Dropshipping: What it is, how to get started and how much you can earn

Dropshipping is a way of selling through the Internet , which does not require too much investment and, moreover, is almost completely risk-free. The web is a world full of opportunities, but to be successful with an e-commerce (as in all traditional buying and selling activities), it is usually necessary to make an initial investment to acquire the most important factor: the product.

However, if you want to start dropshipping, the acquisition of products takes place differently; and this is precisely the reason why, first of all, I would like to define this term and explain what exactly it consists of. If your intention is to train in this area, you should definitely attend the Dropshipping Course , where you will learn how to open and manage an online store.

Read the article, you will find the answers to the many questions that revolve around this theme, including:

    • How to get started with dropshipping?
    • Open a dropshipping business from scratch?
    • How Much Can You Earn With Dropshipping?
    • Where to dropship
    • Dropshipping Vs eCommerce: which is better?

What is dropshipping

In its literal translation from English, it means “shipment triangulation”. This term can also be well known, thanks to the Anglo-Saxon denominations, such as: “dropship” or “drop shipment”. Therefore, we can say that:

Dropshipping is an online sales model that allows you to purchase products individually from the supplier, so that this is the one who will send them directly to the final customer.”

Instead of purchasing a large quantity of products, simply partner with the wholesaler, also called a “ dropshipper ,” through an agreement or prior negotiation. He will be the one to ship the goods directly from his warehouse to your final customer. For some years, selling in drop shipping has continued to revolutionize the traditional logistics management method, in fact the online store must only be responsible for purely administrative and accounting functions, such as:

  • order management
  • the collections
  • customer service
  • and support from potential stakeholders.

Dropshipping in 5 steps

Here is a practical example of how dropshipping works:

  1. Let’s say you are the eCommerce entrepreneur (retailer).
  2. You create the website and identify a number of suppliers who are willing to supply you with their products under a drop-shipment agreement.
  3. You publish the goods on your eCommerce platform.
  4. When a customer places an order and pays for that item, you inform the manufacturer, who sends it directly from their warehouse to the final consumer.

Manufacturers add a dropshipper fee to the final price. Therefore, you are a simple intermediary and your benefits are based on the sum of the commissions you continue to obtain for all your dropshipping sales.

The Drop-Shipping business, although less risky than a traditional business, which imposes high initial budgets for logistics and warehouse, is not totally risk-free. Introducing a Risk Management strategy helps especially in the initial phase to identify what the potential threats may be and how the company must behave to contain them and limit the effects they could have on the organization

But what are the 5 basic steps to create a dropshipping site from scratch?

1. Look for a profitable niche

To be able to sell in drop shipping and make profits, it is first of all necessary to search for a niche market that satisfies the following characteristics

  • Doesn’t have much competition
  • Don’t be saturated
  • Cover the right market areas
  • Be profitable

You must also ensure that you are positioned quickly in search engines ( SERPs ), attracting the right traffic to your store. The goal is to generate online sales. In the initial phase of your project, one of the things that should not be underestimated is the price of the final product to be as competitive as possible.

2. Negotiate with the dropshipper

The definition of the dropshipping contract is very important, as the conditions that will regulate the activity of the digital company will emerge from this negotiation , both in terms of product prices and shipping costs. You should always try to have reasonable selling prices within the product category, therefore, the costs of the dropshipper must be as low as possible, in order to have the most profit.

In addition to the question of price, delivery times must be evaluated , which must be very short, so that customers get their orders promptly. It is convenient and advisable to have multiple suppliers in drop shipping, you never know what could happen…for example, in cases of supply problems, you can always count on the other wholesaler.

3. Create the dropshipping shop

Once you understand how to open an online business, closed the negotiations and clarified all the conditions, you can create your drop-shipping eCommerce . At this point, if your technical knowledge to assemble the web portal is scarce, you can seek the help of a professional, but I assure you that using WordPress or Magento is very simple and intuitive, so in case you want to, you can also experiment independently.

