online store and make them sell under your brand.
The good part is that you can get access to all these products at wholesale prices from those suppliers and sell them with your profit margin.
In fact, you don't necessarily need to buy these products to keep them in stock.
Your role is just to market the products and create a strong brand image in the minds of people so that they will buy from you. The rest, including product storage, packaging, labelling, and delivery, is solely handled by your chosen supplier.
In other words, you partner with a third-party supplier to sell their product under your brand with your additional margin.
The process goes like this -
Thus, it acts as a win-win situation for both you and the supplier, as the supplier gets sales and you book your additional profits.
Let's take an Example -
John started his dropshipping business by listing some dog products. Whenever a customer places an order from John's online store, John books the same order from one of his suppliers and has it sent to the customer's address.
In this way, smart boy John doesn't need to stock items in his garage and still makes a profit with the help of a third-party supplier.
But wait
What products can you Dropship?
The products you list may range from T-shirts, shoes, watches, books, and smartphones to any physical product that is available online for public purchase. When it comes to the best product, our results are as follows:
- Baby care Products
- Apparel
- Beauty Care Products
- Laptops and Mac books
- Bluetooth Earbuds
- Headphones
- Yoga Essentials
- Phone Accessories
- Kitchen Essentials
- Home Appliances
- Stationary Items
- Books and Art
Always remember that in dropshipping, you need to work with physical products only; if you do the same with services, it is called as Dropservicing.
If you remember, we wrote a detailed article on drop servicing too.
But before you start your business, choosing a particular niche and creating a virtual store play a very important role. We'll talk about this in detail further in this blog.
Money Potential in Dropshipping Business Model
The potential of any business model simply defines how much capacity the business model has in terms of revenue and ease.
Dropshipping comes with a great potential for revenue generation, even in 2023. You can set your profit margins to any extent you want if you are armed with the hardcore skills of marketing, branding, and promotion.
Opt-in for the professional marketing courses on the internet to stand out from competitors, as "Learning before Action Has a Great Reaction".
According to Shopify, there are many dropshippers who make up to $100,000 per year. Some reports also say that an average dropshipper can make around $1000-$6000 per month.
Dropshipping Market size value in 2020 was $149.4 billion and expected to grow by 28.8% till 2025 with revenue forecast at $557.9 billion.
Nice Potential, Right?
How to start a Drop Shipping Business with consistency?
Now, you've come across the potential benefits and built your interest in learning more about dropshipping businesses. You might be thinking
How will you do dropshipping?
Doing dropshipping seems like an easy task to everyone in the beginning, but it's not like that.
Dropshipping requires you to perform market research, build your business plan, make a bit of investment (if necessary), and have a disciplined mindset.
Apart from these, the practical bullet points to keep in mind before starting your dropshipping business are:
5 Simple Steps to Take when Starting your Dropshipping Business
- Pick Up a Niche
- Research the potential and analyse the Market
- Select a Trusted Supplier
- Bring up an Online Presence
- Promote, promote, promote!
STEP #1
Dropshipping Business is Niche-Specific. Consider choosing a Niche First
It is particularly the most important point that most people ignore. Selecting a niche that piques your interest will make the competition narrower and help you identify your target customers.
Some of the examples are:
- Selling products to anime fans like bags, hoodies, smartphone cases, hats, and t-shirts.
- Selling products that are rare and hardly found offline.
- Selling kids' care products to parents.
- Selling products to superhero lovers.
- Selling gadgets and tech accessories
- Selling products to animal lovers.
STEP #2
Researching and Analysing is a crucial part of the Dropshipping Business Model
You should be aware of niche potential in dropshipping (to determine your profit margins) and the suppliers that best suit your niche in terms of order fulfilment.
Find out where the most customers in your niche lie (on which online platform)?
Decide on your targeted audience and kindly search for the products they are interested in.
Are they in the areas where the suppliers aren't delivering?
Will customers be okay with the delivery charges and delays due to their location?
How many suppliers are delivering to your targeted location, and what about the product's quality?
Take help from Google Trends, Amazon, Reddit, Instagram, and Facebook to see what is trending and at what price it is, or attend some professionally designed lectures for market research.
STEP #3
An Authorised Supplier is Needed
Once you've found your niche and are done with the researching part, start searching for items falling under $50-$200 and later list them with a margin of 15–30% (mostly recommended) in your store.
Choosing an authorized supplier is neccessary if you're thinking about a long term plan for your Dropshippping business.
A List of Dropshipping Suppliers -
- AliExpress
- Wholesale 2B
- Sunrise Wholesale
- SaleHoo
- Doba
- Mega Goods
- Alibaba
STEP #4
Dropshipping Business Model demands Online Presence
There should be an online presence, and you surely require an e-commerce store (basically a website) to reduce efforts and bring automation to your dropshipping business as online shopping platforms are 24/7 active and easily handled. but the question is
What is the need of a website?
One of the most important aspects of having your own website is that you can market directly to website visitors and customers.
Unlike marketplaces, where people who buy your product are the customers of the marketplace, selling directly to consumers on your website means you get to collect their contact information.
Making your own website with the help of web developers is costly and requires a lot of effort in maintenance and speed.
If you are new to this, then onsidering a Hosting provider for Dropshipping business model would be a great choice.
- Hostinger
- BlueHost
- Go Daddy
- Namecheap
- A2 Hosting
- Dreamhost
are some of the popular hosting providers. Additionally, most of them have a learner interface and a support team for beginners.
An investment in a domain is good for a professional look. Many website builders, like WordPress, Wix, Squarespace, Shopify, etc. offer free trials as well.
STEP #5
Marketing rules the game here. It's Time to Promote your Business
Up until now, you have had a niche, a group of target audiences, a supplier, and most importantly, a website.
It's time to bring some traffic to your dropshipping business and thus generate some leads.
confused?
Dropshipping is a business model that can be easily spread to anyone with an internet connection. But we all know marketing the business to a targeted set of customers (who are willing to buy the products) is effective.
Gather information about your target audience, Run ads according to their willingness to buy. Take help from Facebook, Instagram, and Google ads to reach the customer.
We gave examples of paid marketing here, but it's true that you can always market your products for free without investment with the help of social media posts, reels, Instagram hashtags, Twitter hashtags, and Facebook groups, by creating content, and by bringing organic Google search traffic to your dropshipping business website.
Once you've got a list of customers, ask them for a review and retarget them strategically with combos or special offers.
Use tools like Canva and Adobe Spark to create good-looking ad banners, flyers, and social media posts and stories.
Pros & Cons in Dropshipping Business Model
Every fancy, advantageous business model comes with some disadvantages.
So, it's consciously better to take a look to Make Your Business Plan Clever.
Many professional business advisors say that disadvantages help you look at situations from different perspectives and find approaches to success that you might not otherwise have found.
Conclusion
Okay, I know you came a bit far in reading, but let's take a glimpse at what we've concluded.
Dropshipping is partnering with a third-party supplier to sell their products at a high price to customers via an online store.
It is a perfectly suited business model for entrepreneurs who have skills in marketing and promotion.
Although it has competition, the dropshipping business model is very rich in potential and can be very profitable if done in a disciplined manner, from choosing a niche and supplier to researching and creating an online shop.
Ask Your Queries
If you're left with a question, Our Helping Hands are always there for you. Go on, write your doubts in the comments.
