How To Start A Dropshipping Business In 6 Simple Steps

Dropshipping is hot for a reason: low startup costs, no overhead, and a super easy business model. This means you can launch your own dropshipping company and be your own boss. Plus, you can sell tons of different products without ever having to buy or store any of them yourself!

Starting a dropshipping business is easy! This guide will tell you exactly what to do. We’ll walk you through the steps, show you useful tools, and discuss what to think about before you get started.

What Is Dropshipping?

In dropshipping, you sell products without ever needing to store them yourself. When a customer buys something, you tell the supplier to ship it directly to the customer. The supplier packs and ships the product for you, acting like your behind-the-scenes partner.

The dropshipper acts like a marketer, connecting the customer to the manufacturer. The customer pays the dropshipper, who then pays the manufacturer or distributor. Finally, the manufacturer or distributor ships the product directly to the customer. This keeps things simple!

No inventory means low costs! Dropshipping lets new business owners sell products without much overhead. This also saves you from getting stuck with unpopular items that won’t sell.

Here’s how to start a dropshipping business in six steps:

1. Choose a Business Concept

No inventory means low costs! Dropshipping lets new business owners sell products without much overhead. This also saves you from getting stuck with unpopular items that won’t sell.

Start a skateboarder T-shirt business! Design cool graphic tees that skateboarders love. Make sure the shirts are high quality and stylish, just what skaters wear.

Picking a great product concept is key! It affects everything you do, from your website design to how you market your products. But don’t worry, dropshipping is pretty forgiving. If you pick something wrong or your interests change, you can easily switch things up since there’s not a lot of money upfront involved.

2. Source Products

Don’t jump straight to building a website! Before you invest time and money, research products that fit your target audience. Find several distributors that sell the same items. This way, you can compare prices and get the best deal for your business.

Some of the most popular marketplaces are:

Flipkart
Amazon
Indiamart
OLX
Myntra

Looking for custom clothing, homeware, or books? Print-on-demand companies can take your design and print it on a variety of clothes, like T-shirts, socks, and jackets. You choose the item, create your design, and the company prints it for you.

Choose a product that you get excited about, has a good margin for profit and displays nicely in the images shown on the website. Many of these suppliers also provide statistics of popular items so that you can choose things that are more likely to sell because there is already a market for them.

3. Select Suppliers

Once you find the products you want to offer, it’s time to choose the supplier that will be the actual company to ship the products to your customers. There are a few things to consider with the supplier you choose:

Quality: Choose a supplier that offers the quality you want your company to represent. One business model is to charge more for better quality products. This is in contrast to being a discount provider of goods that might not be the best quality. How do you want to position yourself?
Profitability: You should be able to make a reasonable profit on the product. Consider shipping and transaction costs in your calculation. Most dropshippers look to get 15% to 20% in profit margins. Of course, if you can generate higher profit margins, that’s great.
Reliability: You want to choose a supplier that sends products in a timely fashion with reasonable shipping expenses and times. Many suppliers are overseas, and you’ll have to determine whether or not you want your customers waiting for products. You also need to have a supplier that keeps a product in stock since it is frustrating for you and your customer to have an order that can’t be filled. The best way to check for reliability is to order a few products from the supplier and note the process.
Return policy: When possible, find a supplier that offers a return policy. Many don’t, so you need to check on this before making any final decisions. You need to think about how you state your own return policies based on what the supplier offers.

4. Build an Online Store

You’ll need to build an e-commerce store to sell your products. An e-commerce store is a site that is designed to help you display the products for sale in a pleasing way while possessing the shopping carts necessary to run the purchase transactions.

Building the store can be tricky for a newbie. The reason is there are a few moving parts.

To build a website you will need:

A content management system – (CMS), such as WordPress, Shopify or Squarespace
A domain name
Web hosting (if using WordPress)
Integrations with your chosen dropshippers
A built-in payment gateway to accept online payments

The best e-commerce websites automate the sale of the product with the order to the supplier. If this step is not automated, you’ll be manually entering in orders every day, which can be cumbersome and lead to errors. Shopify is one of the leading choices for those building a dropshipping business. However, it’s not the only option available so it’s worth learning more about the best e-commerce platforms.

Additionally, you may also want to consider selling your products through other platforms, Amazon or even social media (i.e., Facebook or Instagram). Multi-channel selling helps your business gain exposure and drive more sales, so it’s generally advisable to do so. That is, if you have the bandwidth to manage multiple selling channels.

5. Register Your Business

Registering a business in India is an essential step towards establishing a legal and recognized entity. The registration process provides the business with legitimacy, legal protection, and access to various benefits and opportunities. To register a business in India, one must choose a suitable business structure, such as the following:

Sole proprietorship
Partnership
Limited liability partnership (LLP)
Private limited company
Public limited company

The registration process typically involves obtaining a unique identification number, such as the following:

Permanent Account Number (PAN)
Tax Deduction and Collection Account Number (TAN)
Registering for Goods and Services Tax (GST)
Obtaining necessary licenses and permits

It is advisable to consult with a legal professional or company registration service provider to ensure compliance with all applicable laws and regulations during the registration process. By completing the registration process, businesses can operate legally, gain credibility, and access a range of opportunities in India’s vibrant and diverse business ecosystem.

6. Market Your Business

You can’t just set up a website and expect thousands of people to find it. You need to market the new business. Because it is online, you will likely go beyond the word-of-mouth marketing that you’d do with other businesses in your community.

Join social media groups that are relevant to your business and start participating in a productive way. Don’t just try to sell; help people with questions that they may ask. Become an expert in the community to be seen as a resource. People will find your business through this. Have specific business pages on Facebook, Instagram and other social media platforms. Post regularly about new products, sales or tips and tricks in your focus industry.

On top of your social media efforts, you may want to invest in actual ads and sales. You can run Facebook Ads on small budgets that target specific demographics. Think about starting an ad campaign with a INR 500 per day budget to drive traffic to your e-commerce store.

You can also write a blog that helps consumers find you through search engine optimization (SEO) tactics. For many new e-commerce stores, doing a little bit of each of these marketing strategies is the key to getting enough eyes on their store to convert to buyers.

Test Products To Gauge Interest In Them

The great thing about dropshipping is that you can test new products to see if the market has an appetite for them. This is easy to do and doesn’t cost you much more than the time to update your store and announce a new product.

Work with your suppliers to see what new products are coming out that might fit your demographic. Then choose one product at a time to launch. If you feel strongly about the product, establish a marketing budget for it. Run an ad campaign specific to the new product and see how it fares compared to the rest of your products online.

Dropshippers should always be testing new products. This helps sell more items to existing customers who already bought and trust your brand. It’s easy and cost-effective to do and should be part of your ongoing business development.

Bottom Line

Just about anyone can open a dropshipping business by using marketplace suppliers and templated websites. It doesn’t have a lot of overhead to start, and you can quickly begin to turn a side hustle into a main gig with the right line of products that appeals to a specific demographic. You can be a business owner for as little as one lakh and grow from there.