how to start a dropshipping business in 2021

Dropshipping is on the rise. Very trendy in the United States for the last ten years.

If you have started to research dropshipping, you have probably already come across Youtube videos with catchy titles promising to make big profits in record time. It's true that dropshipping is a great launch pad into entrepreneurship, but there are a few things you need to understand in order to make it work.

This guide will help you get started and succeed in dropshipping.

Content of the article

1. What is dropshipping?

2. Who is dropshipping for?

3. What are the advantages and disadvantages of dropshipping?

3.1. The advantages of dropshipping

3.2. The disadvantages of dropshipping

4. How to start dropshipping?

4.1. Choose your dropshipping niche

4.2 Choosing dropshipping suppliers

4.3. Choosing between e-commerce site or marketplace 

4.4 Set your prices and your sales margin

4.5. Create a showcase site

4.6. Create a marketing strategy

5. How to succeed in dropshipping?

6. It's up to you!

1. What is dropshipping?

Dropshipping consists in selling products online without having them in stock. The seller only pays his supplier once the sale is completed. In order to find customers, the seller must set up a marketing strategy and create a showcase site for his products. 

To put it simply, dropshipping is based on a completely automated tripartite relationship: the customer, the seller (yourself) and the supplier. Here are the 3 steps of dropshipping:

1. The customer places an order on your site
2. You place an order with your supplier
3. The supplier sends the product to your customer

There are different ways to do dropshipping, depending on your business goal. 

If you are looking to make a short term profit, you can opt for reselling products purchased on Aliexpress (or other suppliers known for their low prices). In this case, it's all about your marketing strategy and choosing a winning product and niche.

If, on the other hand, you want to build a unique brand, you can customize white label products, which is called print on demand. The advantage of print on demand is the degree of personalization offered. This allows you to differentiate yourself from the competition. Etsy offers you the opportunity to personalize your packaging with stickers, inserts, and personalized notes. You can also choose from a variety of printing techniques and fabrics to print your designs.

2. Who is dropshipping for?

Dropshipping is a good way to make ends meet by creating your own business. Whether you are a student, a worker, unemployed or even retired, dropshipping is for everyone (or almost)! 

Here is what you need to start dropshipping:

1. A computer and an internet connection. (required)
2. Know how to train independently online. You will find all the information you need to start dropshipping for free on the internet. You can also opt for a paid training, provided you choose it well. (important)
3. Have an entrepreneurial mindset and persevere even if you don't make many sales at first. (important)

As you can see, you don't need much more than a computer, an internet connection, and a bit of resourcefulness to start dropshipping. But before you start, it is important to consider the advantages and disadvantages of dropshipping.

3. What are the advantages and disadvantages of dropshipping?

<><>

At first glance, dropshipping has only advantages, so much so that many sellers do not sufficiently anticipate certain aspects. 

3.1. The advantages of dropshipping

Dropshipping has three main advantages:

1. No logistics. Since you don't have any stock, you don't have to worry about the problems and risks associated with managing physical inventory.
2. No large upfront investment. However, don't underestimate the costs of Facebook advertising, subscription to an e-commerce platform, domain name, etc.
3. High margin rates. Since your costs are reduced compared to a physical store, if your marketing strategy is effective, you can make turnover quite quickly. 

Dropshipping is therefore inexpensive, very profitable and very accessible... Almost too good to be true! Some sellers who are a little too greedy commit more than dubious practices ranging from lying about the origin or quality of the product to reselling counterfeits via influencers.

3.2. The disadvantages of dropshipping

The main disadvantage of dropshipping is the dependence on the supplier(s). This means that in case of a stockout or a sudden price change, your business will be directly affected. It is therefore very important to:

• To choose your suppliers well. Some suppliers, especially on Aliexpress, have low quality products, and their customer service and delivery times are not always up to par. 
• To have several suppliers for your products. When you are dropshipping in a niche with strong competition, the risk is that your catalog is similar or even identical to that of your competitors. 
• To establish long term relationships with your suppliers. In case of problems, it is essential that you are able to contact them. For example, in the case of a defective product, your supplier must be able to react quickly.

To find out if a site is dropshipping, just right click on the product image and then click on "Search image on Google". If you find several dozens of identical results, it means that several sites sell the same product in dropshipping.

Now that you have a clearer picture, let's go through the different steps to launch your dropshipping store.

4. How to start dropshipping?

Now you have to choose your niche, your suppliers, a marketing strategy... In short, you have to get down to business.

4.1. Choose your dropshipping niche

It is very important that you find a profitable niche, even before choosing your products. You can choose your niche based on your personal interests or do your own market research through free tools or social networks.

• Explore trends 

You can study the most popular community hashtags on Instagram and Twitter. On Instagram, go to the "Explore" page and refine your search by category "Decoration", "Travel", "Art", "Style" (...) based on your affinities then identify trending products. 

You can also explore product trends directly on the marketplaces by playing with the filters. For example, on Amazon, you can access the "best sellers" page and choose a product category. On Aliexpress, once you have selected your product category, you can filter by number of "orders".

