In this post, you will comparison e-commerce platforms in terms of drop-shipping business model. Moreover, you will learn everything you need to start drop-shipping e-commerce website.
Before you begin you can start with any sub-headlines:
What is drop shipping?
Drop shopping is a very effective business these days, in which the store does not keep goods itself but only take order from customers and forward it to the manufacturer or a third party which then supplies the product to the customer. In this business model, there is no need of physical presence of the store in the market.
Drop shipping is different than traditional businesses in a way that in traditional business is that in traditional business, shopkeeper or store owner handles the products physically but in drop shipping the shop keeper does not handle the product, but buys on customer’s request, from third parties usually wholesalers or manufacturers themselves and deliver them to buyers directly.
Why Drop shipping?
There are many benefits and advantages of being into the drop shipping business. Let’s have a look on few top ones.
- Less Investment: If you want to make a store and keep items in it for your customers to come and buy obviously it will need a lot of capital and patience and it’s kind of lucky spin, in case you don’t get enough customers your whole investment can sink like Titanic.
But in dropshipping you don’t need a lot of capital, all you need is a website and some links to manufacturers or other third parties such as Amazon and Ali Express and neither you need to store products, all you need to do is get customer’s request and buy it from manufacturers as per request and deliver directly to your customer. This cost saving is a huge plus point for the small businesses and new entrepreneurial ventures. The cost of physical space and staff is quite hefty and not everyone can afford it but an online store with a drop shipping model does not require such an investment.
- You are the boss: Don’t like waking up early? No problem. Drop shipping isn’t your conventional business store which you need to keep shutters up from 7 in the morning to 8 at night. Once you’re set up you can choose your own timings and your own location, all you need is an internet connection, belief and a little hard work.
- A Large number of product choices: Unlike normal business you don’t need to worry about capital and you can choose any item you wish to sell to your customers such as cosmetics, sports, clothes, tech and the list goes on. Also you can bring diversity to your business by adding new items for your customers from time to time. The customer demands that change with the latest trends or seasonal changes can be catered very effectively through drop shipping model. Do regular market research, keep track of analytics and offer popular items to your customers. This will show the business’s dedication and lead to long term customers as well.
So that was drop shipping in a nutshell. It has a lot of other benefits as well which I’ll be discussing later in the article. Drop shipping is good but where to start? And how to find suppliers? Let’s have a look.
How to start Drop Shipping Ecommerce Business?
Drop shipping is usually done by making your setup on already existing eCommerce drop shipping platforms. What are these platforms and how you can do that? Let’s have a look at the process:
E-Commerce Platforms With Drop Shipping Models:
There are many platforms with e-com models such as Shopify. Some of the very famous are eBay and Taobao (China’s largest web shop). Ebay is a multi-cultural type of shop and more international as compared to Taobao.
Taobao mainly focuses on China, also many products are cheaply available on Taobao, so buying from Taobao on cheap and selling on eBay for more can be an interesting business technique.
Similarly, you can survey Chinese market and buy foreign products from eBay and sell on Taobao for Chinese people who are willing pay some extra cash for other international brands.
Best E-Commerce Platforms to Build E-Commmerce Stores
Shopify is an online shopping company which make applications and plugins for online sellers, and Shopify is what I would highly recommend you to start off, as this is very easy to use and effective platform. Shopify has recently expanded to over 275,000 stores and still counting, Shopify has many useful features to run your store and it has Oberlo as well.
With oberlo you can import hundreds of products from Ali Express to your shop in a matter of seconds and you can also keep track of your shop items imported from Ali Express with this awesome app.
Some other great e-commerce platforms you can go with are Volusion and 3dCart, best things about volusion, Shopify and 3dcart are that they have options to set up a vendor for your storefront which means your cart can automatically send emails about orders received to your vendor. Other e-commerce platforms such as Magento can also do this but that needs plugins and eventually cost more.
Pros and Cons of using Shopify as drop shipping platform:
Shopify is a good platform to begin with your drop shipping business but it has its own pros and cons which you should know before you go for it.
