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Hackernoon logoWhat Is Dropshipping? How to Start? by@lanamiro

What Is Dropshipping? How to Start?

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@lanamiroLana

I’m falling in love with beautiful web design. I like to share my experience and explore something i

Hi! Any chances you want to dropship? Sounds great unless you don’t fathom where to begin.

Today, I invite you to drill into dropshipping. You’ll learn in what ways your e-store can win from using this model. You’ll also get acquainted with the most popular ways to fire up a drop shipping business. 

What Is Dropshipping? 

There are several ways you can get your goods to your clients. If you’re smart enough, you can invent schemes that will help you to eliminate certain expenses and subsequently make great strides and vie for supremacy on the web. 

One of such schemes is dropshipping. Let’s see how it differs from the commonplace model.

When you have a traditional e-store, you do the following:

  • First, you buy goods, which you’ll be selling, from their manufacturers;
  • And you store those goods inside the bought or rented warehouses;
  • Then, you open up an e-shop and start offering goods you have in stock;
  • When an item is bought, it’s delivered from the storing facility to your client.

In the case of this model, we can see just two sides involved in every transaction: you, the drop shipper, and the buyer. However, to get started you need enough seed money to massively buy the items you’ll be selling in advance. You also should be able to afford a warehouse and hire staff. 

If you can’t get all this at once, you should look for more affordable options. This is where dropshipping steps in. It functions the following way:

  1. You make a deal with the maker of the product. 
  2. You design an e-store and go live offering the products by this supplier.
  3. When someone buys a product, you put order details through to the producer. 
  4. Product is sent to the buyer by the producer;
  5. You monitor product delivery and assist with any issues. 

Now, you have not two sides to each transaction but three. You serve as an intermediary, facilitating the process of purchase. At the same time, you eliminate the unwanted expenses. You don’t have to buy any goods in advance. 

You don’t have to rent out a storing facility. And you don’t even have to hire any staff. These are the main arguments in favor of finding dropshipping an appealing business model

Source: ChinaBrands.com

Dropshipping Draws

As you can understand so far, there’s a number of dropshipping draws, such as:

  1. This supply chain model requires very little seed money. Therefore, you, the drop shipper, do not bear any risks. You will give money to the supplier only after you get the money from the buyer.
  2. You no more need warehouses for trade. All you need to earn an income is a computer with Internet access. You can work from any geographical location.
  3. All the concerns associated with sending the goods are handled by the supplier. You don’t have to hire staff to work in warehouses.
  4. You have the opportunity to cooperate with several producers at once (if your contract doesn’t say otherwise), thus increasing the range of goods you sell, as well as your client pool.
  5. The supplier sends the goods on your name. This lets you create a strong brand presence you can promote on the web.

Disadvantages

As with any other online business, there are, of course, certain risks associated with dropshipping. Let me help you clearly see what these shortcomings are. For example:

  1. The item ordered by the customer may be not in stock on the producer’s side. In this case, there will inevitably be delays, refund requests and customer disappointment that you’ll have to face instead of the producer who actually failed.
  2. While the product is being delivered, it may run into issues going through customs. You'll be held responsible to solve these problems.
  3. The quality of the item sold may not satisfy the client due to objective or subjective reasons. You'll have to deal with this as well.
  4. In some parts of the world, this business model works poorly when the supplier and the buyer are in remote regions. The success of online stores often depends on the speed and cost of delivery.
  5. This supply chain model has a lower barrier to entry. This pretty much suggests that entering certain niches will be tough due to the strong competition in the market.

Source: KBeauty.my

Is It Still Profitable?

No doubt, dropshipping isn’t something new. Despite the fact that this concept has been around for years, dropshipping is still pretty profitable. It is still one of the best ways for a new person to get started with making money online.

A debate on dropshipping business profitability on the FastLane forum.

If you want to determine if something is still popular, just Google the trend. Here’s what I get for dropshipping:

Source: Google Trends

So, dropshipping is still hot. However, don’t just think that you can get an ecommerce business running without investing much effort into it. You can’t just list your products on the e-store pages and start receiving profit. 

