Dropshipping – a model that allows businesspeople to buy products individually from a wholesaler and ship them directly to customers – is becoming a popular method for generating income. Many entrepreneurs have reported over $100,000 per month by establishing a dropshipping business. While the amount may seem too high, it can be accurate if you start your business the right way and put in the time and effort necessary for its success.
If you’re interested in making at least a five-figure pay check every month, simply use the following steps to establish your business.
Dropshipping isn’t a very well-known business model, so you need to understand it fully before you can profit from it. Once you comprehend what you’re up against, you’ll be able to establish your own very quickly, without spending more than $50 initially, and without investing in skill development. One of the important things you should learn is the three components of a functional and successful business:
- The Webstore – This is where your products will be and where your customer will select them from.
- The Supply Chain – Managing an effective supply chain allows you to procure your customers’ selections and deliver them without high investment costs.
- The Marketing – There’s no use for your webstore if no one knows about it. Therefore, you need to promote it everywhere (we’ll get to that in a bit).
Find out as much as you can about each of these and combine your knowledge to the following steps.
Choose a Product to Sell
Determine which products your store will sell. The best way to decide is by doing a little research on hungry markets. There’s no use providing products that no one wants, so find out which products are in demand and deliver accordingly. According to experts, the top 10 items to sell via a dropshipping method are:
- Computer Accessories
- Cosmetics and Beauty Products
- Clothing Items
- Cell Phones
- Movies and Music
Establish Your Online Store and Catalog
Your online store is the most important element of your business, which is why you need to ensure its comprehensiveness. The following are the main tasks you should work on to have a great online store.
- Choose Your Domain Name and Host Carefully – It’s possible for you to get free hosting and a sub-level domain. However, these will compromise your user experience and search engine rankings. Therefore, you need to pick a relevant, simple, short, easy-to-remember, professional and available name. Meanwhile, your webhost needs to flaunt excellent user reviews, be able to run WordPress and cPanel (or a similar system), boast great customer service, and provide quick servers.
- Install WordPress – WordPress is one of the simplest frameworks for creating blogs, websites and web stores. By eliminating the hassle of coding, it allows you to focus on content. It’s also an easy platform, allowing you to quickly have your own site in no time.
- Install a Theme and Configure it – Themes, or templates to be used on WordPress, will give your site the aesthetic appeal it needs to attract people. While some of these are free, don’t be a scrooge and select what’s best for your webstore. Once you’re done, tinker around the theme to configure it. You can also configure the eCommerce plugin to help you with tasks such as adding taxes and handling payment settings.
- Start Adding Products – Add the products you intend to sell to your site, but don’t forget to include an easy-to-understand title, a concise yet thorough product description, a short description under the image, and important info such as the price and shipping type. You should also structure your products according to categories without overcrowding your pages.
Work on Your Supply Chain
As a dropshipper, you need to have a reliable supplier and a place to store some of your most popular products. To find the best dropship supplier for your budding business, use the mother of all search engines: Google. You’ll need to search extensively since most wholesalers and dropshippers are bad at SEO and marketing. This usually means using a lot of modifier terms such as ‘reseller’ and ‘supplier’ as well as going beyond the first ten pages of search results. Another thing to keep in mind is that some of the best suppliers have late 90s era websites, so don’t judge a company by its site and investigate its offerings before ruling it out altogether.
Once you shortlist possible vendors, assess each based on the following:
- The availability of the products you want to sell (you may need to have multiple vendors, but that isn’t advisable)
- The ability to ship to the cities and/or countries you’re targeting
- Product and shipping costs (they should be within a profitable range)
- Delivery time
- Service quality
- Any criteria you believe a good vendor should have
Once you find a vendor, sign up for their services and decide on payment terms. Traditionally, vendors provide net-15 or net-30 (15-30 days to pay), but you may not get these terms since you’re still new in this field. To show that you’re not just any other newbie, you need to:
- Tell the vendor right away that you want net-30 terms.
- Ask for a credit verification form, but inform the vendor that you don’t have any transactional history.
- Re-apply for a net-15 contract if your offer is refused. If you’re still unsuccessful, pay them on a daily basis and ensure proper communication to keep your contract.
With the vendor selection out of the way, work on your order processing phase. The best way to handle this aspect is through software. Find software systems that allow you to process orders and ship them to your dropshipping provider. The same system can also be customized to record product costs so that the vendor can bill you.
Market Your New Business
Many underestimate this part of their business, but no one will buy from you if they can’t find your store. If you don’t want to spend much, consider investing your time in online marketing methodologies such as blogging reviews or social media marketing. Also don’t underestimate the power of word of mouth and spread the word through your family, friends and acquaintances circles.
Set Up a Legal Business Entity
You need to establish a legal entity for yourself to show that you’re serious about starting a business. Check with the local authorities to find out how you can set up a business. You also need to obtain an EIN (employer identification number) to shield yourself from legal matters that may come up later. In case you’re wondering, yes, this is the last step you should make rather than the first one. Not all businesses need this formality, so inquire about it once you have everything ready.
With these, you’ll get to establish your business. However, you need to put more effort to become a success. For instance, you’ll need to follow up after sales to ensure customer satisfaction and ultimately their loyalty. Once you expand, you can also create partnerships with affiliate marketers or with related businesses. They sky’s the limit to your earnings from dropshipping business, so start today to become a success tomorrow.