Pros of using Shopify:
- Easy to use environment both for user and owner.
- Many plugins available to ease you.
- Easy to use Obrelo app.
- Product Vendors.
- Multiple currencies and tax reports are available.
- Automatically recovers the abandoned carts.
- Responsive, so you can access admin part on your mobile devices.
Here are some cons of Shopify:
- Templates have some functions built in which sometimes are not provided by Shopify so choosing template is a very important part and needs to be done carefully.
- You have to pay two sets of transaction fee unless you’re on Shopify plus.
- Content is somewhat limited, let’s say if you wish to do something unique and different, you might have to use any other platform like tumblr, but fortunately you can link it to your site.
Woocommerce comes with WordPress and is also usable to make an online store, According to a survey 39% of e-stores are powered by woo-commerce, and that is because it’s easy to use and flexible in many ways. Here are few things woo-commerce can do
Woo Commerce not only provides shopping cart and basic store functionalities but it also generates a packing slip PDF file, and attaches it to the order notification email. Your drop shippers can print the packing slip, and add it to the customer’s shipment for easy blind drop shipping.
Pros and Cons of using Woo commerce as drop shipping platform:
Woo commerce has its own specific pros and cons. Let’s have a look on these before you actually go and start your business.
Pros of using Woocommerce:
Here are some reasons why I recommend woo commerce:
- Free and easy to learn. Many tutorials are available out there.
- Low cost and Easy Search Engine Optimization.
- Vast in terms of functionality, customization and market place.
- Product vendors
- Waitlists can be maintained.
- Pre-orders can be made.
- Multiple currencies and tax reports
- Ali drop ship plugin
- Very secure in terms of online security.
- Highly customizable
Here are some cons of using Woocommerce:
- WordPress update their software frequently which may sometime leads to the functionality problems (very rare though).
- Content looks not in place sometimes and you need to fix it manually.
- Theme customization can be costly.
- On-going maintenance is shop owner’s responsibility
Woo-commerce is still highly recommended as WordPress is at its back and they keep on bringing new features.
Volusion is another e-commerce company with over 900 features such as built-in SEO, App for Apple watch, Email marketing tools, auto-generated sitemap.xml to name some.
Volusion is effective to use but yet not as large as Shopify but still nothing less, volution is packed up with many great features and support all major sites such as Amazon and Facebook.
Pros and Cons of using Volusion as drop shipping platform:
It is always a good idea to look for all major pros and cons of any drop shipping platform before you actually go and make a purchase. Let’s have a look on pros and cons of volusion.
Pros of using Volusion:
Some pros of using volusion are:
- Multi currencies and tax reports
- Live Chat Function is available.
- Comparison shopping engine.
- Volusion for Apple watch
Cons of using volusion:
Everything which has some pros comes with some cons, here are some cons of volusion.
- Pricing, it can start from 15$ per month and can reach up to 135$ per month no matter which package you use, They have listing fees, monthly price, credit card price, platform transaction fees and exclusives which can make it expensive.
- Mobile site of volusion is not your site’s responsive version but another mobile site which is disappointing knowing the fact that many people buy on mobiles these days.
- Other than mobile site customization is very limited on volusion for your site
- Unlike Shopify very fewer extensions and apps are available, still enough to start off but less compared to Shopify.
Ebay is a known name worldwide; you can do business through this giant too. Ebay has following advantages if you wish to use it.
Pros of using eBay:
- Easy to start and build your own store.
- Large market worldwide.
- Large audience and customer base.
Cons of using eBay:
- Listing fees, this is most probably the biggest drawback of eBay as you have to pay listing fee
- Sales platform is not customizable
How to begin with your drop shipping business with e-commerce?
So now we’ve got the knowledge about drop shipping and various platforms to do it, let’s get started with setting up the business. However, before starting, here are few things you need to take in to the account and make sure if you are ready for drop shipping.
Commitment to work is very important for this business; if you are not serious about it you will not be earning any penny. Instead it will waste a good share of your time. However with commitment, you can start building your store and scale it up easily.
