Dropshipping is a retail delivery system in which a store does not hold stock of the products it sells. Items are ordered by the seller from a third party and have them shipped directly to the customer. As a result, the seller is relieved of having to deal with the product directly.
Benefits of Dropshipping
- Less capital is required.
You don’t have to buy a product unless you’ve already made the sale and have been paid by the customer.
- Easy to get started
You don’t have to be concerned about Managing a warehouse or paying for one, taking care of the packaging and delivery of your orders, or ordering goods regularly and keeping track of stock levels.
- Flexible location
A dropshipping business can be operated from almost anywhere that has access to the internet. You can manage and handle your business as long as you can interact effectively with suppliers and customers.
- Wide selection of products to sell
You can deliver a wide variety of trending goods to your future buyers, and you don’t have to pre-purchase the things you sell. If your suppliers have an item in stock, you can list it for free on your online store.
Disadvantages of Dropshipping
- Low-Profit margins.
For every sale you make, most of the money goes to the supplier. The profit is nearly enough to cover the marketing/advertising costs, site maintenance, sales order management, and office hours.
- Limited branding and customization.
Dropshipping, unlike custom-made goods or print-on-demand, gives you no control over the product. Usually, the supplier designs and brands the drop shipped product, so it isn’t easy to build a brand.
- Dropshipping is Competitive.
- Dropshipping is great for convenience but not so great for quality control since you won’t be able to inspect products to ensure they are up to standard. You must accept responsibility for and apologize for any mistakes made by the dropshipping suppliers when fulfilling orders.
- Some suppliers aren’t as trustworthy as they pretend to be, and you never know where your merchandise comes from.
Steps to building a successful dropshipping business.
- Market Research
- Select a niche. The niche you select must be one you are genuinely interested in.
- Find a product that is inexpensive to ship.
- Check to see if people are actively looking for your products. Check some popular search words relevant to your potential niche using Google’s Keyword Planner and Trends. Perform competition research.
2. Perform competition research
As this indicates a high level of demand and a sustainable business model, look for goods with the competition. Research how your competitors are selling the products.
3. Source for suppliers
Since partnering with the wrong supplier can be disastrous for your company, you mustn’t rush this step. Make sure you find the best supplier. One of the most popular platforms to find reliable suppliers are Spocket or Oberlo.
4. Build your eCommerce website
You need to contact a website designer and developer to help you build a website. The quickest way to launch a website is to Use simple eCommerce platforms like, WooCommerce, Shopify, BigCommerce, Square Online Store, or Squarespace that embraces the dropshipping business model.
5. Promote your products
There are many ways to attract potential customers, but starting a Facebook ad campaign is an effective option.
How much do I need to start a dropshipping business?
You can start dropshipping with little or no capital. Ideally, you can start with $100- $1000 for your online store, domain name, hosting, online advertisement and marketing cost, and other business expenses like obtaining a tax ID, business credit cards, and local business licenses.
Is dropshipping a legitimate business?
Dropshipping is perfectly legal. Like with every business, customer loyalty and creating a brand that resonates with the right audience are still crucial to long-term success.