Install the Free Chrome Extension - Best for Shopify Dropshipping

How to Start a Dropshipping Business in 2022

Aug 18, 2022 · 10 min read

You can create a successful brand if you're willing to work hard. Starting a dropshipping business is a great way to get started in entrepreneurship because you'll be able to sell products to customers, set your own product prices, and promote your very own brand. You won't even have to pay for inventory until it's actually sold to a customer.

If the nearly 3.5 trillion dollars in global ecommerce sales in 2019 are any indication, starting an online business is an increasingly lucrative option right now. This information may be useful if you're still debating whether to launch your online business.

This article will teach you how to start a dropshipping business, including what it is, how to find the best dropshipping business ideas, and everything else you need to know to get started.

Try Handshake, the wholesale marketplace created by Shopify, if you're ready to launch a business but would rather keep your own inventory. You can even do both, dropship and keep your own inventory!

What Is a Dropshipping Business?

With the dropshipping business model, your supplier will send your products from their warehouse to your customer's door as soon as you make a sale, so you never have to worry about keeping any inventory. You won't ever have to be concerned about how to store, package, or send your products.

How Does the Dropshipping Business Model Work?

In the dropshipping business model, the manufacturer, the retailer (you), and the customer are the three main players.

In a dropshipping business model, the manufacturer sells products to the retailer at wholesale prices, taking on the risk of unsold inventory, carrying inventory, shipping products to customers on the retailer's behalf, and replenishing inventories.

In the dropshipping business model, the retailer (you), sells the manufacturer's products on your website under your own brand. You will be in charge of selecting, marketing, and pricing those products so that you make a profit.

The customer purchases the products directly from you, the retailer, in the dropshipping business model. If questions or problems arise, the customer contacts the retailer they purchased the product from.

How to Start a Dropshipping Business: The 6 Step Dropshipping Business Plan

Step 1: Choosing a Dropshipping Business Idea

  1. Google Trends is great for knowing whether a niche is on an upward or downward trend. However, on its own it’s not enough to determine whether or not a niche is viable. Some niches may be on an upward trend but don’t have enough search volume to warrant its popularity.

  2. Browse popular websites within your niche. For example, if you check out a fashion retailers website, they’ll often organize their store into trend categories. This helps you understand what trends you should be adding to your store right now. You can also browse a store’s best-selling products to help you find the best products to sell.

Step 2: Competitor Analysis

  1. Enter the name of one of the products you want to sell into Google and do a quick search to see who shows up on top. The top ten results on Google or any other search engine will give you a good indication of your competition in a certain location. If you are selling products in a location different from where you are based you can use third party tools to gather data. Use tools like SEM Rush or Ahref to get information about search results in different locations across the world.

  2. Use spy tool to analyze your competitors. SimplyTrends, an all-in-one data analysis tool, which has two functions to not only catch your competitors' attractive slogans but also all their marketing actions.

Discover Competitors:

You can hunt all Shopify stores and products you are competing with, and review their performance, marketing, and product strategy to sharpen your competitive edge. Using the Filters, which is the unique function of SimplyTrends, you can also sort out accurate results at your need.

Track Competitors:

With just a click on the ‘follow’ button on this tool, you will be informed when your competitors take any action- from product launches to Facebook ads release, from slogan changes to any page updates, in a twitter-like feed.

Step 3: Find a Supplier

  1. Use SimplyTrends, drop an image of products and you can instantly find suppliers direct from factory AliExpress, with key information like prices, orders, and customer ratings for your quick and easy reference. You can reverse image search for the best suppliers, discover direct-from-factory suppliers.

  2. When you have a list of five or six potential suppliers to choose from you can move onto the next step which is contacting these suppliers to ask important questions like minimum order quantities and shipping times.

By now you probably have reduced possible suppliers from a list of 5 suppliers to 2-3. The best way to make the decision now is to place a sample order with them for a product and compare the results. Compare ecommerce shipping times, product quality, and packaging while making a decision, keeping your customer in mind and what they will expect from you when placing an order.

Step 4: Building a Dropshipping Business Store

The following are some elements that go into building a dropshipping e-commerce business properly:

  1. Domain Name – Your domain name matters, especially if building a long-term brand. You can use free business name generator to help you simplify the process. Always get a .com domain, no matter what. If you want your niche as a keyword in the new domain make sure it’s broad like beauty, jewelry, fashion rather than very specific so you don’t need to change your domain name down the road. Also, avoid using your name as the domain for your store. If you ever sell your business, you could legally use the rights to your own name.

  2. Sign up for Shopify – Shopify is the most comprehensive ecommerce platform on the market. With new features, tools, resources and apps being added regularly, you’ll find that it’s easy to use and run a business on the platform. Plus, if you get stuck you can reach out to a Shopify guru who will personally walk you through any steps for free.

  3. Shopify Themes – Personally, my go to free theme is Minimal Vintage it’s easy to navigate, clean and overall a great starter theme for those on a tight budget. Themes can be changed overtime. In the beginning while you’re just testing out free themes do get the job done. Once you’ve started making some money, you can invest it into buying a new theme for a better store design.

Install Automizely – Automizely dropshipping allows you to find products online that you can sell the same day. You’ll be able to find products in a number of popular niches. Aim for 10-25 products when starting out as it can be overwhelming to write product descriptions for much more than that. If you ever have questions you can reach out for help via the Automizely blog, social media pages or via Shopify’s support line. You can also check out 50 Ways to Get Sales with Dropshipping to learn the exact strategies and marketing hacks I’ve used on my own online stores to make money with dropshipping.

Step 5: Marketing Your Dropshipping Business with Everything You’ve Got

  1. You shouldn't be afraid to put yourself out there because making your first sale is one of the best feelings ever, so stop adjusting your store design and acting like you're improving it. The next step in your dropshipping business plan is to market your company aggressively now that you've chosen your product and established your store.

Step 6: Optimize

  1. Alternately, you could compare your pricing to those of your rivals and see if you could make any adjustments to become more competitive. Once you have invested time in creating your website, brand, and marketing, you can begin to evaluate the outcomes of your labor. You may discover that some marketing initiatives are incredibly successful while others are not so much.

  2. To assess whether a campaign is successful or not, even a brief snapshot of tool data may be sufficient. If you want to check if your online traffic is increasing or decreasing, you can use tools like Google Search Console or Analytics. If you are using third-party tools for email marketing or social media reporting, set up weekly or monthly automatic reports so that you will be reminded to review this information frequently.

  3. In order to ensure that your website doesn't lag behind industry best practices and to stay one step ahead of your rivals, the most crucial aspect of a successful online e-commerce store is to test and optimize in order to boost the amount of revenue you generate online.

Conclusion

Keep in mind that starting a dropshipping business is best learned by actually doing it. There you have it, we've covered how to start a dropshipping business. By incorporating some of the tips from this article into your own online store, you work towards creating your own online empire.

Related Readings