Once the site is created, you can immediately start dropshipping. You as the reseller will manage the collection of orders, once the user’s order has arrived , you will send the dropshipping supplier the details of the requested goods.

4. Receive orders and send items

The dropshipper receives the order from the retailer and becomes responsible for delivering the purchased item . This delivery must be made within the agreed period. If the negotiation allows for the package or goods, it will have your branding and the invoice will be included.

My advice is to look for a very reliable drop ship supplier who takes care of the following points themselves:

    • logistics
    • inventory
    • warehouse
    • storage
    • shipping

Don’t forget returns management, one of the most important points in business like this.

5. Check customer satisfaction

We have seen that the supplier ships the goods directly from his warehouse to the final customer, but does not identify himself. From the point of view of the end customer, the whole process of the sale has been managed by your site, therefore, they will never know anything about the dropshipper . Therefore, it is essential to carry out a customer satisfaction check in order to evaluate the functioning of your dropshipping e-shop.

A call, an email with a short survey or an invitation to express opinions on social networks are ways to contact the customer and find out if the result of his purchase has been positive. Otherwise, the feedback will be useful in order to correct any mistakes made.

This after-sales satisfaction survey is highly appreciated by customers, especially in the online environment, where interaction seems more impersonal. When you receive good service and/or show interest in buyers’ opinions, you have a better chance of customer loyalty.

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How do you make money with Dropshipping?

Ten years ago, this trading technique was much more profitable. With the growth of dropshippers like Amazon, and increased competitiveness in the digital commerce sector , the average income has shrunk significantly.

Therefore, if you want to sell and be successful with dropshipping you must have a very powerful and original proposition. One solution is to provide as much product information as possible, or try to sell related items at the time of purchase.

To do dropshipping in Italy you need to open the VAT number. Register with the commercial register and consult an expert e-commerce accountant. Once the bureaucratic formalities have been clarified, all you have to do is start with your online sales company and start earning not without first setting up a good marketing strategy.

 

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Strategies for selling in dropshipping

The main activity for the drop-shipping business must be to attract traffic to the site to encourage sales. Consequently, the income that comes from dropshipping depends on your ability to implement good digital marketing strategies that will help you beat the competition. The advice is to:

SEO for Dropshipping

As good as the website may be, if it fails to sell it makes no sense. So, you need to implement an SEO strategy for your drop shipping store with the aim of having a good position in the SERP, getting as much visibility as possible. And how can we turn visits into sales?

Start a blog

It is highly advisable to support the sales portal with a blog section that provides users or customers with information relating to the items on sale, promotions, curiosities and any other topic related to the business. The important thing is to introduce content with keywords, both in the articles and in the photos and descriptions of the product catalog, so that the SEO practice is implemented.

Using Email Marketing

An activity that improves the drop-shipping sales strategy is definitely email marketing. When you already have a large enough number of customers, you can use the newsletter to encourage sales, by sending them the latest news, best-selling products section or related news.

Share on social networks

Social networks should be used as a platform to spread your products. It is advisable to open only those social profiles that best combine with your digital business model . They can be used to advertise promotions and product information and especially as an after-sales service channel to achieve customer acquisition .

Use paid advertising

When starting the business, my advice is to carry out a paid positioning campaign that gives us an initial boost, waiting for the SEO strategy to bear fruit. It’s about getting more sales , so even if the investment is small, it’s always necessary. For this type of campaign we can use Google Ads, the ideal tool to gain visibility on the search results page, create Google ads and banner ads.

 

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E-Commerce Vs Dropshipping, which one to choose?

After seeing how drop-ship works , you may have asked yourself the question: is it better to do eCommerce or dropshipping? To answer this question you must have clear ideas on some topics that will help you in the best choice for your new business, for example:

  • Is your project short, medium or long term?
  • Do you have knowledge of web marketing? Are you skilled in digital marketing subjects?\
  • Do you want to sell your product, with your brand?
  • Are you an online marketing enthusiast or are you more into product creation, invention or innovation?

