With the massive influx of online shopping, it's no surprise that so many entrepreneurs want to create their own dropshipping businesses to sell products online.
The profit margins are high, getting started can be quick and easy, and the benefits of running a business from anywhere are highly appealing.
While dropshipping can be a highly profitable business model, you should be aware of a few challenges of this business structure before jumping in.
You'll have to invest serious time and energy in building a successful dropshipping business, and some people can't find the time to commit. Finding reliable dropshipping suppliers who offer quality and consistency can be difficult.
You must be fully prepared for the challenges and obstacles as you start a dropshipping business, but we assure you - it can become a well-oiled machine if you do it right from the beginning.
Let's jump right into how to start a dropshipping business!
Running a dropshipping business is a highly lucrative, profitable way to earn a sustainable income running an online store.
Determining what products are trending and in demand is critical to building a successful dropshipping business and competing in saturated markets like apparel and home decor.
Finding sustainable, reliable suppliers with high-quality products is the best way to start a dropshipping business and ensure your customer base will be satisfied with their shopping experience from anywhere in the world.
In the dropshipping business model, business owners can run their own online stores without ever holding any inventory.
Here's how it works - a seller markets private or white-label products from a dropshipping supplier on their website, where customers can browse and buy items.
When a customer makes a purchase, the dropshipping supplier completes the fulfillment process and ships your products to customers all over the world.
The supplier typically deducts a fee per purchase, and the seller covers shipping costs from the dropshipping supplier, but everything is handled for the seller by the supplier.
At Gelato, we enable global creators to produce and deliver their products anywhere through our network of local production partners and entrepreneurs so that local communities can produce what local communities need.
As a merchant, your products are automatically fulfilled - no need to manage inventory or make any up-front investments. As more than 85% of products are made locally, delivery times, costs, and carbon emissions are cut. Making your business smarter, faster, and greener.
Dropshipping businesses are highly lucrative in today's modern digital landscape, and it's no surprise why. Getting started is straightforward, but you have several important decisions to make along the way. Here's how to start dropshipping in seven steps.
When you start a dropshipping business, determining the niche you'll compete in is an essential first step.
Conduct market research to discover the most popular and trending dropshipping products sold by other dropshipping ecommerce businesses to find the products that you'll sell in your online store.
Explore social media to see what your target audience is talking about, what products they love, and if there are any gaps in the market that you can fill. Use tools like Google Trends to find in-demand products.
Be sure to keep your hobbies and interests in mind as you explore various niches for your ecommerce store.
It will be much more enjoyable if you promote and sell products that you love or use yourself; it creates a feeling of authenticity that customers will appreciate, increasing your profits over time.
To make a dropshipping business model work, it's essential to select products that are in demand, trending, and that will provide high profit margins.
When considering the products to add to your online store, conduct market research to determine what your competitors are selling and how you can stand out against the crowd.
Consider how much inventory you can offer at one time and the different styles and designs available to you as a seller to provide customers.
Your dropshipping business can fall flat if you don't find a dependable, sustainable dropshipping supplier to handle the heavy lifting.
Finding reliable suppliers to do business with may take some digging, but you won't regret it.
Spend time researching white-label or private-label suppliers to get a feel for their products and your business model. You should also consider the following:
Product selection & quality - Ensure the product quality and selection is up to your standards so you can build a business based on versatile and high-quality products.
Pricing - Ensure your profit margins are high enough with your supplier's pricing model.
Customization - Determine the customization options you have with your designs, fabrics, and product offerings.
Customer support - If you're new to this business model, having access to customer support when needed can be invaluable to store owners. Suppliers also handle most of the customer inquiries and issues, so be sure they're friendly and helpful.
Sustainability - Some dropshipping suppliers produce everything in one country and ship to all four corners of the world. Others produce locally, saving time and money on shipping costs and production time.
As far as white-label suppliers go, Gelato strives to offer high-quality products, a reliable experience for dropshipping businesses, and cost-effective pricing that allows you to build and scale your business with ease.
With Gelato, store owners can sustainably add new products to an online store and ship them from 32 production centers around the globe.
To build a profitable dropshipping business, you'll need to create a strong brand that customers can connect with.
For an ecommerce business, branding tells the story of your company's mission and values through color, font, visual elements, graphics, and more.
Here are a few of the brand elements you'll need to establish:
A memorable business name
A color scheme and typeface
Any visual elements or graphics
A unique logo that represents your brand
A compelling brand story that people connect with
These elements will tell the story of your brand and your company; loyal customers will recognize these elements on your packaging, website, social media platforms, and anywhere else your brand exists online.
