DROPSHIPPING as an Online Business

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1 DROPSHIPPING as an Online Business

2 Contents Introduction 1 Who this guide is for? 2 What is Dropshipping 3 Is Dropshipping worth it? 5 How to get started? 6 Choosing a niche 6 Choosing the right Products 7 Find a Drop Shipping Service/Directory website 8 Use a Dropshipping platform 10 Standing Out in a crowded marketplace 11 Promoting your business 11 What are the negatives of Dropshipping as an online business model

3 Who this guide is for? You, if you re looking to start an online business You, if you want to learn more about dropshipping as an online business model You, if you don t know what Dropshipping is or you would like to know more about it. What is Dropshipping? Dropshipping is an amazing online business model with an low barrier to entry. You can start a dropshipping business for less than $100. And in a very short time. Start up costs are so low as there is no need to pay upfront for stock. Dropshipping is a retail fulfillment business model. As a dropshipper you don t keep the products you sell in stock. Instead, when you sell a product at the retail price, that you set, you buy it from a third party (manufacturer or wholesaler) and it is shipped directly to the customer. So you never see or handle the product you sell. 2

4 So how can you make a profit? Dropshippers make a profit by finding customers through their website, for products supplied by another company and he difference between the retail and wholesale price. Below is a diagram of how dropshipping works based. In this example a retail item is offered for sale on the Dropshippers ecommerce site. The Item is priced at $300, The customer pays the dropshipper The dropshipper orders the item from the wholesaler or supplier, for $225 (Let s say the Item is $200 and shipping is $25). The Dropshipper keeps $75 for him/herself. The supplier completes the order and ships the goods to the customer 3

5 Is Dropshipping worth it? Without any major up-front inventory investments, Dropshipping is a great way to start an online business. Easy to Get Started You don't need to worry about: Managing or paying for a warehouse Packing and shipping your orders Tracking inventory for accounting reasons Handling returns and inbound shipments Continually ordering products and managing stock level Easy to run from home (or on the road) You can manage a small drop shipping business part time alongside your regular 9-5 job 4

6 How to get started? All you really need to get started is a website. You can use any website builder you like to make a online ecommerce site. WordPress is a popular content management system, and has templates an plugins especially for creating an online store. WordPress is free, but you will need to pay for hosting and a Domain name for your website and some plugins charge either a one-off or monthly fee Hosting will cost you around $4 per month. A domain name will cost you approximately $10 a year There are lots of deals for hosting and domain names, so there is a chance that you will find what you need, cheaper. You can find more details about setting up your online business, by joining our Setting up your online business training or by purchasing our ebook Guide. I will give you more details at the end of this book Choosing a niche Your dropshipping store will probably be more successful if you sell product that are related to just one niches, at most. Otherwise people visiting your website might be confused. When you are just starting out, it is not possible for you to compete with the volume of merchandise Amazon, AliExpress or ebay have. If so, it would be better for customers to search on those sites, but if your online store sells products belonging to one, or a just a few niche hobbies or interests, such as fishing, mountain biking, running, or computers and gadgets and so on then it will be easier for you to build up a loyal customer base. 5

7 To test if a niche maybe be profitable you can try doing some searches on google using the following search combinations. Just add your niche topic and some indicator keywords and do a simple google search. Such as 4K video courses Your niche + books Your niche + magazines Your niche + courses Your niche + products Your niche + Coaching Your niche + Seminar Your niche + Webinar Your niche + Event As you research, keep a note of all the types of products that people are talking about or using. If those indicator keywords return a lot of search results, there is a good chance it is popular. And the list of products you write down are some of the things that may be popular in that niche and that you can sell. 6

