In the age of eCommerce, it’s possible to build a sustainable online business with an internet connection, a basic business model, and a healthy dose of self-motivation. As digital transformation continues to shape the way we shop, communicate, and connect with our peers, the demand for online shopping is ever-growing. At present, 76% of US shoppers alone purchase goods online. Moreover, experts predict that mobile shopping will rise by 56% in the next two to three years.
But, while there is a serious demand for eCommerce, making your mark in an increasingly saturated marketplace will depend on the measures you take from the very beginning—your foundations. If you’re looking to sell goods that you’re passionate about and create a sustainable business without dealing with piles of stock, dropshipping might be for you. To help you on your path to success, here’s a guide to setting up a sustainable dropshipping business.
What You Need To Know
Before we delve into how to set up a successful dropshipping empire, it’s important to consider why it’s an avenue worth pursuing.
If you’re looking to sell a range of products in a particular niche (those that you don’t need to make in-house), working with a dropshipping platform will allow you to select a virtual inventory. With dropshipping, you can manage your stock in a digital capacity, freeing you from the shackles of storage or unsold items. To put this notion into practical perspective, here are the primary eCommerce advantages of dropshipping:
As you don’t have to purchase your inventory upfront, you will need less capital to set up and launch your business. With dropshipping, you can get start selling almost immediately with minimal costs. Moreover, you don’t have to the challenges of warehouse management, saving you on time and keeping your operational overheads to a minimum. With a dropshipping business model you’re not necessarily tied to one physical location, so you can run your business on remotely or relocate with less logistical fuss.
How To Start Dropshipping The Right Way
Now that you understand the dynamics of dropshipping and its core operational benefits, let’s look at how to get started the right way.
Build Solid Foundations
Regardless of your niche or sector, the success of your eCommerce business will depend on laying solid foundations. From setting sustainable goals and creating an effective brand name to developing business plans, market research, website development and beyond, knowing how to start an online business from scratch will set you apart from the competition. Take your time and make sure everything is in place before launch, this is essential if you want to succeed in the long run.
Choose Your Niche
With your eCommerce business fundamentals firmly in place, your next step is refining your business goals by deciding on a profitable dropshipping niche. Once you’ve selected a wider niche (shoes, for instance), you should conduct research into consumer demand as well as shopping trend data to focus your offerings. That way, you can develop a promising dropship marketing plan. Decide to sell retro-style sneakers from sustainable brands, attracting a slightly smaller but incredibly engaged market in the process. By offering a solid range of products in a particular niche rather than marketing yourself as a general retail store, you will stand out from the crowd and encourage customer loyalty.
Select Your Suppliers
Once you’ve set up all of your essential business assets and refined your niche, now’s the time to select your suppliers. Consider your business aims and objectives, choosing dropshipping suppliers that share your brand values and you feel comfortable working with long term. With your team (or if you’re a sole trader, with trusted friends or relatives), set aside time to sit down and conduct supplier comparisons, exploring pricing models as well as key features and benefits. Doing so will ensure you choose a dropshipping platform and suppliers that will meet your existing needs and scale with you as your business grows.
In addition to finding the best American dropship supplier, avoid undervaluing your products. This may seem obvious but it’s often overlooked: once your dropshipping business is up and running, you must avoid underpricing your items. When it comes to dropshipping your profit margins will be slightly lower than a traditional eCommerce model (as your supplier will take a service fee). To ensure you make a healthy profit, it’s important to set an average order price and consider your general margins in addition to associated business costs (marketing or outsourcing, for example) when creating your retail prices. You should always aim to be competitive, but you must never undersell yourself—not if you want to remain sustainable.
We hope our essential tips help you set up a successful eCommerce business and for further insight, read our guide to working with wholesale only for dropshipping.