Are you an aspiring entrepreneur wanting to test your business model? If so, you may want to consider dropshipping. Dropshipping has become a 15 billion dollar industry that focuses on order fulfillment. Now you may be asking yourself, what does this mean? What is dropshipping and how does one start? If you are curious to learn more, this article is for you!
Unlike the common retail model, Dropshipping allows you to act as the “middleman” between suppliers and customers. As further described in Shopify’s blog post, when the customer orders a product from your store site, the order is sent directly to your partner supplier who ships their product to the customer. Essentially, as a dropshipper, you serve to fulfill the customer’s order from the supplier. With that being said, it may lead you to wonder why engage in dropshipping in the first place?
Dropshipping allows you to source products without having to invest a large amount of money in paying for a warehouse, tracking inventory, packing orders, or managing stock level. In addition, since dropshipping doesn’t require you to purchase the products from the supplier until you sell them to your customers, it may be easier for you to provide a wide range of products, as well as test and scale your business model.
So how does one actually get started? Here are some things to consider when first navigating the dropshipping industry:
- Do your research and brainstorm some dropshipping business ideas. It is important to figure out what your niche will be and create a business model that you can commit to.
- Find a dropshipping supplier. According to Shopify, there are two common approaches to dropshipping on their platform: finding a supplier using supplier databases worldwide or finding a supplier via a Shopify app such as DSers.
- Choose a business model and start up your e-commerce business. After you have chosen your supplier, it is important that you start planning how you will run your dropshipping business so that it is successful and stands out amongst competitors. Make sure you have carefully considered the initial expenses and have come up with a sound financial plan. While costs for test orders and online advertisements may vary with the scale of your business, a domain name can cost anywhere from 5 to 20 dollars a month, and e-commerce platforms for your online store (like Shopify) typically cost around 29 dollars a month.
Dropshippers are usually considered product curators and can make a decent profit depending on how engaged you and your customers are. However, it is important to note that dropshipping requires you to be entirely committed. Newcomers usually face lots of challenges when it comes to competing with others in the e-commerce space, dealing with shipping/inventory issues, and taking responsibility for supplier errors. For more information and tips on getting started with dropshipping check out Shopify’s video!