Through commitment you can earn good reputation and market name which is the success route for all online businesses. Anyone can virtually reach you if your products and services are attractive and reliable. Expansion of the business can also become really easy and convenient if you are working whole heartedly.
Patience is the key to success in this business, do not expect to start earning overnight and be a billionaire in a month, this is more than impossible. It might take few months to get yourself a customer but eventually with hard work and patience you can be the next leader so make sure you’ve got a good stock of patience and hard work in yourself.
- Work yourself
It is possible to pay others some bucks so they can handle your business for you but I would not recommend it especially in the start as I’ve tried this and found that working yourself is much better as you not only see and understand things closely but you also do it for yourself thus make sure everything is nothing but perfect.
- Getting your finances straight
One of the biggest mistakes you can make is that mixing your personal account with financial account, please do not make this mistake. The business account has to be separate as it needs detailed management of cash coming into the business and cash going out. The profit and expenses can be calculated easily if you have a dedicated account for the business. It does not matter how small your setup is but by keeping the two accounts separate you can avoid many finance related issues.
Make yourself a separate business account, have PayPal or any other such service and confine it to the business deals only.
- Learn about the market competition:
Be aware of the fact that drop shipping is not equals to easy money. Drop shipping has a lot of competition and to excel you need to work really hard. When all of these are addressed we can move on with building of our online business store.
Entering into the market has become easier through such online business models. So, anyone who wants to start drop shipping has to be vigilant in keeping up with the market trends and must be resilient enough to face the competition. Data analytics and social profiles of the competitor can provide a lot of insight and help in making better business decisions.
- Learn about state of the art technologies:
State of the art technologies are very important for competing in the market. Learn more about new technologies so you’ll be able to compete in the market easily. Also, learn about front end frameworks and how you can use them in your business.
How to choose a niche for drop shipping business?
It is true that in drop shipping you can go for any product imaginable but it’s not very simple. To start off, you need to consider that there are many other competitors working for years and have much more experience than you so wise decision is not to go with all the products but to go with a specific niche in the start.
Niche means a category and choosing a niche is not a tough task, neither you need to see what things drive you crazy and excited, nope!
You need to choose a niche whose products you use in your daily life and you have good knowledge about it, let’s say you use some skin creams daily or somebody in your house uses them daily and you’ve learnt a lot about its usage and why people use it, you can do this niche.
Here are things to do for choosing niche
- Products you use in your daily life
- Products you have knowledge
- Products you’ve researched about even if very little
- Or things you studied in your college which gave insight about some product or niche
Knowing about your niche will not only help you compete more effectively but will also help you to cater your customers in a better way.
How to find suppliers for your drop shipping business?
Obviously to start you need to find suppliers for your business. Finding a good and trusted supplier is crucial to your success like every business. The supplier must be the one who guarantees quality and cost effectiveness. You can earn well only if the supplier provides you the required items at a reasonable rate. The balance between quality and price is very essential.
In traditional business your products are handled to you so you can check them before selling customers and can get fixed, but in this business, you are not handling products yourself. if your customer do not get what it was supposed to, your name will be ruined along with customers trust so let me say again Finding good suppliers is crucial for your success!!
Here are the factors you should consider before finding a supplier.
- See local
This is what I strongly recommend as it makes things less complicated and easy to work with, try finding some local suppliers of niche you’re dealing in and if you get this golden sparrow get a good hold of it.
Online suppliers are many which are really good and authentic and we’ll come to that in a minute but local dealers can be helpful as they can sometimes offer you better discounts than online dealers and they sometimes can deliver goods on having just a good talk without charging you extra delivery bucks.
In addition, the local suppliers can be reached easily to maintain long term relations with them. New dimensions of the business can be discussed with the suppliers and implemented quite efficiently.
- See online
There are fortunately many online suppliers, many you can find at WorldWideBrands, which is a directory of suppliers.
Other leaders include Obrelo, Doba and Salehoo
These are some best ones in our view but don’t merely sit on them do some research yourself and see if you can find some others
What to consider when choosing a supplier for drop shipping business?
