Drop shipping is an extremely popular business model for new entrepreneurs. Since you don’t need to stock or handle the items you are selling, it’s possible to start a dropshipping business with limited funds.If you are ready to start a business that can compete with retail giants, and do so on a limited budget, then follow these steps below. While it doesn’t take a lot of startup funds to launch a drop shipping business with doba , it will require an immense amount of hard work.
Pros and Cons of Dropshipping
Pros of Dropshipping
Before you jump into building an online store from a dropshipping business model, it’s good to look at its strengths.
- Inexpensive to get started: You already know dropshipping’s biggest strength — a low barrier to entry. (We’re guessing you wouldn’t be here otherwise.) With dropshipping, you spend all of your setup time building relationships and creating a great website.
- Your ecommerce software and website design, are likely to run up the biggest tabs.Buying raw materials to create your own goods or buying products in bulk outright requires a much larger sum of cash in addition to the cost of your eCommerce software and website. There’s no question you need far less money on average to get up and running with an online store built on dropshipping.
- Less supply chain hassle: Retail entrepreneurs who manage the bulk of the supply chain — from storing goods to shipping them — have to wear dozens of hats to run a successful business. With dropshipping, you cut out expensive and time-consuming tasks like stocking goods, managing your inventory, etc.
- Easier to grow: Dropshipping gives you the option to start as small as you want and scale up for many of the reasons we already mentioned. You don’t have sink gobs of money into your store to take it the next level.
Cons of Dropshipping
What are some of the knocks against a dropshipping model for your eCommerce business?
- Lower profit per sale: With a lower barrier to entry comes a different set of financial limitations. Suppliers, wholesalers, and manufacturers who dropship provide shipping and storage services, which means you have to pay a slight premium as compared to bulk wholesale prices.
- A higher price per product means less wiggle room on your consumer price point.What this ultimately means for your business is you’ll have to sell more products to make the same amount of revenue you would if you bought your inventory outright. Your online store has to be a well-oiled machine, running at full steam all the time.
- Less control Businesses aren’t perfect. If you trust a third-party with a core part of your business, you have to relinquish some control. That means embracing and fixing mistakes that aren’t necessarily your fault.
- Tougher to differentiate: Suppliers typically partner with more than one online retailer, which means you aren’t the only one selling their products. The more popular the brand, the stiffer the competition. When you’re selling handmade goods, differentiation is much easier.
But one of the most difficult parts of succeeding with a dropshipping business model is getting to customers before the competition does.
Finding the Right Dropshipper for Your Business
There are thousands of suppliers, wholesalers, and manufacturers your store could potentially work with. To sift through that many options, you’ll need a plan of attack.
Discover products to sell with Doba
Doba is a dropshipping supplier with over 2 million products from quality manufacturers and suppliers. Browse the Doba marketplace and find everything you want to sell, all without the hassle of manufacturing, inventory, packaging, or shipping. Plus, Doba is seamlessly integrated with 3dcart, so you can get set up now and start selling faster. Get started with DOBA
How to search for a dropshipper
- Internet search – It’s natural to hit the internet to research potential partners, and it’s true you’ll find a lot of information there. But researching drop shipper online can be misleading.
- Get on the phone – If you have questions about the legitimacy of a supplier, your first recourse is to hop on the phone and talk to them yourself.
- Work with an aggregator – Drop ship aggregators (or directories) offer the benefit of a slew of vetted suppliers through a single system. Visit DOBA or WorldWide Brands to find distributors.
- Find out who competitors work with – If you find products you want to sell through a competing online retailer, you can always order through their store and check out the packaging when your order arrives.Visit DOBA or WorldWide Brands to find distributors.
AliExpress dropshipping is one of the most popular dropshipping marketplaces because it’s simple, easy to use, and low risk for new ecommerce entrepreneurs. The platform is extremely large, so we recommend only buying from suppliers who have at least a 95% or higher rating in positive feedback and at least a 2,000 feedback score. The highest-rated suppliers are generally the most reliable. Aliexpress suppliers are based in China so delivery to US destinations could take up to 2 weeks, something to consider when selecting the right dropshipper for your business. Get started with AliExpress
1. Select a niche.
The niche you select needs to be laser-focused and something you are genuinely interested in. A product range that isn’t focused will be difficult to market. If you aren’t passionate about the niche you select, you will be more apt to becoming discouraged, because it takes a lot of work to successfully scale a drop shipping business. Here are some points to consider when selecting your niche:
- Seek attractive profits.
- Low shipping costs are very important.
- Make sure your product appeals to impulse buyers with disposable income.
- Make sure people are actively searching for your product. Use Google’s Keyword Planner and Trends to check some common search terms related to your potential niche.
- Create your own brand. Your drop shipping business will have more value if you can rebrand whatever it is you are selling and pass it off as your own.
- Sell something that isn’t readily available locally. Pick something your customer can’t find down the street.
2. Perform competition research.
There are many reasons why a product might not have a lot of competition, including high shipping costs, supplier and manufacturing issues or poor profit margins.
3. Secure a supplier.
Partnering with the wrong supplier can ruin your business, so it’s important that you don’t rush this step. Conduct proper due diligence. If you are not 100 percent confident in the communication abilities of a potential supplier, move on and continue your search.
Alibaba has become one of the largest online resources to identify and communicate with potential manufacturers and suppliers. You want to be certain they have the ability to scale with you.
Make sure to ask a lot of questions and learn what their production capabilities are in the event that your business grows exponentially.