How to Start a Dropshipping Business: 2023’s Step by Step Guide

Want to know how to start a dropshipping business? Here is a comprehensive tutorial to create a successful dropshipping business that rivals other forms of eCommerce. The article covers everything from setting up your store to marketing strategies. The future of retail is here; are you ready?

Dropshipping Business: What Does It Entail?

Dropshipping enables you to run a virtual online store without carrying any inventory or fulfilling orders. It’s the fastest and easiest way in the world to start your online store.

The initial investment for starting a dropshipping business is one of the lowest, and the risk is also very low because you don’t need to invest in any inventory.

In recent years, dropshipping has grown in popularity since it eliminates many of the logistical headaches of running a traditional eCommerce business. For example, there is no need to worry about stocking inventory or dealing with shipping products back and forth between dropshipping suppliers and customers.

>> Get your dropshipping business with Shopify here!

How does the dropshipping business model work?

You never need to buy or handle your customers’ items when running a dropshipping online business. The process of dropshipping allows you to order your customer’s products directly from your manufacturers or suppliers, who then ship the orders directly to your customers. You can set up your price and list the items for sale.

So, the step-by-step dropshipping process is-

#Step1: You set up your online dropshipping store. Customers visit your store and order your product.

#Step2: You place an order with your dropshipping supplier and pay the actual price of the product.

#Step3: Your supplier sends the products to your customers.

Your profit is the difference between your set up price and the actual price of the product you pay to the supplier.

Your profit= Your set up price – Actual price by the supplier

The entire business model is straightforward and based on how it is handled.

Dropshipping Business- A Look Into The Pros And Cons

Pros

• The dropshipping model is easy to launch and manage your own online store.
• You don’t need any experience in dropshipping or eCommerce, and there’s no need for any special skills or technical setup.
• Dropshipping is perfect for entrepreneurs looking to launch their business on a shoestring budget because it’s one of the lowest-cost forms of eCommerce.
• Dropshipping is great for selling products that you like or are passionate about.
• It is also great for seasonal businesses because it allows you to carry no inventory, so you can sale new products whenever you want.
• You can run your business in your leisure time and make good money.

Cons

• Dropshipping businesses are inexpensive to run, but without research and effort into setting up the infrastructure, they can quickly turn into false economies.
• The quality and design of your site matter a lot if you want to make sales and build a brand. Developing a well-designed website can be expensive. Don’t underestimate that.
• You need to know your competition well. As a result, you’ll have quite a difficult time standing out.
• You need to research your niche area thoroughly because you will be competing with other online stores vying for customers’ attention and loyalty.
• It’s tough to find reliable, trustworthy dropshipping suppliers with quality products.

How to start a dropshipping business?

Starting a dropshipping business is an excellent opportunity for anyone looking to start selling products online. However, it’s not as simple as having a website and waiting for sales to roll in. Furthermore, you need to be aware that there are countless scammers out there looking to get their hands on your money by selling dodgy dropshipping products.

So, the question is, how can I start a dropshipping business?

To be a successful dropshipping business owner, you need to follow these steps:

#Step1: Choosing the right niche for Your Dropshipping Business

One of the most important steps when starting your own dropshipping business (or any business, really) is deciding what you’ll be selling to customers. This decision can make or break your store and needs to be approached with care.

It is essential that you do your research thoroughly and decide what products you will sell in your store. The niche you choose will affect many aspects of your business, including-

• The amount of competition you’ll face,
• Your sales conversions,
• the revenue you can realistically expect,
• And how hard it’ll be to build a brand for your store.

Choosing the right niche when starting a dropshipping business will save you a lot of time, money, and effort in the future.

So there are some points you need to keep in your mind while choosing your niche-

• You should sell products that you know a lot about.
• Sell products that have a high demand in the market.
• You should choose an untapped niche market.
• Never sell products that are hard to ship (oversized, heavy items).
• Only dropship source with reliable product images and descriptions.
• You can do this research by looking on Google Trends, searching for your competitors on the web, looking at what items are displayed prominently on their sites, etc.
• If you find too much of a market, it may be time to move onto another niche area or come up with new ideas to separate yourself from the competition.

