Not so long ago, starting an ecommerce business would require a huge amount of time, money and effort. From purchasing inventory to storage, shipping and marketing costs, they quickly add up. In fact, Entrepreneur Magazine famously estimated start-up costs of between $2000 – $50,000 depending on the type of retail enterprise being formed.
Thankfully, since the inception of dropshipping, building a profitable ecommerce business has never been a more affordable or realistic goal for newbies to the world of retail. In fact, thousands of average Joe’s across the globe have managed to build successful dropshipping businesses due to it’s low start-up costs, minimal risk and simplicity.
But what is dropshipping exactly? Essentially an order fulfillment method in which products are sourced directly from wholesalers or manufacturers, dropshipping comes with significantly less risk than a traditional ecommerce business model, mostly because you don’t need to:
Hold any physical stock
Prep or fulfill orders
Receive or process returns
Manage or maintain a warehouse
Ultimately, dropshipping is the perfect business opportunity for noobs who lack the cash-flow or experience to start an old-school retail store. The model has become so popular in recent years that even some major wholesalers have launched exclusive dropship programs, steering away from the traditional bulk selling model and allowing for single-piece purchases.
So how do you get involved with such a business you ask?
Well, in this step-by-step guide, I’m going to take you through the entire process of starting a dropshipping business from start to finish based on my 5 years of experience with it. No stone will be left unturned and no tip or secret left out. If you’ve been pondering the idea of starting a dropshipping business then you’re certainly in the right place.
Step One: Find a Supplier
Finding a supplier is the first step towards launching a dropshipping business.
Whether you want to sell fashion accessories or kids toys, there are literally thousands of reputable dropshipping suppliers to choose from. Furthermore, as the popularity of dropshipping continues to catapult, many new suppliers are being established on a consistent basis, including some major existing wholesalers who have recently introduced exclusive dropship programs.
One of the best ways to find such suppliers is by using a free wholesale or dropshipping directory such as SourceLow. Essentially a database of wholesale and dropshipping companies, SourceLow allows you to quickly find suppliers in any niche and from all corners of the globe. No matter which type of products you want to start selling, you can be sure to find a dropshipping company to suit.
Alternative methods of finding dropship suppliers include using business-to-business marketplaces such as Alibaba or AliExpress, attending local trade shows, searching dropship forums or using Q&A sites like Quora. Of course, you could simply opt to manually search for suppliers on Google or Yahoo by using long-tail keywords.
Try a free wholesale directory like SourceLow or a B2B marketplace such as Alibaba
Search on Google using long-tail keywords e.g. womens dresses dropshippers UK
Check wholesale or dropship forums, as well as related Facebook pages or groups
Try question and answer websites like Quora, studying existing answers or posting a new question
Step Two: Choose a Selling Platform
Once you’ve found a supplier to source products from, it’s time to decide on where to sell them. From selling on third party marketplaces such as eBay or Amazon to building your own ecommerce store, the route you take will depend on your specific goals and future ambitions.
While eBay and Amazon are incredible platforms for bringing in quick sales, building an online store gives you full control and more flexibility to create your own brand. Thankfully, simple drag and drop software solutions such as Shopify or WooCommerce allow for anyone to quickly and easily build a low-cost ecommerce store.
If you’re just first starting out, it’s recommended to choose and focus on one platform specifically, at least to begin with. For example, start by selling through an eBay store until you’ve gained enough experience and profits to take things to the next level by launching your own website.
Take marketplace fees into consideration when choosing a selling platform
Consider building your own website to maintain full control over the business
Leave the door open to expand later and start selling on other channels
Focus on finding success on one selling platform to begin with
Step Three: Consider Automation Software
While dropshipping is an extremely lucrative and low-risk business model, it does have some disadvantages, the most significant being the lack of control over stock levels and source prices. If your supplier changes an item’s price or runs out of stock, the only way you’ll discover the change is when you go to source the item. Unfortunately, this would mean either cancelling the order or absorbing the loss generated due to the sudden price change.
If you plan on having only a small number of listings, manually checking stock and prices is a viable option. However, if you want to scale your dropship business and sell thousands of different products and variations, using automation software is essential.
Integrating directly with the most popular dropshipping suppliers, automation software solutions such as Hustle Got Real allow you to eliminate the issue of selling items which have ran out of stock or changed in price. The software will automatically monitor your suppliers products at regular intervals to detect changes in stock and prices, then automatically update listings on the relevant selling channel.
