A simple Google search reveals that dropshipping appears to be the ultimate get-rich-quick scheme, where you may begin earning passive money while sleeping in bed.
But what is dropshipping exactly? How does one begin a dropshipping business, and does it live up to the hype? (And as simple as it is portrayed to be?)
Dropshipping entails simply marketing and selling a product on your own website without arranging for its fulfilment and delivery.
Suppose you have a £30 (R600) goods for sale on your website, and a consumer purchases it. After they have paid, you go to the wholesaler and buy the merchandise from the supplier, generating a profit of, say, £10 (R200).
With low startup expenses, this company concept is attractive to many entrepreneurs. You do not need a vast warehouse to keep the products, nor are you responsible for delivery.
You are nonetheless still liable for the sale, and if there is a lack of quality or customer service, clients will be pounding on your e-commerce door in anger.
In the end, dropshipping is still a business that requires long-term planning and effort to be successful.
This involves ensuring that you are legal and prepared to begin trading. If you do not register, you will be unable to receive wholesale pricing from suppliers who will vet you prior to trading. This will also require you to begin paying income tax.
Once you have obtained official legitimacy, wholesalers will accept your orders. They often demand bulk purchases and are notoriously tough to get online, so consider scouring a supplier directory to find the ideal match for your specialty.
Additionally, you will need to establish your website or dropshipping platform. A relatively inexpensive e-commerce website may be created in minutes using platforms like Shopify.
Shopify is an excellent example because it allows you to design your website and begin selling immediately.
Not all products are suitable for dropshipping. You should sell a product that is in high demand (you can determine this using keyword websites such as Keyword Planner and Google Trends), preferably a repeat-purchase product, has an appealing profit margin, and is tough for your potential clients to obtain locally (you want them to be searching online). You must also identify a market niche.
Trending products are ideal for dropshipping, especially those that are trending on social media platforms like as TikTok, as they will receive a great deal of exposure and generate a large number of internet clicks.
You don’t want to buy a product that is too large or too fragile because you have no control over how it is handled, and any damage during delivery will result in consumer complaints. In addition to reducing profits, the increased delivery costs reduce earnings.
You should also choose things that are simple to upgrade, such as a product with connected accessories.
In any event, ensure that you have access to the product or samples of it before you begin promoting it. Before you can expect customers to believe in your product, you must believe in it yourself.
If a customer is unhappy with a product’s quality, they will approach you personally. Ensure the provider you select has positive evaluations for both shipping timeframes and product quality.
Websites such as AliExpress, Alibaba, AW Dropship, and SaleHoo provide access to global vendors. You will gain a better understanding of which suppliers are best suited to your offering by perusing supplier directories, but you can also contact the manufacturer of products you like personally.
Before conducting business with a supplier, find out if they offer dropshipping, can put your logo to the product, what their shipping times are, and what their return policy is.
Teemill is a dropshipping supplier. They provide eco-friendly, customizable t-shirts while adhering to legal requirements such as GDPR.
Teemill’s Jon Wells explains, “We have a Shopify integration that allows those with an existing Shopify store to sell products made using our circular supply chain.”
“We have just launched an API, which allows anyone with an internet connection to run a production line, factories, and supply chain with a single line of code.
People can copy-paste Teemill’s public API, sample code, and demos to link their online store or app directly to the factory.
Build customer confidence and begin marketing.
Create a client profile, identify the online communities they frequent, and determine who inspires them (which could be valuable if going down the influencer marketing route).
Paid promotion will be necessary, as you will initially have little visibility and no trust. This will be your largest expense, and you can expect to spend between £1,000 (R20,000) and £2,000 (R40,000) every month on it initially.
Encourage reviews, collect client feedback (and use the positive responses as testimonials), and provide excellent customer service.
The next step is to flex your marketing muscles using methods such as sales, discounts, and scarcity.
Low start-up costs make it a low-risk way to enter e-commerce; all you need is a laptop, high-speed Internet, an online store, and a domain name.
Potentially significant profit margins if a market niche with great demand can be identified.
No requirement for product storage
Possibility of earning passive money over time – it is conceivable for a single dropshipper to earn approximately £40,000 per year.
Can work from any location’
Fulfillment charges – you are not required to keep or ship the product, but you are normally responsible for the fulfilment and shipping costs. This expense should be compensated by your margin of profit.
No eyes on quality before shipment – you must answer for supplier error
There may be intense competition.
Typically, there are no customization options available.
Potentially long shipping times
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