How to Start a Successful Dropshipping Business

The Internet has changed how we do just about everything, from enjoying music to reading the news. Most of all, the web has changed the shopping experience. Thanks to dropshipping methods and wholesalers like Warehouse 115, small businesses can now increase their inventory and selling power. With a few clicks, even the most modest up-starts can compete with global retailers in cyberspace – and succeed.

What Is Dropshipping?

Shopify defines dropshipping as “a retail fulfillment method where a store doesn’t keep the products it sells in stock.” Here’s how it works: a retailer works with a supplier – ideally one with a large distribution center filled with a lot of product. The retailer advertises this product online, where your average buyer can shop around. When the buyer makes a purchase, the retailer orders the product from the supplier, who ships it directly to the buyer. Everyone gets what they want: the buyer gets their new stuff, and supplier and merchant get their money.

What makes dropshipping so great is the freedom it gives small businesses. There’s no need for a stockroom full of product you can’t move. There’s no need to limit your customer base to your local area. Dropshipping opens you up to a whole new world of clients! So, how do you get started? Here are a few simple guidelines:

Step 1: The Market

When you start a dropshipping business, you need to have a niche. Big box retailers like Wal-Mart, Target, and Amazon have the market covered on “selling everything,” so you should find a specific product that resonates with your target market. A Better Lemonade Stand suggests researching small, but passionate communities – yogis, hikers, knitters, etc. – and using these as a jumping off point for your target market. Play around with keyword tools until you find popular search terms and products that pique these groups’ interests. Once you have those in mind, you’ll be able to identify products in demand as well as their seasonality.

Step 2: The Product

Let’s say that you’ve identified some great new apparel, accessories, and mats that will appeal to die-hard yogis. The next step you need to take is finding a supplier. With so many dropshipping wholesalers out there, you’ll certainly have your pick of wholesale outlets that wouldn’t mind a steady stream of orders. However, you need to do your research and ask the right questions. How long will they take to fulfill orders? What does their quality control system look like? Can you use their product photos on your dropshipping site? Find a supplier willing to work with you on your terms, and you’ll be up and running in no time. 

Step 3: The Platform

Whether you build your own website or use an existing app, your platform is one of the most important aspects of your dropshipping business. You need to find an online space that will attract customers and display your products prominently. Of course, the ideal platform is always changing as new apps are introduced; for example, ebay has long been the reigning dropshipping platform, but recent years have seen a rise in stores showcasing product on Instagram, arguably the world’s most popular photo app. Keep your finger on the pulse of online shopping trends and you’ll be lightyears ahead.

Step 4: The Financials

This is a small step, but a very important one. As Salehoo reminds us, you need to have a tax ID and a sales tax ID to do business in the US and Canada. The application process is easy and cheap – so don’t forget it!

Step 5: The Marketing

At this point, all that remains is marketing to your customer base. Be sure to have attractive photos of the merchandise from your supplier. Post those photos on your platform, as well as other marketing tools (social media, for example), regularly. Engage your customers by asking them questions on Twitter, Facebook, and Instagram. And most importantly, when you make a purchase, fulfill the order promptly. Before long, you’ll have a thriving dropshipping business.

Guest post by Carl Turner. Carl has been working in sales for over 25 years. Currently, he divides his time between speaking at corporate events, writing about sales in the digital age, and sailing down Puget Sound. He lives in Los Angeles with his family.

Need some dropshipping affiliate programs?


Photo Credit: wuestenigel Flickr via Compfight cc