This is an A-Z guide for dropshipping beginners who want to start an online eCommerce business in 2021.
What is dropshipping?
Dropshipping is a business model where a retailer never fulfills orders manually and instead tasks a supplier to ship products on their behalf. Essentially the retailer acts as a “middle man,” often listing items on their website at a profitable margin while purchasing said items from a supplier at a cheaper rate.
Dropshipper will build an eCommerce site and list all the products to which they have access. Then when they receive a purchase, they would buy the product and list their customers’ credentials as a shipping address. When the customers receive their orders, they would be reimbursed by the Payment Gateway they’ve installed on their website.
In other words, it is a newer form of albatross marketing. All requests are satisfied and transported directly from a wholesaler, such as CJ Dropshipping. This enables the dropshipper to focus more on building your brand, advertising, and driving sales.
Thus, dropshipping provides you a way to easily start a business at a relatively low cost. You do not have to pull a loan and go into debt buying inventory. You don’t have to deal with the cost of renting, managing, and maintaining warehouses, either. The only question you should be asking yourself is “how soon can you feasibly start your own business?”
Is dropshipping still profitable in 2021?
Dropshipping is still profitable in 2021 because of the number of eCommerce activities taking place around the world. It is not only profitable but thriving!
Search the term “dropshipping” on google trends, the result shows that over the past 5 years, the searching trend of dropshipping went through an upward spiral, it reached a new peak at the start of 2021.
The global market size of dropshipping is expected to rise from $122.3 billion in 2019 to $149.4 billion by the end of 2020, while the space for dropshipping is expected to have a compound annual growth rate of 28.8% from 2019 to 2025, reaching USD 557.9 billion by 2025. The potential market is huge.
Step by step on how to do dropshipping
This part is a detailed guide on how to set up a dropshipping business, step by step, and easy to follow. Stay tuned if you are interested in dropshipping.
Step 1: Choose a Platform to Create Your Store
To run a dropshipping business, you don’t need to rent a storefront to display and stock your goods. Instead, you need a platform to build up your online store, and import products from suppliers.
Types of platforms
Commonly speaking, there are 2 types of platforms to create your store: one is independent store platforms like Shopify and WooCommerce; the other is online marketplace platforms like Amazon and eBay. Since Amazon has a new policy that restricts dropshipping model from the beginning of 2021, CJ Dropshipping stopped integrating with Amazon.
Apart from these two major types of platforms, there is a new emerging platform known as a social eCommerce platform like WED2C, with which you don’t have to build a store, you don’t need to create pages, you even don’t need to handle the customer service. Just share the product link with your friends or followers, once they buy through the link, you gain the commission.
Learn more about how WED2C works: WED2C: A Social E-Commerce Platform for Everyone
|Pros & Cons||Independent stores||Online marketplaces||Social eCommerce|
|Pros||You own the website||The website owns flow||No start-up cost|
|You are able to access the customer list||Top search result by Google||Need not marketing strategy|
|Higher profit compares to eBay/ Amazon||Low start-up cost||Easy to start, you don’t need to build a store|
|Relatively substantial income at the beginning stage||Less competition|
|Cons||High start-up cost to build a website||Strict shipping time frame||Hard to scale|
|Require Marketing Strategy||Can’t direct contact with customers||Limited product listings|
|Need to have a fulfillment supply chain||High competitive for hot selling products|
Top eCommerce platforms (★=recommendable)
|Independent Sites||Shopify★★★★★||Top e-commerce platform that enables individuals and businesses to create online stores|
|WooCommerce★★★||A popular WordPress plugin that enables site owners to create and run online stores. It is an open-source system with many templates available to help get you started.|
|Magento||An open-source platform created in 2007 developed especially for running and building online stores.|
|SquareSpace||A web platform for building websites of all kinds, including online stores. There are many attractive templates to start with, and each is highly customizable.|
|Wix||a popular closed platform for creating all types of websites, online stores among one of them. Building a Wix based online store is easy, anyone who enjoys learning different interfaces can use it.|
|BigCommerce||A statistics lovers’ dream and considered by many as the best-closed platform for online stores. With BigCommerce, you can relish in the nitty-gritty of every component of your e-Commerce store.|
|Online marketplaces||Amazon||The biggest online retail platform, not dropshipping friendly|
|eBay★★★||Items may be bought for a fixed price, or sold to the buyer who offers the highest price|
|Etsy||An American e-commerce website focused on handmade or vintage items and craft supplies|
|Lazada||Popular in Southeast Asia|
|Shopee||Popular in Southeast Asia|
|Social eCommerce||WED2C★★★★★||Start e-commerce with 0 cost: if you are a new dropshipper or you do not have a website or do not want to cost too much on building a dropshipping store you can choose WED2C to start your dropshipping business for free.|
Read More: Top 9 Best Dropshipping Ecommerce Platforms
Step 2: Find a niche to start with/Select products for your store
Making product research and selecting a niche/product to start with is an extremely important step in starting a dropshipping business. This niche that you select can make or break your dropshipping business.
