How to start a dropshipping business?

Learn how to start your shop with a few bucks through dropshipping and discover why it became so popular.

August 25, 2020
10 min read

The dropshipping business has been gaining a lot of traction in the last couple of years. A lot of entrepreneurs took this advantage and managed to make over six figures per month and become a full-time dropshipper.

You can begin your own shop with only a few bucks, but because of the simplicity of entering this business, dropshipping has skyrocketed its popularity, so that means that most of the markets are too saturated and competitive. And in order to stand out, you must be unique and different.

So if you are interested in how to start a dropshipping business then stay with us until the end where we will discuss all the details. By following our manual you will save a lot of time and money. But before we can go deep into this topic let’s discuss some of the basic stuff.

What is Dropshipping and how does it work?

Before you can learn how to start dropshipping, we need to explain the basics to you. A dropshipping business is a retail method where the product is shipped directly to the customer from the supplier. You don’t keep any products in stock, instead, you go ahead and find a manufacturer or supplier that will do all the work for you. You just send them product and shipping details and he will pack it and send it to the customer.

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In order to make it more clear for you we will present it in an example of how it works:

  1. The customers visit your store and find a product that personally fits him;
  2. Then they add it to their cart and proceeds to checkout, let’s say that you valued your product to be 20$;
  3. After that the order automatically forwards to your supplier with all of the customer’s details;
  4. You found the product for 10$ from the supplier (the supplier price must be lower than the price you are selling the product);
  5. The supplier then packages their product and ships it to your customer;
  6. So you end up with a 10$ profit and everyone is happy in the end. You get a fair profit, the customer gets the product, and the supplier gets their money.

So your only job in this drop shipping business model is that you drive traffic to your store and find products that are trending and unique. And this is where most of the droshippers fail. But don’t worry in the next steps we will briefly discuss all the info.

How to become a dropshipper?

So now that you know what is dropshipping, you want to learn how to be a dropshipper yourself. The best part about starting is that it doesn’t require a lot of funds to get started but it will take you a lot of hard work in order to launch your store and make it profitable. So let’s go through the 5 important steps in starting a complete dropshipping business.

1. Picking a niche for your store

The very first step that you want to complete is picking the right niche for your store. If you have a store that is focused on various products from different niches then it will most likely fail. For example, if someone is searching for car parts they won’t be interested in kitchen items as well. And if you put them all together then the customer will just be confused and that may result into leaving your store. So pick a niche that you are familiar with and you will be passionate.

The niche that you will pick must be pretty popular, it has low shipping costs, people are actively searching for this and it is a product that isn’t available in every store. By checking all of these you are actually on the right way in picking a great niche.

A great way to pick a niche is by going to Aliexpress and see all the featured products and the best selling ones. Find a product that you like and that you think it will perform well and then just go to websites such as Google keyword or Facebook and see if people are interested in this product and are they actively searching for it. Once you find a product that you are interested in and it is pretty popular try to find a couple of other products that are in that specific niche. And if they show up to be trending as well, then focus on that path. It will take some time before you find the perfect product and niche, but this is the most important step and the step that you want to spend the most time on.

2. Find the best suppliers

After you find the product the very next step that you want to do is to go ahead and partner with the right supplier. This is a very important step as well because if you pick the wrong supplier it will create a lot of additional problems once you begin getting orders. So, find someone that is friendly, negotiable, and has great communication abilities. Remember that communication is the key for every business.

Try and search up Alibaba or Aliexpress, they are one of the largest platforms for finding the best and cheapest manufacturers and suppliers. Make sure that you ask questions and discuss them with the supplier. Ask him if he can handle multiple orders in a day, what is his return policy, does he do bulk discounts, etc. And a pretty good thing to do is to order a sample from that buyer so that you can see the quality that you will be offering to your customers. This is a simple thing but it might cost you a lot if you don’t do it. So, don’t forget to order a sample product from your supplier.

3. Build your store

Now that you have the product and the supplier figured out the next step that you need to do is to open up a website store. And the best way of doing that is through the e-commerce platform Shopify. It is easy and you don’t need any tech skills in order to design it. There are plenty of plugins and apps that will help you in building the perfect shop.

