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Drop Shipping For Dummies: A Guide

By
Joshua Weatherwax
Table of Contents

As you look into starting an eCommerce business, you'll come across many articles and resources regarding  what is drop shipping.

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Dropshipping has a low barrier to entry and a lot of scalability. Before jumping in, you'll want to look into questions like, "Is dropshipping dead?" and "Is dropshipping legal?"

Once you've done your research on how to dropship, it's time to learn how to start a dropshipping business, and set up shop. Read on to learn how to start a dropshipping business, the steps involved, and the capital you'll need.

How to Set Up Drop Shipping

Though the dropshipping model is more complicated than more traditional direct to consumer businesses, setting up a dropshipping business doesn't have to be difficult. Here's how to set up dropshipping:

Pick a Product

The first step in starting all types of eCommerce businesses is deciding what you want to sell. You may already have general dropshipping business ideas of what you’d like to sell, and with the help of eCommerce keyword research you can really nail it down. Simply perform Google searches for the products you want to sell and look at stores that sell similar products. Take note of what you like and dislike, as well as what additional products these stores are selling. Choose best dropshipping products that there is demand for, but that there is no major competitor that owns most of the sales. This will also be helpful in the future when you perform demand planning.

You should also research what people are already interested in buying. Look to social media and check out the pages of stores in the dropshipping niches you want to compete in. Customers will often leave reviews or comments that can give you insight into the products they like and hate. This lets your business avoid some dropshipping beginner mistakes your competitors have made and start on the best foot.

Research Suppliers

Once you know the products you'll sell, you need to source those products (see how dropshipping works). If you're wondering how to find wholesalers that participate in dropshipping, it's easier than ever. One of the best ways is to look through a wholesale directory for reputable businesses with wholesale items to sell. Make sure the suppliers you choose have experience with dropshipping. You'll also want to make sure the products they sell aren't copyrighted or low-quality. This will ensure you don't upset customers and lose business. You need to know how to find dropshipping suppliers that are reliable.

Decide Where You'll List

One of the most important aspects of a dropshipping business is the storefront. This is the first thing a customer sees when they come to your site, so it needs to be easy to understand. Even more than that, they need to be easy to navigate and make a purchase through. You can choose to create your own site using a headless eCommerce platform. This requires a bit of technical know-how and you'll have to seek out customers yourself, but it's very customizable. This is key in how to make money dropshipping.

You can also build one on an existing online marketplace. These sites feature multiple businesses selling products and already have an existing customer base, taking a lot of hard work out of starting a business. With over 92,000 buyers on the BlueCart platform we can help you take your business to the next level with exposure and access to buyers on our platform.

Establish Store

Once you've decided on the platform or marketplaces you'll use, you need to build your store. Focus on creating a streamlined storefront that does a great job of showcasing your products. You'll also need to create a shipping policy page, so customers know what to expect when they place an order with your business. This is especially important if you choose the reverse dropshipping model.

BlueCart eCommerce is an all-in-one eCommerce platform and wholesale marketplace that makes starting dropshipping websites as easy as possible. We handle all the hard work of building your catalog, processing eCommerce payment, and more, so you can get right to selling.

Start Marketing

Now that your store is up and running, you need to draw in customers. Dropshipping businesses generally rely on selling to as many people as possible as the average order value is low. Make sure your store is built with proper SEO for eCommerce product pages so all of your products can be found easily and invest in dropshipping ads or affiliate marketing vs dropshipping.You should also use eCommerce email marketing. It has the best conversion rate of all forms of marketing and is fairly simple to do. This is especially true if you use eCommerce marketing automation to create emails that will be sent to customers automatically when they perform certain actions.

BlueCart eCommerce users have access to a slew of integrated reports and tools, including email marketing. You can create and send promotional emails right from the platform, so everything you need to increase sales is in the same place.

Things to Avoid When Drop Shipping

Now that you know how to start dropshipping, let's take a look at the other end of the business.

These are the most common things to avoid when dropshipping.

  1. Overreliance on vendors. In the dropshipping model, the supplier handles much more of the process than normal. This means you'll rely on them for product quality control, order fulfillment, and more. But, their focus is on their own business, not yours. They may run into issues with production, lack decoupling inventory or safety stock, or otherwise are unable to fill orders. You need to have backups in place and be capable of serving your customers at all times. This includes having your own eCommerce business insurance to cover product issues that are out of your control.
  2. Uncontrolled shipping costs. Ecommerce shipping costs are one of the largest expenses faced by dropshipping businesses. This can be even worse if you have multiple suppliers and are trying to calculate shipping costs in real-time for your customers. Your best option is using a platform with automated dropshipping that handles these calculations, like BlueCart eCommerce. Customers won't be surprised by shipping costs, and you'll be able to see if they're getting out of control or even set a flat rate.
  3. Expecting easy profits. Dropshipping businesses don't cost a lot to start and are relatively easy to run. But, this doesn't mean success is guaranteed. You need to endure your store sees a steady stream of customers and that these customers are happy. If you start receiving negative reviews, you need to resolve them quickly, or your business can be damaged by a poor public image. Even if you use the drop surfing method, a good dropshipping profit margin isn't guaranteed. You'll also need to make sure you focus on eCommerce SEO, so your site can compete without needing to invest in eCommerce PPC marketing.
  4. Lack of branding. Since you don't create the products you sell, it can be easy for customers to forget your business. Speak to your suppliers to see what options they have for branding. You'll want to get your logo put on eCommerce packaging and all inserts if possible. This will let you build your brand and avoid falling into the cracks.
  5. Confusing or missing returns policy. Returns are more complicated in dropshipping, so you need to have a defined policy in place. Work with your supplier to establish a return policy and lay it out on your website. If you use a dropshipping website builder this should be a page template option you can use. This will ensure your customers aren't surprised if they have issues with their order and help your customer service for dropshipping team. You'll also want to have your supplier insert an RMA in each shipment, so returns can be processed and tracked easily. BlueCart eCommerce has a robust returns/credit system, so you can handle these instances with ease.
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How to Start Dropshipping for Free

Dropshipping businesses are known for their low overhead expenses, but also low margins (see is dropshipping profitable and markup vs margin). This means many people are looking for ways to get their business started with little to no investment.

To start a dropshipping business for free, you need to find the right eCommerce software. Many platforms and programs operate on a subscription revenue model which has a free trial period. This is key to start dropshipping for free. You'll need to find a trial with a web platform and a dropshipper marketplace or wholesaler directory. If you can get your business up on a marketplace within that time frame, you can make sales before ever spending a penny.

Can You Start Dropshipping with No Money

Yes, you can actually start a dropshipping business with no money if you plan well and use free trials. However, this requires a lot of planning, and you will start incurring costs after 2-3 weeks. In general, it only costs about $500 to start a dropshipping business, so you can cover these new operational costs with only a few sales. Once you increase eCommerce sales, you'll be profitable very quickly.

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You're No Dummy, Dummy

Dropshipping doesn't have to be complicated. Follow the steps above and avoid the pitfalls of those that came before you and you can see profits quickly. You can scale this new business without investing much money and even find new avenues for product offerings with ease. Soon, you'll be needing to post ads for dropshipping jobs since you've grown so much, so quickly and adjusting your drop shipping business plan to keep up.

For more guidance, try reading dropshipping books and taking a dropshipping course. You could also look into cross docking if you have a little bit of storage space and want more quality control.