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Ecommerce

An Introductory Guide to Dropshipping

We’ve all seen the ads, blasted over YouTube, Instagram and Google. They’re usually titled along the lines of: “How I made $4 million a month dropshipping this one simple product”.

Sound too good to be true?

It usually is. Most of these ads have an ulterior motive: they’re trying to sell you a course of some kind.

But is it true that you can actually make a lot of money with dropshipping?

Well I certainly think so. A 2017 stat that often gets touted around is that 23% of sales online were dropshipped in that year.

How does dropshipping work?

Dropshipping, in essence, is a type of order fulfilment.

It simply means that you get someone else, usually another company that specialises in holding stock and distributing to customers, to send your orders for you.

But the real beauty of dropshipping is that you don’t need to buy stock up front.

Instead, you buy each product after you have sold it. So it goes:

  1. You get a sale on your website
  2. You purchase the product from the supplier, and provide them with customer details
  3. The product is sent directly by the supplier to your customer

It’s easy to see why this is such an efficient and risk-free way of selling products online.

Step 1: Find a product

Finding a great product to dropship isn’t easy. We wrote a quick guide that certainly helps frame what type of products usually do well.

One method for finding products is to see what is already selling well, as a starting point.

Looking through best sellers on Amazon is a good option. Make sure to use the filters on the left to drill down into different categories.

However its unlikely you will do well if you sell a direct best seller – there is already fierce competition.

Instead, use this as a starting point. If people are buying a lot of a niche product, what other products exist in that same niche that could sell well?

For example, if people are buying lots of vegetable seeds, how about storage containers designed for seeds?

An alternative and highly effective route is to use services such as Oberlo which simplifies finding suppliers, placing orders, and adding products to your website.

Step 2: Choose your sales channel

There are a few three main routes for selling your product:

  • Amazon
  • Ebay
  • Your own website

Amazon and Ebay are both great platforms as they already have a huge user base, which gives you instant access to customers.

However the fees associated with either means you make less money, and the competition can be fierce so these options work best for niche and unique products.

Creating your own website can be difficult. But with various website builders available, this process can be easier for simpler sites and products.

Websites often work better for products that require a lot of explanation, or product features to be highlighted.

Step 3: Get customers!

Getting customers is by far the hardest part about being successful with dropshipping.

One of the easier routes is to use pre-existing audiences, for example selling your product on Amazon

Your product will naturally feature in searches, and marketplace search term optimisation is a key strategy here.

With both the website and marketplace options, driving traffic from social sources is highly important. Instagram, YouTube and Facebook are all great example of this. Building a strong social media presence is key.

You can also use PPC marketing, on Google, and ads on social media platforms. Obviously that is a huge amount to cover here, but its worth investigating.

Step 4: Maximising customer value

Finally, once you’ve been able to attain customers, you need to work out how to maximise their value. This simply means making as much money as you can from each customer.

That could be through an affiliate or referral system, which encourages customers to help you get more sales.

Or it could be with follow-up emails designed to encourage users to buy more product.

Regardless of the route you take, this is of key importance to boosting your revenue from each customer.

Conclusion

Dropshipping is definitely still a viable option in 2020, but I won’t lie – it’s tough.

This guide is just the start. There is a wealth of information available online about how to successfully dropship.

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