8 Choosing the right Products Remember that list of products you wrote down while researching the niche for your store? Take your list of products and do some more research. Try to act as if you were going to buy them online, search on google find out how many online stores are selling those products, what prices do they charge. Try to work out how much competition there is. Too much and it will be hard to get your site found, too few and those products might just not be as popular as you thought. Try to work out where your business would fit in that market, and how you could offer something different could you put two or more products together as a recommended starter kit, and write a blog post about why those items are necessary, and when people should buy them. Remember, with dropshipping, you may be ordering from several suppliers, so if you are recommending products together and they each have a seperate delivery charge, your customers may get annoyed. You can either recommend additional products in follow up s to your list. We have all seen those s from Amazon, Hey you recently bought this, other people who bought it also bought Or if your supplier can sell all those products and maybe they offer free delivery after spending a certain amount, you can either pass that discount on to your customers, or keep it as extra profit. 7

9 Find a Drop Shipping Service/Directory website A website listing wholesale suppliers, other dropshippers / sellers, auction sites etc. Is called a dropshipping directory. Usually sellers pay to get their company listed on these websites so they can be connected to dropshippers. You can search through the listed websites and find a supplier and contact them. You will usually have to manage the back end inventory and product descriptions on your site manually. It can take a lot of work to get this set up and if you often need to change suppliers and descriptions, due to fluctuating availability of stock and non standard product specifications, it can be quite time consuming. 8

10 Use a Dropshipping platform Due to the rise in popularity of dropshipping there are web based platforms with integrated supplier directories and back end inventory system such as SaleHoo, Doba, and Dropship Direct. These companies have a directory of verified and authenticated products you can search and integrate into your own store in a few clicks. This integration means that the product name, descriptions, specification and images, and up to date stock availability can be pushed to your site through an API or other software that integrates with your sales platform. You may even be able to get a flat rate shipping fee, which means you can more effectively control your profit margin Of course, this convenience and automated management comes at a price. So if you use one of these services you will need to pay a yearly or monthly fee. In most cases, the time-saved and being able to correctly fulfill customer orders is worth the cost. You won t need to deal with as many sellers on a basis either so allround it is a good time saver. 9

11 Standing Out in a crowded marketplace Of course, while dropshipping is a good business model, you won t be the only website where people can buy the products. We already talked about choosing a niche and choosing the right products, and we talked about marketing and building a list to sell to over and over. But there are other ways you can stand out in the crowd. I always tell people, to be successful in any business, you need to give value first. Giving value doesn t mean financial discounts. You can give value to your customers through your website. If you niche is 4K Action Video Cameras, you can record some tutorials on how to set up the equipment, or how to edit videos. This is another reason why your niche should be something that you are interested in, and knowledgeable about. You would be surprised how loyal customers can be once you build a relationship. By adding value to their online shopping experience your customers will keep coming back to your website whenever they are looking to upgrade their equipment, or purchase new kit. Make tutorial videos, giveaway niche related ebooks and writing Blog posts are all inexpensive ways to help you stand out in the crowd. 10

12 Promoting your business If you have a traditional brick and mortar store, and you wanted to attract new business what would you do? Put an Advert in the paper, place a sign on the front of your shop, put up posters or hand out flyers. And of course by telling people, by word of mouth. Well in the online business model, you have to do this too, but in a slightly different way. Your website is your online storefront, that replaces the physical bricks and mortar store. The sign above the door, the posters, leaflets and flyers and he word of mouth advertising can be done through online ads, social media posts and adverts 11

13 What are the negatives of Dropshipping While Dropshipping is a good and profitable business model for begginners it does take hard work to turn it into a successful business. Dropshippers are competing not only with each other but also with giants like Amazon, so typically operate with much lower margins. If you decide not to pay the fees for a specialised platform you may have difficulties keeping inventory up to date when you're sourcing from multiple suppliers. If, depending on availability, the same products are sourced from a number of suppliers, there may be a number of different shipping charges. 12

14 If you would like to know more about setting up your own business you may be interested in our online business training course. The course has 20 easy to follow modules with practical example on everything from picking a profitable niche, choosing a domain name and website hosting. Setting up your wordpress site and managing your online identity. Please visit for details 13