Dropshipping-The Ultimate Step-by-step Guide

Author – Ronald Anderson

Start from Scratch

What is Dropshipping?

  1. You offer certain products to your clients that are available from reliable wholesale suppliers and manufacturers in your chosen niche.
  2. Your clients places the order with you.
  3. You in turn place an order with your supplier.
  4. Your supplier charges you for the product at a previously arranged price and then ships the product directly to your client.
The right mindset is essential

You must be hungry for success, you must go into this venture with a go-getter attitude and determination.

You need to fully commit to this business venture and use all the resources available to you.

Perseverance leads to determination; this leads to greater commitment to succeed.

No matter if things do not fall into place immediately, you just keep going until one by one each aspect of your business falls neatly into place.

Trying to bypass necessary steps to save time and effort simply dooms this venture to failure.

Dropshipping gives you the chance to own your own business with limited capital by investing yourself and using your energy to get your business from the ground.

Benefits would include:

  • Your skills and knowledge will grow with your business as you gain first-hand experience of how each facet of your business operates.
  • The skills you learn about operating your business is something that money cannot buy. When you start expanding, you will understand how each section of the company works and this is essential for managing other people that you will employ.
  • You will get to know your customers and how they think and what they want. Markets are ever changing and being a hands on part of the running of the company you will get to know market trends to keep your customers happy. This will allow you to make decisions about suppliers to use and marketing strategies for your website to encourage potential customers to make use of your services.
  • When you are in intimate part of the daily running of your company, you learn what to spend money on that is essential to the success of the business. Your mindset changes and priorities shift away from non-essentials that may look nice or gadgets you can easily do without.
Focus on solutions, not problems

Turn your mindset around and start with, “I have to find a solution to this problem” instead of thinking “I have a problem, I don’t know what to do .”

Train your mind to shift away from problems to see things from a solution perspective.

The internet provides you with knowledge literally at your fingertips. If you have a problem, start searching.

The answers are out there, you simply have to invest some time to search for the best options that suit your needs.

Treat mistakes as a learning curve, not failure

How you handle the mistake and what you do about it makes a huge difference.

Each mistake gives you the opportunity to learn. You will learn to find solutions and different ways to avoid this particular mistake in the future.

Reasons why you should start a Dropshipping Business

Is it really worth your time and effort? → The answer is a resounding yes.

Benefits of the Dropshipping Business Model
  • less capital investment
  • easy to startup
  • overheads
  • not limited to location
  • can target the global market
  • extensive product availability in your niche
  • substantial lower risk factors
  • win-win situation for supplier and dropshipping business
  • multitude of vacant niches
  • scalability
Drawback to be Aware of
  • margins are low
  • competition in the marketplace
  • issues with inventory and product fulfillment
  • online retail platform policies
  • shipping can be complex
  • suppliers can make mistakes
  • lack of scaling abilities of suppliers
Different Forms of Dropshipping
  • from suppliers
  • online retail platform vendor
  • arbitrage dropshipping
  • Amazon Fulfillment Service
Find your Niche

You need to specialize and focus on a specific product or a specific niche and focus only on products that fall within your chosen niche.

It is simply not economically viable for a dropshipping business to grab around for products that catch the eye, or a trend that is popular at the moment.

💡What are you passionate about and what interests you?

Source and Procure Top-notch Suppliers

Wholesalers and suppliers have websites that are minimalistic and functional and often look quite old-fashioned and antiquated.
They are fully aware that clients need them and will look for them, so they do not waste their valuable time and resources in creating websites to entice potential clients.
Learn to look past the outward appearance of their websites, it is not an indication of a bad supplier or mediocre products on offer.

You can place a small order with one of your competitors. This can help you backtrack and find a supplier.
Do a quick internet search of the return address on your package, and it will give you the info of who originally shipped the packaged to you.

Be decisive and professional when approaching a supplier.
Do not be vague about your business goals, and do not start demanding terms and discounts when you have not even start placing orders with them.

When you are sourcing a new supplier, change your mindset and make personal contact by picking up the phone.
Speak to them, hear their voice, and you will find people are far more approachable than keeping it impersonal words on a screen.

Place small orders for the first few orders so that you can observe how this specific supplier or wholesaler operates his business.

Take note of how quickly the supplier issues tracking data and how efficient the company billing department is in issuing an invoice to you.

Make sure that the protective supplier has kept up with the technology needed to make the process from ordering through shipping to delivery run smoothly.

The supplier’s website does not need to be fancy; instead, it has to be super functional.

  • All-inclusive online catalog.
  • Data feeds that can be customized to suit the specific needs of clients.
  • Accessible real-time inventory.
The more central the supplier's location is, the more beneficial it is for your business.

Less shipping time often means lower shipping fees and happier clients.

Placing orders manually through the supplier’s website, the ordering process is slow and takes a lot of time.
You need the third option of placing orders via email to free up more time that you can spend productively doing other tasks.

A competent supplier will allocate a specific support member of staff who deals with your orders and queries.

Red flags to avoid suppliers of this type:

  • negative reviews
  • bulk quantity products
  • demanding ongoing fees to be able to do business with them
  • abnormally high pre-order fees
  • non-negotiable minimum size policy

Cross Channel Sales – You can connect your Shopify store with a Facebook page and use the Shopify app for direct sales, thereby increasing your potential client base hugely.

You can do cross channel sales on other platforms, such as Twitter and Pinterest.

How to Scale your Dropshipping Business

Facebook Lookalike Audiences – Facebook offers a segmentation tool that create look alike audiences based on the followers that you currently have.
This tool works as long as you have a minimum of 100 people in your client group, but the larger your total is, the more effective this tool becomes.

Campaign Budget Optimization(CBO) – Facebook’s advertising budget optimization tool.

2 forms of automation to put in place before you start scaling is to automate order fulfillment and auto order tracking.

Pitfalls and Mistakes to Avoid

You need to know exactly who your target audience is, guessing is a costly mistake.

Research is key; you must gather statistical data about your niche audience and get to know everything possible about them.

Have a solid upselling plan ready, and don't only rely on your frontend products to generate sales.

You have already made the connection and a sale, neglecting to keep in contact through your email lists is a huge mistake to make.

Staying in touch with your previous customers form a large part of your overall profit margin.

Two mistakes that pop up regularly regarding the dropshipping business store and website are the website structure and product descriptions and names that are badly edited.

It is a mistake to not keep your brand as visible as possible at every opportunity.

Custom external packaging, a “Thank You” note after delivery, and sending out customer satisfaction surveys are simple, yet effective, ways to keep your brand visible.

When you start your business it is easy to fall into the trap of manually fulfilling orders, and many people do.
This works well in the beginning, but as soon as the business starts growing, they can no longer keep up.
Save yourself a lot of frustration with an app such as Oberlo that automates your order fulfilling.