Watch the video to get concrete answers and sort out this issue. It is important to understand whether one or the other is better or, another possibility not to be underestimated, to mix the two methodologies, an e-commerce in dropshipping mode.

Why it pays to sell in dropshipping

Starting an online store with a dropshipping model is beneficial for several reasons, such as:

  • Startup Costs – Investing in inventory is one of the biggest expenses for online business . This method eliminates the problem, there is no risk of spending money on items that could remain unsold.
  • Items can be offered instantly – when you post a new item to the site, you can start advertising immediately .
  • A larger catalog can be offered – without the hassle of storage your only job is to advertise the item.
  • Save time making organizational arrangements – This is time consuming, but using a third party for shipping, labeling and packaging will save you time and money.
  • It is not necessary to have an inventory – doing dropshipping also relieves you of this, since all the logistics costs are covered by the manufacturer or wholesaler.
  • Storage – You don’t need warehouse or any other space to house all of your online store products. Storage is the responsibility of the dropshipper.

dropshipping strategies

However, dropshipping also has its drawbacks:

  • Scams – You must be absolutely careful with the suppliers with whom you conclude a dropshipping contract.
  • Lack of quality control – The quality of the items may be worse than initially expected and may not match what you indicated on the website.
  • High Shipping Rates for Customers – If you include items from multiple vendors on your website, your customer may be paying very high shipping costs when ordering items from different sources. This could be one of the reasons that entice a user to abandon the shopping cart of your store.
  • Order Processing Can Be Difficult – The time between selling the product and shipping it can become long, as there are many prior interactions and actions.
  • Not having all the information about the product is problematic – Lack of data leaves significant gaps in the website and this is not good for the company, because poor information, or the lack of it, can dissuade some users from purchasing.
  • Availability – You don’t always know the available quantity of products until end customers buy them. This can be extremely frustrating for consumers who place an order, only to find that it wasn’t actually in stock.
  • Customer Service – Selling with dropshipping means less responsibility for shipping, but also much less control over the customer experience. There is no way to guarantee that products will arrive on time; if there have been delays you will only know when the customer calls to complain or to ask for information.

Examples of successful dropshippers

Dropshipping is certainly a system for selling online that must be evaluated on a case-by-case basis, the convenience of which can vary from sector to sector. To date, there are drop-shipping E-businesses in very different product areas. For example:

  • dropshipping for household appliances or electronics,
  • footwear dropshipping,
  • dropshipping for clothing.

Among the many companies that have been successful in this sector, in addition of course to Amazon that we all know, here are some examples:

AliExpress

Who doesn’t know AliExpress dropshipping, the Asian giant? AliExpress has been at the forefront since 2012, when it started operating and selling wholesale products to online stores around the world: from footwear, apparel, electronic products, and even DIY items.

MiniInTheBox

It is another major dropshipper wholesaler, which distributes electronic products, based on orders placed by online stores around the world.

It has been operating since 2010 and its growth has never slowed since then, given the rise of technology, which now has millions of followers.

BigBuy

He is a Spanish wholesaler who has made his way in the sector, has been able to set up the right strategies, attract the right customers and can now enjoy the merits.

It mainly distributes products related to original business gifts, such as: gourmet kitchen products, electronic products and small appliances, perfumery and cosmetics, health and beauty, and many others.

 

Conclusions and Practical Coaching on what to do

The benefits and potential problems of dropshipping are varied. Therefore, if you plan to use these sales techniques in your online store, you should think about all these factors. Reflect on the pros and cons of opening a dropshipping e-store and, if necessary, first study the experience of those who have already tried it.

Obstacles that arise can, often, be resolved with careful planning and good coordination between the vendor and vendor. Undoubtedly, it is a viable business opportunity to work from home, with virtually no infrastructure or investment, and above all, the most important thing: it will bring you many benefits! So, get off on the right foot and request a free consultation to open your Dropshipping shop.

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