In this article
The technological revolution of the early 2000s has drastically changed the way we live, think, plan, and even develop relationships.
It has especially changed the way we work.
Now that information and goods are available from virtually any corner of the world, and often times within a matter of seconds, people are changing the way they do business and earn money. Long gone is the need to go to a physical office and with that comes the temptation of ditching the need to answer to a boss, as well.
Nearly 33 percent of e-commerce businesses use the dropshipping business model to shed the traditional responsibilities that come with running a business, thanks to the current state of technology.
And with the ecommerce revenue projected to hit $4.9 trillion in 2023 in the US alone, it's no wonder that seasoned small business owners and millennials alike are jumping into the profitable dropshipping trend.
But just because it's easier than ever to open a drop shipping store, it doesn't mean that your online store will immediately become profitable.
With careful market research, product selection, and ecommerce marketing, you can open a successful drop shipping business in as little time as one week.
Yup, it's possible.
I'll break it down for you, from comprehensive keyword research prior to selecting a product to creating an effective marketing strategy...
...and everything in between.
By the end of this article, you will be equipped with everything you need to know to start a dropshipping business.
Let's dig in.
What are the Benefits of Running a Dropshipping Business?
Of all of the possibilities for running an e-commerce website, one with a dropshipping business model is perhaps the most enticing.
Just like any small business, an online e-commerce business certainly has its pros and cons. The difference is that many of the cons that come with running a dropshipping company will come with running any online store, making the dropshipping business model one with lots of unique benefits.
Some of the most notable benefits are listed here.
1. Low Costs
The dropshipping business model requires very little money to start selling and earning money.
In fact, you could start your business for just the cost of running your website, if you wanted to.
Whatever costs come with opening a drop shipping store are virtually negligible compared to any other small business start-up costs.
You are not producing any products, purchasing any materials, or paying any operational costs. Virtually the only thing that you need to pay for when you run a dropshipping company is the website from which you sell your products and any ads that you place.
2. Customizable Profit Margins
Because you don't pay for packaging, stock the product, or manufacture anything, your costs are super low, relative to other small business models. You simply cover the cost of the wholesale price and collect the rest. That means that there is tremendous opportunity for decent profit margins on all of your products.
3. More Flexibility in The Market
Things happen. Trends come and go, the economy crashes, and advancing technology changes the way people purchase products. The dropshipping business model allows you the flexibility to pivot when these otherwise devastating shifts happen in the market. You can follow in real-time which trending products are the most profitable and which are cutting into your profit margins the most.
Then, depending on where the trends are headed, you can adjust your focus accordingly with very little risk.
Very few business models allow for this much flexibility, especially without costing the business a pretty penny to pivot in an ever-changing market.
4. Can Be Managed From Anywhere
Perhaps the most desirable benefits of running a dropshipping business are the kind of personal freedom that comes with it. The only thing you need to run an e-commerce website is a solid internet connection and a computer to work from.
And that is a pretty easy list to fulfill from virtually anywhere in the world.
5. More Free Time
While there will certainly be periods of full-time work required to get your online e-commerce business up and running, running a dropshipping site often feels more like a part-time job with super flexible hours than a traditional 9 to 5 job.
Aside from working with your customers in the event that they run into problems or coordinating with your shipping suppliers from time to time, the time commitment of running a dropshipping site is pretty minimal.
This is where the term 'passive income' comes from and why it is so popular among budding entrepreneurs. Income can be earned with (relatively) minimal effort with a dropshipping business model.
How to Start a Dropshipping Business in 5 Straightforward Steps
Words like ‘simple’ and ‘easy’ are thrown around way too often in this industry and I refuse to do it here.
There is nothing simple or easy about performing market research and setting up an insanely effective marketing strategy.
But that doesn’t mean that you can’t do them or that they’re complicated. It just takes time and effort, both of which are needed for any worthwhile endeavor in life.
So here are my five super straightforward steps to starting a dropshipping business in as little time as a week.
1. Choose Niche Products
As tempting as it may be to jump into the biggest global trends, it's best to hang back and focus on smaller trends, instead.
Because major brands with major marketing budgets will likely be selling globally trending products, making it nearly impossible for you to compete with.
