Ever heard about Dropshipping ? What is it ? How it works?
Here is a detailed guide to get started and make some money from Dropshipping!
What is Dropshipping?
Simply put, dropshipping is the process of shipping products directly to your customers from a third-party supplier. It does not require some intermediate steps such as storage, logistics, etc.
The biggest difference between a drop shipping person and an e-commerce site is that the person selling the product doesn’t have an inventory.
If we take a look at the statistics related to Dropshipping:
- In 2016-2017, about 23% of all online sales were dropshipping, up from $85.1 billion.
- Amazon made 34% of its total sales through dropshipping in 2011. These numbers have increased every year.
- Manufacturers doing business with dropshipping retailers made 18.33% more profits than those who relied on more traditional channels.
What are the Dropshipping Benefits?
The biggest reason dropshipping has emerged as a lucrative business opportunity is that there is no major obstacle to doing this job. Anyone with a small investment can dropshipping.
Dropshipping has many advantages. Now let’s take a step-by-step look at these benefits:
1. Minimum Starting Costs
Unlike a retail or e-commerce store, you don’t need a physical warehouse to store products. You just have to pay for your dropshipping website’s domain and hosting plan.
2. Minimum Additional Costs
Since you are not responsible for the supply, packaging and delivery of the product, you do not need to worry about the additional cost that arises throughout the entire process. You only need to make sure that the customer receives the product.
3. Low Risk and Flexibility
You can easily partner with multiple wholesalers, distributors and suppliers for greater flexibility. In this way, you can offer a much more comprehensive product portfolio and withdraw any products you want at any time without any loss of money.
What are the Drawbacks of Dropshipping?
As with any business, dropshipping has its drawbacks. To list these disadvantages:
1. Sticking to business partners
Since you don’t have a physical product, you always have to rely on your partners to keep stock.
2. Less control over order delivery
Since you do not have a stocked product, it is entirely up to your business partners to deliver the product within the prescribed time. If they do not deliver the product on time, customer satisfaction decreases, which harms your business.
3. Less control over the supply chain
You are not responsible for the supply chain, including packaging, storage, delivery, etc. Everything is taken care of by your business partners. However, when an error occurs, you may not be able to reach your business partners. This leads to the emergence of dissatisfied customers.
4. Lack of brand perception
Your brand image may be damaged because you sell products from other wholesalers on your site. To do this, make sure that your wholesaler allows you to add your own brand to the product. In this way, even if someone else produces the product, if the packaging is yours, you strengthen your brand perception.
5. Lower profit margin
Dropshipping makers have less profit margin than those who produce their own products. If you want to get the same profit as a traditional retail store with Dropshipping, you need to sell much more products at a higher price.
How to Dropshipping?
You have selected the products you will dropshipping, suppliers are secured and you have established your business legally, now is the time to start selling. To do this, you need to decide how to present your products to your potential customers.
There are several sales options available, but you will most likely want to sell in your own online store, amazon, eBay, All here, etc. in several marketplaces.
- How to Make Amazon Dropshipping?
Although Amazon stocks and sells a range of products, most of the products listed are sold by third-party parties through Amazon’s website.
So basically its a multi vendor site!
It’s pretty easy to start with dropshipping on Amazon. You can start selling immediately by creating an account and adding your products.
Amazon is the most preferred e-commerce platform, so it gives you instant access to a wide audience. But you can directly impact your product rankings and sales by optimizing your lists on Amazon to stay one step ahead of your competitors. This process is called Amazon search engine optimization, i.e. Amazon SEO.
Amazon SEO lets you rank higher in Amazon searches for related keywords. When you optimize your product listing, you make it easier for Amazon to find your list and show it to customers looking for something similar to the product you’re selling.
Amazon SEO includes:
- Amazon keyword optimization
- Amazon product title optimization
- Product official optimization
- Backend keywords
- Pricing strategy
- Amazon A9 algorithm
Amazon also provides you with its own storage, packaging and shipping service, known as Amazon Fulfillment.
- How to Make Ebay Dropshipping?
eBay, a site known to most people, is the world’s largest auction site for online physical products.
It’s pretty easy to start with dropshipping on eBay. You can start selling immediately by creating an account and adding your products. You can find the details here.
When you list your products on eBay, you’ll have access to many online buyers. Millions of people see your products and you don’t have to worry about paying for marketing, SEO or traffic. Since marketing is one of the biggest challenges of starting a dropshipping business, this saves you time.
What Do Dropshipping Need?
There are only a few basic requirements for dropshipping:
- A product to sell
- Supplier of this product
- A platform for selling
- A company for Official Transactions
To put it in more detail:
- When choosing your product, choose a niche sector instead of going to highly competitive areas.
- Find at least one supplier, but always have a plan B.
- Set up a company to sell.
- Decide where to make the sale. Marketplaces or your own website?
- Leverage social media ads, email marketing, SEO, etc. to promote your store.
How to Set Up a Dropshipping Site?
In this step we will talk about the necessary steps to create a dropshipping website.
Let’s get started!
1. Choosing a Niche
It may not seem directly related to website creation, but this stage is vital before you start building websites.