- Make sure to read reviews about your supplier on websites such as trustpilot and Google about your supplier, read some reviews and see if they are trustworthy to work with or not.
- Also check about ongoing fee, suppliers with ongoing fee are usually scam
- Check if your supplier deliver products internationally
- Check what do they charge for international deliveries and compare it with other suppliers
- Check if they have all products you need
- Try to have fewer suppliers as much as possible, more suppliers means more complexity
Find your niche and suppliers, also make sure that you give some extra with your products as that is the way to get customer’s attention.
Now we are done with everything so move on setting up our store, our website.
Setting up a ecommerce website for drop shipping business
Why you need a website? Well very obviously if you don’t have a physical store and you need to reach people across globe you need to have a website which can serve many functions such as
- Users can see your products
- Users can place orders
- It’s where you can collect money
- It’s where you can keep track of your progress
- It’s where your supplier can contact you
- Websites carry your whole drop shipping business
Making a website does not need a lot of knowledge in 2017, you can build high-quality websites in minutes, you don’t need any designer or developer.
For example Shopify helps you make your website completely once you sign up.
So, Buy a domain name and get started.
How to choose domain name for drop shipping business?
The domain is the name of your store so make sure It is compelling and related to your business/niche. For example there are two domains onlinemerchants.com (random name) and products4ulive.com (also a random name) clearly which name is more trustworthy? Obviously the first one, make sure your domain name is unique, easy, simple and trustworthy. So these are the things you need to see when having a domain name
- Should be relevant to your niche
- Should be easy to remember
- Should be unique
- Should look trustworthy and professional
- Should be available
Try avoiding getting names which look like knock offs of bigger names, it can make your site look like a scam and annoy your potential customers as well. This can lead to negative publicity of your business.
Getting a web host for your website:
The domain is just a name for your store, it’s just like the banner of your shop, the building is the host.
Web hosts such as GoDaddy are physical servers to which your domain name redirects the user, the server must always be ready to handle traffic and it is probably the most expensive part of this business but still it costs nothing more that 40 to 60 dollars per anum.
Here are few things to see when getting a web host
- Check user reviews about various web hosts
- Check different web hosts and what they have to offer.
- Buy the hosting package that will cater you website’s traffic.
- It’s best to have a server which supports cPanel as it makes installation of WordPress in a click
- They should be fast in service and support
- Avoid cheap web hosts at all costs as their services are not reliable and in the field of online shopping even a minute of down time of the website can lead to loss of many customers.
Once this all is setup, you need a CMS such as WordPress, Magento, Drupal and many others.
For now we will move on with WordPress.
Installing Wordpress with Woo Commerce:
CMS stands for the Content management system, WordPress is one the most famous and widely used cms frameworks today, It has the support of large number of plugins and premium quality free and paid themes.
Most of the webhosts with cPanel have a button of “ 1 click WordPress installation ” which installs WordPress on your server in few minutes with just one click but if that is not available you can use FileZilla (file transfer software) or upload WordPress to the server directly or you can ask your server for help.
Once all is set up you need a good theme, you can buy many good themes at themeforest and then install to setup.
Installing a theme is a very easy task.
- Go to your WordPress menu which will be your domain name.com/wp-admin
- Navigate to Appearance
- Click on themes
- Click on install new theme and upload the downloaded theme
- It will take few minutes to install, once done. Activate the theme
Once done your store is up and working
Many premium e-commerce themes come with woo-commerce in WordPress but if your theme doesn’t have it install it from WordPress menu
- Navigate to Plugins
- Click install new plugin
- Upload your plugin or search from the WordPress market
- Install and you’re ready to go
Configure the site
Although your site is complete totally you still might have to make some minor changes such as
- Changing logo
- Changing general settings
- Changing color scheme if theme allows
- If theme has a slider then changing its activities and images
- Adding your social links
- Making posts
- Adding products
- Shipping and payment settings
- Page structure
- Adding keywords to posts and pages
Some tips for configuration
- Don’t push a lot of things in one place, for example placing multiple widgets in sidebar or footer
- Keep widgets and site relevant
- Use high-quality images and good and clear vocabulary
- Use proper tags
What are Important factors for the success of a drop shipping store?
