How To Start a Drop Shipping Business in Just 9-Steps
Have you ever wondered how big the drop shipping world is?
It's massive!
Currently valued at over $225 billion, it's growing rapidly each year. Allied Market Research predicts it will reach $1.67 trillion by 2031.
Starting a dropshipping business can be profitable, but it's wise to understand the common challenges first. This blog will help you make informed decisions. Let's get started.
What is dropshipping?
When a customer orders something, the order details go to a supplier. The supplier then ships the item directly to the customer.
Many retailers choose dropshipping because it moves order fulfillment to suppliers. This means stores don't need warehouses or risk having unsold products. As a result, businesses can focus more on other areas like marketing.
Dropshipping is a big part of e-commerce, with yearly sales estimated at over $300 billion.
Is dropshipping still worth it in 2024?
To figure out if dropshipping is profitable, let's look at how it's changed over time.
The graph shows a big increase in searches for "dropshipping" from 2021 to 2022. While the trend dropped sharply in early 2023, it has since leveled off.
This suggests that the e-commerce dropshipping market has mostly filled up but is now reaching a steady point.
How popular is dropshipping in 2024?
Research shows that global dropshipping hit $276.71 billion in 2023 and is expected to grow at 23.20% yearly by 2032. Notably, over 30% of online stores use dropshipping for order fulfillment, and dropshippers make up about 34% of Amazon dropshipping sales.
Given these facts, dropshipping is still profitable and offers opportunities. This might answer the question "Is dropshipping worth it?" for some. However, success in this competitive market requires staying alert, being flexible, and focusing on customers.
Before starting a dropshipping business, it's important to do thorough market research, keep up with industry trends, and carefully evaluate the potential of your chosen niche.
Your 9 steps to start a dropshipping business
1. Check if dropshipping fits your business goals
Dropshipping is one way to run an online store. Before starting, make sure it matches your objectives.
This model often suits people with marketing skills who want to start a store with low initial costs. Since you don't need to keep inventory or handle products, you can begin with just a computer and internet access.
However, this ease of entry has downsides. Dropshippers typically have less control over their product range, and because other sellers often offer the same items, competition can be tough.
If marketing is your focus and you're not looking to build a business around a specific product, dropshipping could be a good option.
2. Pick a dropshipping niche
A niche is a specific part of the market. Your store, brand, and products can target a particular niche.
Choosing a dropshipping niche helps you identify who your customers are. When you know your audience, it's easier to find the right products to sell.
There are two main ways to pick a business niche:
The second method tries to find niches where many people are interested, but there's not much competition. Dropshippers look at market demand through keyword and product research.
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Finding a niche with keyword research
Keyword research shows what people are searching for online. Tools like Google Trends and Facebook Audience Insights can show you product-related searches your store could target. When looking at demand, think about both past interest and how many people are searching now to find niches that are steady or growing in popularity.
Finding a niche with product research
Product research helps you spot trending items and what consumers like. Dropshipping apps like DSers show how many orders products get on marketplaces, giving you an idea of potential business size.
Use both types of research to fully understand a dropshipping niche. Consumer trends change fast, so keep checking keyword and product popularity regularly.
You might also choose your supplier before picking a niche to make sure you can get the products you want.
3. Look into competitors
Studying your competitors is crucial when starting a dropshipping business. Spend time gathering information about other stores in your niche.
By looking at your competitors, especially other dropshippers, you can spot potential products and marketing ideas. Check out their product pages and social media ads to see what customers like.
Do thorough competitor research with these steps:
4. Pick a supplier
A dropshipping supplier handles inventory, processes orders and payments, and ships products to customers. Your choice of supplier greatly affects how well your dropshipping business does because of these important tasks.
Depending on your niche and products, you might work with one supplier or several through a directory. Popular apps and websites for supplier directories automatically connect your store to many dropshipping suppliers.
For example, the DSers app lets Shopify users dropship items from AliExpress, a global marketplace.
5. Choose products and set prices
Pick products that fit your niche audience from your supplier's inventory. A well-chosen catalog can help you sell more through cross-selling and upselling.
When choosing products:
Pricing your dropshipping products
Come up with a pricing strategy that makes sure you're profitable:
To run a successful dropshipping business, balance your product choices and prices. Offer good quality items, fast shipping, and fair prices to stand out from other sellers. Read more...
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