If you are looking to break into ecommerce, dropshipping can be an ideal way to break into the trillion dollar market. Most dropshippers start out with limited cash as they are looking to try their hand at a low-risk venture prior to moving on to bigger markets and original companies.
Over-saturated markets, inventory, logistics issues and quality control are just a few of the challenges you have to contend with when trying your hand at an ecommerce business.
This is why following the right principles and committing fully to your dropshipping business is of utmost importance. Peruse and discover how to start a profitable dropshipping business that has the potential for future growth.
Set the Stage
The foundation of every legitimate business is its license/permits. The first step is obtaining a business license. You’ll need to decide if forming a Limited Liability Company or a sole proprietorship is the best option for your venture.
Choosing the right business entity helps you protect yourself from the financial and legal liabilities that running a business entails. It also allows you to apply for a Tax ID Number (TIN), effectively streamlining the process of paying income taxes for your business. A TIN allows you open a bank account for your business.
Next step would be to get a reliable internet service provider and a computer. A smartphone suffices in this regard as well.
Market + Product
With millions of dropshippers around the world, getting the right combination of product and market is the key to a successful dropshipping business.
Focus on diversifying the products you offer at competitive prices by selecting a wide range of related items or by drilling down into a niche set of interests. For example, if you are interested in beauty products, dropship everything from beard oils, face masks, eye serums etc.
While you are at it, only focus on quality.
Logistics is the bedrock of dropshipping as there is no ecommerce without logistics. When a customer places an order, you’ll need to rely on wholesalers to fulfill shipments on time and stick to pre-arranged prices. It’s not going to help your profits if your wholesaler keeps fluctuating the prices that you’ll pay.
You must test for quality assurance when choosing wholesalers as you don’t ever actually see the inventory that gets delivered to your customers.
Vetting your wholesalers for reliability and quality should be a top priority after pricing their products.
Marketing is the ultimate key to your success in dropshipping. If nobody knows you exist, you won’t make a profit. Simple!
To leverage a small marketing budget for maximum website traffic, look into inbound marketing techniques. Inbound marketing is all about evaluating your audience, making connections and driving website traffic organically.
You can embrace marketing techniques like SEO, automated email campaigns and Customer Relation Management (CRM) software to attract your demographic and add value to their lives through your products.
For the best results with your dropship business, plan to upscale after your first year or so. While this might seem aggressive, the low overhead required in dropshipping will make upscaling your product range and quality much more accessible.
Placing a goal like this early in your business will also help to keep you accountable and engaged. This isn’t a get-rich-quick scheme or a passive income gig. It’s a legitimate business that you’ll need to commit yourself to in order to create a future. Create a business plan early on that reflects your future goals and sets the tone for the success you want to achieve.
If you are looking to start a dropshipping business and need advice on which products, markets and management of your ecommerce shop, contact us via WhatsApp
Our services in ecommerce include;
i. Ecommerce Website Development
ii. Manufacturers Contact
iii. Dropshipping Store Setup/Management
iv. Business Advisory