How to start a dropshipping business and earn daily $1000-$2000

How to start a dropshipping business:

What Is Dropshipping?

Dropshipping is a business system that allows a company to sell products without ever maintaining an inventory of the products. The customer places an order, and then the company notifies the manufacturer or distributor of the product that an order has been placed and it should be dropped into a shipment for the consumer. The manufacturer or distributor sends the product directly to the consumer on behalf of the dropshipping company.

The order is simple: the consumer pays the dropshipper. The dropshipper pays the manufacturer or distributor. The manufacturer or distributor sends the product to the customer. Essentially, the dropshipper is a marketer.

Because there is no inventory needed, dropshipping is a cost-effective way for new business owners to sell products without a lot of overhead. It also prevents getting stuck with inventory that can’t or won’t sell.

How does the dropshipping business model work?

There are three key players in dropshipping: the manufacturer, the retailer (you), and the customer.

The manufacturer’s role includes creating products, maintaining inventory, shipping products to customers on behalf of the retailer, replacing defective items, and restocking. They sell products to the retailer at wholesale prices, thereby assuming the risk of any unsold inventory.

As the retailer, you sell the manufacturer’s products on your own website under your brand name. You are responsible for selecting and marketing the products. Additionally, you handle the shipping costs and set prices that yield a profit.

Finally, in this model, the customer purchases goods directly from you. If any questions or issues arise, they will turn to you, the retailer with whom they’ve done business.

How profitable is the dropshipping business model?

“How profitable is dropshipping is a question we hear often. Dropshipping can be highly profitable because you’re not saddled with the costs of shipping and manufacturing. Profits can accumulate quickly, especially when you’ve partnered with the right dropshipping suppliers. To keep tabs on your earnings and ensure you’re on the path to success, consider using our dedicated profit margin tool.

What are the advantages of dropshipping?

A dropshipping business is a profitable business model where you only pay for the products that you sell. This means you’re not burdened with the cost of creating products or carrying inventory. As such, the startup costs of running a dropshipping store are quite low compared to those that come with operating a standard ecommerce business.

In this business model, you also avoid the costs of maintaining unsold inventory and employing staff for packaging and shipping products. While it will require daily work when it comes to processing orders, most of the order processing steps are automated and only require the click of a button. The dropshipping business opportunities are endless—you just need to take the first step.

The 6-step to start dropshipping business plan:

1. Choose a Business Concept

A business concept describes what you are selling and to whom. Because there are so many options with dropshipping, you want to start with a limited number of products that you feel will sell to a specific demographic.

For example, you might develop a business concept that says you’re going to sell graphic T-shirts to skateboarders. The T-shirts will have specific designs that appeal to this demographic and be of the quality and style that skateboarders wear.

The concept is the foundation for the products you sell, your website’s design and your marketing, so spending some time on this is crucial. However, it is good to note that because there are limited costs to implementing a dropshipping product line, you can change things up if you feel that you made a mistake or your product passion changes.

Pro tip: The most popular dropshipping stores often focus on trends within broader niches. For instance, denim apparel is a trend within the fashion niche, artificial eyelashes are a trend within the beauty niche, and marble phone cases are a trend within the phone case niche. It’s wise to incorporate these trends into your product lineup. However, they shouldn’t be the focus of your entire store if you aim for long-term success.

2. Source Products

A business concept doesn’t guarantee that you’ll be able to get the products to serve your demographic. Take the time before you develop a website to research products. Look for multiple distributors that sell the same products to find the best wholesale price of the product.

Some of the most popular marketplaces are:

• Flipkart
• Amazon
• Indiamart
• Myntra

You might also search for print-on-demand apparel, home goods or books. Print-on-demand apparel companies print a custom graphic onto various brands and styles of clothing, including T-shirts, socks and jackets.

Choose a product that you get excited about, has a good margin for profit and displays nicely in the images shown on the website. Many of these suppliers also provide statistics of popular items so that you can choose things that are more likely to sell because there is already a market for them.

