Starting a dropshipping business

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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. AliExpress and Amazon would be some of the obvious choices 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 to your site so that you know where to grow and how to grow it. Below are some of the most popular dropshippers around.

AliExpress – Among the Largest Catalog of Products

When it comes to dropshipping, AliExpress would always be the top choice mainly because of its sheer size. This gigantic marketplace offers almost anything anyone is looking for, ranging from baby products to toys, electronics and gadgets, clothing and so much more.

Among the highlights of dropshipping with AliExpress is that there is no costs or fees upfront. It is very easy to dropship products from your store in AliExpress without needing to be concerned about inventory or stock and other logistics issues.

  • Add products by selecting them from AliExpress to your e-store.
  • Determine the price you want to sell (plus your profit).
  • Fulfill an order when it comes in by paying the cost to your AliExpress seller.
  • The seller will now send the product to your buyer.

Among the highlights of AliExpress:

  • More than 100 million products in its catalog.
  • Free for starters
  • Products can be delivered worldwide.
  • Prices are internationally known to be lower than many others.

Modalyst – Centralized Management for your store

IF you are looking for an automated dropshipping system, the Modalyst could be your ideal choice. It connects your business with suppliers while connecting your customers to their products. Modalyst’s library of products is massive and comes with a free starter plan.

When you use Modalyst, all you need is a single control panel which allows you to connect with your suppliers as it centralizes all the functions in one place. Price starts from US$35 per month for the basic plan while it costs 3 times more for the Pro Plan.

One of the main reasons why Modalyst is so popular is because it is Wix-integrated which makes it very easy for you to set up your store. The free trial gives you up to 25 products for listing.

Oberlo – Large directory of products

Oberlo is a great option that integrates very well with the suppliers in Shopify. It has a very extensive directory that gives you a lot of options to find items that you might want to sell. This is where you can check out the sellers which include analytics data like star-rankings, page views, etc.

From as low as US$30, you can use the Basic Plan while the Pro Plan is at US$80. For starters, you can use the free starter version. Oberlo will help to ship your item to those sales that you have made in your store.

  • Oberlo will manage your product selection and order fulfillment processes.
  • This means that you can focus on increasing more traffic to your site.
  • The Starter plan is a lifetime but if you want more functions like order fulfillment and tracking of shipment, you might want to consider going for the Basic Plan. Take note that you can also go up to 500 sales orders with the Basic Plan.

SaleHoo – Verified sellers

SaleHoo comes with a 60-day free trial version. It is a members-only dropshipping service with more than 8,000 suppliers in its database. If you are going in for the long-term, you should consider the Lifetime Plan package at only US$127 for a one-time payment.

As for a shorter term, you can take up the US$67 per year plan. This will give you access to its extensive database. What makes SaleHoo so unique is that the suppliers are verified by Salehoo which is very popular for its excellent customer service and support. How SaleHoo works:

  • Easily set up your store and start listing products you find for sale.
  • Spend some time working on converting sales and drive traffic to your site.
  • Once a sale is made, your supplier will be notified to do the needful.
  • You can now make the payment to the supplier.
  • The product is shipped to your customer by the supplier.
  • Post-sales service and support is handled by you.

Megagoods – Good for Private Label sellers

Megagoods is one of the top names especially in the US when it comes to e-commerce and dropshipping. It comes with a 30-days free trial version. You can also opt for the US$14.99 per month package.

This dropshipper is an ideal platform of you are looking to sell under private label. They will ship your good with your own branding and packaging designs at an affordable rate. This is one of the lowest fees among all the other dropshippers but is known to specialize in consumer electronics and digital goods. Be sure to check any additional fees.

Spocket – Focuses on US and Europe

This app is easy to use and very comprehensive. You can easily sort the dropship items by country and then add them to your store (Shopify or otherwise). If you are selling in Europe or the US, then this should work very well for you.

This is because Spocket helps you to find items from the US and European countries which expedite the delivery time (instead of China). It has a free starter plan while you pay US$49 monthly for the Pro Plan. Another level higher would be the US$99 monthly Empire Plan.

You will be given 25 products to list and 250 products for the Basic and Pro plans respectively. With the Empire Plan, you can list unlimited products.

Amazon – Worldwide-renowned brand

World-leading e-commerce giant Amazon offers dropshipping if you are looking for a strong brand in this market. It is relatively similar to the other dropshipping services out there where:

  • You list your products for sale on Amazon’s e-commerce site.
  • Any customer on Amazon can buy the product that you have listed.
  • The transaction takes place and the customer pays you. You can then pay for the product from the supplier.
  • You then flourish the information of the customer (contact, items purchased, etc) to the supplier.
  • The supplier sends the product purchased to the customer concerned.

Amazon has many other models besides dropshipping like private labels and Wholesaling. What makes dropshipping a viable option on Amazon includes:

  • Easy to start – You can easily start this business and ride on Amazon’s strong brand name.
  • Low-cost – You do not manage any inventory which means you do not need a lot of startup capital.
  • Automatic and self-running – It is very easy to operate this business as there are a lot of third-party plugins and apps that can help you to fulfill the orders.

Wholesale2B – Various models possible

Wholesale2B comes with a variety of options with many models available. You can go on wholesaling or more notably dropship. It comes with a unique plan for the different methods you are selling.

A DIY-Plan will cost you US$67 per year while the others range between US$29.99 and US$49.99 per month, depending on what you are going for. It integrates with many big names out there like Amazon and Shopify too.

If you want Wholesale2B to handle your orders for you, there is a 3% fee or you can do it for free if you handle them yourself by registering as a seller.

Dropified – Integrates with AliExpress

Dopified comes with a 14-day free trial version which is designed to run with Shopify. If you take the Premier Plan (top of the range), it is US$127 per month or the lower Builder Plan version is US$47 per month.

Dopified is perfect if you want to have a system to handle your orders that come in from AliExpress. This includes order fulfillment and management of details like shipping addresses of your customers.

Take note that Dropified does not use a marketplace but is a plugin for your browser to extract information from those you searched online.

Doba – Extensive library of items

Doba is known to house more than 2 million products. With Doba, you can fulfill orders through this system seamlessly. It has a 14-day free trial while comes with 3 plans. The Basic Plan is US$29 per month while you pay US$69 for the Advanced Plan and Pro Plan at US$249 per month.

Doba is among the higher ones when it comes to pricing which means it would be best to try out this system before deciding if it is right for your store. This is to ensure that you are making enough profit to cover your overheads prior to starting out.

Wholesale Central – Free and easy

Wholesale Central provides one of the most cost-effective dropshipping services around. What you get from this free directory is a huge list of suppliers. You can work with them directly and then order the products that you want to list on your site.

There’s no membership required to use Wholesale Central and it gives you free directory not only suppliers by trade shows too. This is the best place to start your research if you are planning to dive into dropshipping.

It is reported that Wholesale Central has over 1,000 wholesalers in its library and more than 600,000 items that you can use to sell. The highlight here is that there are no intermediaries and you will liaise directly with the suppliers.

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