How To Start A Dropshipping Business

These last few years have been very exciting for entrepreneurs or companies looking to build an e-commerce business. A decade ago, launching an e-commerce platform, integrating your payment processing, calculating local, state, and national tax rates, building out marketing automation, integrating a shipping provider, and bringing in your logistics platform to move a product from sale to delivery took months and hundreds of thousands of dollars.

Launching a site on an e-commerce platform can be accomplished in hours rather than months. Most have payment processing options built right in.

What is Dropshipping?

Dropshipping is a business model where you, the retailer, don’t have to store or even handle any stock. Customers order products through your online store, and you alert your supplier. They in turn process, package, and ship the product directly to the customer.

What is Dropshipping?

The global dropshipping market will reach almost $150 billion this year and should more than triple within five years. 27% of web retailers have transitioned to drop ship as their primary order fulfillment method. Not to mention 34% of Amazon sales were fulfilled using a dropshipper in the last decade!

With dropshipping platforms, you can begin designing and selling products immediately. There is no need to handle stock or worry about production… your dropshipping business is simply you managing, optimizing, and promoting your products online with no other complexity.

Dropshipping Statistics

The dropshipping model has showcased impressive growth and resilience in recent years, with data pointing to a prosperous future:

• The dropshipping market value stood at $149.4 billion in 2021 and is expected to surge to $557.9 billion by 2025. This growth is indicative of the model’s increasing adoption and success.
• 27% of web retailers have integrated dropshipping into their business operations, exemplifying its widespread acceptance.
• Dropshipping plays a significant role in e-commerce giants like Amazon, where 34% of sales were fulfilled using dropshippers in 2021, highlighting the model’s scalability and integration with major online platforms.

How To Start A Dropshipping Business

1. Find Your Niche and Products: To carve out your space in the market, select a niche that aligns with your interests and market demands. Utilize tools like Google Trends, Facebook Audience Insights, and TrendHunter to identify promising products.
2. Choose a Supplier: Establishing a relationship with a reliable supplier is critical. Consider ordering samples to assess quality, and be mindful of the supplier’s location and shipping policies to ensure a smooth operation.
3. Sort Out the Legal Side: Ensure your business is set up properly by applying for an EIN (Employer Identification Number), registering your business, and addressing any tax obligations.
4. Pick a Sales Channel: Your platform is your storefront. Options like Shopify, BigCommerce, and Amazon are popular choices for launching your online store.
5. Start Marketing: Dedicate significant effort to establishing your brand and marketing, with a recommended 75% of your initial budget allocated to this area. Building a strong online presence is crucial for attracting customers. Marketing automation platforms like Klaviyo, Omnisend, or Moosend bolt right on without anything but the click of a button.

Dropshipping Mistakes To Avoid

Because margins are thin and support can be expensive, there are three reasons why dropshipping businesses often fail:

• Not Investing Properly: Underfunding your business can stifle growth. Ensure adequate investment in marketing and customer service to build a sustainable operation.
• Ignoring Customer Support: Excellent customer service is the backbone of any retail business. Neglecting this aspect can lead to dissatisfied customers and harm your reputation.
• Rushing Into Paid Advertising: While paid advertising can be effective, it’s important to understand your market first. Premature investment in ads can lead to wasted resources.

Dropshipping Myths

Plenty of myths surround dropshipping, most spread by competitors or the dropshippers themselves… here are the top three:

1. Dropshipping is dying out. This is untrue, as the model continues to thrive, as indicated by the sustained interest in Google over the years.
2. Dropshipping is super easy. Although dropshipping isn’t overly complicated, it demands effort and commitment to succeed.
3. Dropshipping is a ‘get rich quick’ scheme. Patience and persistence are key, and while some may find quick success, it’s not a universal outcome.

Pros and Cons of Dropshipping

Dropshipping could be a viable business model if you have an existing online presence, a clear vision for a niche market, and a readiness to invest in marketing and customer relations. It’s particularly appealing if you’re looking to start with a limited budget and want to avoid the complexities of inventory management.

If you are unprepared for the competitive nature of dropshipping, the need for persistent marketing efforts, and managing the potential customer service challenges, it might not be the right fit.

Dropshipping Providers To Work With

Here’s a variety of dropshipping providers to get you started:

• Printful – a print-on-demand service that allows businesses to sell custom products online without needing inventory. They offer a wide range of products that can be customized with designs, including t-shirts, hoodies, mugs, and more. Businesses of all sizes have trusted Printful and provide reliable shipping through carriers such as USPS, DHL, FedEx, and Asendia. With Printful, sellers can quickly turn their ideas into premium products and strengthen their e-commerce brand.
• Spocket – is a platform that connects dropshippers with thousands of suppliers worldwide, offering a wide range of original US/EU products. With Spocket, dropshippers can easily find winning products to sell, benefit from up-to-date inventory, and access high-quality products with great profit margins. The platform integrates seamlessly with popular eCommerce platforms like Shopify, BigCommerce, Wix, and WooCommerce, allowing easy order fulfillment. Additionally, with 80% of their dropshipping suppliers based in the US or Europe, Spocket ensures super-fast and reliable shipping.
• Supliful – specializes in the health and wellness sector, offering entrepreneurs and influencers to create and sell branded supplement products. With Supliful, users can select from various FDA-compliant, nutritionist-approved supplements and vitamins, customizing them to fit their brand’s concept.
• Trendsi – offers a wide range of dropshipping products, including women’s apparel, shoes, jewelry, dresses, jumpsuits & rompers, bottoms, activewear, and men’s apparel. They also have a Trendsi Luxe collection featuring top-rated US boutique brands. With Trendsi, sellers can connect their Shopify store, add products to sell, and pay the product cost only when they receive an order. Trendsi handles quality checking and shipping to customers and even provides a branded invoice. They offer fast shipping times, open-pack options, a large selection of styles, and a hassle-free fulfillment experience.

Ultimately, the decision to embark on a dropshipping venture should be informed by a clear understanding of its benefits and challenges. Are you ready to commit to the hustle of dropshipping? The answer to this question will shape your e-commerce journey.