What is a drop shipping business and how to start one

Article written by Rebecca Di Noia , Business Connect Advisor, Western Sydney Business Centre.

Drop shipping is a retail fulfilment method where an online store does not hold inventory. Instead, when it sells a product, it purchases the item from a third party (usually the supplier or manufacturer) and has it shipped directly to the customer.

This means the merchant never sees or handles the product, saving money and time on inventory and logistics.

Good things about drop shipping:

• you don’t need a lot of money to start
• you can offer many different products
• you can manage the business from anywhere

So how to start a drop shipping business? Below are some tips:

1. Do market research

There is no difference between setting up a physical store and a drop shipping store, so you will want to research competitors and trends, your potential customers, and any niche that you may be interested in; making crucial decisions based on how profitable it will be.

1. Choose a drop shipping supplier

Choosing a drop shipping supplier is a critical step towards creating a successful drop shipping business. Without reliable suppliers, a drop shipping business does not have any products it can ship to customers. You will need to find suppliers or wholesalers who are willing to dropship their products. These suppliers can be found through various online directories or by contacting manufacturers and distributors directly.

1. Setting up an online store

You will need to set up an e-commerce website or use an existing platform like Shopify, WooCommerce, or eBay.

1. Market your drop shipping store

To stand out in the market, you may want to put extra effort into your marketing and advertising efforts when building your drop shipping business. There are many options such as Paid ads (Facebook and Google), Content marketing such as YouTube, creating communities such as Facebook Groups, or email marketing.

Successful drop shipping businesses often require a combination of effective marketing, niche selection, and good supplier relationships. It’s essential to thoroughly research and plan your business strategy before starting a drop shipping venture.