Here you can read my full story of how I started my dropshipping businesses from scratch, all the pitfalls I had to survive, and how I made my online dropshipping businesses to match my 9-5 day-job income.
Disclaimer:This information is general in nature and for educational purposes only. And, it does not constitute formal financial, investment, or business advice.
Starting a dropshipping business is pretty much straightforward, but running a dropshipping business is NOT as easy as it sounds! It is not the perfect side hustle anyway.
Contrary to popular belief, you cannot run your dropshipping business while partying on a private yacht or sitting by a hotel pool in Malta. Sorry! Do not fall into those honey-potting ad campaigns.
I am not selling any dropshipping courses in the end. This guide includes everything from selecting a product, creating a store, running Facebook ads, and everything in between. So, all you have to do is read the whole thing and decide whether starting a dropshipping business is the right business idea for you.
If you do not know what is dropshipping, click here to expand the answer.
What is dropshipping?
Dropshipping is basically the process of re-selling products online without holding any stock. When you make a sale, your supplier will deliver the product from their warehouse to your customer’s address. So, you do not have to worry about bulk purchasing, storing, packing, or shipping the products you sell.
You have to be extremely persistent to start and run a successful dropshipping business. If you cannot spend at least two hours a day, every day, don’t start dropshipping. You have to be fast and be responsive to manage orders, answering to customer’s questions, and so on. Dropshipping is NOT a passive income method that you can set up one time and keep making money on autopilot.
Why should you start a dropshipping business?
The number one reason for starting a dropshipping business is that anyone can do it without any special skills, business knowledge, or having a lot of money to invest.
Part-time job seekers, stay-at-home parents, social media influencers, students, and many others start dropshipping to make money online. So, here I will tell you how to start a dropshipping business without having to spend a lot.
How much can you make from dropshipping?
Rather than relying on my words, here is a way for you to go and check it by yourself.
EXCHANGE is an online marketplace where people buy and sell already built eCommerce websites. There you can find a large number of dropshipping stores up for selling. And, in this platform, you can see the revenue of these businesses as well.
So, go and see how much profits these dropshipping businesses make.
If you like, you can also buy an already built dropshipping website from this marketplace. However, here I will tell you how to create your very own business without having to spend that much. So, don’t forget to come back and read the rest of this guide.
How much do you need to start a dropshipping business
Well, you cannot start a dropshipping business for free. You need some cash to build your store and to promote your business. Remember, you need money to make money. Do not waste your time trying to start dropshipping for free. It will only waste your valuable time and lose your faith in this lovely business idea.
Dropshipping startup cost breakdown
Below I have added a cost breakdown for starting a dropshipping business.
Essential costs
- Buying a domain address – $14 a year
- Building an online store – $29 per month
- Product testing – $50 one time
- Advertising – $100 – $200 per month in the beginning
Optional costs
- Hiring a freelancer to build a website – $70 one time
- Getting a logo and branding design – $30 one time
- Market research tool – $99 one time
- Creative tools – $ 9.95 per month
- Freelancer to create ads/graphics – $20 per month
So, if you do the math, the running costs of a dropshipping business will be around $140 a month (including the ad cost and hiring a graphic designer to create ads). Keep this value in mind when pricing your products.
I cannot stress this enough. Do not waste time trying to start dropshipping for free. It is just a waste of your time. If you don’t have the budget to get started, try doing an online job to make money online for free. Then, you can come back and start your dropshipping business.
How to start a dropshipping business in 4 steps
You can start a dropshipping business in four steps.
1. Decide what to sell
The first step in starting a dropshipping business is to decide your product niche. Let’s find how to determine what you are going to sell on your store, where to source them, and to who you should sell them?
2. Create your online dropshipping store
Anyone can create an online dropshipping store without any technical knowledge. I will tell you how to set up your website quickly, how to create a logo, and how to list your dropshipping products on the store.
3. Start social media marketing
Social media marketing is the quickest way to sell in dropshipping. You can use paid ads, influencer marketing, and content marketing to sell more.
4. Scale-up your dropshipping business
The success of your dropshipping business depends on the effectiveness of your customer services and marketing strategies. So, I will tell you how to manage the customer services and scale-up your marketing campaigns to make your business ready for the next level.
What to sell when starting a dropshipping business
This decision can make or break your dropshipping business. Everything you do hereafter will be based on the outcome of this step. So, if you made the wrong decision, you are going to lose your investment.
The criteria to select winning dropshipping product
Not every product fits into dropshipping. I follow these criteria when selecting a product idea for dropshipping.
- Fits into envelope packing – Helps me to reduce the shipping costs so that I can offer free shipping.
- No food – No brainer.
- Low-priced products – Because the high ticket dropshipping needs advanced skills.
