Conclusions, Advice, and Recommendations
Congratulations on making it this far! The conclusions, advice, and recommendations we’ve shared in this guide will give you most of the information you need to start up a successful dropshipping business. But, no guide can be completely exhaustive, that’s why you’ll find links to some other useful resources below.
There’s also no substitute for actually running your own business. The day-to-day challenges of being an entrepreneur will teach you much more than any guide ever could. That said, there’s still a great deal of value in preparation and planning. Here’s a summary of the main steps you need to take if you want to start and run a successful dropshipping business.
An Introduction to Dropshipping
- Learn what dropshipping is and isn’t.
- Understand the business model for dropshipping.
- Review the distinctions between what you do as the ecommerce provider and what the supplier does.
- Make sure you understand the benefits and drawbacks of running a dropshipping business.
Defining Your Dropshipping Niche
- Find out the types of products consumers are after. Check that there is demand in the marketplace for your products.
- Identify your own experience, expertise, and skills. Research your niche to establish there’s a space in the market.
- Look at your competitors in that niche.
- Decide what you can offer that they don’t — your “value proposition.”
- Identify your niche customers, where they hang out, and their key demographics.
- Get a specific idea of your customer’s needs.
- Find products that can help them to meet those needs.
Sourcing Your Products and Finding Suppliers
- Create a shortlist of products.
- Double-check that there is demand for the products you want to sell.
- Search for suppliers who can dropship those products for you. Understand all the costs of manufacturing and distribution.
- Work out if there are likely to be other costs like customs fees or tariffs.
- Complete due diligence with the suppliers you’ve chosen to work with.
- Get a sample of the product so you can check quality and specifications.
- Set up a formal dropshipping agreement with the supplier.
Working with Specific Dropshipping Suppliers
- Explore if you can find dropshipping products and suppliers through Alibaba.
- Explore if you can find dropshipping products and suppliers through Worldwide Brands.
- Explore if you can find dropshipping products and suppliers through Salehoo.
- Explore if you can find dropshipping products and suppliers through Doba.
- Explore if you can find dropshipping products and suppliers through Wholesale Central.
Setting Up Your Dropshipping Store
- Decide whether to use a web building framework to create your ecommerce store.
- Decide whether to use an online web building service to create your ecommerce store.
- Decide whether to use a specialised ecommerce service to create your ecommerce store.
- Decide if you want to open an ecommerce store on an ecommerce marketplace.
- Decide if Amazon would be a good option for creating an ecommerce store.
- Decide if eBay would be a good option for creating an ecommerce store.
- Decide if Rakuten would be a good option for creating an ecommerce store.
- Decide if another platform would be a good option for creating an ecommerce store.
- Set up your ecommerce store.
Marketing Your Dropshipping Business
- Understand how online SEO can help you appear in search results.
- Get online SEO techniques in place.
- Understand how off line SEO can help you appear in search results.
- Get off line SEO techniques in place.
- Understand how content marketing can help you appear in search results.
- Get good content marketing in place.
- Understand if PPC advertising could work for your business.
- Look into other types of marketing for your dropshipping business including social media marketing, YouTube, influencer marketing, display network advertising, and referral marketing.
Managing Your Dropshipping Business
- Understand the importance of managing your cash flow.
- Create an accurate monthly budget.
- Create a cash cushion of three to six months of expenses.
- Automate how you provide orders to your supplier.
- Get an inventory management system in place.
- Understand the taxes you will need to pay.
- Put aside enough money to pay your taxes.
- Understand the likely cost of currency conversions.
- Use The Currency Shop to avoid poor exchange rates and high fees.
- Use analytics and reporting to manage your business better.
The True Costs of a Dropshipping Business
- Work out exactly how much each item is going to cost.
- Work out your overall business costs.
- Work out the necessary margins on each item.
- Set a realistic selling price.