There are two methods to that are used when starting a dropshipping business: offering a third-party company's products alongside your own niche products or starting a business that exclusively dropships a third-party company's products.
The first method is an excellent way to generate passive income with no financial investment, while the second method leads to the failure of 9-in-10 websites that try it. Selling third-party products without establishing your business as a voice to be heard in a niche looks like spam and, in many cases, has been used as a thinly veiled cover for collecting bank details for criminal purposes.
The Internet is rife with sites promising to display "50 photos from history that you must see" and then inserting countless advertisements for unrelated products from "suppliers" who are often dubious. The fact that there are so many is a reflection of the laziness of many online business owners, and the unfortunate reality is that many individuals are still willing to provide their personal and financial information to anyone who requests.
Furthermore, these websites do not attract repeat visitors; why would you consider returning? They will be gone in a few months if you try to find them again.
However, for savvy entrepreneurs who offer dropshipping in addition to their niche, it is a proven method to expand their business, as they can now offer products across the entire market sector, backed by the credibility they've established in their own niche.
Dropshipping is a method of order fulfillment that enables businesses to sell directly to customers without stocking inventory. When a consumer purchases a dropshipping product from your website, the product is shipped directly to them by a third-party supplier. The customer pays the retail price you establish, you pay the wholesale price of your suppliers, and the difference is your profit.
You never have to manage the products, invest in inventory, or even deliver the products.
To sell the finest dropshipping products, you need only create an account with a provider.
Currently, the leading dropshipping directories where suppliers can be located are:
AliExpress is the eldest Chinese e-commerce platform that connects you to the world's largest product market.
Alibaba - Comparable to AliExpress, with a concentration on technology.
SaleHoo – Connects you to a vast, international database of wholesalers.
Worldwide Brands – An eBay-exclusive certification for a U.S. company.
Doba – For a monthly fee, they offer an integrated system in which they manage the logistics and permit you to source from various wholesalers.
Sunrise Wholesale – Similar to Doba, you only engage with Sunrise as opposed to individual wholesalers.
In the dropshipping business model, you are responsible for creating a website and your own brand, as well as selecting and marketing the products you wish to sell. You determine which dropshippers' products to sell, and you can advertise products from as many dropshippers as you like.
Two segments comprise the dropshipping business model:
The front-end is what visitors to your website see. They will see the products in your store alongside your own goods and/or services, and they will purchase them at a price that you determine. The customer will then receive confirmation of their order and a shipment notification. The notification also contains tracking information so he can trace the order, just as he can with the products you provide.
The back-end - When a customer places an order for a product, you "purchase" the product from the supplier, who then ships it directly to the customer. The consumer is unaware of the fulfilment process, as their experience is identical to that of any ecommerce store.
By focusing on more niche and trending products, you can attract consumers' attention and gain traction without having to compete with larger, more established companies.
Niche products typically have a more passionate customer base, which can make selling to specific audiences simpler by increasing product awareness.
These are examples of niche businesses with a dropshipping store:
A kindergarten that sells educational toys;
iPhone repair shops that sell cases and selfie sticks;
A tent company that sells outdoor culinary equipment;
A coffee shop that sells coffee machines.
A podcast that sells branded T-shirts and souvenirs
As with any business, dropshipping requires an initial investment of time and effort, but there is significantly less to do over time. You must approach dropshipping with realistic expectations regarding the required time investment and profit potential.
Once dropshipping is operational in your e-commerce store, maintaining it won't require much time. In terms of efficiency and scalability, the dropshipping model returns a substantial portion of your investment.
When you create a niche business, you create more than just a source of income; you also create an asset that you can sell in the future. A niche business that can offer products across a larger industry will generate real equity value, making your company significantly more appealing to potential purchasers in the future.
Dropshipping enables you to expand your product offerings across a larger niche, allowing you to develop your store around your own niche products and/or services.
The dropshipping industry is highly competitive and rapidly evolving. You will need to an extensive investigation for products in order to compete with established sellers. If you want to rise above the competition, guesswork will not suffice.
Popular dropshipping products are typically sub-$60 impetuous purchases. They tend to be add-ons or accessories, as well as products that are already selling well; a product over $100 with a high commission may appear enticing, but the commission is high because no one is purchasing the product:
If you want to dropship women's clothing, look for one-size accessories; a significant amount of women's clothing is returned, so it is best to search for less expensive products that are not "sized"
To dropship baby products, search for accessories and toys that cost less than $60.
If you are dropshipping tools and vehicle accessories, it is best to avoid vehicle-specific items; otherwise, your store will require a great deal of products!
When selling beauty products, it is also beneficial to search for gifts and sets, as well as items that consumers may wish to "try," as opposed to competing in the vast central market.
Try to avoid high-commission "get-rich-quick" products, as the reason for the high commission is desperation rather than sound business.