Rather than competing with these multi-million dollar corporations, focus on a product that has little competition and a committed group of buyers. That's exactly what a niche market is.
So how do you find a niche market or niche products? By doing a little market research online.
How to do Keyword Research
The first place to start your market research is with keyword research. Keywords are search terms and phrases that people all over the world enter into a search engine, whether to find random information or to shop for a product.
The higher the volume for a particular keyword, then (presumably) the higher the demand for that keyword.
My favorite keyword research tool is Ahrefs, which not only shows you the keyword but also all related keywords and relative competition for each keyword. It is much more comprehensive than Google Keyword Planner and easier to use, as well.
Plus, it will come in handy when you do your competitor research.
You can sign up for a 7-day trial for just $7, which is plenty of time to do all of the research that you need to start your drop-shipping business.
When you log into Ahrefs, navigate toward the 'Keywords explorer' tab on the top menu and enter your search term.
The two most important metrics to pay attention to are the search volume and the keyword difficulty. The volume, like I mentioned, is roughly how many people are searching for that particular term in a month. The keyword difficulty refers to how difficult it would be for you to rank for that keyword.
Ideally, you will find a search term with a high volume and low difficulty.
While a high search volume seems like the most important metric, the magic lies within the low difficulty. The less competition there is for your search term, aka niche product, the more opportunity you have to snag all the buyers for that product.
Amazon is one of the most robust online marketplaces today, being the most popular place where most people purchase products compared to any other online retailer. So it makes sense that any market research that you do should naturally include Amazon.
Plus, it's likely that you'll eventually want to sell your products on Amazon, as well.
Just like you would begin your keyword research to find a profitable niche market, you will do the same within Amazon.
After all, Amazon is basically its own version of Google but with the sole purpose of selling products.
The best tool to do this research is the aptly named Keyword Tool for Amazon. It's a bit pricey so isn't totally necessary, but it will certainly give you valuable insight into the current selling trends for your particular product on the most popular selling platform online today.
Plus, you can just sign up for one month, power through your research within that month, and then cancel your subscription.
Just like with Ahrefs, you will be able to see all related search terms as well as volumes and competition score for each search term.
If you’re not into the paid tool, then a free option that I love is the Chrome extension Keywords Everywhere. This extension automatically populates search volumes in the search box on a whole host of websites, Amazon and Google included.
It also has its own competition score so that you can see how many other businesses are competing for that search term.
You can pop a few of your product ideas into these tools to get an idea of both the demand and competition to make a more informed decision about which products to sell in your ecommerce store.
Once you get an idea of the raw search terms, it's a good idea to get to know your potential customer base.
If you don't understand your potential customers and what motivates them to purchase your products, then your shop might as well exist in a vacuum.
It is important to take the time to understand
- what problem they are trying to solve by purchasing your items
- what pain points they are experiencing with your competitors
- what features they are looking for within the products
- where they gather information about which products to purchase
As you get to know precisely what motivates people to purchase items within your niche market, you can create an entire ecommerce shop that satisfies their needs.
The more that you can satisfy your customer's needs, the more likely they will come to your shop to spend their hard-earned cash.
The process of understanding the motivation behind their purchase behavior is called 'social listening.' Peek into different social media platforms to find out what people are currently saying about items within your niche and their experiences purchasing those items.
Facebook groups and pages are also super helpful in trying to understand what people are looking for in certain products and ecommerce shops.
Competitor Market Research
Even if you've found the perfect product to sell online, your ecommerce website may not stand a chance against the other websites that are currently selling similar products.
Because of this, you absolutely must take the time to understand your competitors.
Since your entire customer base will be coming to you through the internet, you will want to know how to make your website more discoverable online, whether through search engines or through paid ads. To understand this, you must understand precisely what you will be competing against online.
Basically, you need to look at the top ranking sites for your target keyword and see what kind of power these sites have behind them.
And then you need to either match that power or surpass it in order to rank higher.
So what is this power, anyway?
Well, it's made up of several things.
Search engines tend to rank websites that have a few key characteristics, including
- relative age, or how long the website has existed
- the number of backlinks
- how relevant the content on the website is to the search term
We can't do much about how old your website is and we will tackle the content on your website a bit further in this article. The number of backlinks is what you need to focus on, now.
