How to Start a Dropshipping Business Properly
Have you ever had thoughts like, “How can I start a dropshipping business from home? I work a 9-5 and know nothing about eCommerce” or “I don’t want to take a risk losing lots of money.” Let’s dive right into how to start your own dropshipping business properly.
You’ll be happy to hear that starting a dropshipping business from home is inexpensive, flexible, and very easy to build.
It’s one of the best businesses to start from home, especially for people who have never built a business before.
What is Dropshipping?
Dropshipping is a method of ecommerce where an online store sells products to consumers, but the merchandise moves directly from the wholesaler to the final consumer without being handled or stored by the retailer. A drop-shipper could be a manufacturer, distributor, or other supplier. Drop shipping is a straightforward business model that requires store owners to work closely with their distributors, ensuring a seamless supply chain and keeping the behind-the-scenes handoffs out of sight from the customer.
This partnership between the retailer and the distributor is what makes dropshipping different from other business models. You don’t have to buy your products upfront or pay for somewhere to store them. You don’t have to manufacture anything yourself. All you need to do is build an online store that sells well and make sure your fulfillment process is running smoothly.
Benefits of Dropshipping
- You don’t need much start capital to launch your business because you don’t need to stock up on inventory. (It is, in fact, one of the cheapest online businesses you can start with no experience!)
- Since the entire business model runs online, you can manage it from anywhere in the world. Perfect for every (aspiring) digital nomad!
- It is easier to start than a normal retail business because you don’t have to worry about things like a warehouse, stock level, packing, shipping, or handling returns.
- You can be very flexible in terms of your products. If one product doesn’t sell at all, you can easily switch to another one because you haven’t purchased large amounts of it.
Disadvantages of Dropshipping
Intense competition. With the rapid development of the e-commerce industry, more and more people choose to shop online, and the relative competition is also growing.
Whether the inventory is sufficient and there is a large stock of goods. The fact that no inventory is needed is a good aspect as well as a disadvantage, since it is not possible to know the exact inventory quantity of the supplier. A shortage of supply is likely to occur when selling products. Chinabrands will update the inventory status every day. If there is an out-of-stock product, it will immediately notify the seller and contact the supplier to purchase the goods as soon as possible.
Shipping and packaging. If the product is not packaged properly during transportation, it can easily cause damage to the product. Before packing and transporting goods, Chinabrands ‘s professionals carefully inspect each item in each package to prevent damage to the product during transit.
Product quality. Distribution or drop shipping are generally online transactions. If there is no strict control, it is easy to cause poor product quality, because even the owner does not know what kind of product quality he sells to customers. Chinabrands has strict control and monitoring of the quality of each product.
How Does Dropshipping Work?
The working process of drop shipping is quite simple. It includes 3 simple steps as follows:
- The store owner publishes products he wishes to sell on his online store. The customer sees the product and places an order on the website.
- The retailer receives details about the order and forwards the details of the customer and order manually or automatically to the dropship supplier.
- The supplier then packages and ships the required products directly to the customer with the store owner’s branding.
This is an attractive business model as it eliminates the warehousing cost of the store owner. Also, he need not have a physical business location.
Is the Dropshipping Model Right For You?
Drop shipping does not suit all business types, but it is a great option for these entrepreneur types that would work well with the dropshipping model.
Let us understand them in detail by considering the type of entrepreneurs:
Validating entrepreneur: With dropshipping, an entrepreneur gets the freedom to test new products before they invest in inventory and stocking.
Buying new products have a risk that it may not sell and if an entrepreneur wants to lower risks and perform product validation before buying then dropshipping is the perfect business model to choose.
Budget entrepreneur: With drop shipping, you can sell online in the least expensive manner. Due to this, it works for entrepreneurs that have a limited or low budget or for startups who want to keep their costs as low as possible.
First time entrepreneur: If you are just starting to sell online then this is the best business model to choose. E-commerce is not that easy and if you do not have proper knowledge of digital marketing then you must start with dropshipping till your website gets optimized.
As dropshipping can get started with low investment, entrepreneurs can start with it till they create their brand value. It also allows newbies to learn about setting up an online store, conversion optimization, driving traffic and other e-commerce fundamentals.
Walmart Entrepreneur: If you want to sell a huge variety of products then this business model would suit you. If you want to sell thousands of products then you would need massive funding for it to maintain all inventory.
With drop shipping, you need not purchase all the inventory and just redirect orders to the correct supplier. This is key on how to start your own dropshipping business properly.
Starting and running a dropshipping business is no small task. It takes a lot of research, planning, and follow through.
With careful planning, though, you can run a dropshipping company from virtually anywhere in the world. And by then, every step of the process will be well worth it.