The only thing that you need to register is an e-mail address and store name. So, go to the official website and fill out this information and begin with setting up your store. Pick a shop name that will be related to the niche and will be easy to write. By creating a memorable name, you will get returning customers to your store. Consider, moreover, making a logo and a page that describes your business.

Having done that you are ready to go. So, just add the products with all the essentials (description and prices). A plugin that might help you a lot is Oberlo, it automatically imports the products from your supplier and does all the job for you. It imports the pictures, descriptions, names, stock, etc.

4. Advertise

You may have thought that you are finished and now you can relax and wait for customers. Well, were hate to break it to you, but that was the easy part.  90% of the dropshipping beginners give up and don’t proceed to do this pretty important step. So, if you don’t give up and proceed on following us you will be one of the 10% who successfully launched their store and actively earn from it.

Consider that, even though you have the best and most attractive product, it is useless if you don’t have customers in your shop. We will tell you a few ways of getting customers to your shop, but the most efficient way is by using Facebook Ads.

Facebook is the most popular social media platform and with the use of their tools you can target audience and that can result in quickly getting your first sales. You will be able to advertise and show up to people with some of the biggest brands. Not only that, but the price for Facebook advertising is affordable and everyone can allow themself to run ads on their platform.

The other advertising methods is by doing SEO (search engine optimization), email marketing, or paid promotion. A pretty good method is paid promotion where you go ahead and find an Instagram influencer or page and pay him to promote your product to their followers. This can result in getting a lot of clicks and sales.

5. Analyze the results

So, at last, but not least, the last step is to track all of the data of your store and do some optimization if needed. Sometimes you may be spending a lot of money on advertising on the wrong product and you won’t get a single sale. Yet, that shouldn’t stop you, just continue and test out different products until you find the product that will best fit you and your business.

Remember that, even if you find the right product that drives your customers and sales, you shouldn’t just rely on that single product. Because the world of e-commerce changes daily and every single day new trends are born. So, you must keep an eye on the trends and find new products that you might think that they will perform okay. When you start getting the hang of things this all will seem easy, but for beginners, it is really hard to find a spot in this e-commerce platform.

There are a lot of people who are doing this business 5+ years, and even more who are trying to do that right now. Dropshipping has been evolving and it will be far more popular. Even though it has a lot of competition, there are millions of people who are searching for a product daily. So don’t hear from others when they say “dropshipping is impossible to start now” because if you put your mindset and love into it you will be a successful dropshipper.

Dropshipping for Beginners – FAQ

Here are the most frequently asked questions by beginners who are just starting out with the dropshipping business model. We have answered them all and tried to give you the best solution as possible.

How to take care of Returns from customers?

When you find a retailer store ask for their return policy because most of the stores actually allow returns and won’t charge you anything for that product. But you must divide returns into two situations:

Defective products:

If your customer receives a product that is broken or doesn’t work then it will be the best solution for you to either send him a new product or just refund his money back. Because if you take his money you will build up a bad reputation for your store and you will lose potential customers.

Non-defective products:

Sometimes your customer may dislike the product because of personal needs, either because of the size or the color. And if they decide to return it then they will return it with their own shipping costs.

Can the wholesale dropshipping companies ship internationally?

If you find a supplier from Aliexpress or Alibaba, then most of them do ship internationally, but you still need to ask them to tell you correct details about their shipping time, costs, etc.

Can you earn a lot of money when dropshipping?

The most straightforward answer to this question is YES! You can absolutely earn a lot of money if you find a product that your customers will like. Just make sure to find products with bigger profit margins with at least 50% profit and just keep on advertising that product. You can easily be earning six figures per month in no time.

Should I buy more than one product?

Well, with dropshipping you don’t need to buy the products upfront. When a customer orders from your store it automatically sends all the details to the supplier and he will send the number of products that the customer ordered.

How to get a tax ID?

To get a tax ID is pretty easy now. Many states are now offering registrations online, and you just need to fill out some information. But you need to go ahead and search what is the procedure for your state.


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