Criteria of a promising niche
Dropshipping has specific criteria for picking a niche/product, there are many differences from picking a niche for a local store. Here are some criteria for reference.
Features of a good niche for dropshipping:
- Niche with a variety of products
- Products that customers can wait for due to their uniqueness or much lower price
- The target consumers are wide
- Products that have low shipping costs and risk
Features make a niche bad for dropshipping:
- Products that are too personalized
- Products that have brand loyalty
- Products that have potential hazardous to health or personal safety
Ways/where to find a good niche
- Finding niches on popular eCommerce platforms
- Local stores research
- Doing market research by Google
- Finding hot niches from Facebook, Instagram, and Pinterest ads
- 5 Ways to Find a Good Niche for Dropshipping
- How to Select Profitable Niches For Dropshipping?
- How to Find Your First Profitable Product? 8 Strategies for Finding Winning Products | Tips for Beginners
Sites & tools help you to find winning product
Find a handy tool with useful functions that can save tons of time in product research and data spy on your competitors. There are many sites and tools providing overall data of trending products. We picked some top sites for reference.
- Google Trends: A website by Google that analyzes the popularity of top search queries in Google Search across various regions and languages. ★★★★★
- Ecomhunt: This allows you to easily find products that are already proven to sell. ★★★★
- Commerce Inspector: Track any Shopify store’s product launches, best sellers, traffic, sales, ad campaigns, apps, and more. ★★★★
- Ecomlad: Helps you to discover viral products for your store.
- Niche Scraper: Spy on winning products. ★★★★
- Sell The Trend: A.I. product discovery app
More to read:
- 12 Websites to Find Trending Products for Dropshipping
- Find Winning Products from Facebook Ads & Typical Examples Study
- Find all the dropshipping tools you need in seconds – Dropshipping dictionary
Step 3: Create a store
It takes 2 hours to 2 days to create a store. Creating a store on online marketplaces usually takes less effort because it’s always easy and there will be step by step setup guide. So we’ll take how to create a store with Shopify as an example.
Add the products you want to sell
Adding products should be one of the first things you do because your products are what you’ll design the look and feel of your website around.
Pick a theme and customize your online store
- Choose a theme
- Design your homepage
- Customize your navigation menus
- Set your colors, typography, and other theme settings
- Customize your checkout
- Ask for feedback
Customize your shipping settings
Offer free shipping. Free shipping can be an effective incentive for customers to shop with you, whether it’s applied to certain products, order amounts (e.g., if they spend over $50), or regions of the world.
Charge real-time carrier rates. Shopify integrates in real-time with various carriers like USPS and Canada Post to generate shipping options and live to price. This allows your customers to choose the exact service and price they want.
Charge a flat rate. Flat rate shipping works best when your products have similar sizes and weights, making actual shipping expenses easier to predict.