3. Select Suppliers

Once you find the products you want to offer, it’s time to choose the supplier that will be the actual company to ship the products to your customers. There are a few things to consider with the supplier you choose:

• Quality: Choose a supplier that offers the quality you want your company to represent. One business model is to charge more for better quality products. This is in contrast to being a discount provider of goods that might not be the best quality. How do you want to position yourself?
• Profitability: You should be able to make a reasonable profit on the product. Consider shipping and transaction costs in your calculation. Most dropshippers look to get 15% to 20% in profit margins. Of course, if you can generate higher profit margins, that’s great.
• Reliability: You want to choose a supplier that sends products in a timely fashion with reasonable shipping expenses and times. Many suppliers are overseas, and you’ll have to determine whether or not you want your customers waiting for products. You also need to have a supplier that keeps a product in stock since it is frustrating for you and your customer to have an order that can’t be filled. The best way to check for reliability is to order a few products from the supplier and note the process.
• Return policy: When possible, find a supplier that offers a return policy. Many don’t, so you need to check on this before making any final decisions. You need to think about how you state your own return policies based on what the supplier offers.

Most dropshippers use online marketplaces because they tend to have a better inventory of products with reliable suppliers. It is possible to get a direct source supplier if you have a specific product in mind. This requires some extra work to see who is distributing the product for the manufacturer and often requires a minimum number of sales per month to be eligible.

4. Build an Online Store

You’ll need to build an e-commerce store to sell your products. An e-commerce store is a site that is designed to help you display the products for sale in a pleasing way while possessing the shopping carts necessary to run the purchase transactions.

Building the store can be tricky for a newbie. The reason is there are a few moving parts.

There are a few components to building a dropshipping business store the right way:

Domain name

Your domain name is especially important if you’re building a long-term brand. You can use a free business name generator to simplify the process. Always opt for a .com domain, regardless of your niche. If you want your niche to be a keyword in your new domain, make sure it’s broad—like “beauty,” “jewelry,” or “fashion”—rather than specific. This way, you won’t need to change your domain name down the road. Also, avoid using your own name as the domain for your store. If you ever decide to sell your business, you could legally lose the rights to your own name.

Ecommerce platform

Shopify is the most comprehensive ecommerce platform on the market. With new features, tools, resources, and apps being added regularly, you’ll find it easy to run a business on the platform. Plus, if you get stuck, you can reach out to a Shopify expert who will personally walk you through any steps, free of charge.

Theme

Since we’re using Shopify, you can explore free themes. Minimal Motion is one such option. It’s clean and easy to navigate, making it an excellent choice for those new to store design. As you start generating some revenue, you can invest in a new theme. This will give your store a more polished design.

Dropshipping app

To manage your inventory and place orders efficiently, you’ll need a reliable dropshipping app. DSers is a solid option that allows you to find products online that you can sell the same day. This app lets you explore products in a variety of popular niches. When starting out, it’s advisable to focus on 10 to 25 products, as writing descriptions for a larger inventory can become overwhelming. If you have questions or need guidance, you can turn to the DSers blog, its social media pages, or Shopify’s own support line.

The best e-commerce websites automate the sale of the product with the order to the supplier. If this step is not automated, you’ll be manually entering in orders every day, which can be cumbersome and lead to errors. Shopify is one of the leading choices for those building a dropshipping business. However, it’s not the only option available so it’s worth learning more about the best e-commerce platforms.

Additionally, you may also want to consider selling your products through other platforms, Amazon or even social media (i.e., Facebook or Instagram). Multi-channel selling helps your business gain exposure and drive more sales, so it’s generally advisable to do so. That is, if you have the bandwidth to manage multiple selling channels.

