Dropshipping is an essential business model, especially during a pandemic. It has a low entry value making it the most attractive business model for most entrepreneurs, and the work itself is pretty simple. But what exactly is dropshipping?
Dropshipping is a particularly new business model, one that came along with the rise of e-commerce. It’s a simple business model where a buyer purchases from your online store, then your store sends the order to the supplier, and the supplier ships the item to your buyer. You don’t need stocks to make it work because the supplier handles that side of the process for you.
There are various reasons why dropshipping is so attractive for many aspiring entrepreneurs. First, dropshipping doesn’t have a high overhead cost. Second, you don’t necessarily need to manage a brick-and-mortar store. That’s a big plus, especially during this pandemic. Third, there is a high potential for the market to grow.
It’s expected that the dropshipping market will grow by 28% between the years 2019 to 2025. It’s valued at a staggering $102 billion despite being a new market. There is a lot of room in dropshipping, and here are ways to get you started.
Looking for Your Niche
If you want to start dropshipping, you’re going to need to choose the right niche for you. This means selecting a particular market that you know. It’s also building connections in that given market. If you don’t know where to start, review your interests. What market are you familiar with? What market are you interested in? What market are you following right now? These are all good questions to answer when choosing your niche.
If you still can’t find your niche, you’re always free to start your own. However, this requires a lot of time and investment because you also have to build your audience. You’re also free to choose a growing trend in the market. Feel free to check which products sell the most in Amazon and Shopify and choose your niche from that.
Get Started with the Right Equipment
As a dropshipper, all you’re going to need is a computer and a good internet connection. You will be the one interacting with the consumers the most. For your shipper, they are going to need the right equipment. For example, if you’re a dropshipper who sells bulky and heavy items, your shipper will need a load cell scale to get the accurate weight of the items. This will help them calculate the cost of a product accurately, and it will help you reduce the cost of shipping.
Having the right equipment for the job is already half the battle for dropshippers. Ultimately, you’ll also need to expand your horizons, which means investing more money into consumers. Once you’re big enough, you might also want to have your own delivery department. These are all great options for you, as they will help grow your company and your overall revenue stream.
Start Your Website
You can’t have a dropshipping business without a website. This is the most important part of your business, and you should make it as clean as possible. There are various templates in Shopify, Squarespace, and Amazon that you can choose. If you can afford it, you can hire your website developer to create your dream website into reality. These are all excellent options when starting your website.
Manage Your Finances
Before starting any business, you must manage your finances first. For a brick-and-mortar startup, it’s expected that you have at least $184,000 in the bank for a year’s worth of operations. However, since dropshipping doesn’t require an office, you can deduct your rent. In addition, if you’re planning to run the company alone during the start of the business, you can deduct employee expenses. You’ll end up only needing at least $20,000 for your started overhead cost when those things are deducted. Pretty good, right?
This is why dropshipping is such a wonderful business model and why so many entrepreneurs are into it. But you’re going to need to invest more into your business, especially in marketing.
Marketing Your Business
Lastly, you’re going to need to market your business. There are different free options for this: blogging and social media sites. If you have money to spend, consider investing it on Google and Facebook Ads. Consider having your ad posted on YouTube as well. These are all great options if you want to invest in marketing.
Dropshipping is a simple but profitable business model. If you have built your connections and a loyal consumer base, you can start gaining some serious cash flow into your business in no time.