Investing in automation software is absolutely essential if you want to build a sustainable, consistently profitable and long-lasting dropshipping business, particularly when selling on a platform such as eBay. The software will allow you to minimise the risk and earn a profit on every single sale.
Thankfully, most automation software programs are compatible with the top dropshipping suppliers and seamlessly integrate with them. Hustle Got Real is one of the original and most reliable eBay dropship software solutions, recently expanding to include compatibility with Amazon, Shopify and eventually WooCommerce.
With Hustle Got Real’s (free forever) baby plan, users can list, monitor and automatically reprice up to 30 items for completely free, while pricing for 300 or more items starts at less than £20 per month. Therefore, it won’t cost a single cent to test it out and get started.
Step Four: Start Listing
Now that you have a supplier to source products from, a channel to sell on and hopefully automation software to manage inventory, it’s time to start listing products for sale. Regardless of which platform you’re selling on, creating your own unique titles and descriptions is essential.
Distinctive titles and descriptions will allow you stand out from the crowd and get that edge over your competitors. While others opt to copy their suppliers descriptions, taking the time to create a unique description will allow for a better chance of getting ranked on Google or within the search engines of eBay and Amazon.
If you’re using automation software, most will come with some type of streamlined listing tool, such as Hustle Got Real’s Chrome Lister Extension which automatically pulls all supplier data including product titles descriptions, categories and prices, while also setting a final selling price based on predetermined calculations.
One of the other important considerations when creating listings is price. While you want to earn as much profit as possible, keeping your prices low is essential to attract the most sales. In general, you should aim for a 20-25% profit margin which is very healthy yet low enough to attract customers. It’s better to sell an item 10x with a £2 profit than 1x with a £5 profit.
Take the time to write unique and keyword relevant titles and descriptions
Aim for a healthy profit margin but keep prices low to attract customers
Use a professional template when listing on a marketplaces like eBay
Offer a fair returns policy and consider providing a warranty period
Step Five: Maximise Profits
Once you’ve created a decent number of listings, the next stage is to maximise your profit margins. To do this, it’s important to frequently monitor and tweak your listings if necessary, ensuring the hot sellers are given maximum exposure while under-performing listings are edited and lowered in price.
Consider trying promoted listings when selling on eBay or run pay-per-click campaigns if selling through Amazon. It’s important to remember that brand new listings will take time to gain exposure and clicks. Really take the time to create quality listings while also frequently updating and tweaking them to stay one step ahead of any competition. Lowering your price even by a few cents to undercut other sellers can make a huge difference.
A common issue most people face when dropshipping on eBay is other sellers copying their titles. Thankfully, Hustle Got Real’s optional Price Warrior tool will automatically detect listings which use the same title and automatically undercut them on your behalf, an innovative feature which other software programs lack.
Step Six: Scale Up
Once you’ve gained some experience with choosing products, creating new listings and managing existing listings, you can start to scale the business by continuing to launch new products, as well as branching out to selling on as many platforms as possible.
Remember, as a dropshipper you’re not limited by cash flow or inventory, you have the enviable ability to build the business at a superfast rate. Focus your time on researching products, writing descriptions, tweaking listings and testing marketing strategies.
Eventually and with time, you’ll have an ever-growing list of hot sellers which continue to generate significant income for you each month. Success in dropshipping comes down to your ability to stand out from the crowd and create or find hot sellers. Treat the products as though they were your own and you can’t go far wrong.
Branch out and sell on as any platforms as possible including eBay, Amazon and your own store
Invest in paid advertising methods such as Amazon PPC, eBay promoted listings, Google Ads or Facebook Ads
Keep creating new listings even if you don’t gain instant sales
Try, test and try again to uncover hot sellers
When it comes to starting a dropshipping business, the process includes finding a reliable supplier to source products from, choosing a platform to resell the products on and creating unique listings, as well as ensuring you have an effective stock and price management system in place, preferably with the help of a software such as Hustle Got Real.
Once you’re up and running, be sure to monitor and tweak your listings to improve performance or boost sales. Focus on the hot sellers and weave out those that are under-performing. Keep updating prices to stay ahead of the competition.
When you start to earn decent profits, reinvest them into expanding the business by creating new listings, branching out to other selling platforms and harnessing paid advertising options such as Amazon PPC, eBay promoted listings or Google Ads.
Stick with it and over time you’ll have a booming dropshipping business which will generate you significant income for years to come.