Dropshipping has become more popular among both small and large business owners for a number of years. Its great advantage is the low cost of running a business and small start-up requirements. How to start dropshipping? The only thing you actually need is an appealing, well-known website. Check what dropshipping is all about, how it works, and why it is still so popular today.
How does dropshipping work?
The distinctive logistical concept of dropshipping presupposes the transfer of shipments from an online retailer to a manufacturer or wholesaler. Essentially, this means that the online shop is not required to reserve a storage unit or buy products in advance.
The manufacturer or dropshipping wholesalers in this instance pay for all logistics and warehouse management costs, and they are also responsible for sending the package to the customer’s address.
It is necessary to have excellent knowledge of the market and industry, as well as the needs and expectations of consumers. Which products are good for dropshipping? Really, there are no boundaries! However, to avoid going too far in either direction, it is crucial to understand what influences the product’s pricing.
So what is the dropshipping profit? The difference between the price the retailer agreed upon with the wholesaler and the price he posted on his website is how the retailer generates revenue. The seller’s operations are restricted to marketing and promotion because he does not acquire the products shown on his website directly from the source.
4 pillars to start with in dropshipping
How do you begin dropshipping such that people are interested in your products? How can you effectively market your e-commerce business? What is worth trading? In addition to constant analysis of competition and an extremely important case study: automatic price management on Allegro or another platform, an entrepreneur setting up his dropshipping store must remember about 4 key pillars.
By using them, he will be able to better meet client wants by, for example, offering a new product, as well as raise earnings and enhance the functionality of the online business.
Pillar I PRODUCT – find your niche!
Offering goods that are available in every other online retailer is a very challenging task, especially for a novice business owner. It will be challenging to persuade new customers to purchase items that are available practically everywhere without an established reputation or brand awareness.
An excellent place to start with dropshipping is with a niche. It is crucial to pick a sector that aligns with your passions and interests. Of course, identifying a market or potential clientele is just the beginning.
Additionally, it’s important to provide an assortment that focuses on the individual demands of customers. Remember, your product will become more popular faster and without the risk of competition the more unique or effective it is at solving a problem.
Pillar II WHOLESALER – determine on the terms of cooperation
If you already know what you want to trade in dropshipping, the next step will be to discuss the best terms of cooperation with the wholesaler of your choice. However, keep in mind that you won’t be able to count on the biggest savings immediately away as a fledgling firm, frequently made up of one or more persons.
Prioritize customer acquisition and brand promotion, and over time when your company will guarantee a steady and high volume of orders, you will be able to negotiate better terms of cooperation.
When starting a business connection with a manufacturer or wholesaler, it is important to discuss more than just the dropshipping products you will sell., but also such issues as:
- from what level of monthly orders you are entitled to additional discounts,
- what are the conditions of returns and warranty,
- what is the shipping time,
- can you get trade credit,
- how the parcels will be shipped,
- does the shipment also includes other countries,
- if products can be reserved directly in the warehouse.
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Pillar III ADVERTISEMENT – make your store famous
Dropshipping is a very common technique of internet sales today, therefore you must accept the reality that there will be competition. Even if you’ve found your niche, it’s likely that you’re not the only one there, therefore excellent promotion will help you attract a lot of new clients.
Be multi-channel! Remember that just monitoring the prices of competitors is definitely not enough. Bet on proven communication channels, such as:
- Sponsored links from paid search. They sometimes involve a bigger financial investment, but they give you the opportunity to rank well in search results. The final outcome of this type of advertising is determined by the ratio between the reported cost per click and the effectiveness of your ad, which is evaluated by Google directly;
- organic positioning (SEO) – You will be able to rank well in the organic results of the Google search engine thanks to skillfully prepared content, without spending any money;
- website promotion in social media – by far the most frequently used tool today. Interesting campaigns on TikTok, Instagram , or Facebook are one of the most effective ways to reach potential customers;
- promotion by influencers – It is the ideal addition to social media marketing campaigns. However, keep in mind to pick your partnerships wisely, taking into account the audience and influencers’ interests.
Pillar IV SALES – take care of your customers’ satisfaction
Spending extra time on perfecting, improving, and even automating dropshipping is worthwhile because it includes a slightly different delivery model than a traditional online store. You’re not sure where to begin. Learn in-depth about the path that your website’s products must take in order to get to customers’ homes first.
- The buyer makes a purchase through your online store and pays for the order.
- Your online shop notifies the warehouse that the order has been received.
- The warehouse handles the delivery to the location the customer has specified.
- Your sore issues and sends a receipt or invoice to the customer’s email address.
- Depending on the terms you and the wholesaler already agreed upon, you settle before or after sending the order.
- In cases of returns, the goods are frequently accepted by the online retailer, whereas complaints are typically handled by the wholesaler. Dropshipping wholesalers are the exception because they permit returns.
Automation in dropshipping
When your dropshipping business begins to thrive and gain recognition, it will be worthwhile to implement powerful technologies that will not only continuously study the behavior of the competitors but will also enhance numerous purchasing procedures, speeding up and facilitating work.
Automation tools usually enable two-way communication between the store and the wholesaler. In fact, this implies that all transactions will be available in the producer’s system and that you won’t need to manually pass information about orders.
Dropshipping is substantially facilitated and expedited by automation, which naturally affects customer satisfaction levels.
Dropshipping is one of the most convenient and easiest ways to run your own online store. Thoughtfully keep in mind that being at ease does not make you less vigilant. The Brandly360 application and other cutting-edge technologies will make it easier to continuously keep an eye on prices and product availability so that you may always have your finger on the pulse. Try it out today and enjoy your thriving business!
Miłosz manages sales at Brandly360. For many years works on projects involving the implementation of software for businesses. On a daily basis, he works with trading companies, providing tools and services that improve work and follow the most recent market trends. Driven by a passion for data analysis, modern management systems, and process improvement.