Dropshipping is a very popular business model recently

Compared with using Amazon FBA, dropshipping does not require retailers to stock any items, the required cost is low, the risk is low, and it is very attractive to start-ups.

Let’s take a look at dropshipping.

What is dropshipping?

Dropshipping is an order fulfillment method where a store does not keep inventory of the products it sells. Instead, the store purchases inventory from a third party (usually a wholesaler or manufacturer) as needed to fulfill the order.

The biggest difference between dropshipping and the standard retail model is that sellers don’t stock or have stock – they act as middlemen.

With dropshipping, you don’t have to do tedious inventory management and order fulfillment, and you can focus more time on sales and marketing.

Is dropshipping legal?

It is safe to say that drop shipping is legal. There are countless retailers around the world using this fulfillment model.

However, there are some problems to be aware of in this process, otherwise there will be risks.

Work with reliable suppliers

It is crucial to find a supplier who can provide dropshipping services for your products.

When you use the dropshipping business model, both inventory and shipments are managed by your suppliers. Therefore, it is important to cooperate with an honest and reliable supplier.

Otherwise you can run into these problems

  • The product sent by the supplier does not match the picture shown
  • The supplier does not ship within the stipulated time
  • The product provided by the supplier does not have the relevant certification
  • ….

So make sure your supply is legitimate and trustworthy.

Products must comply with relevant laws and regulations

For some products, each country will have some specific requirements. such as baby clothes, toys, liquid products, etc.

So before you sell these products, you must know if your target market has certification requirements for these products.

Otherwise your product may be confiscated and destroyed by customs in transit.

Follow the rules of the sales platform

Selling platforms will formulate some regulations to constrain sellers to ensure that no inferior products appear on the platform.

To avoid breaking the rules, it’s also important to know the rules of the selling platform you’re using at the start of your business. Otherwise your store may be closed.

How does dropshipping work?

In simple words, dropshipping works by when a retailer receives a purchase order from a customer, the retailer passes the sales order to a dropshipping supplier, and the supplier then fulfills the order.

Retailers do not store their own inventory or drop-ship items. Instead, they mainly focus on marketing, advertising and managing their online presence.

Retailers make profits from the difference between the initial item cost and the price they sell it.

These are the parties involved in dropshipping.

  • Manufacturers create products. They don’t usually sell to the public, they instead sell in bulk to wholesalers and retailers.
  • Wholesalers buy products from manufacturers and then mark them before selling them to retailers. Wholesalers usually stock products from different manufacturers.
  • Retailers sell products directly to the public at a markup.

Here’s how it works.

  • A customer places an order with your business (i.e. the retailer).
  • You remind the dropshipping partner – the manufacturer or wholesaler – to package and ship the product to the customer.
  • The dropshipping partner charges you (the retailer) for the service, and you charge the customer.

Generally speaking, the shorter the supply chain, the greater your profit.

How to find the best dropshipping suppliers?

Finding a dropshipping supplier can be a tricky and time-consuming task, but it is critical to the success of every dropshipping business.

Many suppliers offer the same product, so how do you know which one to choose?

Usually you can find dropshipping suppliers in the following ways.

Contact the manufacturer

Contact the manufacturer of the product you want to sell for a list of suppliers they work with. This simple step ensures that you are looking for a legitimate supplier.

If the same name comes up again and again, this might be your ideal supplier.

Attend trade shows

Find out if any trade shows in your niche are taking place near you. Tickets can be expensive, but trade shows are a great way to meet suppliers and see products in person.

Google Search

Many dropshipping suppliers market on Google, especially those that specialize in dropshipping.

With a Google search, you can reach dropshipping suppliers from all over the world.

But there are still some dropshipping vendors who haven’t mastered marketing yet. With this in mind, you should search for various search terms and not just look at the first page of Google results.

Don’t ignore vendors just because their sites are clumsy.

From competitors

Order some products from a competitor or dropshipper you want to be. Searching for the return address will tell you who their dropshipping supplier is.

This is a great opportunity to look at the competition and find potential suppliers at the same time.

Dropshipping websites

This is one of the most used ways by startups to find dropshipping suppliers.

The advantage of using a dropshipping supplier website is that there are many suppliers offering the same product, and you can choose to work with a Chinese supplier.

This allows you to get a better purchase price, which increases your profits.

Below we have listed some popular free sites. However, just like on Amazon or eBay, users rely on feedback and reviews to determine which suppliers are trustworthy.

AliExpress

AliExpress is a very popular website for sourcing dropshipping products.

It’s a B2C retail website owned by Alibaba, and basically all suppliers are Chinese.

Importantly, most of the suppliers here offer dropshipping services.

It is very simple to carry out drop shipping operations through AliExpress. When your store receives an order, you only need to place an order directly on AliExpress, and fill in the buyer’s address for the delivery address. The AliExpress supplier will then deliver the product to your customer.

Of course, before that, you need to reach an agreement with the supplier in advance on the delivery time, product packaging, transportation method, after-sales guarantee, etc.

