There are lots of different types of online businesses but one of the most popular ones in recent years is dropshipping. This type of business is quite effective since you don't have to worry about many overhead expenses which increases your chances of business success.
Basically, with dropshipping, you don't have to worry about paying rent since your store is an e-commerce website where all you have to pay is website hosting which is only a small fee per month. You also don't have to purchase stock since the dropshipping model is based on finding suppliers who actually fulfill each order that you receive, on your behalf. We will now take a look at a couple of tips and guidelines that will help you to find faster success with this business model.
Choose A Great Niche
It is imperative that you choose a niche that is not overpopulated, has enough products that you can dropship while having enough interest to generate sales. You can start by listing out all of the different niches that you're personally interested in and research those niches. For example, if you're a tech lover, you may want to specialize in products for a particular type of item and brand. If you enjoy survival prepping, then this is also another great niche to get into. You can analyze the competitiveness of a niche by checking out its monthly search volume and checking for other e-commerce stores in that niche. Now, even if a particular niche has lots of e-commerce websites, that doesn't mean you shouldn't enter it. Instead, check out how much traffic the store gets, whether they do social media advertising, the price point of their products etc. If you can do better and it's a niche you're truly interested in, then you should go forward with it.
Selecting Great Products
Next, once you've decided on a niche, you need to find great products to dropship. There are lots of great websites where you can find suppliers and wholesalers who offer dropshipping.
When you find products for your store, you will then need to decide on your markup. If you price your products too high, then you won't make any sales. So, you should check out other e-commerce sites that are selling the same products that you intend to sell and see how much they are selling them for. This will give you an idea of the markup and how you should price your own products to be competitive.
It is best that you select products that you can sell for at least $10 – $15 more than the price you pay. Remember, you will need to spend money on ads and SEO in order to generate sales. So, the cost of your product should be able to cover the cost to purchase it from your supplier as well as the cost of your ads. It will require a bit of experimentation to determine the best price for your products, especially in relation to your competitors.
Marketing Your Products
As mentioned above, you will need to get traffic to your e-commerce website through purchasing ads and SEO. You can create direct ads to your product or you can create ads that direct people to sign up to your email list so you can market your products to them, through regular emails. It may be best to do a combination of both strategies where once someone has purchased a product, they are automatically added to your email list so that you can continue to market to them at no added cost.
Email marketing is extremely effective and fortunately, many other e-commerce stores don't utilize it. The best thing about email marketing is that once someone is on your email list, the list is an asset that you own and you're able to continue marketing to that list whenever and as many times you want. A large email list can earn you thousands of dollars, with just one email. You can use the email list to advertise special discounts, upsells, limited edition products etc. However, it is important that you don't oversell to your list and provide lots of valuable emails so they look forward to them.
How To Deal With Long Delivery Times
Unfortunately, one problem you'll likely run into when dropshipping is long delivery times. This is especially a problem when you're dropshipping products from places like China. One way to deal with this is to offer free shipping and simply indicate that shipping will take 20 – 30 days. You should also only offer products that have shipping through the ePacket system since it is a bit faster and cheaper than the other methods.
In order to make your dropshipping business a success, you need to put in the work and do a great deal of testing and experimentation. However, once you persevere, then business success will eventually be yours.