Offer local pickup/delivery. You can also give local customers the option to pick up their online orders at one of your locations, setting specific notification settings, pickup instructions, and other details for each location.
Set up your payment gateway and payouts
Next up is deciding how your store will accept payments and how you as a store owner will get paid.
Shopify has made it easy to start accepting all major forms of payment with Shopify Payments. You can also choose from over 100 third-party payment providers here or offer your customers additional payment options, such as PayPal.
Prepare your store for the launch
- Adding a custom domain
- Installing relevant sales channels
- (Optional) Customizing your email/SMS notifications
- Setting up your store for marketing (tracking and analytics)
Launch your store
Now you can tell the world you are open for business.
View the entire guide: How to Start an Online Store with Shopify: A Step-by-Step Guide
Find more dropshipping sites & tools on cjdropship.com
Step 4: Choose a Supplier
Finding the right suppliers is one of the most important aspects of starting a dropshipping business. Sellers are dependent on the third party, such as wholesalers, suppliers, and distributors, that handle the fulfillment of the orders.
Thus, it is important to realize that dropshipping suppliers’ quality and overall reliability decide the future of a dropshipping eCommerce store. As a bad supplier can destroy all the hard work and credibility that you have achieved, a good one will multiply your shop’s value.
How To Find Dropshipping Suppliers
Contact the Manufacturer: Contacting the manufacturer is an easy way to find legitimate wholesale suppliers. You can call the leading manufacturer of the products that you want to sell and ask for a list of its wholesale distributors. Then you can contact these wholesalers to see if they dropship and inquire about setting up an account.
Use Google Search: It is obvious that you can use Google search to find good suppliers. However, you’d better search extensively for the reason that they may be bad at marketing and promotion. And you should use various keywords to search, such as “distributor”, “reseller”, “bulk”, “warehouse”, and “supplier”.
Join Industry Networks and Groups: Industry networks and groups are other effective resources to find suppliers. The people who join industry networks and groups prefer to share, learn, and grow. You can gain valuable insight from them after you join and become part of the dropshipping community.
Place Order From the Competition: You can find a dropshipping competitor and place a small order in the store. Google the return address to find out who the original shipper was as soon as you receive the package. In some cases, it will be a supplier you can contact.
Popular dropshipping suppliers
- CJ Dropshipping: The best professional dropshipping supplier with fast shipping times and warehouses over the world
- Doba: A US-based dropshipping website, it works well with eBay, Esty, and Amazon
- AliExpress: Global retail platform, has large supplies
- Spocket: Suppliers based in the US and EU
- Printify: Print on Demand supplier
- SaleHoo: A powerful research tool, supplier directory, and online community for dropshippers
- How to Find and Work With Reliable Dropshipping Suppliers
- Popular Dropshipping Supplier Websites/CJ Dropshipping/Aliexpress/Spocket/…
Step 5: Draw traffic to your site
Traffic is the most important matter in your dropshipping business. Traffic generation can help an online eCommerce store to skyrocket sales and earn more profits. And according to the State of Inbound, generating traffic and leads is the leading challenge facing companies today. If you want to get sales, you must have visitors who enter your store and show interest in your products. It is necessary to know about the different ways to drive traffic to your dropshipping stores.
Six Popular Marketing Strategies for Dropshipping in 2021
Social Media Marketing: If you’re out to do marketing for dropshipping, then you shouldn’t neglect the power of social media. There’s more to merely posting on your social media accounts daily. It would be best if you came up with a plan that actually works.
Run Facebook Ads to Suit Your Dropshipping Marketing Plan: With over 2 billion monthly active Facebook users across the globe, dropshippers have a wide audience to reach. While there are other Facebook marketing alternatives, most dropshippers can’t leave Facebook completely because of the diversity and richness of data it gathers. You can narrow your targeting to hit the exact audience you need.