- Should trigger impulse buyers – Works well with social media marketing.
Speaking of impulse buyers, they are the easiest customers to convert through an online ad. And, impulse buyers may not be actively looking for the product you sell. But, they will make a purchase just because they fall in love with it.
Take a look at this cleaning brush ad posted on Facebook. People do not even think of buying such a product until they see one. So, that is how the impulse sales are made.
The best products to start a dropshipping business
Once you know the criteria for selecting winning dropshipping products, now it is time to pick a niche.
When you start your first dropshipping business, it is better to build it around a specific niche. It is easier to promote your store that way. For example, promoting an online sock store is more manageable than promoting an online clothing store that sells everything.
To make this easy for you, I have listed some trending and beginner-friendly dropshipping product ideas below.
Additional reading: Try these 10 online business ideas to launch an ecommerce business
Ideas to start a dropshipping business
Updated: September 2020
- Wigs
- Shapewear
- Sports bras and leggings
- Phone cases
- Swimsuits
- Fake eyelashes and nail extensions
- Men’s watches
- Plush toys
- Socks
- Anti-snoring
- Laser hair-removals
If you like to come up with your very own product idea to start a dropshipping business, go ahead and select one. However, make sure that it fits into the above criteria.
Selecting products in your niche
Once you decide your product niche, now you have to select individual products to sell. There are two ways to do this, and both involve spying!
Competitor analysis
First, you have to start searching for your potential competitors. Just do a google search for the product that you are planning to sell. Then, see who is dominating the online market. You can forget about marketplaces like Amazon at this stage and focus only on the businesses, specifically in your niche.
Once you find them,
Method 1
Check the best selling listings of your competitor’s website.
- Search “best selling + [your competitor]” on google
- Most eCommerce websites have a separate feed for the best selling products, and most probably, this feed will be there as a search result.
- voilà!
Method 2
Check the best performing ads of your competitor’s Facebook marketing campaign.
- Go to their Facebook page and click on “See All” under the Page transparency snippet. You can find this snippet on the left column of the site.
- Then click on the “Ads library” on the popup window.
- There you can find all the Facebook ads they are running now.
- If you can find multiple variants of a similar ad, that is a positive sign of a best-performing ad.
- Again voilà! Whatever they promote through these ads is what they focus on selling right now.
Amazon best sellers
One should not merely forget the power of Amazon in eCommerce. Amazon has a massive customer base, and it is a gold mine for you to get market data for your dropshipping business.
Note! You can try the same on Etsy as well.
- Go to Amazon best sellers
- Search for your product niche
- See which products are trending with more sales and positive reviews
That is it. Now copy the links to all these top products on a Google sheet or Excel. Next, we are going to find dropshipping suppliers for these products.
Finding suppliers to start dropshipping
When you first start a dropshipping business, the easiest way to source products is from AliExpress. AliExpress is a Chinese online marketplace, but you can find AliExpress sellers with fulfillment centers in Europe and the USA.
Later on, as you scale-up your business, you can start working with wholesale dropshipping suppliers to enjoy better profit margins. Until then, just get a jumpstart to your online business with AliExpress product sourcing.
I have another complete guide to teach you how to find dropshipping suppliers on AliExpress and other online marketplaces. There are a few filters that you should use when selecting dropshipping suppliers on AliExpress. So, I would strongly recommend you read it before getting started.
Pre-order what you sell
If you remember, we have added $50 for product testing in our dropshipping cost breakdown. So, once you select your suppliers, place some sample orders actually to test the product you sell.
By doing this, you get to know what you sell. So, you can answer customer service questions and reply to hecklers’ comments on Facebook without having to sweat.
Once you have the product on hand, you can get some unique product photos under natural settings. So, you can differentiate your ads and product photos from thousands of other sellers selling the same product. Speaking of product photography, try using a photo tent to get some pro-looking pictures of your products.
Creating an online dropshipping store
There are several platforms that you can use to create an online store for dropshipping. And, WordPress and Shopify are the two most popular solutions right now.
Creating a WordPress site is a bit complicated for a beginner, and you might need to hire a web developer to help you out. However, I have already worked with many dropshipping beginners who have created their own stores on Shopify without any help.
Shopify is a silver bullet when it comes to creating eCommerce stores. It has all the tools and features you need to create a dropshipping store.
If you have the branding guide, product photos, descriptions, and pricing ready, you can build an online store in less than 4 hours without technical skills.
Intuitive tools and features to start dropshipping
When you select a platform to build your dropshipping store, make sure it has the right tools to cater to your business.
Since we are exclusively talking about starting dropshipping businesses, you should be looking for methods to ease your product search and fulfillment process from third-party suppliers. For example, when you use Shopify, it has apps like Oberlo, which you can use to find trending dropshipping products, import product photos, and to forward your orders automatically to the sellers – all in a click of a button.
