Drop shipping is definitely a popular business structure for new entrepreneurs, especially Gen Zers and Millennials, due to internet marketing skills far outweighing financial capacity. Since you don’t have to stock or handle the products you might be selling, it’s easy to start up a drop shipping business with limited funds.
An e-commerce website that operates a drop shipping model purchases the things it sells coming from a third-party supplier or manufacturer, who then fulfills the order. This not just cuts operational costs, but it also frees your time to focus your efforts on customer acquisition.
In case you are able to start up a business that can contend with retail giants, and do this on the limited budget, then stick to the six steps below. Even though it doesn’t take lots of startup funds to launch a drop shipping business, it will require a tremendous amount of hard work.
The niche you decide on has to be laser-focused as well as something you might be genuinely considering. A product range that isn’t focused will be challenging to market. Should you aren’t excited about the niche you choose, you will end up more likely to becoming discouraged, because it takes lots of work to successfully scale a drop shipping business. Here are some facts to consider when choosing your niche:
Seek attractive profits. When you are running a drop shipping business model, your focus is on marketing and customer acquisition, so the volume of work necessary to sell a $20 item is basically exactly like it would be to market a $1,500 item. Decide on a niche with higher-priced products. Low shipping costs are very important. Even though your supplier or manufacturer will handle the shipping, when the price is excessive, it can serve as customer repellant. Find a thing that is relatively cheap to ship, since this also provides you with the choice of offering free freight in your customers and absorbing that cost as a business expense in order to draw in more sales.
Make sure your product or service interests impulse buyers with disposable income. If you are dedicated to driving traffic to your website, you would like to experience the highest conversion rate possible because most visitors will never return. The products you are selling should trigger impulse buys and interest those that have the financial ability to create a purchase on the spot. Ensure individuals are actively looking for your product. Use Google’s Keyword Planner and Trends to check some common search terms associated with your potential niche. If nobody is trying to find what you are planning on selling, you might be dead in water before you even begin.
Make your own brand. Your drop shipping business will have more value should you can rebrand whatever it is you are selling and pass them back as the own. Search for a product or line you can white label and sell when your own brand with custom packaging and branding. Sell a thing that isn’t readily available locally. Pick something your customer can’t find down the street. That way, you are more desirable to a possible client.
Remember, you are you rivaling other drop shipping operations as well as retail giants like Walmart and Amazon. Here is where a lot of potential drop shippers go wrong, because they choose a product which has sixmim to no competition. That’s a sign there isn’t interest in that specific product.
Many reasons exist why a product might not have plenty of competition, like high shipping costs, supplier and manufacturing issues or poor profit margins. Look for products that have competition, as it’s a sign that there exists a popular demand and also the business model is sustainable.