HOW TO USE DROP SHIPPING TO START AN E-COMMERCE BUSINESS: ULTIMATE GUIDE

drop shipping
Posted on 7.11.2017
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Written by Eva Ciga

Perhaps you have been contemplating whether to venture into a webshop business or not. Starting an e-commerce store requires hard work and many steps and decisions that need to be done at the right time.  

Doesn’t it feel like too much task to handle? It should. You need to have a good understanding of key things such as logistics, fulfillment, and marketing, and so on to get started. But these are not the only important thing to look out for, you need to conduct a detailed research on what you want to venture into. 

GETTING STARTED WITH DROP SHIPPING. 

Sometimes all you need is to get started. This is where drop shipping comes in as a brilliant idea for an e-commerce business. Drop shipping offers you an affordable way to get into retail. Simply, the idea is that a wholesale supplier or drop shipper offers you an option to sell a set of products without having to buy them initially. They also do the hard task of storing, packaging and shipping items to the customer.  

Drop shipping is an ideal business for the “solopreneur” or the lone ranger who prefer to get work done on their own with limited time and capital. While it doesn’t take a great deal of money to start a drop shipping business, you will definitely need to put in the hard work to make your first sale.  

Searching through thousands of web pages for the right product to sell can be daunting. Then, you need to go back again and find the right supplier to partner with. Also, remember you have to convince the supplier to partner since you’re just starting out. Only then will you be in a position to make your first sale. 

So, if you have already decided to venture into drop shipping, this article is for you. Here you will know how to identify the right products, how to get the best suppliers and how a working relationship with them. 

Let’s dive into the details. 

  • Choose a Niche

By now you must be excited to venture into drop shipping business. You have put in the energy and capital ready to get things started. So far so good. You will need to keep up that energy and even more, this is the time to do all the research. It may seem boring and tiresome but it’s extremely important if you want to propel your business to success. Also, you don’t want to spend the next few weeks working hard on a new idea only to find that there’s no market for your product, or there’s too much competition.

Do your research and find the right mix of niches that will help you come up with a good product to sell. Remember, as a drop shipper, your fellow drop shippers are not the only competition you have, you are in the same race with large and well-established online retailers like Walmart, Office Depot, and Best Buy.  But despite all the advantages they may have, they also have weaknesses. They sell almost every variety of product, while the drop shipper can concentrate on a certain set of products.  

  • Research For Contact Suppliers 

Having identified the right product to sell, spend time searching for suppliers that drop ship your product. It will also be good to check out some of your competitor’s suppliers who deliver products that make them good money. Instead of taking a big risk of unknown partners, use this information to your advantage. 

If you decide to do your research, you can use Google to find the product. Scroll through the web results and pick specific stores that drop ship your product. In most cases, the drop shipping companies will not have any physical location which can be found on their “about us” and “contact” pages. This is a good trick to save time. Once you identify these stores, write down all their supplier’s detail into a worksheet for future research. Repeat the same process until you find a good of product suppliers you can contact for drop shipping. 

Based on which niche market you have chosen products, you may or may not find suppliers who have that kind of product. This is why it’s important not to disregard other niche markets you had suggested, as they may be used as a backup in case you don’t find any suppliers for your current products. 

  • Create Your Store/Website 

You need to have a store or website before you partner with the suppliers. They are aware that talk is cheap, so they need to see your talk match your actions and that you can execute what you have promised. 

A quick tip I can give you when it comes to this part of the process is not to focus too much on your store looking perfect because it never will. Your aim is to build a brand that people can trust.  

If you’re not a computer guru, there’s no need to panic. Actually, you don’t need high-level knowledge of coding or site building to create a good drop shipping website. There are several E-commerce platforms that make the experience easier with just plug-and-play. A good example is Shopify that offers an easy-to-use experience for an affordable price. You can also prefer other companies such as Bigcommerce and Magento. 

Your site is actually the shop where you update products, optimize the layout, add new appealing features, and so on. It should be a work in progress. Remember, you’re about to build a great foundation and framework for a powerful brand, so make it worth it. 

  • Select Products to Sell and Create Brand Pages 

Now that you have a good site up and running, you’ll need something to sell. So define the specific products you intend to sell. Also, you need to show your suppliers how their products will look in your store. In fact, it will be easier to partner with a supplier if they see their product on display on your site. This is an indication that you’re ready to start a business. 

The next step is to create relevant pages for each of your suppliers. Good and quality content will make customers spend much time on your site.Also, don’t forget to include user reviews of your supplier’s products. Most drop shippers rely on two sources of user review. They go for the public ones that are results monitored by a third company and include them into their systems. On the other hand, they’re those that go for the already-curated reviews from the manufacturer. New drop shippers can also collect their own reviews from companies such as Trustpilot and Testimonial Guard 

  • Register Your Business and Get a Tax ID 

By now things may be running smooth and excitement may set in, but it’s easy to forget. You need to form and register your business as per the government guidelines. Also, get a sales tax ID especially if you’re in US or Canada. Applying for a tax ID is easy, you can do it online or visit your local county clerk’s office. Just go to Google and type “(your state) + sales tax ID.” 

Suppliers will need you to have an EIN (Employer Identification Number) accompanied by a Sales Tax Exemption Permit before partnering with you. The process of getting a sales tax exemption permit differs with the state, so you may speak to a tax professional to help you with the process. 

  • Launch and Promote Your Business 

Finally, you’ve got everything set and ready to launch your site. Take time to reflect on the progress you’ve made. You took the risk and put in much time and effort, so you should be proud of what you have accomplished so far.  

Having a set launch date will show the supplier that you’re ready and they need to get their products on your store on time. Furthermore, they wouldn’t want to breach the contract and risk having their competitors’ products in your store. During this time, you will have a clear timeline on when the products need to arrive, you can make follow up calls, and ensure all contracts are sent on time.  

From here, you can go on and promote your store to attract more traffic. This will not be easy, but it’s worth taking time to identify ways to get people to visit your store and buy. The main tactics that can help with this process are; 

  • Search Engine Optimization (SEO) through keywords research, optimization of web pages and building backlinks for your store. 
  • Social media such as Facebook ads with a clear Call to Action (CTA) 
  • Content marketing which is a marketing approach that aims to use valuable and consistent content to attract customers. 

When you combine these three aspects, you will be able to build a powerful customer base. 

CONCLUSION 

At this point, you have undertaken the right step to start a drop shipping business. It feels good, but this is not a signal to get too comfortable. You have a store ready and you need to run it properly. 

Continue learning how to make your drop shipping business better by getting the right product, creating relevant content, working on your SEO, and promoting it even more. Also, develop a strong relationship with your suppliers and keep tabs on the specific products you’re offering. Taking these key points into consideration will help build a successful business.  

Good luck and we hope you build a successful drop shipping business using our guide. 

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