Starting a dropshipping business in 2020 can be an excellent first step into entrepreneurship. Moreover, you will be able to trade products to buyers, set your prices of the product, and promote your brand.
Today, we will guide you to start your successful online dropshipping business, how to find the perfect dropshipping business concepts and everything in between you need to know to establish dropshipping.
What is Dropshipping Business?
Dropshipping is a business model that provides you with a fantastic opportunity to run your store without having any inventory. After making any particular sale, your provider will send your products from their storehouse directly to your buyer’s doorstep. You do not need to bother about packaging, storing, or sending your products.
How Does the Dropshipping Business Model operate?
There are three fundamental layers in the dropshipping business model: the retailer, the manufacturer, and the customer. The primary role of manufacturer’s in the dropshipping business model is crafting products, carrying inventory, shipping products to consumers, replacing the faulty products, and replenishing them. The retailer is the reflection of you; sell the manufacturer’s products on your site within your brand. You’ll be responsible for picking and promoting those products. Moreover, you’ll also be accountable for their shipping expenses and setting values that make you a benefit. Ultimately, the customer purchases the products directly from the retailer. If queries or issues emerge, they get in touch with the retailer they bought the product from.
How Profitable is Dropshipping?
Before jumping to this industry, you might be curious about how much you can earn. Well, we are happy to inform you, Dropshipping is still profitable even in 2021 because of the number of eCommerce actions taking place around the world. It is not only lucrative but booming all by the time! Ecommerce and dropshipping profits have touched over $4 billion, which is a 7 per cent year on year increase for the last ten years. In addition, small entrepreneurs have seen an almost 30% expansion in conversion rates via smartphones.
Here Are the example Calculations:
For example, if you get a product for $15 from AliExpress and you sell it for $30. After cutting the shipping expenses and the cost of marketing, your original profit over the product is $10. To be precise, to earn $100,000 per calendar year, you need to sell at least one thousand products per month.
$10 profit x 1000 orders = $10,000 per month
$10,000 per month x 12 = $120,000 per year
Roughly, you have to sell a minimum of 34 orders per day to bag $100,000 per year from your dropshipping store.
Why Is Starting a Dropshipping Business can be a life-changing idea?
When it comes to startup costs, you only pay for products that you sell to paying customers. Luckily, you don’t become over compulsion with the loss of creating products, carrying inventory, costs of maintaining unsold inventory, and the worth of employees for packaging and shipping products. It’s a grand entry into entrepreneurship as you can start your own dropshipping business by yourself during your evenings and weekends. It will require daily work when it comes to processing orders. Although, most of the order processing steps are automated and require a click of a button. The dropshipping business opportunities are unlimited; you just need to take the first step to become eligible to achieve glory. Success will follow you if you could move the footstep in the right direction.
Can You Make Money Dropshipping?
You can generate money from dropshipping, as like, many of our successful businessmen.
Dropshipping lets you search products you are enthusiastic about and set up a business selling them.
When you are inspired to sell products, you are more likely to invest more time into promotion and advertisement, leading to more benefits from your ventures.
How to Start Dropshipping Business in Bangladesh: The 6 Step Dropshipping Business Plan
Step 1: Choosing a Dropshipping Business Idea
First of all, you need to invest some time in discovering the best dropshipping business ideas. Many experts will suggest you pick a domain you’re passionate about. But this point of view is not 100% right. To be precise, it is a cocktail of passion and profit. The reality is the best dropshipping business concepts generally tend to make a decent amount of money. It’s irrational to enter a niche with no real competition. Fitness, jewellery, fashion, tech, beauty, backpacks, and purses are some of the evergreen subjects that we keep watching top online stores enter and succeed in. For instance, Tim Kock not long ago built a dropshipping case study where his pineapple business failed, on the other hand, his watch business made nearly $7000 in only eight weeks, showing that your niche speaks the final words. So make sure to spend some time looking into diverse dropshipping business thoughts. If you are about to start your dropshipping you may check out the below thing to keep in your mind.
- Use Google Trends to discover the trends: Google Trends is a great free of cost resource for knowing whether a niche is worthy or not. Although, on its own, it’s not sufficient to decide whether or not a niche is stable. Few of them may be on a higher trend but don’t have adequate search volume to warrant its popularity.
- Keyword Research tool to analyze your keyword: Make sure to use Ubersuggest, Keyword Tool. What’s the search volume for a particular keyword? Or the competitiveness of it? Using Ubersuggest’s Keyword Tool will make you understand the potential of your dropshipping business ideas and give you new plans for the upcoming days.
- Research the competition: Visit successful sites within your niche. Get an idea of how they are approaching their business. For example, if you look at a fashion retailer’s website, they’ll often arrange their shop into trend categories. This assists you to perceive what trends you need to be added to your store right now. You can also look around a store’s best-selling products to benefit you to find the best products to sell.
- Find the product volume: Examine out the order volume for products to get an idea of which product is generating more sales. Also mindful not to rule out dropshipping business notions if they’re not as high as other products because those products could be fresh.
- Ensure the niche is lucrative: The fundamental goal of a business is to make a profit, right? Therefore, you need to examine the profitability of each dropshipping niche and product concept that you come up with. Ideally, you want a profit margin of at least 35-40% after seller fees, shipping costs, and taxes, but you should be targeting margins of 100% or more.
- Find the answer on your own: It is old school entrepreneurial tips. The idea is, if you have difficulty in your life, then it’s highly likely that others will have an identical problem. If you can pinpoint a product that resolves that problem, you might have unveiled a perfect dropshipping niche.
Bonus Tip: You may use an online calculator to dictate the profitability of the particular products you are thinking of selling. It cuts out Amazon fees from the retail value and estimates how many items are being sold each month, which is an indicator of need.
Step 2: Analyze your rivals
The minute you have made your mind what to sell, you now need to teach yourself who your rivals are, what they sell, and how they sell their products. There are a lot of ways of selling a product.
- Provide the name of one of the products you want to sell into Google and do a rapid search to spot who shows up on top. The top ten results on Google or any other search engine will give you a sound knowledge of your competition in a specific location. If you are selling products in a location different from where you are based, you can use third-party tools to gather data. Use tools like SEMRush or A Href to get information about search results in various locations across the world.
- Take the help of Alexa or SimilarWeb to find niche competitors that might not show up high in usual search results. These websites will provide a summary of the sites you are searching for, including their social media profiles, any advertising they are doing, traffic and audience data for their website, and a chart of competitors for that business.
- Dig deep over the different social media. Social media is a place where people like to share trends. You can get very precious information through regular social media surfing.
- Know your competitor’s content and what plays better for them through the use of BuzzSumo so you can repeat it. This tool will deliver you insight into what content gets the most social shares so you can find encouragement to update blog ideas. Signing up to a rival’s newsletters can also keep you on top of their content if they share their blog content this way.
Step 3: Find a Reliable Supplier
Each drop shipping brand has its own advantages and drawbacks. It is super important to make a deep assessment before selecting a particular company. When you have an option of five or six potent suppliers to select from, you can proceed onto the next step, communicate with these suppliers to ask essential queries like minimum order quantities and shipping times. You can plainly type your product and “supplier” into Google to see what comes up. Otherwise, you can find your product on websites like Alibaba.com or Aliexpress.com. A lot of China-based suppliers use these sites to sell their wares.
A decent dropship supplier should have followings qualities:
Really be a drop shipper
Not every product supplier provides dropshipping as a service. Some are merely wholesalers or manufacturers. Before you make a talk about making sure the supplier is a drop shipper. It will help to save your time as well.
Pick an experienced buddy
It will be a wiser option to pick a supplier that has years of experience with dropshipping. Suppliers take on a lot of liability with dropshipping, so you should be sure that you can count on them at all times. A healthy sign is if the sales rep you’re in contact with seems conducive and well-informed. If you suspect they’re not experienced, go elsewhere.
Higher numbers of drop ship suppliers are situated in China, so you can’t look for overnight shipping. Although you do want to make sure your buyers will receive their products as fast as possible. Check their shipping times to the countries you service. One-two weeks is allowable for dropshipping. Opposite to this can make the customer annoyed. As a result, they drop negative feedback.
Quality is the king
You should every time call for product specimens to test quality prior to committing to a supplier. The supplier should preferably have top-notch images that you can utilize in your product listings. By now, you probably have shrunk the numbers of suppliers from a list of 5 suppliers to 2-3. The best way to make a final call now is to place a sample order with them for a product and analyse the results. Compare eCommerce product condition, shipping times, and packaging while making a decision, keeping your customers in mind and what they will expect from you when placing an order.
Step 4: Creating a Dropshipping Business Store
Your domain name has a lot of importance, in particular, if you are focusing on building a long-term brand. There are a handful of name generators available to help out. It will be a wiser option to choose a domain name with a .com extension. Besides, avoid using your name as the domain name for your business. If you decide to sell your business, you may legally employ the rights to your own name.