Backlinks are basically every search engine's form of word-of-mouth marketing. The more websites that point to your website, the more that Google sees it as a trustworthy site.
The more quality backlinks that you have, the higher your ecommerce website will rank.
In order to beat out your competition, you will need to have as many or more backlinks than they have.
You can quickly check out a site's backlink profile in Ahrefs by going to the 'Site explorer' tab within the menu.
Fabletics is the first site listed for the search term 'yoga pants'. If I would like to sell yoga pants online, then I will need to compete with Fabletics.
I will need to compete with their yoga pants category page, in particular, which alone has 60 backlinks pointing to it.
Not only that, but the domain itself has a strong domain rating of 73, which is impossibly high.
For reference, your brand new ecommerce site will have a domain rating of zero. It will likely take years and tens of thousands of dollars to reach a domain rating of 73, making this particular search term and niche a difficult one to compete for.
As a rule of thumb, stick with a niche that has competitors with a low domain rating so that you have a chance to rank for your particular search terms.
2. Research Dropshipping Suppliers
You've finally narrowed in on a niche product to sell in your e-commerce store. Now it's time to find a dropshipping supplier that can make it happen.
As you select a dropshipper, look for one that provides
- high-quality products
- a diverse inventory
- quality product photos
- accessible customer service
- Provides fast shipping
This will not only make your life easier as you run your business but it will also help make selling your products easier.
There are tons of dropshipping suppliers out there, from wholesale suppliers to full dropshipping service providers. While you can definitely connect directly with a wholesale supplier, working with a dropshipping service will save you lots of time and headache.
Don’t worry, I’ve already done the research for you. Of all of the options, these are by far the easiest to work with.
Oberlo is one of the most popular dropshipping suppliers for people selling from the US and Canada. The Oberlo app connects directly to your Shopify store so that all you need to do is select which items you want to sell and the app automatically populates your shop with those products.
When customers make a purchase, Oberlo sends the orders to the wholesalers directly, where the orders are fulfilled automatically.
All you really need to do is manage your Shopify store. The Oberlo app makes Shopify dropshipping easier than ever.
- Easy-to-use interface
- Excellent customer service
- A comprehensive step-by-step guide is available on their site
- Easy inventory management with AliExpress
- The free account is sufficient to get started
- Compatible only with Shopify
- No order and shipment tracking
Oberlo is free for the first 500 products, then increases with the more products that you sell in your shop.
Doba is next level when it comes to wholesale dropship services.
It is more comprehensive than Oberlo, offers more flexibility in selecting wholesale shippers, and offers dropship services as well.
Doba provides a directory of wholesalers so that you can pick and choose who you work with.
And if you don't want to do that, then you can use their dropship services so that they do all of that for you.
All you have to do is select the products that you want to sell and they will contact the suppliers for you.
- Has one of the largest inventories from almost 200 suppliers
- Provides immediate access to over 2 million products
- Allows you to bulk export products to your preferred e-commerce platform
- Can be pricey, depending on your budget
Doba offers a free 14-day trial so that you can test out their wholesale suppliers and drop-ship services. After that, they have tiered paid plans starting at $29 per month.
Sunrise Wholesale provides a lot of the same benefits as Oberlo and Doba but with the freedom to manage your inventory and drop shippers yourself.
With Sunrise, you have access to nearly 15,000 products at wholesale prices and can directly export those products, images, and product descriptions to your preferred e-commerce platform.
- Super easy order processing
- Has easy integrations for selling on eBay
- Provides access to Amazon Selling and Research Manager, allowing for easier integration with Amazon
- It's a bit pricey with little flexibility in their membership options and a 20 percent restocking fee
- The inventory is a bit limited compared to other wholesale dropship companies
The monthly membership is $49 per month.
3. Research Best Dropshipping Platforms
There are tons of options out there to build your ecommerce business, from trendy website builders like Wix to online marketplaces like Amazon.
Select a site that is most compatible with your preferred dropship suppliers and allows you the most flexibility for search engine optimization (more on that, later).
I’ve scoped out the best options currently on the market and all you have to do is choose the right e-commerce platform for you. Below are my top picks to start a dropshipping business.