When you start a dropshipping business, you'll need to select a sales channel to list and sell your products. The two common sales channels used for a dropshipping business model are ecommerce platforms and online marketplaces.
Not sure which channel is best for your dropshipping business? Let's discuss the pros and cons of each.
An ecommerce platform is a website that allows a dropshipping business to create an online store to sell products to customers. You can manage listings, process orders, and interact with customers.
For store owners who want complete control over their customer shopping experience, an ecommerce platform is typically the best choice. You'll have access to customer data, marketing tools, and lower per-order fees than online marketplaces charge.
The primary downfall of an ecommerce platform is the upfront cost compared to an online marketplace. You'll have to pay to host your website, outsource any design, and set up payment processing.
An online marketplace is a centralized location where customers can shop and compare prices and products from different sellers. You'll have access to a substantial customer base ready to buy, but it's up to you to stand out against the competition.
Online marketplace sites like Etsy are relatively easy to set up and start selling; you don't have to design a storefront, have technical skills, or pay any upfront costs.
On the other hand, you will have less control over your branding or many customization options in this type of sales channel.
Once you've chosen the online platform to run your dropshipping store, it's time to get going!
Create an account, choose a domain name, and customize your storefront. If you haven't already, develop your brand with colors, fonts, messaging, and your shop's mission and values.
This information should all be used in your dropshipping store to present a cohesive experience for every customer.
You'll also need to create a refund/return/ cancellation policy, so shoppers know what to expect when shopping with your dropshipping business. Then, you'll need to set up payment processing and shipping for customers around the world.
When pricing products for your online business, consider the cost you invested in sourcing the items and creating the designs (particularly if you outsourced anything), along with what you'll pay the supplier per order.
Be sure to do plenty of competitive research to see what other stores charge for similar products. Lastly, determine your desired profit margins so you can price accordingly.
You don't have to be a super-savvy marketing expert to promote your dropshipping business to consumers worldwide.
You can quickly implement a few marketing tactics and strategies to build exposure for your brand, market your ecommerce store, and start selling products.
Use social media to interact with your target audience, share your brand's story, run paid ads and campaigns, and allow customers to shop within social media apps (like Facebook and Instagram).
Optimize your search engine optimization strategy by creating product descriptions and titles using relevant keywords to rank higher on search engines and drive traffic.
When a customer purchases a product, offer them free gifts and discounts for future orders.
Share promotions and upcoming product launches with your social media followers to build interest in your dropshipping store.
Collect email addresses through your website and social media accounts to launch email marketing campaigns that contain promotions, product updates, behind-the-scenes content, and more.
Partner with influencers in your niche; host giveaways and provide creators with unique discount codes to share with their followers.
Launching an ecommerce business in today's digital landscape is one of the best decisions an entrepreneur can make.
If you've been debating whether or not to start a dropshipping business, know that it's a low-cost, high-profit business structure that can earn you significant income if you focus, put in the appropriate time and energy, and learn a lot along the way.
The challenges of running your own dropshipping business are not lost on us. From finding a reliable supplier to market saturation and opting for low-profit products, you will likely encounter difficulties running a dropshipping store.
Fortunately, Gelato takes a different approach to the dropshipping business model to alleviate many brands' challenges. Our print on demand model and product quality is superior, our customer service is unmatched, and our sustainability promise makes an actual difference in the environment and the world.
Get started with your own dropshipping business with Gelato here.
For those just getting started with building an ecommerce store, the dropshipping business model is ideal.
With minimal upfront costs, no inventory, and no need for packaging or shipping orders, there is plenty of opportunity to focus on marketing your store and all the other tasks involved with running an online business.
Evaluate the following as you consider whether to start a dropshipping business:
Do you have a target audience or niche that will buy your products?
Can you spend significant time building and executing a marketing strategy to reach your target audience?
Do you know of a reliable supplier you can partner with to provide high-quality, versatile products?
Starting a dropshipping business as an online retailer can be overwhelming for entrepreneurs who are new to the industry.
From running an ecommerce website to handling business finances and understanding the dropshipping process, there are many moving parts.
That's why the print on demand business model we offer at Gelato is ideal for newcomers to the dropshipping business model.
We offer reliable service, high-quality printing and products, and a cost-effective pricing strategy that will have you earning profits in no time.
According to BlueCart, successful dropshipping businesses can earn $100,000 in their first year of business.
"Dropshippers make between 20% and 30% profit from each sale or up to $100,000 annually on average. This works out to be between $1,000 and $5,000 per month."