Drop shipping today has become quite a popular business model for the newly self-employed gentry and among the new entrepreneurs (Among Generation Z and Millenials). Such is due to the internet marketing skills outpacing financial capacity.
Since drop shipping businesses need not stock up or handle the items they are selling, it is hence quite possible to start a drop shipping business with limited capital.
An eCommerce website working using a drop shipping model purchases the items it sells from a third-party vendor, supplier or a manufacturer (who fulfill the order). This reduces the operational costs and also frees up time so the self-employed person can focus their efforts on customer attainment.
While it does not take a load of startup funds to start a drop shipping business, it will require a lot of hard work for sure. According to app development experts from an app development Toronto agency, apps for drop shipping business are in popular demand.
Those who are ready to start a business which can compare with retail giants on limited capital; they are in good luck. Shared by experienced individuals, here are some key steps aspiring drop shippers can use to have one of their own.
The steps needed for making a drop-shipping business
1. Choosing a forte
The forte the aspiring drop shipper will choose should have laser-focus (something they have genuine interest in). A product range that is not focused will become difficult to promote. Lack of passion about chosen forte will discourage the aspiring drop shipper.
It takes a lot of hard work to scale a drop shipping business successfully. These points should be considered by aspiring drop shippers when they are choosing their forte:
- Look for attractive profits.
- Its important to keep shipping costs low.
- Ensuring the product appeals well to impulse buyers with a good disposable income.
- Ensuring people actively search for the product.
- Making their own brand.
- Selling things that are not quickly available in the locale.
2. Conducting research on competition
With aspiring drop shippers competing with other drop shippers and retailers (giants included), this where a lot of them go wrong. They often look for products with little or no competition meaning a product with no local demand goes bust.
High shipping costs, production issues, supplier problems and poor profit margins are among the reason why drop shippers’ operations fail. Products having competition thus support the drop shipping model.
3. Securing a good supplier
Drop shippers should never partner with the wrong supplier else its game over for them. With a lot of them based overseas, conducting proper due diligence is extremely important. If drop shippers are not confident 100 percent in their suppliers, they should look for another one.
Learning from other entrepreneurs is vital. Business blogs, tech blogs and subreddits are vital to help aspiring drop shippers avert costly supplier mistakes.
4. Creating their own eCommerce site
The quickest way to launch a website supporting drop shipping is using Shopify. It is easy to set up and has loads of apps to help boost sales.
Even if they have a good budget to hire a web design firm for a custom solution then it’s a good option (even for starters). Once the cash starts rolling in, further customization can be pursued.
5. Making a customer acquisition plan
A good product and website are good, but without customers; they’re nullified. There are a lot of ways to bring them in and one of them is to start ad campaigns on social media (Facebook and Instagram). This allows them to get good sales and revenue from the beginning.
Other than that, social media allows them to place their offers directly in front of their audience. This enables them to compete with established brands and retailers immediately. Eventually, this goes long term. Hence search engine optimization, email marketing, automated email sequences, discounts and special offers become part of it.
6. Analysis and optimization
Keeping track of all data and metrics is a must. Tracking each single conversion helps them scale what works and remove what doesn’t as well as tracking customer origins. There is no set and forget solution for this. It always needs constant monitoring and check, testing new opportunities and fine-tuning marketing campaigns to optimize or shift spending for campaigns.