Updated: 2022-03-03 14:59:20
It has to be said that the competition of dropshipping is constantly intensifying. Many people who want to start dropshipping are worried about whether dropshipping is still worth it and how to start dropshipping in 2022 to stand out from the fierce competition? Let's figure it out step-by-step in this article.
Judging from the dropshipping industry, it is expected to reach a market valuation of $557.9 billion before 2025, registering a CAGR of 28.8%. It means that dropshipping will not die for at least the next few years. Instead, it will keep growing fiercely. Several reasons support dropshipping as a great business choice.
The growth of retail e-commerce has been noteworthy. In 2020, retail e-commerce sales worldwide amounted to $4.28 trillion and e-retail revenues are expected to grow to $5.4 trillion in 2022. What a huge value! If you are engaged in dropshipping, then you will definitely be able to profit from retail e-commerce.
Online shopping is one of the most popular online activities worldwide. As we can see from Google Trends, the outbreak of the epidemic in 2020 has caused the popularity of online shopping to explode. The trend of online shopping is higher than ever.
AliExpress is gradually eliminated from dropshipping. One of the main reasons is that the global delivery time on AliExpress is too long, usually over one month.
With the strengthening of global shipping capacity in China (most of the dropshipping suppliers are located in China), and the emergence of European and American dropshipping warehouses, fast global delivery has become easy. And fast global delivery has become the standard for a qualified supplier.
Among all the e-commerce business models, dropshipping is the most flexible and easiest to get started. Because you don’t need to deal with any offline issues, such as keeping inventory. It means that you can save a lot of costs of hiring employees and renting warehouses.
Besides, The product is sent directly from the suppliers to the customers. There is no middleman to share your margins, and you can get a profit several times the product cost. No matter how fierce the competition is, dropshipping is profitable is a fact that will not change.
All in one, dropshipping is still worth it for people who are willing to invest enough time, money, and energy in it.
The biggest concern for those who want to start dropshipping is the cost. Dropshipping is not as easy to start as advertised by some scammers, nor is it a shortcut to get rich overnight. To start drop shipping, you must have a budget for setting up stores, testing products, fulfilling orders, advertising, and investing in marketing tools, etc.
We have mentioned the main costs of starting a dropshipping business in our previous blog. And the minimum start-up cost is around $1100.
Usually, it doesn’t cost much to set up a store at the beginning. Shopify’s 14-day free trial is a good choice, and you can set up a store in hours with Shopify. Even the paid plan is only $29 per month.
When choosing dropshipping suppliers, dropshipping agents are relatively more reliable because they will take care of your whole supply chain and are more friendly to novices. And most of the dropshipping agents don’t charge monthly fees.
The main cost of dropshipping lies in advertising and product testing. Advertising is the most efficient way to test out the bestseller among all your store products. And meanwhile, advertising is the fastest way to drive traffic. You will have to prepare a budget of at least $1000 to make product testing. But, if you have a lot of followers on social media, you can of course save the cost of advertising.
Besides, you will also spend some money on buying samples and investing in dropshipping tools. Dropshipping is more like a process of investment. You can not see perfect results if invest little, and investing too much will increase the risk. Therefore, before starting, make a budget for the cost of each step to start dropshipping more confidently.
What is the best dropshipping product? There is no standard answer to this question. If you are not sure what to sell, you can start with all categories. Then find the bestseller after a period of testing. But here are some ways to help you narrow down your search and quickly target the best dropshipping products.
1. What are your areas of expertise?
Things you are good at can help you better gain trust in the process of marketing.
2. What niche are you interested in?
You are more likely to invest time and energy in things that you are interested in.
For example, you are good at pet care and interested in pet niches. Then you can start a niche store. Such a store is conducive to branding in the later stage. However, it is not recommended to start dropshipping with just one product because if you fail on the product, you’ll have to start a new store for another new product, which may waste a lot of resources and time. After a period of testing and finding the bestseller with stable orders, you can turn to a one-product store.
If you are not sure about the first two questions, then you can start a general dropshipping store. You will have many choices among so many hot-selling products in all niches. But it is difficult for general stores to turn into the branded dropshipping store.
Google Trends. You are able to find out the search interest of a specific niche or product on Google Trends. It is also an excellent tool for finding historical search data and predicting future trends. So if you are looking for the best dropshipping niche or product, Google Trends will be your go-to resource.
Facebook, Instagram, TikTok. These social media are golden sites for finding hot items. Dropshippers are advertising their products on social media. You can search for products on Facebook, Ins, or TikTok to see how many people are advertising for these products and how people react to them.
AliExpress, Amazon, eBay. On these platforms, you can find the most popular products based on sales in every niche.
We all know that the shipping prices of dropshipping sometimes are higher than the product prices. So to get high margins, It’s better to choose products of small size and weight to reduce shipping costs. Also, don’t choose products that are super cheap with much little profit margins.
84% of e-commerce retailers cite that the initial stages of finding and securing a good supplier are the biggest obstacle to getting their business going. There’s a fact that you have to be aware of. Dropshipping means that you have little control over your product quality, delivery, packaging. These all depend on your suppliers. Supplier is the key to dropshipping. So be cautious and keep the following key points in mind when selecting your suppliers.
• Competitive (product+shipping) prices.
• No MOQ.
• Less than 5 days processing time.
• Optional shipping methods and fast delivery time.
• Reliable customer support. (Quick reply, fluent communication, solve problems efficiently)
• Responsible after-sales service. (Handle return or refund issues.)
• Warehousing service for your inventory.
• Branding or private labeling service for further needs.
It's a good idea to work with different dropshipping suppliers in the stage of testing products. Many dropshipping start-ups choose AliExpress suppliers to be the first suppliers for their dropshipping businesses. But to find reliable suppliers on AliExpress can take you much time. You have to negotiate with suppliers yourself to make sure that everything goes smoothly.
To avoid long shipping times, you would better choose a more efficient way when your business runs up. Many AliExpress alternatives (like Oberlo, Spocket) provide high-quality products, fast delivery, and highly automated systems. They can save you a lot of money and time.
Compared to dropshipping suppliers, a dropshipping agent can source cheaper products directly from manufacturers in China. And there will be a sourcing agent or customer manager who helps you with all the matters 1-on-1, which can make your business more efficient. Most of the dropshipping agents have automation apps and may work with multiple shipping companies to provide unified order processing, packaging, and very fast shipping.
SourcinBox is one of the dropshipping agents that offers fulfillment services including sourcing, purchasing, quality checking, warehousing, packaging, shipping, as well as private labeling. It has integrations with Shopify, WooCommerce, PayPal to automate your order fulfillment.
There are many powerful platforms for building an online store, 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!