Starting dropshipping is gaining momentum in the ecommerce industry and it’s not just for large businesses. Many people run smaller online marketplaces that utilize dropshipping successfully. Anybody who has an internet connection and a little bit of time can begin using the dropshipping model. Whether you are an ecommerce rookie or a veteran seller wanting to offer more products, this selling method can work for you.
How Dropshipping Works
By starting dropshipping uses a third-party supplier to fulfill orders for an online business. The supplier handles fulfillment and inventory, so there is no need for the seller to house or ship items on his or her own.
Here’s how it happens: When your customer places an order for one of your products, you will notify the supplier you’ve chosen to work with. The supplier gets the customer’s order information, then fulfills the order and ships it to your customer. Your customer typically doesn’t know that the item is coming from another location, as the products can be branded under your own company name.
It’s not all butterflies and rainbows with dropshipping. Dropshipping has its pros and cons compared to other forms of fulfillment, but the unique benefits makes it a powerful tool for ecommerce businesses at any level.
Dropshipping Can be a Good Fit for New or Small Online Stores
Large retailers have been using dropshipping for a while, but it’s also worth considering if you are just starting an online store or if you have a smaller selection of products.
If you are just starting out, then starting dropshipping can be especially beneficial because you won’t have to buy a huge amount of inventory without knowing if it will sell. By starting dropshipping there are less risks and expenses. As a new ecommerce retailer, you won’t have to worry about the overhead costs of start-up beyond your website and paying for listings.
If you already have an online store, starting dropshipping is also beneficial to you for a couple of reasons. It will allow you to test new products on your website without a financial risk of it not selling. You can also use dropshipping to list seasonal, niche, or less popular items.
How to Get Started with Dropshipping
Dropshipping isn’t as complicated as you might think, and neither is getting it started. There are basically four things you’ll need to do.
#1 Research and Establish Your Products
First, decide what you are going to sell. In a lot of ways, picking your niche will be the most important and most difficult part of the process. Picking a market that you know something about is always a good idea, but you must make sure the niche isn’t already saturated with other sellers. There are a couple of ways to come up with that initial idea.
- Browse social media sites to see what products people are talking about.
- Consider your own interests and hobbies.
- Focus on solving a common problem.
Explore the niche online before you start selling. Are there already lot of stores like the one you envision for yourself? How could your store improve on their formula? What are customers saying about the products? These questions not only help you decide what to sell, but will help you figure out how to sell it.
The next step is to get your store set up. Marketplaces like Amazon, eBay, and Rakuten make it fairly easy to set up and customize a store. You could also build a website of your own using templates from Shopify or Bigcommere.
Check out our infographic comparing major marketplaces and selling platforms to find out which could be best for you.
#2 Find Your Dropship Suppliers
Now you are ready to find suppliers to work with. This can get frustrating, but it’s worth it to find suppliers who are experienced, professional, and prompt.
One of the easiest ways to find a dropshipping partner is to locate the products that you want to sell online, and get in touch with the manufacturers directly. Many manufacturers provide dropshipping services to resellers.
Some websites offer dropshipper directories for sale, but the reviews are mixed. They can be helpful to get you started, but why pay for information you can find for free online?
This is also the time to consider if you will be using any type of software solution to streamline your inventory and dropshipping needs. If you are, then look for a multi-warehouse dropship management system. That way you can either start off with multiple suppliers, or if you only start with one, you’ll have room to grow your business.
#3 Get Your Feet Wet
The best advice for this stage of the game is to start small. Get comfortable with your products, your platform, suppliers, and software. You’ll also want to spend some time on marketing and increasing your traffic. Nurture your product listings and customers until you feel like you’ve got a good handle on it. That’s when you can focus on adding products and growing your store.
#4 Ensure Order Fulfillment Runs as Smoothly as Possible
This is an ongoing step that you will do as long as you have an online store. You are going to have unexpected issues come up with suppliers – it’s pretty much inevitable. Backorders and out of stock products are two of the biggest problems you’ll run across and will happen with more frequency if your supplier is in high demand. Inventory management software for dropshipping can dramatically reduce this risk.
Whether the issue is your supplier’s or not, you must take ownership of it and make it right for your customer. Your customers may not even know that you use a dropshipping supplier, and they certainly don’t care. They just want their shipments as quickly as possible. When problems happen, be prepared to fix them as best you can. You want your customers to continue buying from your store and to leave you positive reviews and ratings.
Are You Ready to Get Started?
Using dropshipping for your order fulfillment isn’t all that complex, but it does take time and commitment to do it successfully. But the affordability and convenience make it possible for new retailers who are just getting started to run a successful store. Get started today and see for yourself.