Sign up to Shopify
Shopify is the most trustworthy e-commerce platform around the globe. With new cool features, resources, tools and apps; you’ll find that it’s convenient to use and conduct business on the platform. Moreover, if you get stuck, you can reach out to a Shopify expert who will in-person walk you through any steps for free of costs.
Set up your store
After you have set up your theme to your Shopify store, you can edit it to your liking. You’ll be able to modify the images, colours, fonts, text size, menus, borders, etc, and you should, to make it distinctive to your store.
At the minimum, you should:
- Select typography for the headers and text
- Set up the colours
- Put the logo in a suitable place
- Set up the menu (top bar and footer)
- Set up the layout of the front page, product, and collection pages
This is where the time you used up enhancing your brand will come in. The choices you’ve made in terms of the colour pallet, photography style, and font will influence how you make edits to your theme.
Step 5: Promoting Your Dropshipping Business
Now, as you have discovered your desired product and established your store. The next step is to spread your store among the potential buyers. It is vital to keep the marketing strategy organic to earn the trust of the search engines. You don’t need to be afraid of putting yourself out there. Getting your first sale is one of the best feelings! Although getting attention through social marketing is getting harder day by day. However, you can still succeed if you focus on the basics.
Because of continuous up-gradation of the Facebook algorithm, it is getting harder to get the attention of interested people. A successful marketing facebook campaign is dependent on several aspects. A lot of fresh entrepreneurs think you’ll generate rain money on your first try – you won’t. At first, you need to analyze your audience in-depth before posting your first advertisement on Facebook. To be precise you should be fully aware of your customer requirement and design the ad keep in mind. Another thing, you need to experiment to learn what turns good for you. When it comes to targeting, create a World ad but keep Canada, Australia, the United States and the U.K. out of context, this will help to keep your ad costs fewer. As your business expands, or if you have a smarter budget, you can make separate ads for those four countries.
Arguably Google is the world’s most powerful search engine by far. If you have an online e-commerce store, you want it to rank on the first page of Google. You can acquire this organically, or you can purchase ads for your store to appear at the peak of the page for the keywords you want to rank for. Google ads are an excellent option for the following causes:
- You can earn great exposure in search appearances.
- It’s the most prominent advertising platform in the universe.
- You can aim for highly-specific demographics (language, location, device, etc.)
- Increase exposure to your ads with high volume keywords linked to your niche
Retargeting can be an excellent option for you to save your penny. This can produce a decent result when your store has tons of traffic. So often customers tend to buy the product when it is shown to him again and again. Retargeting will definitely help you in that cause. It also gives a great opportunity to create a permanent buyer.
Making an email list is still one of the most useful ways of reaching potential customers. You need a method of conquering email addresses, such as a request to sign-up at checkout or offering free ebooks, or an offer that requires an email address. Once you have an elegant list of email addresses, you have a way of reaching a large group of people so often, for free.
Influencer marketing has become a large part of customer acquisition for retail companies in recent times. It could play a decisive part in any buyer acquisition strategy in 2020. It can be fruitful in particular if you are in a popular niche. For example, if you’re selling a modern style of handbag, you could reach out to an Instagram influencer and offer if she will share a post of her with the bag, tagging your business. One post can produce a bunch of new audiences and customers. The expense of influencer marketing purely depends on how famous the influencer is. A post from Kim Kardashian might cost $250,000, while a model with 10,000 followers might only cost a few hundred dollars.
Step 6: Optimize
Once you have spent the time to finalise your website, brand, and marketing strategy, you can start to explore the results of your hard work. You may find that particular marketing activity is hugely successful while others are not so much. Or you can look at your pricing against competitors and see if you could change things up a bit to make things more competitive. You can use free tools like Google Search Console or Analytics to calculate your online traffic. If you are using third-party tools for email marketing, set up weekly or monthly automatic reports so that you will be reminded to explore this data regularly. Even a quick snapshot of datum from a tool can be enough to determine if a campaign is working or not.
Is Dropshipping Worth It?
Dropshipping is worth the time and money you invest in it. If you don’t spend time in your online business, you will never think to reap the rewards. Dropshipping takes some time as you need to establish a store, import products, decide your pricing strategy, and start selling. Nothing can occur if you don’t put in the endeavour.
It can be tricky to start a dropshipping business. However, if you scale your business in the right approach, it can produce unimaginable profits even in Bangladesh.