Shopify is one of the world's largest ecommerce platforms and has a robust list of apps that make dropshipping a breeze for even the most novice of entrepreneurs. Their easy integration with the Oberlo app makes it a preferred choice for many dropshipping companies...
...500,000 to be exact.
This is for you if: you are not technically savvy and would like full customer service support.
As a digital marketer, WooCommerce is probably my first pick for any e-commerce business, dropshipping or otherwise.
Because it is an easy-to-install plugin that can be used with any Wordpress site, giving you complete control with the content and site structure of your online shop. This is super important when it comes to making your website discoverable on search engines and even more important when it comes to design.
Not only that, but WooCommerce will automatically send email notifications to your wholesale dropshippers when an order is made on your WooCommerce store.
Considering that WooCommerce makes up 28 percent of all e-commerce websites, you can be sure that it is a quality platform that is easy to use.
This is for you if: you want the freedom to customize the content on your website and install more robust plugins and apps.
BigCommerce is a simple platform alternative to Shopify that offers a few additional perks, like unlimited staff emails and no transaction fees per order. It's super easy to integrate with most e-commerce websites, making it great for budding entrepreneurs.
Depending on which dropship service you choose and your own technical skills, BigCommerce may be a great option for you.
This is for you if: you want a more engaging user interface with more diverse feature options than what Shopify has to offer.
4. Build a Site That is Optimized for Search Engines
Even if you have selected the perfect niche product and found the best suppliers in the world to deliver your products, it will all be in vain if you don't have customers to buy them.
So the next step is to build a site that your customers can easily find.
In a virtual world with more than 1.94 billion websites on the internet, this can be a daunting task to complete as a budding entrepreneur.
Don’t stress, though. With some basic search engine optimization, you can make your e-commerce shop more discoverable to your potential customers.
You've probably seen all the buzz about search engine optimization, aka SEO, for top ranking sites and for good reason.
It is the only way to get your website seen by the eager eyes (and wallets) that you want to sell your products to.
While there is an infinite list of SEO tools and tactics to rank your website, you don't really need to use them all.
Plus, they are super time-consuming and often times expensive.
All you need is a basic understanding and a few chunks of optimized content to get the ball rolling.
Understand Search Engine Optimization
People use search engines to begin basically anything they do online.
And if you want to make sure that people stumble upon your online store in the process, then you need to optimize your website in a way that makes that more likely to happen.
This is basically what search engine optimization is.
Search engines recommend pages based on the user search query and an increasingly complex algorithm that analyzes the query a little bit like a seasoned therapist.
What I mean is, the search engine algorithm is good. Damn good.
It not only knows what a general search query means but also the thought process behind the person entering the search query.
Then, search engine crawlers scrape the entire internet in search for websites that can best answer that query.
This is where your fully optimized online store will be waiting.
In general, search engines will deem a website useful to the search queries based on specific keywords related to the queries as well as how many other sites link to it, kinda like a virtual recommendation.
As for the keywords, you’ve already done quite a bit of keyword research when you selected your niche product, so you should already have an idea of what to include on your website.
There are three main places where you can optimize content on your site and that is what you should focus on as you set up your ecommerce shop.
Any and all text on your homepage is an opportunity to tell Google (and other search engines) what your website is about. So use it wisely.
But, to be honest, the internet is too large and too cluttered for the search engine crawlers to read every single word on every single website. Instead, they focus on the page title, the meta description, and the subheaders within the content.
While it might be tempting to put something cheeky in your title tag or headers, it is best to include one of the top keywords that you are targeting for your shop.
When the crawlers see your target keyword in the title tag, then it will know precisely what your page is about within a matter of seconds.
And that is a very good thing.
Not only that, but the title tag is also what will show up in the search engine results pages (SERPs).
As potential buyers are scrolling through the SERPs, they are most likely to click on the titles that most closely match what they are looking for, not the cute yet vague phrase that you spent hours thinking up.
Any of the pages that hold a category of products is, aptly named, a category page. Many shop owners lump their products onto the page and then let the shoppers scroll through them on their own.
But there is tremendous content opportunity on each of these pages that you should for sure be taking advantage of.
