The concept of dropshipping has given birth to a lot of businessmen having their own startups which are generally small business set ups at first.
What is Dropshipping?
Dropshipping is the process through which people can sell their products without having to set up a warehouse and maintain inventory in it. Are you wondering that how come one will provide products to customers if he/she does not maintain inventory? Well, the answer to this question is the whole concept of dropshipping. You get yourself a membership from a dropshipper who will be the one to actually maintain the inventory. When you get an order from customer, you forward it to the dropshipper, who will then ship that product to your customer. So, this is the whole process of dropshipping.
Need for Dropshipping Model
Dropshipping model is getting quite popular nowadays as it allows you to have your own setup with just limited amount of money. You actually don’t have to invest much and that is the biggest motivation people get to start adopt a dropshipping model for their business. All you have to do is acquire customers and you can be your own boss.
This is an online business and you can have your own setup by following the below-mentioned few steps.
By following the above-mentioned four points, you can start an ecommerce business that operates via a website and can forward your customers orders from a third party manufacturer or supplier who then processes the order and ships it to your customer by your name so the customer never knows that he/she has received the order from somewhere else.
What do you Need to start a Dropshipping Business?
All you need is some premium marketing skills and a creative mind to develop a good customer base. These excellent marketing skills of yours will balance and even outweigh your lack of funds.
Why Should you Choose to Start a Dropshipping Business?
1- Risk is Low
You don’t have to invest much in a dropshipping business i.e. you don’t have to buy inventory and therefore, if by any chance you fail to acquire a good customer base, you still won’t have much to lose. Will you? Also, dropshipping prices are also low and are just like wholesale prices so you still make profit.
2- Cost is Low
Mostly, as mentioned above, the price of drop shipping goods are low and is just like wholesale price of those goods. So, you can price them at market value on your website and still make a decent profit from it.
3- Convenient Start-up
As you do not need to purchase products in bulk and maintain an inventory of them, therefore all you have to do is develop a website and acquire customer base. So, you can start your business as soon as you sign yourself up with a dropshipper. Therefore, this business is quite easy to start.
4- Does not Require Too Much Manual Work
Dropshipping is mostly an automated business as customer places his/her order with just a few clicks. If you wish for 100% automation, then you can always make use of a tool. These tools facilitate order processing and shipment of products with just a few clicks. People who do not have much time to give their business i.e. students, benefit greatly from such tools as they provide automation which is quite convenient.
Now that we know about the benefits of choosing dropshipping model for business, let us discuss some pro tips to start and have a successful dropshipping business.
Tips to Have a Successful Dropshipping Business
1- Your Marketing Skills Should be Top-rated
Dropshipping business is all about marketing. Dropshipping model does not require you to maintain an inventory or to invest much, but when it comes to marketing, it requires lots of work and it is quite fair as well. You do all your customer acquisition via Digital marketing. The right kind of digital marketing, some premium marketing skills and creativity is all that a dropshipping model asks for in return of all the ease it provides in terms of financial investment and lack of funds.
When we talk about digital marketing, it encompasses everything from choosing the right theme for your website to choosing and designing its logo and some good search engine optimization also known as SEO to target the right audience and engage them. SEO helps in the acquisition of customers and helps you in developing a brand image and a loyal customer base. It drives traffic to your website which in turn increases sales.
You can also use promotional ads to increase your sales in a short period of time. However, if you want to stay in business for a long time and get yourself ranked by google, then you will have to do good SEO of your website and then stay patient until results come out. Also, you can do blog posting and optimize your product pages to gain more customers by spending the minimal amount of money.
2- Offer Discounts
People are attracted more towards discounts and promotional offers than anything else. Therefore, it is quite necessary to put your items on sale or offer a discount on your products to engage them and pique their interest in your business. People may lose the motivation to buy your products and that even includes your regular customers, if you do not introduce discounts or seasonal promotions. Also, you can put buy one get one free offer on those products of yours which are not sold oftenly and people tend to buy more and get attracted towards a buy one get one free offer. Also, on Christmas and such events, you can offer gift bundles to your customers. The more creative you get, the more interested your customer will become in your business.
3- Don't Underprice or Overpriced your Products
Setting up the right price of your products is very crucial. You get dropshipping products at prices which are close to the wholesale prices of those products. Therefore, you can set higher prices on those products when you display them on your website. This allows you to make more profit. However, you need to make sure that the price you are setting is neither below market price or above the market price. Of course, the goal of your business is to gain profit, therefore you need to set a price that provides you enough profit margin to bear the costs of marketing, ads, salary of employees and other expenses too. Also, if other brands are cutting their prices, it is not necessary that you undercut yours as well. As long as your prices are reasonable, just go with them.
However, as we all know that “All that glitters is not gold”. Dropshipping model of business also has its cons just like its pros. This business is highly competitive, therefore, you have to rely just on your marketing skills. You can also face problems from suppliers. It is you who is directly in contact with the customer and address their problems yourself but still any problems related to products have to be solved by the supplier and you may face some issues there, therefore, always choose a reliable dropshipper.
Now that you know about the pros and cons of dropshipping, you can make your decision on whether you want to adopt the dropshipping model of business or not. What are your thoughts on this, people?