For startups and entrepreneurs, dropshipping is a great (and possibly effective) business area to go into. Most e-commerce businesses have already jumped into this bandwagon and if you are on the online platform, you should too.
What is dropshipping?
You would probably have heard of this term by now. Dropshipping has taken the world by storm which is a very economically-sound model. An e-commerce business that uses dropshipping saves costs in many ways. You purchase the products that you sell from a third-party supplier who fulfills the order on your behalf. Basically, you are like a middleman that brokers the sale. How can you start this attractive business model?
Ascertain your value proposition
Like any other business, you must find the area that works best for you. You need to have a niche that you are passionate about and is an expert in. In dropshipping, you need to be focused and it takes time for this to work. This is where you need to be aware of:
- Profit margin – You need to spend as much effort on products in any range. In this case, you may as well try to sell products with a higher profit margin.
- Delivery cost – Although the delivery is managed by your supplier, you need to find one with the lowest cost. In any case, if the cost is low, you could even offer free shipping to your customers. That is your unique selling point.
- Product – Things that are easy to buy are the best categories. Gadgets, clothing, household items are the top in the list. What you want is to have products that can drive impulse buying.
- Competitive Pricing – In whatever business model you run, your customers will always be concerned with price. Check out what your competitors are doing and how much they are selling, then work your way to level it.
Finding a supplier
There is no doubt that having a cost-effective dropshipping partner will be the formula of your success. You will be in the red ocean of thousands of dropshipping companies. To find suppliers that will help your business, you need to research and negotiate. Alibaba is the obvious choice when it comes to finding potential suppliers.
Your platform matters
Your platform will be the bridge to your customers. Once you have done your homework, you can start by launching a simple e-commerce site. A lot of names are available to help you get started like Shopify or Lelong. Start with a simple one and then move on as you progress. Remember that you must always keep track of the visits in your site so that you know where to grow and how to grow it.