Steps to Begin a Dropshipping Business
A terminology that has become frequently mentioned in the last few days years in the e-commerce space is- Dropshipping! Dropshipping has boomed in popularity over the past decade as a trendy business model for current business owners or newcomers in the online entrepreneurial area. Here, internet marketing skills far exceed financial limitations for success.
Ecommerce sales became a nearly 3.5 trillion dollars industry worldwide in 2019. So, if these global stats are any hint and with our increased business transactions turning digital in 2020, starting an online dropshipping business can be a very lucrative option right now. So if you are eager to start a company that can compete with retail giants, on a limited budget while setting yourself up for success, then keep on reading!
Why Should You Even Consider Dropshipping as an Option?
Dropshipping presents the freedom to sell products to customers, set your own prices, and market your brand all at once. You don’t even need to stock inventory until it’s ordered by an actual customer! And if you’re prepared to put in the work, you can definitely build a hugely reputable brand.
So How Does a Dropshipping Business Work?
Knowing how the dropshipping business model works is essential since it’s quite distinct from traditional retail and other eCommerce businesses. This is where you can sell merchandise to your customer without keeping any inventory. The customer buys an item from your store at the retail price. You then share the order with your supplier, paying the wholesale price. Once your supplier confirms, they ship the item straight to the customer under your business name while gaining the profit margin. All you need to do otherwise is set up the eCommerce website, find customers, and handle customer support.
This means that you don’t have to buy and store bulk stock, which protects you from investing a lot of money upfront. It further eliminates the risk of buying in bulk and not being able to sell all the products. This makes drop shipping so popular – it requires minimal investment but draws similar benefits to traditional retail models.
How Can You Get Started?
As mentioned before, dropshipping requires you to have four main components set in place: A product to sell, a supplier, a platform to sell on and a GST ID.
Let’s check out each of these in details below:
Step 1: Choosing a Dropshipping Niche
Choosing a niche and core market research is the first step to starting a dropshipping business. It is a segment of a market. The more specific your it is, the better. A typical misinterpretation about dropshipping says that you can be effective with any niche, but that’s not true. If you pick an area that’s already steeped with sellers or major brands, you’re going to encounter an uphill battle with your new business. Here are a few indicators to keep in thought:
- Start with your interests and passions
- Find a product that provides a solution to something
- Research the competition to give yourself an advantage
- Ensure the niche is profitable
Step 2: Select a Supplier
Choosing that one seller for your store from a ton of suppliers, is crucial, even if you have to spend some days completing this first step. When you have a list of five or six potential suppliers to choose from, you can move onto the next step, contacting these suppliers to ask essential questions like minimum order quantities and shipping times. The best way to decide now is to place a sample order with them for a product and compare shipping times, product quality, and packaging. While making a decision, keep your customer in mind and what they might expect from you when placing an order.
Another question to consider is, does your supplier provide white-label products for your customers? Doing this means that the supplier will offer products that will be manufactured and packaged for your brand name. This is great for your business because your customer will anticipate the product from your store labelled with your brand’s designs.
Step 3: Get Your GSTIN
Introduction of GST has required businesses to change a little. If you are a registered company, share your GSTIN to the supplier for all the transactions to claim the input credit later. But, if you’re not a company, you could quickly begin the dropshipping business in India as an individual as well. Before pairing up with any supplier, clarify the GST requirements to stay secured against any legal concerns that may happen in the future.
Step 4: Build Your eCommerce Store
The most agile way to launch a website that supports a drop shipping business model is to adopt a simplistic eCommerce platform such as Shopify. You don't require a tech background to get it up and running, and it has plenty of apps to aid in increasing sales. And if you have a sizable budget that would allow you to hire a web design and development company, go ahead and opt for conceiving a custom solution. With the revenue coming in, you can even explore additional website customization.
Step 5: List Your Products
Now, listing the products on your store, make sure to share all the crucial details of the products with the customers. Ask your seller for product photographs with variations to improve options and chances of selling. An essential component of this is also creating a great customer acquisition plan! So, plan out social media marketing strategies and run paid campaigns on the web and Google Adwords to land buyers for your products. If you do this right, your products should sell in no time at all!
Having the best quality product may not always guarantee sales unless you're able to attract and retain customers with a spectacular e-commerce website, the first impression of your online business. Approach our team of experts today at Anblik Web Development Company fora consultation discussing your e-commerce website requirements!