Dropshipping is a business system that allows a company to sell products without keeping inventory. The customer places an order, then the company notifies the manufacturer or distributor of the product, that the order has been placed and should be shipped to the customer. The manufacturer or distributor then ships the product directly to the consumer on behalf of the dropshipping company.
The order is simple: the user pays the drop. The distributor pays the manufacturer or distributor. The manufacturer or distributor sends the product to the customer. Basically, a dropshipper is a marketer.
Since there is no inventory required, dropshipping is a cost-effective way for new business owners to sell products at a low cost. It also prevents getting stuck on an unsold property.
Here’s how to start a dropshipping business in six steps:
1. Choose a business concept
A business concept describes what you sell and who you sell it to. Because there are so many options in dropshipping, you’ll want to start with the number of products you think you’ll sell to a certain demographic.
For example, you might develop a business concept that says you sell graphic t-shirts to skateboarders. T-shirts will appeal to this demographic and have unique designs that have the quality and style that skiers wear.
The concept is the basis for the products you sell, your website design and your marketing, so spending some time on it is crucial.
Since there are limited costs to implementing a drop shipping product line, it’s good to note that you can change things if you feel like you’ve made a mistake with your design or your product needs change.
2. Source products
Business Concept does not guarantee that you will find the products to serve your demographic. Before setting up a website, take time to research products. Find multiple distributors that sell similar products to find the best wholesale price for the product.
Some of the most popular online shopping sites in Australia are:
- International brands;
- Megagoods; And
- Ozdingo market place
You can also search for custom printed clothing, furniture, or books. Print-on-demand apparel companies print custom graphics on a variety of brands and styles of clothing, including t-shirts, socks, and jackets.
Choose a product that you enjoy, that has a good profit margin, and that looks good in the images on the website. Many of these vendors also provide statistics on popular items so that you can select items that are more likely to sell because there is a market.
3. Choose suppliers
Once you’ve found the products you want to offer, it’s time to choose a supplier that will be the company that ships the products to your customers. There are a few things to consider with the provider you choose:
- Quality: Choose a vendor that offers the quality you want your company to represent. One business model is to charge more for better quality products. This is as opposed to being a discount supplier of goods that may not be the best quality. How do you want to position yourself?
- Profitability: You should make a reasonable profit on the product. Factor shipping and handling costs into your calculations. Most drops aim to make 15% to 20% profit margin. Of course, if you can generate higher profit margins, that’s an advantage as a seller.
- Reliability: You want to choose a supplier that ships products on time with reasonable shipping costs and times. Many suppliers are overseas rather than based in Australia, and you need to decide whether or not your customers want to keep products. Having an order that can’t be filled is frustrating for you and your customer, so you need to have a supplier that keeps the product in stock. The best way to test reliability is to order a few products from the supplier and note the process.
- Return Item Processing Process: If possible, find a supplier that offers a return policy. Many do not, so you need to check this before making any final decision. You should think about how to define your own return policies based on what the supplier offers.
Most hackers use online marketplaces because they have a better inventory of products with trusted suppliers. It is possible to find a direct source supplier with a specific product in mind. This requires some extra work to see who will distribute the product to the manufacturer and often requires a minimum number of sales per month to qualify.
4. Build an online store
You need to build an e-commerce store to sell your products. An e-commerce store is a site designed to help you display the products for sale in an attractive manner by having the shopping carts necessary to complete the shopping transactions.
Building a store can be difficult for someone new to dropshipping or e-commerce in general. The reason is that there are few moving parts.
To build a website you need the following
- A content management system (CMS), such as WordPress, Shopify or Squarespace;
- domain name;
- Website Coordinator;
- Combinations with selected drops; And
- Built-in payment gateway to accept online payments.
The best e-commerce sites will automatically order the product for sale to the supplier. If this step is not automatic, you will manually enter the order every day, which can be difficult and lead to errors. Shopify is one of the leading choices for those building a thrift store. However, it’s not the only option available so it’s worth learning more about the best e-commerce platforms.
Additionally, you may consider selling your products on other platforms such as eBay, Amazon, or social media (ie Facebook or Instagram). Multi-channel sales can help your business gain exposure and drive more sales, so it’s generally worth doing. That is, if you have the bandwidth to manage multiple selling channels.
5. Register your business
You need to separate the company from your personal assets and set it up as a business. This means creating a name (usually a domain name of your choice) and registering for an ABN.
Registering for an ABN is free, and can be done online through the official Australian Government website. You can also register your business name and any other tax registrations you need to complete. This includes taxes such as GST if applicable to your business. Following the guidelines laid out by the government website will help you know what is required and what is not required for your needs.
6. Market your business
You can’t just set up a website and expect thousands of people to find it. You need to market the new business. Because it’s online, you can go beyond word-of-mouth marketing to other businesses in your community.
Join social media groups relevant to your business and start engaging effectively. Don’t just try to sell; Helping people with questions they may have. Become an expert in the community to be seen as a resource. This is where people find your business. Have specific business pages on Facebook, Instagram, Tik Tok and other social media platforms. Post regularly about new products, sales or tips and tricks in your focus industry.
In addition to your social media efforts, you may want to invest in real advertising and sales. You can run Facebook ads on a small budget that target specific demographics. Consider starting an ad campaign with a budget of $10 per day to drive traffic to your e-commerce store. You can also write a blog that helps consumers find you through search engine optimization (SEO) techniques.
For many new e-commerce stores, doing just a few of these marketing strategies is the key to getting enough eyes on their store to convert into buyers.