Let’s take an example-

If you’re into fitness, decide what kind of fitness products you’ll sell in your store. You could create a general sports nutrition store or choose something specific like protein powder or weightlifting accessories. The chances are that you’re going to find competition in both of these niches, but by focusing on a particular type of product, your store is more likely to stand out from the crowd.

If you’re still confused about your niche, we suggest you read Top 10 Profitable Niches for Dropshipping in 2022.

Using Google trends and comparing the performance of all of your niches for a specific region can help you identify which niches are performing well in that region. Here we can see the jewelry industry is doing very well in the United States.

You can read Dropshipping: 12 Secret Tips for Using Google Trends 2022 for more information.

#Step2: Search for winning products in your niche market

The main threat to your eCommerce business is competition, so you need to know everything about what kind of products are popular in your niche area, who your competition is, and how they are marketing their products.

If you’re starting a dropshipping business and want to be successful, selecting which products to sell in your store is the most crucial step.

Some tips for finding winning products in your niche

• Researching keywords is the first step in finding what people search for related to your niche area. No matter what industry you’re thinking about entering, there are always keywords that exist about that particular niche.
• When you go to Google or any other search engine, you can type in anything related to your niche and see what results appear on the first page. If you check out these search results carefully for each keyword, you’ll get a good idea about which products are selling well within your niche area.
• You should also check out the listings of other dropship competition in your niche market to see which products they’re selling and how you could compete with them.

We suggest you read Finding Winning Products for Dropshipping for more details.

Now that you’ve determined what kind of products are popular within your niche, it’s time to find suppliers who can supply these winning products.

#Step3: Finding Suppliers for Your Dropshipping Business

In this step, you must find suppliers for your store. Several suppliers are available in eCommerce stores, but not all of them can be trusted. So, if you’re new to this industry, I recommend finding reliable suppliers with quality products.

So now you have zeroed in on your product or niche area, it’s time to find the right supplier for your store.

There are some practical ways by which you can find a supplier-

• If you’re a beginner, go for the dropshipping wholesale suppliers with a good reputation.
• You can find a lot of wholesale directories available online, from where you can find thousands of drop shippers and resellers. Some are free, but some premium wholesale directories offer better deals to their subscribers.
• It’s essential to do your research and investigate the latest reviews about suppliers before making a final decision.
• The supplier you choose should offer a wide variety of products. It’s essential to have a more extensive catalog in your store because you never know what things will do well in your business.

In this step, always ensure that the supplier has official reseller permits and they can offer quality images and descriptions on their products pages. Using images of other retailers’ products is strictly prohibited.

Read our article 10 Indicators to Spot the Best Dropshipping Suppliers.

Before choosing any supplier, you should look for certain things-

Shipping Costs-

Check if they charge for shipping on each product or offer free shipping. It’s better to use a supplier who offers free or less shipping cost on all the products sold on your site. It will encourage your customers to purchase from you rather than another store.

Shipping time-

You need to consider the average shipping time required for delivering your product to your customers. You can obtain this information by visiting their official website or contacting them directly.

Customer support-

It’s crucial to find out how your supplier responds to complaints and problems with their service. Some suppliers also offer wholesale chat services, through which you can ask them specific questions regarding your business.

Payment options-

It’s also essential to find out what payment options are available for these suppliers because not all offer different payment modes. Some only provide wire transfers or cash payments, while some offer other international payment methods.

Some reputed suppliers replace damaged products within 30 days of purchase. So always try to look for such offers when choosing a supplier because it can save you from getting into serious trouble.

Now once you’ve found a reliable supplier, then it’s time to communicate with them and talk about your business.

Communicating with Suppliers for Your Dropshipping eCommerce business:

After choosing your suppliers this step is essential because you’re going to discuss the requirements of your online store with the supplier. Also, there are some important things like-

Pricing details-

Make sure to ask them about the wholesale price of the products you intend to sell on your eCommerce website because it affects your profit margin. Also, find out if they charge extra for shipping or other additional costs.

