HOW TO START A PROFITABLE DROPSHIPPING BUSINESS IN 2020?
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| Dropshipping |
In 2020 starting a dropshipping business is so easy, but making it
profitable is a good task. In this blog, we will discuss, How to start a
profitable dropshipping business in 2020?
Starting a dropshipping business is a great first step towards entrepreneurship.
What is Dropshipping Business?
Dropshipping is a retail fulfilment method where a store
doesn't keep the products it sells in stock. Instead, when a store sells a
product, it purchases the item from a third party and has it shipped directly
to the customer. As a result, the merchant never sees or handles the product.
How does the Dropshipping business works?
There are three key players in the dropshipping business model: the
manufacturer, the retailer (you) and the customer.
The manufacturer’s role in a dropshipping business model includes creating
products, carrying inventory, shipping products to customers on behalf of the
retailer, replacing defective products, and restocking them. They sell products
to the retailer at wholesale prices assuming the risk of unsold inventory.
In the dropshipping business, the role of retailer (you) is to sell the
manufacturer’s products on your website under your own brand. You’ll be
responsible for choosing and marketing those products. You can set any shipping costs and set prices that make
you a profit.
Also, in the dropshipping business, the customer buys the products directly
from you, the retailer. If questions or issues arise, they contact the retailer
they bought the product from.
How Profitable is Dropshipping?
Dropshipping can be the most profitable business model, as you are not
responsible for the costs of shipping and manufacturing. Because of this
profits can quickly be reaped once you have found the right suppliers. You can
calculate your profit to ensure you are on the right track.
Is starting a Dropshipping business a good idea?
Yes, As dropshipping
business is a low-risk business model. When it comes to startup costs, you only pay for products that you sell to paying customers. You don’t
become overburdened with the cost of creating products, carrying inventory,
costs of maintaining unsold inventory, and the cost of employees for packaging
and shipping products. It’s a great entry into entrepreneurship as you can
start your own dropshipping business by yourself. It will require daily work
when it comes to processing orders. However, most of the order processing steps
are automated and require a click of a button.
Can You make money through Dropshipping?
Yes, you can make money through dropshipping. Dropshipping allows you to
find products you are passionate about, and set up a business selling them.
When you are motivated to sell products you are more likely to invest more time
into promotion and marketing, leading to more profits from your
endeavours.
Is Dropshipping worthy?
Yes, Dropshipping is worth the time and money you invest in it. If you
don’t invest time into your online business you will never be benefitted.
Dropshipping takes time as you need to set up a store, import products, decide
your pricing strategy, and starting selling. Nothing can happen if you don’t
put in the effort.
How to start a
Dropshipping business: The 6 steps Dropshipping business success key
Step 1: Choosing
a Dropshipping Business Idea
Truth is, what you sell matters. You should take some time to find the best
dropshipping business ideas. Most people tell you to pick a niche you’re
passionate about. But that’s only a half-truth. It’s about a combination of
profit and passion, skewed towards profit. The reality is the best dropshipping
business ideas are usually the profitable ones. It’s a lot easier to be
passionate when you’re actually making money.
If you’re set on coming up with your own dropshipping business ideas. You
should consider these points while starting:
1. Google Trends is great for knowing whether a niche is on an upward or
downward trend. However, on its own, it’s not enough to determine whether or not
a niche is viable. Some niches may be on an upward trend but don’t have enough
search volume to warrant its popularity.
2. Use Ubersuggest’s Keyword
Tool. What’s the search volume for a keyword? Or the competitiveness of it? Using Ubersuggest’s
Keyword Tool will help you understand the potential of your dropshipping business ideas, and give you additional ideas for the future.
3. Browse popular websites within your niche. For example, if you check out a fashion retailers website, they’ll often organize their store into trend categories. This helps you understand what trends you should be adding to your store right now. You can also browse a store’s best-selling products to help you find the best products to sell.
4. Check out the order volume for products. You can browse products based on their order volume to help you understand how popular a product really is. Don’t rule out dropshipping business ideas if they’re not as high as other products,
because those products could be newer.
Step 2:
Competitor Analysis
Once you have decided what to sell, you now need to educate yourself on Who
your competitors are?, What they sell,
and how they sell their products. There are many ways to do this.
1. Enter the name of one of
the products you want to sell into Google and do a quick search to see who shows up on top. The top ten results on Google or any other search engine will give you a good indication of your competition in a certain location.
If you are selling products in a location different from where you are based you can use third-party tools to gather data. Use tools like SEM Rush or Ahref to get information about search results in different locations across the world.
2. Search through Alexa or SimilarWeb to find niche competitors that might not show up high in general search results. These websites will give a summary of the websites you are searching for including their social media profiles, any advertising they are doing, audience and traffic information for their website, and a list of competitors for that business.
3. Hunt around on social media. You can gather more dropshipping business ideas by doing competitor analysis. You can also browse Facebook ads within a
niche and social media pages for top brands. How many followers do they have? How do they market their brand? How much engagement does their brand get? What can I do differently to stand out against them? What are they doing right that I should copy?