Before you delve into the world of drop shipping, you’ve got to first get a firm understanding of what dropshipping products are profitable. You should also teach yourself the techniques of marketing your store. So, this will take some time till a complete newbie learns the tricks of dropshipping and develops a successful business. 

How big can you grow if you dropship?

Read the success story 'Hitting 500k in Sales after 10 Months of Drop Shipping'.

You’ll learn about the main components of real dropshipping success. 

When To Dropship? 

'To dropship, or not?' is a good question. Let’s see some stats to come up with the right answer:

  • 33% of all online stores use dropshipping;
  • It’s predicted to grow even bigger. With e-commerce increasing 17% per year, the share of drop shipping business in online transactions is bound to increase. 
  • In 2017, 23% of all sales involved dropshipping. This brought about $85 billion dollars to drop shippers. 

However, again, dropshipping is niche sensitive. This suggests that you should generally choose the niche and dropshipping products that will be popular amongst the online audience. 

There’s a number of niches that are profitable for online stores that dropship:

  • Wireless devices;
  • Mobile bars;
  • Sportswear;
  • Wearable devices;
  • Baby care products;
  • Video & photography lights;
  • Wall stickers;
  • Smartwatch accessories;
  • Men’s grooming and personal care;
  • Pet products.

If you don’t find your niche on this list, take a look at the competition on the Internet prior to making a final decision to start your online store. Your product has got to be appealing and in demand. It should be in some way unique to put the competitors aside and develop into a successful business. 

If there’s next to no competition, it may be the case your niche has few potential customers. Try to broaden the range of goods you offer to appeal to a wider client pool. If the competition is, on the other hand, too intense, make sure that you offer some unique value to your clientele. This value will make them prefer your dropshipping store to others. 

Source: Ali2woo.com

Geography of Dropshipping

Your geographical location also matters a lot if you’re planning to dropship. Here’s the list of most popular drop shipping destinations:

  • USA
  • Canada
  • Australia
  • New Zealand
  • UK
  • Spain
  • Germany
  • Austria
  • Portugal
  • France
  • Italy
  • Norway
  • UAE

According to the analysis of ShippingEasy clients, Canada, the United Kingdom, and Australia are by far the most common international destinations for drop shippers.

Source: Ecommerce Platforms

What Platform To Dropship With? 

Creating a digital store, you’ll need an e-store engine to run your shop with. No doubt, you can use a bunch of e-store platforms to facilitate drop shipping. WooCommerce is the most popular of them. As many as 21% of the top 1 million e-commerce sites are using WooCommerce. On a global scale, WooCommerce holds the palm of supremacy, outscoring Shopify stores by 4%. 

Source: BuiltWith

Learn More About Shopify Themes for your Store.

There’s a number of advantages that make WooCommerce a top option for drop shippers. For example:

  1. Drop shippers are often on a budget. WordPress + WooCommerce combo will be a good match as both the engine and plugins are free.
  2. WooCommerce plugin was created by Automattic, the fathers of WordPress. That’s why the quality of this well-coded plugin is really supreme. 
  3. Easy to finetune, WooCommerce is a comprehensive option for those who value their web design freedom.
  4. At the same time, there’s a large number of themes available for WooCommerce dropshippers. Drop by here and see the top WooCommerce Themes.
  5. Unlike other solutions, WooCommerce caters to selling all kinds of goods with no restrictions.
  6. Extensions for WooCommerce are typically free or way cheaper than Shopify store extensions. 
Want to learn more about attracting potential customers and other hacks of drop shipping? Then, check out this article.

You’ll get all of them listed and explained. 

Over To You

Now, the question 'What is dropshipping?' was answered and you can determine whether its a good option for you.

Double Check the niche you’re choosing, pick unique goods to sell, go for high-quality web tools and you’re bound to have a top-notch store you’ll be happy with. 

Which tools would you use to dropship with an e-store?

Share your thoughts below. 

Stay tuned for more!

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