Also, towards the end of this guide, I will tell you how to use print-on-demand to scale your business. And, POD services like Printful and Printify also have apps to integrate their service with Shopify. This means you can seamlessly manage all the functions of your dropshipping business from a single dashboard.
By the way, if you ever get stuck making your dropshipping store on Shopify, email me on “ecommercebuff@gmail.com”, and I will personally help you out – for FREE!
Why would I help you for free?
If you subscribe to Shopify by clicking on the above button, they pay me a commission for letting you know about Shopify. But, I want to assure you that I am not promoting them just because of money. Shopify is something I regularly use for my stores and my clients, and I know it really works. So, I decided to help you out if you ever get stuck taking my advice. And, I do that for free.
Start social media marketing for dropshipping
Online marketing is a vast subject, and we cannot cover that in a single post. However, as a dropshipping beginner, you do not need to learn everything before you start. In this guide, I will tell you three fail-proof marketing strategies that you can use with your new online business.
- Paid advertising
- Influencer marketing
- Content marketing
These marketing strategies may generate different results based on what you sell. So, it is better to do a little bit of research before prioritizing any of them.
And the easiest way to do this is by spying on your competitors and see what works well for them.
You can use a tool like Semrush to identify your competitor’s traffic sources. Go to Semrush and enter the domain address of your competitors to see how much paid, organic, and direct traffic they get to the website.
If they are getting more paid traffic, the ads are working well for them. And, if they are getting more organic traffic, they might be doing well with content marketing. Finally, if they are getting more direct traffic, it is the referral marketing that does the trick.
So, go ahead and try Semrush. If possible, buy at least a one-month subscription until you get your information straight in the beginning. This cost is already included in our dropshipping startup cost breakdown.
Using paid ads to promote your dropshipping business
There are hundreds of different ad publishers, but Google and Facebook are the front runners for online advertising. Facebook ads run mainly on Facebook, Instagram, and Messenger platforms. And, Google ads run on websites, YouTube, Google search pages, etc.
In my experience, Facebook ads work better than Google ads for a dropshipping store. Why? Because when we start a dropshipping business, we focus on products that can trigger impulse buyers. So, we need our potential customers to be relaxed and not hurry to make a sale—otherwise, it not that efficient trying to distract people with specific intent.
The Facebook ad copy
Facebook ad copy is the creative graphic and text that you display to your potential customers. And it is going to be the main asset of your marketing campaign. The right ad copy can improve the click-through-rate of your ads and make better conversions.
If you have creative skills, you can create attractive ad creatives using an online tool like Canva. It has thousands of fantastic templates, stock photos, and fonts that you can use for your ads. So, give it a try.
If you do not have creative skills, rather than wasting time creating some ugly and cheap looking graphic, try to hire a freelance graphic designer to create your ads. Remember, the ad copy is the main asset of your marketing campaign!
Targeting for your ads
If you use a paid version of Semrush, you can identify the target audience of your dropshipping competitors. And you can target the same audience demographics for your ads using the Facebook Audience Insights tool.
Adjusting the ad campaign
It is nearly impossible to hit the bull’s eye from your very first ad campaign. You might need to test out your ad campaigns, get results, and re-adjust to improve the results. So, make the necessary changes if your Facebook ads do not work initially.
Influencer marketing for a dropshipping business
Influencer marketing is one of the most effective marketing strategies in my experience. It gives the highest ROI (Return of investment) ever.
Influencers are considered to be the thought-leaders among their following. For example, think of a fashion model who gets admired a lot by her Instagram followers. These thought leaders can influence the purchasing decisions of their following. So, you ask them to recommend your products on their social feeds to gain trust among their following.
Finding influencers for a dropshipping store
There are different levels of influencers, and their fees may vary depending on their popularity and the number of social following. So, depending on your marketing budget, you can select one or more influencers in your product niche to promote your dropshipping business.
When you first start your dropshipping business, I would highly recommend you to work with micro-level influencers in your niche. I usually work with micro-level influencers who have around 5k to 10k followers on Instagram for my dropshipping stores.
You can easily find influencers to work with on Fiverr, and their fees start from around $10 depending on their audience and niche. On the other hand, if you found a suitable influencer on Instagram, you can just DM them and make an offer.
Sometimes, they may happily promote your product for a free sample of what you sell. However, if possible, pay them to do the promotion. After all, they are also doing business, and it is better to network with them for a long-term business relationship.
Content marketing strategies for dropshipping
Paid ads and influencer marketing are quick ways to make sales. However, it is not economical to get all your sales through paid marketing channels in the long run. