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What Is Dropshipping & How Do You Get Started?
Understanding dropshipping and steps to launch your own online business
May 2, 2024
16 min read
Dropshipping is a retail business that allows you to sell products online with very little capital. The question is: how do you even get started?
In this article, I will discuss:
By the end of this article, I am confident that you’ll have the information you need to start your very own dropshipping business!
Dropshipping is a retail business where you sell physical goods online. The one thing that makes it different from typical retail is that you do not need to buy inventory upfront.
What happens in the dropshipping process is a combined effort between you and your supplier. You take care of marketing and processing payments, while your supplier takes care of shipping the order.
Here is how it works:
In dropshipping, you are doing what retail businesses do, but you do not need to buy stock at all. You do not need a warehouse, an inventory system—nothing of these things. You only spend money on the product once a customer already completed a purchase from you.
Your profit in dropshipping is the difference between your price and your supplier’s product price. For example, let us say that your supplier sells a short for $19, and you sell the same shirt for $39, your gross profit is $20.
The first question you might ask yourself is: where do I sell my products? In this section, I will show you several ways to do it. These are social media, your own ecommerce website, or online marketplaces.
There are several platforms you can use to build a dropshipping store. If you do this, you will have your own domain name or website address—you will operate your own online business just like the big brands out there.
Here are some platforms you can use:
What you are essentially looking for is a platform where you can host your website. If you ask me, the best two are Shopify and WooCommerce. Shopify is best for people whose primary goal is to build an online store, while WooCommerce is best for those who need more flexibility and functions on their website.
Social media dropshipping is possible, and the best I recommend is Facebook. What you can do is put your products in the Facebook Marketplace.
Do not use Instagram, TikTok, or Facebook Shop. These platforms require a URL. What I mean is they require a live website before they approve your application for a shop.
Don’t confuse this with marketing your existing store on social media. I’m talking about the built-in store option on these social media platforms. Marketing an external store on social media is another topic I will cover in this article.
Marketplace refers to websites like Amazon, eBay, and Etsy. These are the big three when it comes to dropshipping.
What you can do is create a seller account, and then post your dropshipping items on the platform. Once a customer orders, you contact the supplier for shipment.
Just be wary that these three platforms have varying rules when it comes to dropshipping. For example, Etsy only allows dropshipping if you designed the product, and you can do this with print-on-demand services like Printify. Etsy explicitly bans mass-manufactured products.
In addition, you must comply with their shipping rules. For example, if the platform requires that you ship the item within 48 hours after payment, you must ensure that your supplier fulfills this requirement. Otherwise, you will get banned from the platform.
The best process I recommend is to build your online store. This gives your brand better credibility. If you want, you can sell on three platforms at the same time (same products all at once). For example, it is possible to integrate a Shopify store with Facebook and Amazon.
As such, you have three storefronts—the Shopify one, your Facebook store, and your Amazon store. Whatever changes you make to your Shopify store also happen in the other two.
For now, if you are a beginner, I suggest that you learn how to build a dropshipping store with Shopify only. You can always add more sales channels later.
In this section, I will show you four easy steps on how to start a dropshipping business. I will discuss how to choose a product, what tools to use, and how to effectively market your products.
A niche refers to a specific type of industry or product. For example, healthcare is a niche. Shoes are a niche, and electronics accessories are also a niche.
Your dropshipping success begins with niche and product selection. You want to choose:
There are millions of products out there, and you will waste time if you do your research manually. It is where Tradelle comes in.
With Tradelle, picking winning products has never been easier. You can also find suppliers for this product right from Tradelle’s platform. See the sample screenshot below:
As you can see, the product entry here shows you the capital cost of the product, the suggested selling price, and your profit for every sale. It is on the same page where you’ll see suppliers from AliExpress.
On top of that, you can also see if the product has Facebook ads or if it is currently being sold on Amazon. If you take the time to browse, these things will show you how the competition is going.
Here is an example:
The product is now selling for $35, higher than the suggested retail price of Tradelle, which means you can compete between these price ranges and still make a decent profit.
Once you have decided on what to sell, the next step is to find a reliable supplier. Your performance as a dropshipper relies heavily on our supplier’s standards and how fast they ship the item. Instead of searching manually, use Tradelle’s platform. After selecting a product, Tradelle ships the products out automatically for you. Meaning you don’t have to worry about that. You can find external dropshipping suppliers on that platform as well, which saves time and money.
To do this, go to the Product Picks section of Tradelle, and then type the product name in the search box. Once you have the results, you will see something like this:
Now, click on a product, and you will see this:
Earlier, we discussed what some of the buttons can do. Now, let us click on the FIND BEST SUPPLIER button to see if there are more product sources apart from AliExpress and Tradelle.
As you can see, there are others here. If we click on DHGATE, we will see this:
Here, you can find several suppliers of either the same item or a similar one. It is up to you now to browse them one by one and choose the best deal.
Please note that these supplier databases are different from Tradelle. You need to sign up for an account to be able to make orders. Do not worry, as creating an account is free.
