Updated: 2023-03-06 13:40:19
As is known to all, dropshipping is the perfect choice for first-time e-commerce entrepreneurs because the dropshipping model allows you to outsource manufacturing, warehousing, and delivery to third-party dropshipping suppliers, which means you can easily make money online while sitting at home!
Still, many people are confused about dropshipping and hesitate to start. Keep reading, this article covers the basic information about how to start dropshipping in 2023.
Dropshipping is a retail fulfillment method for online stores, where retailers only need to sell products online and forward the orders and shipment details to one or more third-party suppliers who will then handle the rest and ship the products directly to final customers.
Such a way almost eliminates the risk of overstocking as online retailers do not need to keep inventory anymore. And what's even better is dropshipping frees up the retailers' time and money that can be spent on store advertising and marketing.
You may think of dropshipping as a three-step process:
First, the customer places an order and pays you $200 as a product price. Next, you forward the order to your supplier and pay $150 as a wholesale price. Then, the supplier ships the product directly to your customers, and you keep $50 as profit.
You can check our previous blog to get more detailed explanation of what is dropshipping.
The market of dropshipping is still heating up with thousands of people pouring in each year. The dropshipping industry is expected to reach a market valuation of $557.9 billion before 2025, registering a CAGR of 28.8%. So we can say that dropshipping is still worth it and thriving in 2023. The following realities can give a support.
There is no doubt that online shopping is increasingly widespread and bigger. People all over the world are sharing the benefits it brings. In 2022, there were 268 million online shoppers in the United States alone. This number is estimated to grow to almost 285 million online shoppers in 2025, according to Statista.
For dropshipping retailers, Gen Z is absolutely a significant population with the greatest potential for online shopping. 55% of Gen Zers still prefer to shop in-store (the lowest for this generation), but online channels are close behind. Gen Z, Millennials and Gen X are most interested in making purchases through social media and companies' mobile apps.
Global retail e-commerce sales in 2023 are expected to reach $6.913 trillion, accounting for 20.8% of total global retail sales, according to eMarketer.
The growth of dropshipping is mainly influenced by the growth of retail e-commerce. Forrester’s Research findings state that approximately 23% of all online sales are fulfilled through dropshipping.
The increase in internet usage and access worldwide has boosted the ecommerce market growth greatly. The latest statistics have shown that there are 5.16 billion internet users in the world today. And now there are 4.76 billion social media users around the world, equating to just under 60 percent of the total global population. Along with this increase, dropshippers have gotten more opportunities and a higher possibilities of success.
You may know dropshipping has a lower barrier to entry than traditional business. That’s because it has the following advantages:
• Low Investment: with low upfront investment, it’s possible for you to start sourcing products and launch a successful dropshipping business with minimal capital.
• Low Overhead: You don’t need to worry about maintaining inventory or managing a warehouse.
• High Flexibility: l Starting dropshipping has no requirements in time and places. And you can sell as many(or few) dropshipping products as you wish on your store.
• Wide Selection of Products: You can list any trending products you are interested in selling on your store as long as your supplier offer them.
• Simple Testing: Dropshipping is a perfect fulfillment method for both beginners and business owners looking to testing customers’ preferences for certain products
Before start your own dropshipping business, it’s also essential to know about the disadvantages of dropshipping:
• Low margins: Many competing stores will sell the same products at low prices in an attempt to increase sales. Thus, your customers would compare these prices to yours before purchasing. If you want to get sales for those products, you’ll have to lower the price and profit margin. On top of that, you also need to incur high advertising costs! The price competition will hurt the potential profit margins in a niche. Fortunately, you can do a lot to alleviate this problem by finding a profitable niche for dropshipping.
• Intense competition: Considering this low-risk, low-investment, and easy-to-start business model, the competition is fierce. If you want to stand out from the competition, you can focus more on improving customer shopping experience.
• Shipping complexities: Most dropshippers choose to work with AliExpress or Chinese suppliers for a massive product choice and lower product costs. However, the global shipping cost is usually expensive and AliExpress delivery is usually slow. Sometimes shipping costs can be complex and hard to control when working with multiple suppliers. So, working with dropshipping agents can be a better choice. If you are experiencing poor profit margins caused by problems such as high shipping costs, you can chat with our team directly. We would be glad to help you as a professional and reliable dropshipping agent.
• Make a list of your interests and passions, as well as think about the people you want to sell to. This is the foundation of your online business. Only when you have found out your areas of expertise and what niche are you interested in, will you have a chance to succeed.
• Use online research techniques to find potential products. Google Trendscan give information about the search interest of a specific niche or products. Social media like Facebook, Instagram, TikTok are international sites for finding hot items and how other dropshippers advertise their products. Also, you can go and check the best-selling products in every niche on shopping platforms like AliExpress, Amazon, eBay,etc.