For example, suppose you sell textile-related products. Who will be your target audience? Woman, child, man, baby… You can sell products to all these age groups, but narrowing the target audience will allow you to stand out in the competition. Let’s say babies are the target audience you choose. You can even narrow down this selection to ‘girl’ children’s products between the ages of 0-1. The more niche you make the products, the better it will be for you. But when choosing a niche, you need to make sure that people are actively looking for the product.
2. Determining the E-commerce Website Platform
Creating an e-commerce website has become as easy as you can create today using a ready-made template in just a few steps.
3. Domain Name and Hosting Purchase
Domain is the address where internet users can access your website. It is important to keep the name you will use short and simple so that the catchiness is high. The second transaction after receiving a domain name is to purchase hosting.
4. Creating a Web Site
You have chosen your e-commerce platform, you have received your domain name and hosting, the next process is the process of creating a website. Regardless of the platform you choose, you need to open an account and pay for the desired pricing plan. After that, a store will be automatically set up for you. Then you can organize your store to your taste.
Below are some of the website personalization processes.
Theme Selection: Many of these platforms have many themes (free and paid version) to choose from. You can choose what you want and start editing.
Structure: The platform you choose will probably provide a layout for you. However, you need to build and reconfigure your website in a way that suits your customers.
Logo: Place your logo on the platform of your choice to strengthen brand perception.
Content: Prepare your product images and text to be placed on the website.
Pages and Categories: This will most likely be done by the platform you are using. However, you can add more pages if necessary.
Other important things you can add to your website; additional widgets, security details, blog pages, plugins, refund and refund policies.
5. Finding a Reliable Supplier
When you dropshipping, make sure you have a good supplier. Even, if possible, deal with not one, but multiple suppliers.
6. Adding Products to a Website
Once you’ve found a reliable supplier, you’ll need to add the products you want to sell to your store. Fortunately, many of these platforms have functions or plugins that allow you to import products directly to your website.
7. Editing Product Descriptions and Images
After you add the products to your website, you may want to add descriptions and images to them. Note that the product description given to you by the supplier will also be given to another store owner who sells the same product (if you use the same supplier). Therefore, you need to edit product descriptions in terms of earning traffic from Google. You can edit the image as well as the product descriptions.
8. Dropshipping Website Templates / Designs
It is possible to get your website templates or designs from the following platforms:
- Shopify theme store
- Theme forest
How Much Does Dropshipping Cost?
Dropshipping is still a profitable business in 2020 due to the increase in e-commerce figures worldwide.
That’s because e-commerce and dropshipping profits have risen to more than $4 billion in the last 10 years.
If you’ve already thought about getting a slice of the cake above, let’s explain the situation with an example.
Let’s say you aim to make $100,000 from dropshipping How many products do you need to sell?
If you buy a $15 product from AliExpress and sell it for $30; after reducing shipping costs and advertising costs, your actual profit on the product will be $10.
That is, to earn $100,000 per year, you need to sell at least 1000 products per month.
$10 profit x 1000 orders = $10,000 per month
$10,000 per month x $12 = $120,000 per year
So if you want to earn $100,000 a year, you need to sell at least 34 orders a day.
Things to Consider About Dropshipping (Recommendations)
Did you know that there are 12-24 million online stores in the world, but only 650,000 sell for more than $1,000 per year? As the numbers show, there’s a lot of competition. So, given this brutal e-commerce environment, how are you going to make your business a success?
Here’s the answer:
1. Add customer reviews, ratings and testimonials
Customers tend to be skeptical about the quality of the products you sell at first. Therefore, increase your visitors’ confidence by adding customer reviews, ratings, and testimonials to your online store.
2. Run social media ads that fit your marketing goal and budget
Using social media ads can be highly customizable, depending on your audience, destination, and budget. That’s why it’s so easy to reach your audience.
3. Use retargeting techniques to avoid losing potential customers
98% of visitors do not shop with you on their first visit. In this case, retargeting can help you recapture a seemingly lost opportunity. Retargeting is a marketing strategy that targets visitors who have visited your e-commerce site before but have not taken any action. Using retargeting, you can show relevant ads to visitors who leave your site.
4. Increase your organic search visibility with SEO studies
Search engine optimization, i.e. SEO; Google is a process that allows you to attract organic (i.e. free and natural) traffic from search engines like Yandex and Bing. That’s why SEO; it has the potential to increase your revenue, sales, conversions and make you an authorized brand in your niche. The best thing about SEO is that it provides you with a constant source of traffic without paying a penny.
SEO saves you time and money and decreases your cost per conversion.
5. Get a blog on your website
Blogs; it is the 5th most reliable source of information on the internet, behind news sites, Facebook, retail sites and YouTube. So build a blog where you’ll write SEO-compliant content for more traffic and sales when you dropshipping. You can start by selecting high search volume topics related to your products.
6. Make visitors subscribers with impressive email pop-ups
55% of website visitors leave their websites within the first 15 seconds of their visit. Therefore, getting your visitors’ email addresses is an important step for potential customer conversion. At this point, you can use the email pop-up form to get people to sign up for your email list, and once you get their email address, you can run a series of email marketing campaigns to direct them to purchase.
We tried to answer questions you will be most curious about dropshipping . If you are willing to do dropshipping or intending to do so, write us your experiences or curiosities in the comments section and we will use it to improve our content in our next update.