Learn how to start a dropshipping business
March 21, 2022 at 7:19:44 PM
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Step 1: Choose a niche
A good niche is one with products people are willing to pay for online. There should be some demand drop shipping isn’t the place to roll out a bunch of untested products.
Step 2: Select products and find vendors
One of the most important steps when considering how to start dropshipping is choosing suppliers to work with. Some suppliers offer a huge variety of products that fit into nearly any niche.
Step 3: Develop a marketing plan
Marketing begins with knowing your audience and your niche. Who are you marketing to, and why?
Step 4: Watch your expenses
Though you don’t have to create packaging, acquire materials, manufacture anything, or ship products, your dropshipping business will still have costs.
Step 5. Find Dropshipping Suppliers
Online dropship and wholesale supplier directories can make it easier and quicker to find suppliers for your business. These research tools are encyclopedic, listing and categorizing thousands of suppliers and their product offerings. Some of these directories are free, but the paid ones tend to vet and research their suppliers thoroughly before publishing them to their sites. Salehoo Worldwide Brands Modalyst Inventory Source DSM Tool Printful Printify AliExpress Chinabrands.com BigBuy
Step 6. Build your ecommerce store
This will be the home where you send traffic, sell products, and process payments. Shopify makes it easy to build and launch your eCommerce website. It’s a complete commerce platform that allows you to sell in multiple places, including online, sell in multiple currencies, and easily manage products and accept payments.
Step 7. Decide on a business structure
Sole proprietorship- This is the simplest business structure to implement but also offers no personal liability protection. So if your business is sued, your personal assets also may be in jeopardy. Filing requirements are minimal and you simply report your business's earnings on your personal taxes. No other state or federal business filings are required. Limited liability company (LLC)- An LLC offers increased protection of your personal assets by establishing your business as a separate legal entity. While the liability protection isn’t foolproof, it does offer more protection than a sole proprietorship. You may need to comply with additional filing requirements and will need to pay both incorporation and ongoing fees. C corporation- Most major corporations are set up as C corporations, which, when done properly, offer the most liability protection. They are likely to be more expensive to incorporate and are subject to double taxation, as income doesn’t pass directly to the shareholders.
Step 8. Get your finances in order
One common mistake entrepreneurs make when starting a business is blending their personal and business finances. This causes confusion, makes accounting more difficult, can lead to the personal assumption of business liabilities, and is a big red flag for the IRS if you’re ever audited. You’ll want to keep your business and personal finances separate as much as possible. The best way to do that is by opening up new accounts in your business’ name. You’ll want to open the following:
Business checking account
Collect sales tax
Local business licenses
Step 9. Market your dropshipping store
Paid ads (Facebook and Google). The average cost for a Facebook ad is around .97 cents per click, which isn’t too bad if you’re newer to advertising on the social media platform. Facebook ads are scalable, products can perform well on them, and they tap into people’s desire to impulse buy. There’s typically more price competition with Google ads, but it may be worth your time to test it out. Influencer marketing. Influencer marketing is an affordable way to reach your target audience because people tend to trust influencers more than traditional advertising. If you go this route, negotiate an affiliate fee with the influencer versus a flat rate. Content marketing. If you want to build a long-term stream of traffic for your store, add content marketing into your dropshipping business plan. Start a blog around your dropshipping niche and create content that entertains and educates your target audience. You could also start a YouTube channel, create infographics. Mobile marketing. Mobile marketing is a broad term that refers to a business connecting with customers on their mobile phones. For example, you can start a VIP text club and encourage website visitors to sign up for exclusive deals and promotions. Or provide customer support in a live chat conversation with shoppers through Messenger. Communities. Get involved with groups of people who are passionate about your niche. You can start conversations with potential customers on Reddit, Facebook Groups, or online forums. Remember not to be too sales-y when engaging with a community. Aim to help and build relationships with potential customers so they trust your brand and want to buy from it.