Dropshipping Guide, Dropshipping 101
In this comprehensive guide, we will examine what is dropshipping, how to get started, advantages and disadvantages, and dropshipping on amazon.
For decades, starting a new business has been a costly and difficult affair. It was necessary to find a sufficient amount of money, rent a store and attract people to the store.
Even today, building a traditional business takes a lot of money, time and effort. If you have a dream to start a business, it’s easy to get discouraged quickly.
Estimated costs, starting to earn money and other requirements make you feel like you will never be able to start your business and prevent you from being successful.
Unfortunately there is a growing tendency among entrepreneurs to give up when starting a business, but dropshipping has made me rethink something that I once thought was impossible.
Dropshipping opens up all possibilities to entrepreneurs.
- Almost zero capital requirement
- Lack of needs such as office and staff to start
- Opportunity to sell all over the world
It offers a fast and accessible opportunity for an entrepreneur to earn income and fulfill their dreams of starting a successful business.
So if you have a desire to start your own business, this guide is for you.
Dropshipping Guide Content Overview
I know what it’s like to be worried about the future, you may think you will never succeed. But I’m here to tell you it’s completely up to you to start dropshipping.
In my opinion, dropshipping is one of the best ways to start a business today. Dropshipping is also an extremely flexible career path, so you can do it as a job or earn additional income while working a full time job.
However, there are a lot of things that are unknown about dropshipping. There is a lot of information out there on the internet, but it is difficult to tell what works and what doesn’t.
This is a big enough problem, plus most of this information is outdated.
Sometimes you may be suspicious of the information you read, you may see information that is not fully proven.
You may want to get useful advice from dropshippers who know the business, but this type of advice isn’t always easy to get. So my goal is to write a guide full of current and useful information.
I’ve prepared this guide specifically for people who seriously want to dropshipping like you, but don’t know where to start.
I’ve covered everything from choosing a niche to building a digital marketing strategy.
You will find information on website design for dropshipping, competitor analysis, brand building.
Finally, I’ll cover some of the problems I think you might encounter. If you want to know all the ins and outs of getting started with dropshipping, this guide is for you.
I’ll go through everything step by step and show you exactly what to do. Now that you know what information to learn when you read this guide, we can get started.
What is Dropshipping?
Before we go any deeper, you need to have an answer to the question: What is dropshipping?
Dropshipping is a dropshipping method of e-commerce retail sales. Products are sold by the dropshipping person without being stocked in a warehouse or store, purchased from a third-party supplier and sent directly to the consumer.
The dropshipping entrepreneur does not have to hold stock, ship or pack orders. All of these works are done by the supplier.
Dropshipping is a good business model for entrepreneurs because it doesn’t need as much capital as in a traditional business model. You don’t need to open a store or warehouse, keep stock.
You open an e-commerce site and buy products from suppliers who own a warehouse. The entrepreneurs’ responsibility is mostly to find customers and process orders, thus profiting from the products sold.
Advantages of Dropshipping
Millions of entrepreneurs want to do dropshipping because less work and money is required to get started. This is probably why you are interested in this business model.
The best news is, thanks to dropshipping, you can build a sustainable business in the long run with the laptop. Of course, there are many challenges and advantages, and you need to learn them before you start your own dropshipping business.
You shouldn’t approach dropshipping as a business that will make you rich quick. Instead, you should view dropshipping as a business model that creates value by focusing on a specific product category.
Once you understand the pros and cons of dropshipping, it will be much easier to start your business.
Dropshipping Advantages are:
Business Knowledge and Experience
Getting started with dropshipping is easy because you don’t need work experience, you may have never worked before. If you take some time to learn the basics, you can get started quickly and learn the rest as you go.
Dropshipping is relatively easy because you have less work to do than a conventional business model. You don’t need a warehouse or staff to store tools to help you. Or you don’t have to worry about stock and shipping.
You don’t have to build a big team and recruit. If you do not want to have someone do the minor things that will occur, you can do almost everything yourself.
One of the biggest advantages of dropshipping is that it has a flexible business model. You become the boss of your own business and make your own rules. This is the career everyone wants, you don’t need to spend a certain amount of time every day in the store.
You can work with a laptop at the most convenient times for you, from home or in a cafe. This is the ideal direction for entrepreneurs who want to start a business.
You don’t need to spend months starting your business and selling. You can get everything done and get up and running in just a few hours. All this means you can get started today.
But some basic knowledge and the right tools and resources are required, and that’s why I created this guide. Once done, you will have the information you need to do dropshipping.
No Cost Scaling
It’s easy to grow the dropshipping business, the business model doesn’t need to change as the business grows. As you grow, you will need to do more work with sales and digital marketing, but your daily work will remain roughly the same.
One of the benefits of dropshipping is that their costs do not increase as your business grows. Therefore, it is easy to keep growing fairly quickly.
You don’t need a lot of capital for dropshipping. You can start even with a small capital, as it takes very little capital to start dropshipping.
You can set up the entire business from your laptop and you don’t need any other investment. Costs will still be considerably lower as the business grows, especially compared to traditional operating expenses.
