Drop shipping is a very popular business model among young entrepreneurs whose digital marketing skills outweigh their limited financials.

Drop shipping is a model in which items are purchased from a wholesaler and then sold directly to a customer once an order has been placed.

As there is no inventory or warehouse to manage, it is possible to start a drop shipping business with limited funds. However, let’s be realistic; even though starting a drop shipping business doesn’t cost much, it does take lots of work.

The following dropshipping guide contains 6 simple strategies to help you start a successful drop shipping business.

dropshipping guide

#1 Choose Your Niche

Make sure your niche is very focused; otherwise it will be very difficult to market. You also need to think about whether you have the skills, experience, and affinity for the niche you've chosen. If you're working with something you dislike, chances are you'll get fed up or discouraged very soon.

Here's what you need to consider when choosing your niche:

  • Choose attractive products. If you’re selling a product that nobody wants to buy, your venture is over before it even begins. You need to find out what people are interested in, i.e. what the market is lacking. For this, you need to examine current trends using tools like Google Trends or keyword research tools like Ahrefs and Ubersuggest. You can also check Amazon’s best sellers and Etsy trending items to see what people are actually buying right now, as well as product curation sites and accounts on social media.
  • Offer products that aren't easy to find locally. This will make your business more attractive to potential customers.
  • Choose higher-priced products with lower shipping costs. The amount of work you'll put into marketing and attracting customers is the same whether you're selling $5 items or $500 items. Make your effort worthwhile. On the other hand, although the manufacturer or supplier will take care of the shipping, high shipping costs might repel customers. Make sure the product isn't expensive to ship so you can offer free shipping and drive more sales.

#2 Perform Competition Research

In order to stand out from the crowd, you need to find a way to be better and more efficient from your competitors. In other words, if you want to outsell your competitors, you need to know them well.

Start by identifying your competitors. The top players in your industry are giants like Amazon, eBay, and Walmart. In addition, identify the number of sellers in your specific niche.

Next, analyze what they're selling. What do their product listings look like? What are their product descriptions and images like? You can 'borrow' some of their strategies or figure out ways to make your product listings more appealing to potential customers.

Finally, check out your main competitors' customer reviews. Read the comments do detect what the customers liked and disliked, and use these notes to polish your customer service approach.

#3 Choose a Supplier

Choosing the right supplier can be crucial for your business, so pay close attention. Most suppliers are situated overseas, which makes communication very important. You need to choose a supplier that is available, easy to work with, fast, and efficient. If you have doubts about the supplier’s communication abilities, look for another option.

You can use Alibaba as a resource to identify potential suppliers and communicate with them. You can also learn from entrepreneurs who already have experience in your industry. There’s a lot of info available online; look for blogs, forums, and subreddits about drop shipping.

Another option is to use more than one supplier. This is especially convenient if you’re selling a lot of products.

If you’re working with only one supplier and a product goes out of stock, you’re in trouble. Using more suppliers with similar inventories ensures that the item will be available to you at all times. In addition, if a supplier decides to raise its prices or goes out of business, you’ll have other options to keep you operational.

 Choose a Supplier

#4 Build an eCommerce Store

The fastest way to build a site that supports a drop shipping business model is to use an e-commerce platform such as Bigcommerce or Shopify. Even if you do have enough money to hire a professional web designer, it's much better to use ready-made templates, at least in the early stages. Once you start making profits, you can consider additional site customization. The best part is that you don't need to have any tech knowledge.

#5 Set Up a Marketing Plan

Did you know that there are about 20 million e-stores on a global level, but only 650k make more than $1,000 of annual sales? Now that's a competitive market! If you want your drop shipping business to stand out, you need to create a marketing strategy.

Whether your goal is to attract new customers to your online store, boost conversions, or maintain customer loyalty, you need a strategic blend of the most effective marketing strategies. Here are just a few to get you started:

  • Build trust by adding customer testimonials, ratings, and reviews to your site
  • Run Facebook Ads to suit your marketing goals and budget
  • Nurture leads with a series of email marketing content with the help of a cold email outreach templates
  • Start a blog to drive organic traffic to your drop shipping business
  • Share social videos to boost traffic and increase engagement

#6 Track and Measure the Results

Tracking and measuring all the metrics and available data is crucial if you want to grow your drop shipping business. Use tools like Google Analytics and Facebook Pixel to track conversions, measure the results of your marketing campaigns, see what people are searching for on your site, identify the best and worst performing pages, etc. This will enable you to scale what's working and eliminate what isn't.

Final Thoughts

Building a successful drop shipping business is a long process and, as mentioned earlier, the competition in the industry is fierce. But the above-listed strategies will give you a solid base to start out and with a little luck, the rest will soon fall into place.