SEO: If you’re truly committed to making your dropshipping marketing process yield better results, then SEO is inevitable. Without a doubt, you’ll not get results immediately, but the long-term benefits are immeasurable. SEO becomes your best bet if you want to keep your acquisition cost at a low spot.
Read More: 25 Ways to Increase Traffic to Your Website
Email Marketing: If you’re looking for how to advertise dropshipping products, you can’t overemphasize the importance of email marketing. It drives fast and long-term results. You can capture the emails of your site visitors within the first 15 seconds of landing on your site. Use compelling email pop-ups that offer them discounts, free guides, ebooks, and coupons, among others to entice them to input their emails.
Influencer Marketing: Influencer marketing is a major source of traffic, in addition to Google ads and Facebook ads. Instagram, YouTube, Snapchat, etc., are the leading platforms that work for the “converting influencer power effect.”
Affiliate Marketing: Affiliate marketing is the process by which an affiliate earns a commission for marketing another person’s or company’s products. The affiliate simply searches for a product they enjoy, then promotes that product and earns a piece of the profit from each sale they make. The sales are tracked via affiliate links from one website to another.
Step 6: After-sale service
What is an after-sale service?
After-sales service is of great importance to not only retain the existed customers but also to bring back lost customers. After-sales service could be defined as the processes which are followed post the sale of the product. The nature of the services includes maintenance, guidance, repair, etc.
How to provide a good after-sale service?
Know the target customers. To do it, you should begin by finding those who own the greatest number of your products and who have the greatest demand for aftermarket parts and labor.
Know how to sell service contracts. In order to sell service contracts to your customers most effectively, you should know how to explain the benefits of the contract to the customer.
Develop Reliable Procedures and Invest in Training. Invest in training your technicians to explain to your customers how and why these procedures are vital. It’s important, also, to have established processes to assess the efficiency and productivity of your technicians.
Develop Efficient Stock Handling Processes. Know which parts you need to keep on the shelf and make sure that enough of those parts are always on hand.
Nurture Customer Relationships. Use data to track the performance of the program for each customer, and work quickly to correct any problems as they occur.
Stay in it for the Long Haul. The goal of an after-sale program is to foster customer relationships that grow and add to your bottom line over time. You’ll have to view it as an ongoing process that demands constant attention and refinement.
Step 7: Branding
What is POD?
Print-on-demand (POD) allows businesses to order print materials on an as-needed basis in a piecemeal fashion. It is a process in which you work with a supplier to customize white-label products with your own designs to sell them on a per-order basis under your own brand.
The Advantages of POD:
Easy Set-Up: You don’t need to hire the best web designers to get your print-on-demand business up and running.
Low Startup Cost: With traditional businesses, you must have a good stock of cash to purchase inventory and get your store up and running.
No Inventory Management: Your supplier handles pretty much everything from order printing, packaging, and shipping which means you don’t need to handle any amount of inventory.
Ability to Customize: One of the biggest advantages of print-on-demand is that it gives you a chance to create and sell unique designs.
Scale & Test with No Risks: With print-on-demand, you aren’t directly involved in printing or production so there’s no major monetary investment from your side.
- How to Dropship POD Products: Bring Value to the Customer
- Why You Should Choose POD Products over Normal Ones
Custom packaging uses bags or boxes that are specifically tailored to your company and the product your company is making and shipping. It aims to fit the product perfectly and is designed to protect the product better than standard and generic packaging. Plus, it renders your band impressive.
Benefits of custom packaging:
- Increased brand value.
- Better customer experience.
- Better product protection.
CJ Custom Packaging: CJ offers everything you need to create your own brands. And in order to help dropshippers build a brand and give consumers a better experience, CJ updated the custom packaging system. Through the new version, you can get more options and a better experience.
Here is the youtube tutorial about How to Use CJ Custom Packaging 2.0.
Dropshipping has brought prosperity to many dropshippers. However, it is not too late to start your own dropshipping business; carefully reading through this informative article will help you get started. Don’t forget to check out the branding section to build your own brand as well.