Dropshipping also gives you a lot of flexible possibilities to make appropriate decisions. Whenever you want, you can easily add new products to your site and change your strategies instantly.
If you’re going on vacation, you can automate everything to run while you’re away. Since you don’t have to make a commitment, you can manage everything with very little hassle.
As I said, you can do everything yourself if you want. After you find suppliers and set everything up, you’re mostly just in charge of your e-commerce site
You understand what I mean, the possibilities are endless and the dropshipping business is easy to manage.
As with any business, dropshipping has its drawbacks. There are many obstacles when it comes to competitors, profit margins, business and order tracking. Detecting them ahead of time will prepare you for problems.
The disadvantages of dropshipping are;
Low Profit Margin
One of the disadvantages of dropshipping is that you should expect low profit margins initially. This doesn’t mean you won’t make a profit, but you should be aware that the product margin may be low in some niches.
This problem creates trouble when selling, especially for a very competitive niche. While you are struggling to get the customers’ attention, you cannot afford to make the profit you want.
If you don’t choose the right niche, you can find bigger competition. In niches with lower competition, you’ll have better profit margins. So you need a good amount of sales to make a profit on dropshipping.
Dropshipping can make order tracking difficult. Dropshipping seems simple: the customer places an order, you deliver the orders to the supplier, and the supplier ships the product. Usually the system is simple, but if you are sourcing from more than one supplier, you may run into some problems.
Each of their suppliers can use a different shipping option that poses a problem for both you and your customers. Costs can rise and shipping multiple products can be a problem.
Different suppliers will also have different structures for processing and invoicing. This can be difficult as you have to manage the interaction with your suppliers.
One of the disadvantages of dropshipping is that it doesn’t have much control over certain aspects of the dropshipping process. Dropshipping doesn’t give you much control.
When it comes to product stocking, ordering and shipping, it’s entirely in your hands. You have to trust your suppliers to do everything right and run smoothly.
This lack of control can hurt some entrepreneurs, but it’s usually not an issue. It just means that when something goes wrong, the situation can be difficult to manage.
If all goes well, then good. But when there are supplier problems, you have to find solutions.
This can sometimes cause customer retention issues, but with the right damage control you can reduce problems and keep customer churn to an absolute minimum.
Customer Service Issues
Dropshipping makes customer service more difficult. This is another problem that arises when orders go wrong or suppliers fail.
Because you’re just a showcase, solving orders can be difficult. As I mentioned earlier, you don’t have much control and this can present difficulties when it comes to the support side of customers.
One of the disadvantages of dropshipping is that when customers complain, you have to take the blame. If there are problems with the suppliers, you may be doing everything right and still run into problems.
Should I Dropshipping?
As I mentioned earlier, dropshipping has both pros and cons, and that means it’s not something everyone can do, especially for those who want to get rich quick.
Dropshipping is not going to get you rich, if you’re approaching this way, it probably isn’t a good option for you. But almost anyone can start a dropshipping business.
Still, you may experience one of these fears:
- I don’t know if I have enough time to start a job.
- I don’t want to risk leaving my daily job.
- I don’t want to work that hard for dropshipping, I work hard from 9 to 5 already.
The good news is you can start dropshipping as small as you want. Here are two common approaches.
Dropshipping as Additional Income
Dropshipping can be ideal additional income as it is flexible and doesn’t require a lot of capital. Many entrepreneurs have a basic job that generates a fixed income but prefer it as an additional income.
You don’t have to sacrifice your day-to-day job to pursue your dreams of becoming an entrepreneur. You don’t need to spend a lot of time and energy on dropshipping, which means you can probably keep up with your business.
You don’t have to worry that extra work will degrade your performance. You can only work for a few hours each day and still be successful, but it’s important to know your limits.
If you regularly work overtime in your day-to-day job and are struggling to find time for important daily responsibilities, you may not be able to pay attention to your dropshipping business.
Dropshipping doesn’t require much, but you need to do some serious work and time on it. In most cases, it just requires some time management and timing.
Many dropshipping entrepreneurs easily manage their main and side businesses. You don’t need to skip meals to get 3 hours of sleep or work a night. You need to make a business plan and stick to it.
Dropshipping as a Full Time Business
One of the benefits of dropshipping is its flexibility. You can make your job as big or small as you want. Many choose to do dropshipping as a side job, but it’s also a viable career path.
If you want to be a full time dropshipping, that is also possible. With Dropshipping, it’s easy to grow your business, which means you can grow your business fairly quickly while keeping costs low.
After reaching customers and making sufficient sales, you can now switch from additional business to the main business model. Best of all, you can do this whenever you want. Obviously, this will take more labor, but the gain is worth it.
Once you have experience, you won’t have to worry about unstable income. A good dropshipping business works like hours and you can feel like you’re getting passive income.
Since it doesn’t take much time, you can even do extra work while becoming a full-time dropshipping player. Maybe you’re dreaming about becoming a full-time dropshipping player right now, but thousands of entrepreneurs in your case have a success story today.