5. Register Your Business

Registering a business in India is an essential step towards establishing a legal and recognized entity. The registration process provides the business with legitimacy, legal protection, and access to various benefits and opportunities. To register a business in India, one must choose a suitable business structure, such as the following:

• Sole proprietorship
• Partnership 
• Limited liability partnership (LLP)
• Private limited company
• Public limited company

The registration process typically involves obtaining a unique identification number, such as the following:

• Permanent Account Number (PAN)
• Tax Deduction and Collection Account Number (TAN)
• Registering for Goods and Services Tax (GST) 
• Obtaining necessary licenses and permits

It is advisable to consult with a legal professional or company registration service provider to ensure compliance with all applicable laws and regulations during the registration process. By completing the registration process, businesses can operate legally, gain credibility, and access a range of opportunities in India’s vibrant and diverse business ecosystem.

6. Market Your Business

At this stage, you’ve selected your product and set up your store. The next step is to aggressively market your dropshipping business.

This is a crucial component of any dropshipping business plan. For those just starting out and likely on a tight budget, it’s worth noting that effective marketing doesn’t have to be expensive. Here are some suggestions::

Facebook advertising

Resist the temptation to pour $500 into Facebook ads right away. Many new entrepreneurs think big returns will happen quickly, but they usually don’t. Start with a modest $20 ad spend to gauge effectiveness. If the first ad doesn’t yield conversions, don’t get discouraged. A low initial budget allows for valuable experimentation, especially when the bestselling product isn’t clear yet. 

Create multiple ads to identify which product sells best. When setting up targeting options, craft a worldwide ad but exclude Canada, Australia, the United States, and the UK. This strategy keeps ad costs low. As the business scales or the budget expands, create targeted ads for these four countries individually.

Retargeting ads

If your budget is small, retargeting ads are a good option. These ads work well if your store has high traffic. You may already have high traffic from free marketing on Pinterest. Or maybe a blog post on your site is bringing in visitors. Retargeting ads can take this free traffic and turn it into sales. Compared to standard Facebook ads, they usually do a better job. Plus, they’re a lot cheaper.

Influencer marketing

In the early stages of a dropshipping business, budget constraints are common. If paying influencers isn’t an option, consider offering an affiliate commission instead. This reduces financial risks for your business and shifts the onus of sales conversion to the influencer. It also adds value by generating images or reviews that elevate your brand’s social proof. With an affiliate commission model, influencers can often earn more than they would with a flat fee, especially if they have an engaged audience.

Media coverage

To boost exposure for your ecommerce website, consider using HARO. This tool connects reporters with potential sources. By subscribing to their thrice-daily emails, you get a chance to be featured in articles. Some reporters look for expert opinions, while others seek product recommendations. Use this media attention to drive targeted traffic to your ecommerce website. For better results, link directly to specific product pages instead of the homepage. Pair this approach with retargeting ads to maximize potential sales.

You can’t just set up a website and expect thousands of people to find it. You need to market the new business. Because it is online, you will likely go beyond the word-of-mouth marketing that you’d do with other businesses in your community.

You can also write a blog that helps consumers find you through search engine optimization (SEO) tactics. For many new e-commerce stores, doing a little bit of each of these marketing strategies is the key to getting enough eyes on their store to convert to buyers.

Test Products To Gauge Interest In Them

The great thing about dropshipping is that you can test new products to see if the market has an appetite for them. This is easy to do and doesn’t cost you much more than the time to update your store and announce a new product.

Work with your suppliers to see what new products are coming out that might fit your demographic. Then choose one product at a time to launch. If you feel strongly about the product, establish a marketing budget for it. Run an ad campaign specific to the new product and see how it fares compared to the rest of your products online.

Dropshippers should always be testing new products. This helps sell more items to existing customers who already bought and trust your brand. It’s easy and cost-effective to do and should be part of your ongoing business development.

Is dropshipping worth it?

The value of dropshipping depends on the time and money you invest in it. If you dedicate time to growing your online business, you are more likely to reap the rewards. Setting up a dropshipping business involves multiple steps: You need to set up a store, import products, decide on your pricing strategy, and start selling. All of this require effort and commitment for your business to be successful.