Building a Successful Online Drop Shipping Business
You are keen on eCommerce and would like to start an online store? You are not alone! Online business is attracting more and more entrepreneurs and more specifically with the drop shipping business model.
The most significant difference between drop shipping and the classic way of operating is that you don’t hold any product inventory. Instead, you only pay for the products when the customer has already given you the money for the order.
Therefore, drop shipping is a great business model for aspiring entrepreneurs to start with because it’s accessible. There is a good earning potential with arguably low barrier to entry. Since you don’t need to stock or handle the items you are selling, it’s possible to start a drop shipping business with limited funds.
It’s a business model that I’ve chosen back in 2008 when I launched Candlesbook.com and still use today. Why? For its simplicity!
Drop shipping is a supply chain management method in which the retailer does not keep goods in stock but instead transfers its customer’s orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer. As in retail business, the majority of retailers make their profit on the difference between the wholesale and retail price, but some retailers earn an agreed percentage of the sales in commission, paid by the wholesaler to the retailer. Wikipedia
In this series of articles we will go into details on how to create your own drop shipping store following a super simple 11 steps blueprint:
1.Market and competition research
2.Choosing a niche
3.Securing drop ship suppliers
4.Purchasing domain name and hosting
5.Choosing an eCommerce platform
6.Creating a product catalogue
7.Creating blog posts
8.Creating a customer acquisition plan
9.Building a list with newsletters and follow-ups
10.Promoting on social media
11.Analyzing metrics, ROI and optimizing.
Pros and Cons of DropShipping as a business model
- Good earning potential with low barriers to entry. Ideal for limited fund budgets.
- More time to dedicate to growing your business by not having to handle your own inventory and take care of shipping
- You only pay for what you sell which lowers the risk.
- More choices to offer as you do not create the products, you curate them into your online catalogue.
- Mitigate the risk in trying out and experimenting new products.
- It’s not your logo on the box, so difficult to build a brand.
- It’s vital that you work with safe and verified drop shippers. You do not want customers being displeased. It reflects on your business.
- You are subject to sudden stock shortages if you are not selling print on demand products.
- Quality. Have the product or samples delivered to your home. Doing so also allows to take better photos for your online catalogue.
- Suppliers illegally using a trademarked logo or another company’s intellectual property. ex: Nike, Adidas
- Delivery. 3 to 5 business days is ideal. Some platforms like AliExpress and Alibaba can take from 17 to 40 days. It might trigger orders cancellation.
The good news? There is a solution for each of these ‘cons’!
This business model is a powerful way to generate automatic revenues and can be set up to simply round off the end of the month or for more substantial income, depending on the time you’ll allocate to it.
Now that you know the main whereabouts of a dropshipping online business, will you endeavour to pursue your idea? If your answer is YES, get ready to jump on the band wagon by claiming your spot in my upcoming free eCourse “Super Simple Drop Shipping Business”!
Social media strategist and trusted advisor helping online and offline entrepreneurs leverage social marketing tools to improve web visibility, build credibility and reach profitability faster.
Not sure if this business model suits your vision and would like to discuss more about it?
Simply book your FREE discovery call.:)