If you ever wanted to start your own ecommerce business, then dropshipping can be a good option. Dropshipping is a business model where you sell products that are stored and fulfilled by the supplier. Dropshipping is easy to start and doesn't require a large initial budget compared to other business models.
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What is dropshipping?
Dropshipping is a way for you to sell products without storing the inventory yourself. You only buy products when you make sales. Your products come from suppliers who ship products to your customers on your behalf. These suppliers can be manufacturers, warehouses, or even family members who make products from their homes. This means that you don’t have to worry about product shipping, storing, or packaging.
This is how the dropshipping business model works:
Your customer purchases the product for $200 USD from your online store.
You purchase the product from the supplier for $150 USD and make a $50 USD profit.
The supplier ships the product directly to your customer.
Learn more about dropshipping features, benefits, and drawbacks.
How to start a dropshipping business
You can start your dropshipping business with Shopify and Oberlo. Shopify makes it easy to build an online store and process orders from your customers. Oberlo helps you find suppliers of products you want to sell, add products to your Shopify store, and ship products directly from suppliers to your customers once you receive orders.
You can run your store from anywhere in the world and you can sell products to almost any country. However, you need to be at least 18 years, have a credit card to collect payments from your customers in Shopify, and purchase products from suppliers in Oberlo.
Shopify is an ecommerce platform that makes it easy to set up and manage your online store, sell products added through Oberlo, collect payments, and manage orders.
Shopify provides you with beginner-friendly tools to build and run your online store so you don’t need to have extensive technical and design skills. For example, you can easily design the appearance of your store by installing a free or paid website template.
Oberlo is an app that lets you source products from AliExpress suppliers and gives you access to resources and courses on how to build an online business.
It takes just a few clicks to add products to your Shopify online store. Oberlo also makes it easy for you to edit product listing information such as title, description prices, and images. If you want to customize your products, such as add your brand logo to products and packaging, then you need to ask a supplier directly.
With Oberlo, you can place orders with just a few clicks. After you make a sale, you purchase the products from a supplier and they ship them directly to your customer. This means you focus on adding products to your online store, making sales, and placing orders without managing or investing in inventory.
How much it costs to start dropshipping?
Dropshipping business starting costs are usually low compared to other business models. There are no costs associated with inventory, warehousing, research and development, or retail space. This lets you focus your efforts on marketing and creating a good buying experience for your customers.
When starting your dropshipping business, you should expect the following expenses:
Shopify subscription (from 29 USD/month).
With Shopify, you build and run your online store. Shopify offers a 14-days free trial and multiple paid subscription plans.
Oberlo subscription (from 0 USD/month).
Oberlo helps you source products, add them to your Shopify store, and place orders. Oberlo offers a forever free plan and two paid plans to meet your needs.
Custom domain (from 14 USD/year).
A custom domain is optional, but it strengthens your brand and adds credibility to your business in the eyes of your customers.
Marketing costs (average of 250 USD for initial product testing).
Marketing costs depend on the market you target and which method you choose: free or paid marketing. Free marketing, such as engagement via social media, networking in local meet-ups, and building website SEO, may take more time to attract an audience and get sales. Paid marketing, such as Facebook, Instagram, and YouTube ads, influencer marketing, and TikTok, helps you quickly test the products that you're selling and different audiences.
Additional apps (some apps are free, while others charge a monthly fee).
Apps are optional, but they can help you drive sales and run your store more efficiently.
Tips on starting a dropshipping business
Here are some tips to help you start your dropshipping business:
Have a growth mindset.
Dropshipping is like every other business - you have to put a lot of effort and time to make it work. No one gets rich overnight, however, the more you try and learn, the more you will achieve.
Use a computer with an internet connection.
You need to have a laptop or a desktop, and an internet connection to be able to run a dropshipping business with Oberlo. Oberlo does not work on tablets or mobile devices.
Understand your responsibilities as a business owner.
When you start a dropshipping business, it’s important to understand the responsibilities you are taking upon yourself as a business owner: taking ownership of the products you are selling, handling customer support, managing returns and refunds, and others.
Sell a minimal amount of products.
It’s best to add just a few products (5-10) to your online store. In dropshipping, products are usually promoted and tested to a possible audience one after another to save time and money. You should put most of your effort into a few main products. Other products in your store can work as a background.
Define your goals.
You can get your first sale on the first day, after a week, or even after a month. Everything depends on your marketing activities and the amount of work you put into your store. It’s better to spend less time on the store setup but to put more effort into product research and marketing. Even without sales, every business you start teaches you a lot about marketing strategies, product markets, and how to manage your time and budget effectively.
Focus only on the essentials.
There are many useful and advanced features both in Oberlo and Shopify, however, you don’t have to set up everything at the beginning. It’s best to focus only on the essential settings and launch your store as soon as possible. To start building your dropshipping store, check out the essential dropshipping store setup checklist.
Understand the order fulfillment process.
Once you are done building your store, it’s useful to make a test order and order something for yourself to better understand the whole ordering process. Once you are familiar with the process, then you will feel more confident to place your first order.
Register a business entity.
Once you start making sales on your store, then you might have to register a business entity. However, this requirement varies from country to country, therefore, it’s best to check with your local legal advisor.
Learn more about preparing for a dropshipping business.