4. Know your competitors content and what performs better for them through the use of BuzzSumo so you can replicate. This tool will give you insight into what content gets the most social shares so you can find inspiration for new blog ideas.
Signing up to a competitor’s newsletters can also keep you on top of their
content if they share their blog content this way.
1. You should choose
suppliers on the basis of their reviews, ratings and how long the supplier has been on the platform? for each supplier and this should help you to make your decision on which supplier to choose?.
2. When you have a list of
five or six potential suppliers to choose from you can move onto the next
step which is contacting these suppliers to ask important questions like
minimum order quantities and shipping times.
3. By now you probably have reduced possible suppliers from a list of 5 suppliers to 2-3. The best way to make the decision now is to place a sample order with them for a
product and compare the results. Compare eCommerce shipping times, product quality, and packaging while making a decision,
keeping your customer in mind and what they will expect from you when
placing an order.
Step 4: Build a
Dropshipping business store
There are a few components to build a dropshipping e-commerce business store
the right way. Here are a few:
1. Domain
Name – Your domain name matters, especially if building a long-term brand. Always get a .com
domain, no matter what. If you want your niche as a keyword in the new domain make sure it’s broad like beauty, jewellery, fashion rather than very specific so you don’t need to change your domain name down the road. Also, avoid using your name as the domain for your store. If you ever sell your business, you could legally use the rights to your own name.
2. Web hosting: Good web hosting plays an important role in the speed of your website. So, be sure to choose a trusted and powerful Web hosting.
3. Choose a good platform:
Choosing a good dropshipping platform is very important. Choose the most comprehensive eCommerce platform in the market that is enabled with new features, tools, resources and apps being added regularly. You’ll find that it’s easy to use and run a business on these sorts of platforms.
4. Store theme: Choose a theme that is easy to navigate,
clean and gives a good experience to users. Themes can be changed over time. In the beginning, while you’re just testing out free themes do get the job done. Once you’ve started making some money, you can invest it in buying a new theme for better store design.
Step 5:
Marketing Your Dropshipping Business with Everything You’ve Got
So at this point, you’ve found your product and built your store, now’s the
time to market your dropshipping business. This is a crucial step in your
dropshipping business plan. You don’t need to be scared of putting yourself out
there. Getting your first sale is one of the best feelings!
If you’re just starting out, you’re probably on that super tight budget.
Here are few to get you started:
1. Facebook
Advertising: Facebook advertising is the most effective way of marketing these days. The conversion rates of Facebook Ads are found good than other social media sites. SO, It is recommendable to use Facebook Advertising.
2. Retargeting
Ads: If you’re really tight on budget you should focus on retargeting Ads because they keep the cost low. This ad works great if you have a store with a huge amount of traffic.
Maybe you’re marketing for free on Pinterest and getting a lot of traffic from there. Maybe you wrote a blog post on your website, featured influencers and now influencers are sharing your blog for free. With a
retargeting ad, you take that free traffic and it’s a lot more likely to convert into a paying customer. Even better than a standard Facebook ad.
Plus, it’s a lot cheaper.
3. Influencer
Marketing: Starting a dropshipping business will require you be a bit scrappy in the beginning. If you can’t afford to pay influencers their rates, trust me this is a good thing, you can offer them an affiliate commission instead. Why is this a good thing?
I learned the hard way that sometimes even a niche-specific influencer doesn’t actually convert. It’s almost like a shot in the dark. If you pay an affiliate fee for every sale, you lower the risk for your dropshipping business and it’s up to the influencer to convert the sale. Plus, you’ll get some pictures which will help increase your social proof for your brand. If the influencer has real followers, they could potentially make a
lot more money as an affiliate than they would’ve if they were paid a flat rate. Thus, giving them a chance to make even more money.
Step 6: Optimize
1. Once you have spent time building your website, brand, and marketing you
can start to analyze the results of your
hard work. You may find that certain marketing activities are hugely successful
while others are not so much. Or you can look at your pricing against
competitors and see if you could change things up a bit to make things more
competitive.
2. You can use tools like Google Search Console or Analytics to evaluate your
online traffic to make sure that traffic is increasing, not decreasing. If you
are using third-party tools for email marketing or social media reporting, set
up weekly or monthly automatic reports so that you will be reminded to analyze
this information regularly. Even a quick snapshot of data from a tool can be
enough to decide if a campaign is working or not.
3. Overall, the most important part of a successful online eCommerce store is
to test and optimize in order to increase the
revenue that you generate online. This makes sure that your website will not fall behind
best practices and keeps you ahead of your competitors too.
Conclusion
In this blog we have covered, How to start a profitable Dropshipping
business in 2019?. By applying some of the advice from this article into your
own online store, you work towards building an online empire of your own. If
you have questions along the way, feel free to leave a comment or reach out to
the Scientificatt on social media.
And remember, the best way to learn how to start a profitable dropshipping
business is by taking that first step to building it.
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