No diploma or millions of capital is required to earn a living from this business.
I’ve briefly reviewed what dropshipping is, but you may not know exactly how it works. Here is a step-by-step overview of the entire dropshipping process. We will look at what is behind the transactions and also what the customer goes through.
In this guide, you’ll see the term ‘supply chain’ a lot. This refers to how a product gets from supplier to customer. We will use this to understand dropshipping.
As a dropshipping person, you are only part of the puzzle. In a successful dropshipping process, there are multiple jobs running in sync. The supply chain works exactly like this:
Coordination of producer, supplier and retailer. The supply chain can be divided into 3 basic steps:
The manufacturer manufactures the products and sells them to suppliers or wholesalers in bulk.
Let’s say Manufacturer A makes water bottles. After the bottles leave the production line, they are sold in bulk to vendors and wholesalers.
Suppliers and wholesalers sell products to retailers.
A retailer looks for a supplier for a specific product type. The retailer and supplier then enter into an agreement to work toge
Tips: As you can buy directly from the product manufacturers, it is often much easier to buy from their suppliers.
Most manufacturers have minimum purchase requirements that can be quite high, and it is also necessary to stock and ship products.
Retailers sell products to consumers
Suppliers and wholesalers do not sell directly to the public; This is the retailer’s job. The retailer is the last step between the product and the consumer. Retailers provide online stores where consumers buy products.
After the product has been put on profit by the wholesaler and sold, the seller also puts a profit on it and sells it. That’s all, it’s the entire supply chain from start to finish. You may have noticed that I refer to anyone as a dropshipping.
Because ‘dropshipping’ is not a specific role. Dropshipping is just a dropshipping act for someone else. Manufacturers, suppliers, and traders can all technically do dropshipping. In this guide, I will tell you how to get started with the dropshipping business.
In other words, I will show you to be the merchant who buys products from wholesalers to sell to the customer. This could mean that you can sell it via Amazon or your own website.
Now that you know what the supply chain looks like, think about what it is like for the customer.
You’ve purchased hundreds of times online before, but you probably never thought of this experience. As a customer, you don’t need to think about this, but as a seller you definitely should.
Retailers can learn a lot about the ideal customer experience by considering ordering from a retailer.
This may seem obvious, but if there is any problem with the customer experience, it can create problems for you as a seller.
It is important to know what your customers expect. For example, let’s say there is a business called Strong Gears, a website called stronggears.com.
Customer’s view ordering process:
The customer orders a gear at stronggears.com.
After a day or two, the Customer receives a notification that their order has been shipped with shipping tracking information, so the Customer knows exactly where their package is on the way.
The same happens every time you buy something online. This seems simple, but there are two important aspects to this experience:
The only thing the customer has to do is order the product and pay for it. Other things like order confirmation email and shipping tracking information come to them right away, bringing this customer to the second point: convenience.
The purchasing experience is extremely convenient in all respects. Buying something online takes just a few minutes, and customers can browse any retailer’s site at any time.
If everything goes well, the customer doesn’t have to interact with anyone. Minimal effort is made for the desired result to obtain a product. A process that does not cause any problems or confusion.
This is a big reason why people buy in the first place on the Internet, so the store has to provide the same convenience to their customers.
The customer should never realize that other parties other than the retailer are involved. Think about it, when you bought something on the Internet, “I bought a gear from stronggears.com.” you think
You do not think about where the retailer bought the product or who will ship the order. To make the process smooth, the customer should not be aware of all the stages their products go through.
There should be your brand name on the package they receive, so the customer will think that you sent the order. This is that the dropshipping process should ideally be viewed from the customer’s perspective. Let’s understand what happened on the other side.
Procurement Process for Dropshipping
This is what the customer sees, but how does the situation behind the scenes work?
An overview of the process:
The customer orders a water filter on stronggears.com. Receives e-mail confirmation with the customer’s payment.
This is usually possible with automated software that sends the approval to both the buyer and the seller.
Strong gears send the order to the supplier, a sales representative at the supplier receives and processes the order.
The retailer will then be charged for the purchase.
In this example, let’s say the seller sold for $ 30.95 and the supplier charges $ 28 for each water filter. The retailer pays this amount, the difference is the profit the retailer will earn.
In my example, the retailer makes a profit of $2.95.
The supplier packages and ships the order.
Although the wholesaler sends the product, the name of the abc water filters will appear on the package, invoice name and packing slip.
The wholesaler then sends an invoice and shipping information to the seller.
The retailer sends the shipping information to the customer. This ends the retailer’s role in the ordering process. The customer receives the package and is satisfied with the water filter.
This is the supply chain action.
You can see how the retailer, wholesaler and manufacturer should all work together seamlessly. It’s a hassle-free process that, when done right, results in minimal work for everyone involved.
One point I want to emphasize is that the retailer is only responsible for two steps: submitting an order to the supplier and shipping information to the consumer.
Sometimes you have to be responsible for other things like customer support, but if everything goes well, these two steps are all you need to do.