Dropshipping is a great way to get started in e-commerce and entrepreneurship in general. It’s fun and enables you to get practical experience with minimal financial risk.

The beauty of dropshipping is that it allows you to sell physical products online with virtually no upfront investment.

What is Dropshipping?

You’re likely wondering what is dropshipping and how does it work?

Dropshipping is a unique business model that works as follows:

  1. You list a product on your e-commerce store
  2. Customer buys a product from your e-commerce store
  3. You place an order for said product with your 3rd party dropship supplier, indicating your customer’s delivery address
  4. Dropship supplier ships the product straight to your customer’s door on your behalf, for a fee
  5. Your profit is the difference between your store’s price from step 2 and your supplier’s fee from step 4 (and any inherent fees such as credit card processors)

This business model is amazing because it requires no logistical effort on your end and you don’t need to tie up your cash in inventory – you can invest it in marketing and advertising instead.

The best way to learn how to start a dropshipping business is to hear it from someone who has real life experience in starting and growing e-commerce companies. Our team members at ZenRevenue have grown profitable dropshipping ecommerce stores and are here today to fill you in on how to start a dropshipping business successfully.

Here’s a very quick overview of the steps required to make money using dropshipping. These steps are based on our team’s personal experiences creating profitable e-commerce dropshipping stores for ourselves and for our clients.

Instructions on How to Start a Dropshipping Business

Select your Niche:

This is the first step and one of the most important steps. I assume you are looking to dropship products from AliExpress (although there are other options that I will not discuss here in the interest of time). I could go on a long rant about the intricacies of selecting a good niche but, in the interest of concision, here are some of the key considerations:

  • Make sure that YOU feel personally comfortable & confident in marketing whatever product(s) you choose to the target market — start by exhausting product categories within your sphere of passions or hobbies. This will make your marketing efforts more effective and authentic. If you don’t know anything about a target market, don’t try to sell to them – it likely won’t work.
  • Depending on your risk tolerance, you might consider avoiding products that retail for over $100 USD. This is because dropshipping suppliers are notorious for losing parcels in transit — so you probably don’t want to be stuck refunding customers for large ticket items.
  • Your product should be a reasonably small size, to make transportation easy. Consider selling products that fit within a shoe box.
  • Profitability — go to AliExpress & check the cost for the products you want to sell. Now go to Amazon or other boutique e-commerce shops that you will be competing with and check their retail price points. If you can make a decent profit margin on each unit, then it’s a viable product. If you can’t, then scrap the idea.

Create your E-Commerce Store:

Once you’ve decided on your niche, it’s time to build your e-commerce website. You can choose to make the e-commerce storefront yourself or hire a web designer to create an e-commerce website for you.

Common options for e-commerce stores are Shopify, Squarespace and Woocommerce integrated with WordPress. I personally recommend Shopify as it is very powerful and e-commerce oriented.

Load Products into your E-Commerce Shop:

Shopify comes pre-packaged with tons of incredibly useful plugins.

One plugin that I can’t recommend enough for quickly building out a dropshipping website is Oberlo. This plugin lets you quickly filter and import products from AliExpress directly to your storefront. Rather than combing AliExpress, downloading photos and copy & pasting data manually, this tool seamlessly does it all for you. Oberlo even offers automatic order fulfillment functionalities – check out its full scope of features here.

Once you’ve loaded your products into the shop, set up your retail price points and write all of your copy for each product. This process can be time-consuming depending on how many products you hold in your store. You could hire a copywriter to write compelling product descriptions to help you boost sales.

As a rule of thumb (this depends on your niche and target market), I’ve achieved optimum sales results by listing at least 50 products in the e-commerce store. This offers a decent variety to your visitors and conveys the message that you are in business.

Promote your E-Commerce Store:

Whether you opt for organic social media marketing or paid digital ads, you need to promote your store. This can also be accomplished with blogging and SEO efforts.

Dedicate your time to promoting the heck out of your new e-commerce shop but don’t spam! This will devalue your brand and put off potential customers. Share valuable content and authentically engage with your online communities and your audience will reciprocate with orders.

Once you get an order, make sure you show appreciation and go above-and-beyond to offer a personalized experience. I recommend sending a customized note to the buyer, thanking them for their order. You want each individual customer to tell their friends about your brand. This is how the real scaling happens.

Processing Orders:

Congrats on making your first sale! Now it’s time to make sure your product gets to your customer.

So your customer sends you a payment via your online payment gateway at your established retail price. You then take their contact info, sign into your AliExpress account, and order the respective product using the end customer’s name & home address (provided you haven’t set up automatic order fulfillment with Oberlo). You keep the difference between your retail price and the AliExpress product cost — this is your profit margin.

Note: make sure that you put YOUR phone number on the AliExpress order because if anything goes wrong in the delivery, you will want them to call YOU rather than your end customer.

Dealing with Product Returns:

In general, there is a relatively high chance of poor quality product or damaged products when it comes to dropshipping. It’s the cost of the business model — you don’t see the product at all so you’re ultimately leaving product quality control in the hands of your supplier overseas.

In light of this, I recommend offering a no-hassle returns policy on every order. If a customer is not satisfied with the product, they simply send it back to you and you refund the cash.

Agsin, it’s a cost of doing business but it will improve your on-page conversions if you offer such a guarantee.

Conclusion:

Dropshipping is fun and standing out from your competitors is the key!

Social media marketing goes a long way I’ve found — particularly Instagram marketing.

If you want any help getting started or growing your business once you get it up and running, please send me a message. I love seeing new e-commerce companies develop and I’d be happy to help you boost your sales.

Don’t forget to bookmark our digital marketing blog and follow us on Facebook, Instagram and Twitter!

Happy Selling!

Dylan

Dylan Bridger

Author: Dylan Bridger

Dylan is the Founder of ZenRevenue. He graduated from McGill University with a Bachelor of Engineering & has worked in marketing roles for multinational companies. He loves launching e-commerce shops, drinking coffee, listening to music & spending time with his girlfriend.