The search engine crawlers are extremely thorough and will be checking your category pages for clues as to what those pages are about, as well. And then they will recommend these pages to the users searching for your target keywords.
So you want to leave relevant keywords there for the crawlers to find.
It doesn't need to be all that complicated or even comprehensive. Famous Footwear does exactly this at the bottom of their category pages.
Your product descriptions are your last ditch effort to convince Google to rank your products and customers to buy your products.
This is where you list both the product features and benefits, two key points that people search for when they begin the buying process...
...and two key points that convert them from shoppers into buyers.
NastyGal does a great job of not only fitting in key features of their products, many of which users will be including in their search queries, but also making them sound fun.
5. Create an Ecommerce Marketing Strategy
Once you have your e-commerce site up and running, it's time to actively seek out your customers with a solid ecommerce marketing strategy.
Because as much as we’d like to believe that all that optimization you just did will do the trick, it takes a bit of time to build momentum.
There are thousands of ways to do this, with some of these ways costing thousands of dollars, but there are only three surefire ways to grow traffic and boost sales on a low budget.
You can grow your marketing strategy later, when you’re generating major profit and ready for expansion. For now, these three tactics will do.
Content marketing is basically the idea of using all of the content on both on your website and website within your niche to bring in fresh organic traffic. This is under the same family as search engine optimization, making all of the groundwork you did in building your website especially helpful.
Content marketing is generally broken down into two areas
- On-page content - all of the content on your website, where you will include keywords to help communicate with search engines what your website is about
- Off-page content - all of the content not on your website that links back to your website, indicating to search engines that your site is trustworthy and reliable
If you’ve already optimized your website like I recommended earlier, then your on-page content marketing is sorted for now.
As for off-page content, it is helpful to create an on-going backlinking strategy that can help you earn links to your shop continuously. The more relevant links from within your niche that you get, the more likely that your shop will rank for your target keywords.
Remember my example of Fabletics from earlier?
You can view the backlinks to their category page through Ahrefs by clicking on the ‘Backlinks’ button on the left-hand menu.
From there, you can view the websites that currently link to their category page.
This not only gives you an idea of where backlinks can potentially come from, but also about how many you’d have to get in order to compete with a brand like Fabletics.
Social Media Marketing
When I say social media marketing, I do not mean that you need to have thousands of followers and trendy content.
Those things certainly help, but they aren’t necessary for marketing.
Instead, focus on understanding your target audience and gathering data about your existing audience so that you can place super effective ads.
First, install Facebook pixel on your site to begin gathering data about the users who visit your site.
As creepy as it sounds, it’s pretty essential that you do this. It will show you where your audience is based, what their online behavior is, and how they interact with your site. It will also help Facebook place your ads on pages they are visiting that are related to your page.
Basically, it does all the dirty work for you. All you have to do is create the content for the ads.
Rather than just blasting out links to your product pages and a one-liner about the product, take the time to look into what kinds of adverts work well. Look for high converting ad content ideas, in particular.
Then test it out.
Run a few tests on which ads perform better and then once you find one that works for you, double your budget on it and let it run.
Email marketing is the unsung hero of digital marketing where a lot of the magic happens. Sure, it takes a lot of planning and even more creativity, but when done right, it is worth its weight in (digital) gold.
With an estimated $44 earned for every dollar spent, it is by far the best marketing tactic with the highest return on investment (ROI)...
...if done well.
An email blast to anyone that ever gives you their email is not likely to give you as big of an ROI as, say, a carefully structured email sequence that is tailored to your audience. The process of tailoring your emails to your audience is called email segmentation and can increase your email revenue by 760 percent.
So, yeah. A carefully organized email marketing campaign is definitely worth your effort.
So how do you tailor your email sequence to your audience?
Any good email service provider, such as MailChimp or ActiveCampaign, will have a segmentation option within their platform. They will have you install code on your website to track user behavior and then organize that data in a meaningful way.
Then, all you have to do is create the email sequence and let it run automatically.
Starting and running a dropshipping business is no small task. It takes a lot of research, planning, and follow through.
With careful planning, though, you can run a dropshipping company from virtually anywhere in the world. And by then, every step of the process will be well worth it.