Dhgate

This is another Chinese site that feels similar to AliExpress.

Likewise, DHgate offers a wide variety of products and buyer protection, but it also has warehouses in the US that can shorten delivery times.

It operates in much the same way as AliExpress.

Now that you know how to find a dropshipping supplier, it’s important to know some tips for identifying and selecting suppliers.

Here are the questions you must figure out when contacting your supplier.

  • Understand the quality of products offered by dropshipping suppliers.

Product quality is the most important thing buyers care about, so this is an important factor in your selection of suppliers.

Product quality can be checked by product raw materials, product certification, product size, etc.

Of course this information may not be true. So the best way to guarantee product quality is to order some samples to see for yourself the packaging, delivery time and product quality.

  • Know what suppliers charge

Calculate the numbers before choosing a dropshipping partner. If wholesale prices aren’t enough for you to make a decent profit on your product, look elsewhere.

In addition, there are some specialized dropshipping companies that may charge a handling fee. If so, evaluate how it affects your profit margins.

Again, every expense and every middleman impacts your bottom line, so you should try to simplify your supply chain.

  • Know the supplier’s delivery time

Before you work with a supplier, you must calculate whether the supplier’s processing speed meets your criteria.

If your store shows that the delivery time is 3 days, the supplier must process your order within 3 days and give you a tracking number where you can track the shipment information.

Make sure your supplier can do this or your customers may return it.

  • Learn how suppliers package products

Is the product packaging secure? Otherwise the product may be damaged in transit.

Does the package include any dropshipping supplier information? If a customer finds out the real supplier of the product may not buy from you again.

These are all important issues that affect your business.

In addition to this, you can put more effort into the packaging to make it yours.

For example, customization includes unique packaging for your brand, custom thank you cards for your customers, and more.

  • Know the supplier’s shipping method

This is also about the time the buyer receives the product and your cost.

If the supplier uses economy shipping, the shipping will be slow and there is not even a tracking number to track the order information.

If the supplier uses a courier service, the shipping fee can be very expensive.

You have to strike a balance between your cost and shipping time.

  • Understand the after-sales service of dropshipping suppliers

With shipping comes returns. Learn about returns and warranty policies. If returns are not accepted or the product is not guaranteed, please steer clear.

  • Understand the supplier’s billing process

Does the dropshipping partner charge your credit card immediately after you submit an order? Or will they send you a monthly bill? Make sure to choose a partner whose billing process is a good fit for your cash flow.

  • Know the supplier’s reputation

If you’re looking for a dropshipping supplier online, it’s worth measuring whether they provide a reliable service by checking reviews and order counts.

In addition to that, you can also enter the supplier’s name or address into Google to see search results, as well as phrases like “fraud” or “scam.”

These are some of the things you must consider when choosing a supplier to ensure the authenticity and reliability of the supplier.

Again, suppliers will want to verify that your business is genuine, so have your company registration details ready.

You can then ask them the above questions.

You have to show that you are serious. That way they’re more likely to work with you and maybe even meet special requests – like custom labels.

How to start dropshipping business?

Earlier we learned how the dropshipping works, let’s take a look at the specific process of developing the drop shipping business.

Choose your niche and dropshipping products

First, you have to consider your niche and product. You need to determine what you will be selling in your store. There are countless products for you to choose from.

Ideally, choose something you know very well, such as a product you’ve been exposed to or related to your hobbies and interests. Picking something you are familiar with will help your business.

Or you can look at Pop and Fashion. If you’re not a creative person, you can use the following tools and websites to help uncover product ideas.

  • AliExpress Hot Products – AliExpress releases their most popular products every week, giving you an idea of what’s trending for sale online.
  • Amazon Bestsellers – Amazon features a Bestsellers page of their best-selling products, updated hourly.
  • Ebay Bestsellers – Ebay provides a list of bestsellers where you can easily find currently popular and bestsellers.
  • Pinterest ideas – Pinterests is the best place to find product ideas. You can create an account and subscribe to categories and lists of interests and groups to follow real market product needs.

Don’t start a business right away after you’ve found the product you want to sell. Please check that your product follows these principles.

  • The product should not be fragile and easy to transport.
  • The product size should not be too big, otherwise the shipping will be expensive.
  • This product should not be readily available in brick and mortar stores.
  • The industry in which the product is located is not monopolized by big brands
  • Products should have a strong value proposition and/or cool factor.
  • The price of the product should be greater than $30 with at least a 200% markup.

In addition, there are some issues that need to be paid attention to.

  • Remember to avoid branded products, counterfeit products and knockoffs.
  • If there are logos or slogans on the product, avoid them. To ensure legitimate business, try to stay away from these potentially bad products.

Find a reliable supplier for your product

Next, you must identify your dropshipping suppliers. For beginners, this is a daunting task.

You can learn how and tips for finding a dropshipping supplier in “How to Find the Best Dropshipping Supplier”.

Build your own online store

Once you’ve selected your products and suppliers, it’s time to set up your dropshipping store.