Shipping Process-

If your supplier is charging you for shipping product(s), ask them about their shipment process. Inform them about the type of shipping you intend to use (USPS, UPS, etc.) and ask if there are any limitations regarding international shipping.

Image guidelines-

Always ask the suppliers how they want you to display images for their products in your store. It’s important because some suppliers might not allow showing specific images which they think can violate their rights.

Also, find out if they allow adding custom product descriptions to the images, or you have to write a report for each of your products below the image.

Inventory management-

Without a proper inventory management system, things can quickly go haywire for your business. So always ensure that they allow automatic inventory updates on your store page.

Returns & Replacements-

It’s essential to know your supplier’s policies regarding return and replacement. Some suppliers can allow you to make replacements for damaged products within 30 days of purchase, but some might not offer any kind of returns or replacements at all. So always ask these things before finalizing a supplier.

#Step4: Creating a Stunning Dropshipping Store That Converts Visitors Into Customers

Now it’s time to build your store, but you should develop a unique eCommerce site name before that. When was the last to visit an online store without any branding or logo? Well, not anymore! Having a unique name is one of the most critical steps in setting up your business, so choose wisely.

After that, you’ll need to find the right eCommerce platform for your dropshipping store. We recommend using Shopify because it’s an industry leader for building online stores, and it offers a 14-day trial without credit card information. You can create an eCommerce store with Shopify in just a few minutes.

If you want, you can dropship with AliExpress using Oberlo with shopify. So, it’s entirely up to you which platform you’ll use for your store. We have published AliExpress Dropshipping Center: The Definitive Guideline (2021). If you’re interested in AliExpress, we hope you find it useful.

Now it’s time to do the hard part, building your eCommerce website. You can hire a Shopify Expert or any other professional who can help you set up your store according to your requirements. Or if you don’t want to spend some extra bucks, you can do it yourself as well.

We recommend reading our Shopify dropshipping business guide for more details.

You need to find out the best theme that goes well with your dropshipping niche. By reading our article How to pick the right Shopify theme in 2022: 10 pro tips you’ll get some idea.

If you’re still confused about your theme, Don’t worry. Read 2022’s top 10+ Shopify dropshipping themes to boost sales. Here we listed some of the best Shopify themes for your dropshipping store.

>> Free! Free! Signup for Shopify free trial here!

#Step5: Setting up Your Ecommerce Store

Once your store is ready, you’re good to go and set up your Shopify standard pages. Now it’s time to add all the winning products you figured out from step2.

• Make sure that the titles of every product page include the most important keywords for that particular product.
• Use high-resolution images for all the products.
• Add attractive product descriptions and titles according to their categories.
• Create a strong brand foundation and include your logo in the product layout.

#Step6: Marketing your New Dropshipping Store

Now it’s time to market your store with the help of winning products. You can use several marketing strategies for advertising your dropshipping business, such as.

PPC marketing-

PPC stands for “pay-per-click”. A form of online advertising that requires you to pay a fee each time someone clicks on your ad. The adverts are usually placed at the top and bottom of the search results, and they are also displayed as sponsored links on relevant websites.

With PPC marketing, you can put your website in front of people looking for the products or services you offer. You choose how much money you spend on ads, and you only pay when someone clicks on them. This makes PPC a very efficient way to reach your target audience.

Social media marketing-

More than 70% of users rely on social media sites for gathering information about new products and deals. Using this method will help you successfully market your dropshipping business. You can also try out Facebook ads for promoting your products online.

Email marketing-

Most eCommerce store owners, including Shopify dropshipping, use email marketing to communicate with their targeted customers. Therefore, you need to build a mailing list of people interested in buying products from your eCommerce store regularly. You can also send follow-up emails and SMS regarding your products and store.

You should create your email marketing campaign because this strategy has long-term benefits. The more subscribers you have on your list, the better are your chances of making more sales.

In addition to these, you can use Google Shopping optimization tools such as Feed planner and Product Listing Ads for marketing your store.

Do SEO to increase your organic reach-

Using search engine optimization (SEO), websites rank higher in search engine results. Therefore, it allows the site to get more visibility on Google and other search engines.