Finally, Google trends is an essential tool to anticipate trends. It allows you to evaluate the popularity of a keyword over a given period.

• Find keywords

You have chosen your niche? Now, it is important that you know the jargon around this niche in order to be in phase with your customers. For this, you can use the following tools:

Keyword Tool: to find keyword ideas (premium version to access all features)

Answer the public: to find searches related to keywords (the free version allows you to do a limited number of searches per day)

It is important to know your niche. If you decide to sell golf accessories and you are already a big fan of this sport, you will know how to address your customers, you will know their needs and the appropriate jargon, which will help you to reference your site on Google.

4.2 Choosing dropshipping suppliers

Now you need to find the dropshipping supplier that best meets your expectations in terms of quality, price and delivery time. But how to find a reliable wholesaler?

Here are some criteria to consider when choosing your supplier: 

• Price and delivery costs: do a market study to check that your supplier's prices are competitive. 
• Product quality: It is essential that you order samples before selling. This will also allow you to verify that the delivery time is respected. 
• Customer service: anticipate problems such as the return policy. 
• Reviews: have the reflex to look at the reviews left by customers. An average of 4.5 out of 5 stars on more than 2000 reviews is much more impressive than a 5 out of 5 on only 20 reviews.

4.3. Choosing between e-commerce site or marketplace 

You can sell your dropshipped products through your own website or through marketplaces (Amazon, Ebay, etc). Here are the main differences between the two solutions:

• The identity of suppliers: this is visible to buyers on marketplaces, unlike dropshipping sites. For example, on Amazon, when you buy a product, the mention "sold by [supplier name] and shipped by Amazon" is indicated.

• The commercial margin: it is between 8% and 15% on marketplaces and between 40 and 50% on dropshipping sites.

In short, marketplaces offer incomparable visibility and are a guarantee of confidence for many consumers. On the other hand, they charge a commission of 5 to 20% on each sale. If you decide to sell through your own site, the advantage is that you can work on your brand image.

4.4 Setting your prices and your sales margin

If it is true that dropshipping is within everyone's reach, it is still necessary to keep a minimum of accounts in order to make the right strategic choices. The sales margin is an indicator that allows you to know the profitability of your business. Its calculation is an essential step to realize your business plan before launching your business. Theoretically, there is no limit to your profit margins. But be careful, because the higher the price, the higher the quality and exclusivity your customers expect. 

4.5. Create a showcase site

If you decide to sell your products through your own website, you have the choice between creating a turnkey website with a monthly subscription or creating your own website if you have the skills. The advantage of the former is that the hosting costs of the site are included in the subscription. Then, it is advised to buy your own domain name (on GoDaddy, Namecheap..) so that your site looks more professional. 

Your site will be your showcase for your products. It is therefore necessary to create a coherent visual identity and to take care of your product sheets. 

4.6. Create a marketing strategy

The goal of your marketing strategy will be to generate traffic on your website or your sales page if you sell on a marketplace and to convert it. You can opt for free strategies such as natural referencing through SEO or a presence on social networks. 

You can also opt for paid marketing strategies, such as advertising on Facebook or collaborations with influencers on Instagram. The best is to combine these strategies. Also think about adapting your communication according to the target area, if you are dropshipping all over Europe for example.

You have chosen a niche, suppliers, a marketing strategy. All you have to do is make your first sales.

5. How to succeed in dropshipping?

Here are some tips to put all the chances on your side and succeed in dropshipping:

• Get trained. There are many free resources online.
• Get in touch with other dropshippers to exchange tips, tools, questions, etc. There is strength in numbers! There are many Facebook groups, Meetups, etc. for e-tailers and dropshippers. Doing e-commerce does not mean that you have to do everything alone.
• Set realistic goals for yourself. For this, you can follow The SMART method according to which your objectives must be specific, measurable, achievable, realistic, and temporally defined.
• Take care of your product sheets. Order samples to be photographed to illustrate your product sheets and differentiate yourself from the competition. It is important to have unique product sheets: avoid duplicate content to improve your ranking on Google.
• Work on your natural referencing. Do keyword research, detail your product sheets, create optimized content on your keywords through blog posts, etc.
• Be transparent in your communication. Delivery times, shipping costs, origin and quality of products: it is better to avoid unpleasant surprises. Keep in mind that high additional costs are the first cause of shopping cart abandonment.

Don't forget to define your delivery strategy. For example, you can offer free delivery for orders over a certain amount.

6. It's up to you!

Dropshipping is a good way to become an entrepreneur. This model allows you to test a market with limited risk. It's also a great way to monetize your creativity, especially for graphic designers through print on demand. 

If your goal is to create your own brand with a well-defined identity, starting in dropshipping is a good strategic choice. It will allow you to focus all your efforts on your brand image and marketing. And who knows, maybe dropshipping will just be a launching pad to your own full-fledged brand!

Now it's your turn to tell us about your drop shipping experience in the comments!