Drop shipping market is very competitive these days as more and more people are getting into it these days because of ease and no investment. Therefore, it is very important to take care of these things, if you want to be a market leader.
- Build a user-friendly platform:
You website is the place which represents your store so make sure it looks premium and is easy to use, your customers should not be confused, one of the best approaches is not to push a lot of content on the same page especially on the main page, Google wants the best information to reach out to their customers thus it values such websites so make sure your site is not messy and beautiful as it will help in SEO too.
The landing page can have details about the company and some showcase of products you’re dealing with and everything must be elaborative and self-explanatory. You can use icons and pictures to make the items clear for the customers. Also, the process of order placement should be very easy so that even new internet users can easily shop from your online store without any issue.
- Maintain minimum Drop shipping time:
Drop shipping time means the time you give your customer in which product will be delivered, this usually depends upon your supplier, let’s say your supplier delivers product in 2 days, give your customer the time of 3 days or so. Also try to keep your drop shipping time as less as possible.
After the order is placed the customer must be clearly notified of the drop shipping time to avoid any confusion. If there is some delay or issue then the customer should be informed on time.
- Invest in SEO:
SEO stands for search engine optimization; this means how your website is indexed on search engines such as Google for certain keywords. Better SEO means more traffic, more traffic means more customers.
SEO can be done yourself or some expert can be hired to do it for you, usually SEO needs to be done all the time to stay on top of results in search engines. Do not hesitate while investing in SEO, it will pay off. However, you’ll have to be very patient in terms of SEO results.
- Check over items
Make sure to keep a check over your inventory of your website if something is out of stock and still taking orders or if available item is not being displayed, there are many plugins on all platforms which can assist you in this.
- Understand your customers:
Start using and understanding Google Analytics and other business analytics from day one as the more you’ll understand your customers, the better you’ll be able to retain old ones and bring more. Using Google Analytics, see from where your customers are coming, understand their site behaviour and then plan your strategies accordingly.
If the customers are giving negative feedback or opting for the competitor’s products then try to determine the root cause and plan a strategy to counter it. It is also equally important to track the behavior of satisfied customers as well for future lead generation.
- Stay Mobile Friendly:
Most of the customers these days are ordering via mobiles and mobile commerce (m-commerce) is the major thing which is being discussed around the globe these days. Your website should be responsive and optimized in terms of mobile and tablets view. So your customers will be able to check out easily on their mobile devices.
- Optimize for speed:
Users over the internet are very impatient, thus your website should be optimized for speed. Slow pages and bad design let customers leave your site. As there are a lot of competitors out there, your customers may switch to another site very easily with no switching cost.
How to do efficient marketing for a drop shipping ecommerce business?
Niche is selected, products are selected, Store is ready but where are customers? Well word needs to get out so customers can reach you and for that we do marketing and SEO (search engine optimization), There are various ways of marketing such as local, online and even TV adverts but initially when working from scratch we don’t have money to advert on TV so we will exclude that for now.
So for marketing following things need to be answered
- Who are your target buyers?
- What is their age group?
- What is the country you’re targeting?
For example you are selling mobiles, your target audience is most probably tennagers to middle aged people lets say from 17 to 45 so make sure you advert your product to those people, similarly if you are selling gym items your audience must be people related to the gym not the old aged men.
Mostly e-com sites target the whole world they take whole world as a market place so that will not affect your many products, food items or clothing can be affected by countries and regions though.
There are two types of marketing
It happens in your surrounding in which you can tell people about your site. You can reach people without using internet or technology. For instance, you may meet people personally and inform them about your platform. Here are other ways to do offline marketing of your business.
Flyers and posters
You can hand over flyers to people in busy markets or go door to door, you can use posters on allowed places for the public to see. This will bring more traffic to your site.
You can arrange small free to join events on road sides or small door to door campaigns to get the word out. You can invest in marketing through sponsoring events that have already attracted your target market.