84% of ecommerce retailers consider the initial stages of finding and securing a good supplier to be the biggest obstacle to getting their business going. Generally, you need to work with reliable suppliers to provide high-quality products and delivery to your customers. Supplier play a significant role in dropshipping. So be cautious and keep the following key points in mind when selecting your suppliers:
• Fees: competitive product and shipping prices.
• Fulfillment services: No MOQ, less than 5 days processing time,warehousing service for your inventory, branding or private labeling service for further needs.
• Shipping: Optional shipping methods and fast delivery time.
• Customer support: Quick reply, fluent communication, solve problems efficiently, Reliable after-sales service.
There are tons of dropshipping suppliers for you to choose from on AliExpress. While to save your time and money, we recommend working with dropshipping agents. A dropshipping agent can source low-price but high-quality products directly from manufacturers in China. And there will be a professional sourcing agent or customer manager to help you with all the matters during the business 1-on-1. Most of the dropshipping agents have automation apps and may work with multiple shipping companies to provide unified order processing, packaging, and very fast global shipping.
SourcinBox is one of the dropshipping agents that offers fulfillment services including product sourcing, purchasing, quality checking, warehousing, packaging, shipping, as well as private labeling. You can connect your store with SourcinBox easily.
To set up dropshipping stores, you can choose professional platforms, such as Shopify, WooCommerce, Wix, BigCommerce, Magento, etc. They all have their own characteristics. You can choose the most suitable one based on your budget and needs.
Shopify is one of the most popular e-commerce platforms. It is extremely easy to set up for beginners. There are massive Shopify apps in their App Store, which allows you to expand features for your Shopify store. It charges a monthly fee but it is affordable. Shopify is the least error-prone choice for dropshipping beginners.
WooCommerce is a free and open-source shopping cart plugin that works with WordPress sites. It may be a little complex to set up but more SEO-friendly than Shopify. If you are already running a WordPress site, WooCommerce is a perfect option to build a dropshipping store.
Wix is a functional e-commerce platform and drag & drop website builder. It has hundreds of beautiful and advanced design collection which is customizable. Its App Market provides integrations with various useful tools to help you expand features. And its friendly pricing plans make it a perfect alternative to Shopify.
BigCommerce is a good choice for those with little technical knowledge and who feel difficulty in coding. It integrates with top marketplaces such as eBay, Amazon, and Google Shopping. It also offers free hosting and allows users to get more traffic with customizable, SEO-friendly URLs, and out-of-the-box Metadata and robots.txt editing.
Magento is one of the most powerful self-hosted e-commerce platforms. It is completely customizable with expensive but excellent features for those who have the resources to implement the best and advanced technology. It may be not as user-friendly for small businesses as compared to other platforms.
When setting up a dropshipping store, no matter which platform you use, you should focus on SEO at the beginning. The design of your store should meet the preference of your audience. As well as every step of the settings, including product pictures, descriptions, pricing, your contact information, etc, should be real and convincing.
Marketing is an imperceptible process. Although advertising is the fastest way to gain traffic, the proportion of advertising in marketing is best not to exceed 20%. You need more marketing channels to get long-term sustainable effects.
For beginners, one of the lowest-cost ways is content marketing. In one word is to insist on outputting creative and valuable content for your customers. You can do this via blogs and social media. On the one hand, all this content can make you and your store more trustworthy and professional to gain more loyal customers. On the other hand, it also helps SEO and helps your website rank higher in keyword searches in your field. Content marketing can also have a good combination with social media marketing.
Email marketing is another cost-effective way to maintain and convert more loyal customers. As start-ups, attracting traffic is the first step in marketing. In order to convert more visitors into customers, in addition to attracting by content, you can use personalized emails for promotion. You can learn more in our guide about email marketing.
Influencer marketing (also known as branded content or working with creators) is rising in 2021. More than two-thirds (67.9%) of U.S marketers will use some form of influencer marketing this year. It’s expected to increase to 72.5% in 2022. Instagram and TikTok are the platforms of choice for social influencers. This form of marketing could have greater effects than advertising.
Your cost. Don't be afraid to negotiate prices with different suppliers. By comparing different suppliers or agents, you can find the one that can provide you with the most competitive prices.
Your store. The first impression your store makes on your customers is very important. Your contact information, product descriptions, prices, and shipping times must be clear, it is better if you can provide great customer service and after-sales guarantees.
Your content. Keep following the hot topics on social media in real-time and keep the marketing content updated. You will be more able to get more exposure and traffic in this way.
Your marketing strategy. It is always a good idea to try different marketing strategies for different products. If you don’t have the time and energy to do this, you can use marketing automation tools, which can help you run strategies and analyze the effects at the same time to better optimize your marketing strategies.
Dropshipping is competitive in the retail business but also challenging. You need to continuously optimize your business to beat the competition. There are no shortcuts. The dropshipping skills you can learn online all come from the experience of pioneers who were brave to try and succeed. So if you are wondering to start a dropshipping business, just do it and enjoy the process!
It only takes a few minutes
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