Especially for beginners, it’s highly recommended to just stick with Tradelle’s fulfillment system. They will take care of the entire fulfillment process and shipping while you focus on what is important – marketing.
At this point, I suggest that you order the products so that you can test them. You need to know the product you’re selling, otherwise you could get into trouble later. Having the product on hand is advantageous because you can make your own product images and product ads.
Once you have a product list and their respective suppliers, you need to start planning how to build your ecommerce store. The two I recommend are either Shopify or WooCommerce. I would opt for Shopify if you used Tradelle, as you can integrate both systems.
Here are some tips on building an online store:
The way your store looks contributes to your success. Stores that are poorly designed are not likely to perform well. My advice is for you to look for online stores in the same niche as yours. See how they present their products and get ideas from them about how you can make your own retail store look professional.
The last step to achieve dropshipping success is to market your brand. There are several ways to do this, and I suggest that you begin with these free methods.
Most dropshippers start their marketing activities with ads, which I do not recommend. It is true that ads significantly increase your chances of being seen, but it is expensive and you need experience to turn a profit. What I suggest is that you click on the Facebook Ad link from Tradelle and get ideas about what kind of content resonates with your target market.
You must push yourself to be creative. You can order the products yourself, and create several videos out of them. You will never know what video will go viral. It takes only one viral video to experience tremendous success.
What I recommend between these two is Shopify. The founders of Shopify built the platform for only one purpose: e-commerce.
For $25 a month, you get to build an online store fully equipped to:
Shopify also takes care of hosting your online store. There is no need to pay a separate fee for hosting. The biggest draw of Shopify is that you get to do all these in one platform. You can get Shopify for just $1 in your first month using this link: tradelle.io/shopify
This is not to say that WooCommerce is a bad choice. WooCommerce is an excellent option, but you need to have a basic understanding of how to design a website. With WooCommerce, you also need to use several plug-ins, update your website security, and so much more.
What WooCommerce offers is flexibility. If you use Shopify, your store will look like a cookie-cutter online store. It is difficult to personalize Shopify stores, and even if there are apps you can use, they are all expensive.
I recommend Shopify because it allows you to build a dropshipping store without the fuss and the headache. As such, you can concentrate on marketing your products, not maintaining the technical aspects of your store.
Before you jump on the bandwagon, there are several things you must consider. For one, dropshipping is not a foolproof way to make money, and neither is it a get-rich-quick scheme. To help you make this decision, below are the pros and cons of starting a dropshipping business.
Pros of Dropshipping
Cons of Dropshipping
All in all, I can say that dropshipping is an active business, not a passive one. You need to be on top of your game all the time. You need to manage orders, process refunds, provide customer service, etc. You also need to manage the technical aspects of your store, your marketing strategies, and more.
If passive income is what you are looking for, then the dropshipping model is not the best choice. However, if you love retail, then you must seriously consider this business model.
Dropshipping is not free—you can do it for free, but you are not likely to succeed. Dropshipping is a real business and, as you know, it takes money to make money.
I can say that you can start with dropshipping for only $1 per month. This is the price you pay for your Shopify store. The other expenses you will incur now depend on how easy you want your processes to be.
For example, you can opt to use paid tools that allow you to import products to your store, or you can use free ones and do manual work. One such example is Tradelle, a product research and auto-fulfillment tool that you can use. It saves a lot of time and shield you from potential mistakes.
The other cost you will need to think about is marketing—ads cost a lot of money. Your alternative is to do free marketing on social media by releasing product videos or publishing blog posts.
How about profits? How much can you make? There is no single answer to this, as your profitability depends on your profit margin, expenses, sales tax and number of items sold.
For demonstration, let us say that you are selling phone cases for $15 each. If the capital of each phone case is $3, and you are selling 100 units amount, your profitability will look like this:
This may not be big enough to make a living, but we are looking at only one product. Imagine if you have hundreds and if you are selling items that are in high demand.
The money you make in dropshipping depends heavily on how you market your goods, and how you create a demand for your products. In theory, if you sell thousands of units in a month, then you can also make tens of thousands of dollars monthly.
Dropshipping is a retail business model where you sell someone else’s products. You do not need to buy inventory. You only pay for products that your customers already paid you for.
All you need to do is to start looking for products to sell, and then build your website. Whether you must register your business with your government or not depends on your local laws.
You can start with less than $1 monthly if you use Shopify as a platform. I suggest you add a tool like Tradelle so you can use real data to make business decisions. It costs just $30 per month, so you will not spend more than $31 per month.
The average profit margin of dropshipping, depending on the niche, is 20-30%, and the conversion rate you can expect is around 2% or 3%.
The next step is to decide on the niche you want to target. List down your ideas, and then head on to Tradelle to sign up with a free account. Do your own market research and bookmark the products that you want to sell. Use Tradelle’s product supplier links and order the products so you can sample them.
While waiting for these products to arrive, I suggest that you start learning how to build your store on Shopify—there are many free videos out there that will teach you how to build a dropshipping store on Shopify from scratch.
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