When it comes to drop shipping, you need your store to rank high on the search engines’ results pages. Therefore, you should use all the basic SEO strategies, including keyword research, on-page optimization, and link building. For optimizing your dropshipping store, you may also hire SEO experts.

Influencer Marketing-

Use this strategy for building a massive army of loyal tribes. Ask some influential people from your niche or industry to leave a positive review for your store and products.

Run giveaways & promotions in your store-

To increase sales, run giveaways and promotions in your store. This will help you to get the word out about what products are available in which categories so that more people can find their perfect purchase!

Start guest blogging-

Guest blogging is a popular marketing strategy businesses use to market their products and services. This strategy is effective because you get a chance to grow your email list, gain some valuable backlinks and reach out to a wider range of audiences on popular platforms.

It will be better if you read our article What is the best marketing method for dropshipping?

You must always maintain a balance between advertising and traffic generation. If you rely on traffic only, then the products doing well will start to lose their momentum, and your store’s revenue will drop.

In this step, it’s essential to track the visitors from various sources.

Use a Google Analytics account for tracking real-time data related to your website traffic.

#Step7: Making Your First Sale & Scaling the Business

You’ll have to add a payment option to your store so that customers can pay for their purchases. For this, we recommend using Shopify Payments because it’s secure.

Converting the traffic into sales depends on creating a smooth shopping experience for your customers. They should find what they are looking for without much hassle.

Improve the UX/UI-

UX or User experience is an essential factor in boosting your store’s performance. When improving user experience, you need to pay attention to every small detail. Use high-quality product images, write spam-free yet helpful product descriptions and keep the website interface clean and clutter-free for a better user experience.

You can also use Facebook Pixel to retarget and place conversion tracking codes on your store.

Use Remarketing-

With remarketing, you can advertise to people who have already visited or used your website. It works wonders when paired with Google Ads because you’ll find out which marketing campaigns are more effective in generating conversions. You can also use Facebook remarketing for the same purpose.

Don’t stop here! Keep scaling your business by expanding your product line. Try to create a brand name for yourself so that customers start trusting you and keep coming back.

#Step8: Managing Your Dropshipping Business

Now it’s time for fulfilling orders and providing excellent customer service so that you can retain customers and prevent them from leaving. You should constantly monitor the status of each order to ensure that every product reaches the desired destination on time, along with the other details.

You should also keep an eye on your order list and email list so that you can figure out whether your customer service is doing a good job or not. If there are any delays in responding to the customers, it will be easy for your customers to switch to another store that offers better support.

Guidance to manage your dropshipping business-

Use a CRM to manage your customers and orders.

A CRM or Customer Relationship Manager is an all-in-one tool that helps you manage your customers, orders, and support team. Every aspect of your store can be tracked, including-

Email campaigns-

You can send follow-up emails to customers who didn’t complete their purchases. This strategy will help you retain customers and improve conversion rates.

Scheduling-

It allows you to schedule emails for a later date. This is very helpful in creating a positive image of your store in front of your customers even if you cannot reply right away.

Use abandoned cart email campaigns to make sales from the products left behind by customers during checkout.

Automate order fulfillment and shipping

It’s your responsibility to fulfill all of your orders as quickly as you can. For that, you need to forward all of your orders to your suppliers or drop shippers immediately after receiving them. You can also use inventory management software to complete the task.

Use tracking software to monitor your shipments.

It’s not enough to just upload the customer details on an app and forward them to your supplier. You must keep track of each shipment till they reach their destination successfully. It is essential because customers are more likely to trust you if you show that you’re providing excellent support for your services.

For this, there are several tracking software available online that you can use to track all of your orders.

Use automated emails to let your customers know the status of their orders at every step.

Customers will appreciate that you’re following up on their order and will likely place more orders for your products.

Offer excellent customer support.

Offer instant support to your customers, so they don’t have to wait long before addressing their concerns. The best way is through live chat, where people can quickly get in touch with you.

Keep your store updated.

You must always keep updating your store by removing old offers, editing images and descriptions of products, etc. It will improve the conversion rate to make more sales for you. You should also upload all of your new offers to your stores as soon as they’re available.