Usually, you can choose to sell your products through your own website or sell your products through a third-party e-commerce website.

Self-built website

Self-built websites can design pages completely according to your own preferences, and you have more space for your own control. But self-built websites take more time to design. Below are the top self-built website platforms.

Shopify

The most popular self-built marketplace platform is Shopify. It offers several different templates, tools and plugins for you to build and manage your store.

Shopify is simple and easy to operate, suitable for beginners without any website building experience.

Wix

Wix is a website building platform that allows you to create and host your business website and blog. Therefore, it provides the following benefits to dropshippers:

  1. Fully customizable website
  2. No technical skills required

If you’re looking to create a website but don’t know how to code, Wix is the platform you need. You can design your website, publish it, and even start selling online without coding skills.

WooCommerce

WooCommerce is a free WordPress e-commerce plugin. It has everything you need to sell online, including an e-commerce shopping cart, customizable payment options, and support for popular payment gateways.

WooCommerce benefits dropshippers in the following ways:

  • It integrates seamlessly with WordPress
  • Free to use
  • Super customizable

WooCommerce is a bit more complicated than the previous two website building platforms, so it is more suitable for people with coding skills.

Magento

Adobe’s Magento is an open-source e-commerce platform that is popular among e-commerce professionals who need high-performance and secure solutions.

Magneto can act as a great dropshipping platform by offering:

  • Fully customizable website
  • SEO friendly enhancements

Magento provides fully customizable features to build an online store.

Third-party e-commerce website

The third-party e-commerce platform itself has a lot of traffic, so when you sell your products through the e-commerce platform, you can get traffic faster.

The following are commonly used dropshipping platforms.

Ebay

eBay is an extremely attractive e-commerce marketplace for new sellers with no upfront investment and huge business growth potential.

Facebook marketplace

The Facebook marketplace is part of the social network’s foray into e-commerce. Facebook is an important part of people’s daily lives, so the platform makes it easier for people to buy and sell things from each other.

Amazon

Amazon is one of the most outstanding e-commerce platforms, offering a large number of products and services on its marketplace.

Etsy

Etsy is an online marketplace where global sellers can sell their handmade and vintage items to millions of buyers.

Walmart

Walmart is the world’s largest retailer with more than 10,000 stores in 27 countries. Additionally, Walmart provides a marketplace platform that allows us to sell our products.

To set up your store, aside from technical issues, content is also crucial.

You have to write product descriptions to make them unique. Use high-quality images and be clear about the product’s shipping policy, return policy, quality assurance policy, and more.

Promote your own online store

Once you’ve got your online store set up, it’s time to market your business.

Your target customers should know what you offer, so target them with promotions.

Create a multi-channel marketing plan to promote your business. Common promotion channels are as follows.

Social Media Marketing

Promote your products through social media platforms such as Facebook, YouTube and Twitter, etc.

Create content that brings value, build your social media footprint to reach customers to increase sales.

Google SEO

Get more exposure by optimizing your website to improve your ranking in Google.

Paid promotion

Advertising is another way to help you get a wide range of customers right away. You can advertise on different platforms such as Google and Facebook.

Influencer Marketing

An influencer is someone who has a large online audience and has the power to “influence” that audience’s buying behavior. Get traffic fast by partnering with influencers.

Partnering with the right influencers can increase your brand awareness by getting your products in front of a large number of potential customers.

Email Marketing

Even in a brick and mortar store, having a strong email marketing strategy is important.

Collect as many email addresses as possible – customers, prospects, people interested in your event, etc.

When you launch, you’ll be able to email all of these people to let them know they can access your store online.

Affiliate Marketing

You can create an affiliate program for your website and invite those who are good at marketing to promote your products.

When someone buys your product through their link, they get paid.

Leverage your brick-and-mortar store

If your brick-and-mortar store has a high profile and a loyal following, you can use your face-to-face time with customers to help drive traffic to your new online store.

Process customer orders

After getting an order on your online store, a critical step is fulfilling the order.

You need to contact your dropshipping supplier to purchase the product, and then have the supplier deliver the product to the buyer within the specified time.

This step does not require you to actually do much, you just need to ensure that you communicate with the product supplier in advance about the price, delivery time, packaging method, etc.

That is the whole process of developing a dropshipping business. What other questions do you have?

Is dropshipping worth it in 2022?

There are several statistics that show that the industry is saturated, but not killing its potential, a business that is lucrative and thriving.

It is more profitable to dropshipping than to store the goods yourself.

Plus, the world recognizes e-commerce, people are increasingly shopping online, the ease of paying online, and the low cost can all convince you that it’s worth starting this business in 2022.

Of course, you also need to be aware of the risks involved.

Avoid shipping delays in the first place or you will lose many customers.

Second, you must do the relevant after-sales agreement.

Finally, reduce customer refunds and returns, which can affect your store reputation.

We can see in many community messages that people recognize and agree with this model, not to mention that starting this business will not require you to pay too much money, why not try it?

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