Marketing over the internet is a wide playground, you can advertise on Facebook, on Google using AdSense, on YouTube and almost everywhere on the internet. But similarly during this advertisement make sure you’ve addressed the above mentioned questions and have planed the strategy accordingly, many sites such as Facebook makes it very easy to market as they allow you to set your target audience’s age and region.
For SEO you need to find out well and trending keywords related to your niche and SEO your website accordingly, you can hire a good SEO expert for this job if you don’t feel like doing it. Google AdWords can help you find keywords for SEO.
Writing quality content relevant to your niche and using proper keywords can get your SEO easy and rank you higher in Google and other search engines, and as we said, more traffic means more customers.
This is a way to drive customers to your site by posting comments on other related topics of other sites but few sites allow this while many don’t. You can do partnership with many other businesses to exchange back links and thus on top of search results.
This is a very common method in SEO where you pay some site to let them post your content on their site, so find a site with high traffic, get your post there and get customers. Guest posts help a lot in bringing traffic to your site.
One of the most trending ways of marketing is email marketing, once a user visit your website try to get him join your email list by showing a popup or something very visible and also promise your user about not spamming so that trust can be made.
Affiliations and discounts
Who doesn’t love discounts? Everyone does. So give your customers a coupon number or a unique code which on sharing with other users, others user can use as a reference when placing an order and can get some percentage of discount on all products.
You can find other stores or website with the similar target audience and you can ask them to advertise your site on theirs and in return you advertise their site on yours so this makes a win win situation for both the companies.
Pros and Cons of Drop-shipping business
Drop shipping has its own advantages and disadvantages as this business model is relatively new and still growing. Let’s have a look on pros and cons of this new business model both from store owner and customer perspective.
The marketing partners can even be those online stores that sell some complementing products. Affiliate marketing can attract a lot of potential customers. For example a shoe store website can have its ad placed on a clothing brand’s website. This can lead customers looking for shoes matching their outfits to the shoe store’s website.
Pros and cons of drop shipping for store owner:
For store owners, let’s have a look and understand that how feasible this business could be for you.
Advantages of Drop shipping:
Drop shipping is a hot topic in 2017 as you can start your business easily and advantages such as:
- Less to no capital required for starting a business.
- Flexible Timings and location.
- Variety of products to choose from.
- Work from home. No need to go to the office.
Disadvantages of drop shipping:
While there are many advantages of it, disadvantages have their own fair share which includes:
- High competition because of less investment
- Less margin in sales because of high competition
- Quality control issues
- Drop shipper can make mistakes
- You may end up discounting and discounting because of competition
- Switching cost is less for the customer. They may leave you very easily.
Pros and cons of drop shipping for a customer:
Just like store owners, drop shipping has its own pros and cons for all those who prefer to purchase online. Let’s have a look on top factors.
Advantages of Drop shipping:
- Competitive prices as compared to traditional market.
- The user can order online while sitting at home.
- The user can pay after receiving the product.
- The user can get a refund if it’s in the site’s policy.
Disadvantages of drop shipping:
- User can not examine the product before buying
- Product delivery can get very delayed
Well that was all about drop shipping, from finding a niche to finding suppliers and setting your store, marketing and platforms with advantages and disadvantages of everything. I hope this guide will help you a lot if you’re going to set up your own store.
In a nutshell see if you are really willing to work, if yes then move on and see what products and niches you have knowledge about and select your desired products, make a list of your goals and your targets including target audience. Select your desired platform for e-com and move on with making website, do marketing, Study marketing techniques we mentioned or dig deep in the internet to find more if this is not enough for you. Once all is done get your hopes high and sit back applaud for yourself have a tea and wait for your first customer.
In the end we would say that drop marketing is no doubt a very authentic way of earning and many people are making a living out of it but it is not an easy job now, today in 2017 drop shipping has a lot of competition and requires a good amount of time, patience and hard work and with all this surely anybody can make a living out of it. With margins from 10% to 15% and on small items margins can go up to 100% possibilities are unlimited; all you need is hard work and belief in yourself and our guide.