Regularly check your inventory levels.

Always keep track of your inventory levels. For example, if you offer a product that is out of stock. In such a case, you can’t fulfill your order. It might lead to negative reviews for your store, which could affect your reputation as a whole.

To figure out some best apps for your Shopify dropshipping store, read Best Shopify Apps for Dropshipping in 2022.

You can use those tips to take your business to the next level and make it a success.

>> Start your Shopify store here!

Q&A About Dropshipping Business

#Q1: Dropshipping for beginners: what are the steps?

Answer: Dropshipping for beginners steps are as follows-

• Step1) Choose a niche
• Step2) Find reliable dropshipping suppliers
• Step3) Create a store and add some products
• Step4) Set up your payment and shipping information
• Step5) Drive traffic to your store
• Step 6) Convert traffic into sales

#Q2: Dropshipping is it profitable?

Answer: In a word, “Yes.” The potential profit from drop shipping comes from the difference between the wholesale price and the retail price that the customer pays. When you dropship a product, you simply order it from a supplier and ship it directly to your customer. You never handle any inventory, and there is no risk that you’ll be stuck with unsold items.

The main cost associated with dropshipping is the cost of your supplier’s products. But because you’re not buying any inventory, you don’t have to worry about warehouse costs.

#Q3: Why is dropshipping getting more popular?

Answer: The reason behind this popularity is that you don’t need to invest in inventory upfront. When an order comes through, it goes directly to your supplier/manufacturer, who sends it directly to the customer.

It does help you save money on overhead costs. It also allows you to get started quickly and easily with little initial investment.

#Q4: Can I do dropshipping business internationally?

Answer: As long as your supplier ships to that location, yes. You should always contact your suppliers before ordering anything to ensure that they can ship to the country/state where you want it shipped. That is one of the easiest ways to prevent problems with international orders.

Want to know more about worldwide dropshipping? We suggest reading our article Is Dropshipping Possible Worldwide in 2022?

# Q5: How much does a dropshipping business cost to start?

Answer: The short answer is “not as much as starting any other kind of business.” There’s no need for a brick-and-mortar store or employees, and your startup costs will be much lower.

It’s possible to start with only $100 if you sell small items like phone cases and accessories, but your range of products and potential profits will be more limited. You might want to start with a more profitable niche like fashion.

Also, it takes time to build up sales and gain customers. If you don’t have the cash to spend on ads, you may want to consider social media marketing.

#Q6: Is dropshipping legal?

Answer: Dropshipping is 100% legal if your dropshipping products are legal for sale. Before you begin selling anything, you should research it thoroughly.

#Q7: How do I start a dropshipping business with no experience?

Answer: It’s simple! Getting started is as simple as finding products, suppliers, and your dropship store. Then you will need to drive traffic to your store.

We recommend that you follow this step-by-step beginner’s guide to dropshipping.

#Q8: What are the advantages of dropshipping over retail?

Answer: Dropshipping has some significant advantages over retail is that you don’t have to spend a lot of money building a brick-and-mortar store. Dropshipping doesn’t require employees or fees for a physical location.

#Q9: Is dropshipping a good idea?

Drop-shipping has proved to be profitable. This is a market estimated at $476 billion by 2026. 40% of the largest retail companies have adopted drop-shipping as a solution to reduce inventory costs. Drop Shipping has the added advantage of getting the product sold easily and without putting in a large investment.

Obviously, there are ways to reduce your losses if your bank is having a big problem. If your product has not sold you can’t have unused inventory.

Final words on the dropshipping business

Dropshipping is an extremely profitable business model because it saves you from the hassle of building your inventory. It works well if you’re new to online retailing or ready to start a part-time eCommerce venture.

The model does require that you pay close attention to your suppliers and the products they offer. It also takes time to get established and build up sales.

The more effort you put into marketing your store, the more sales you can generate down the line. Dropshipping is also a perfect way to test product ideas when you’re starting with practically zero risk.

That’s all!

We hope you enjoyed this article. Feel free to share it, and in case of questions, let us know in the comments. You can reach us anytime!

>> Start your dropshipping business with Shopify here!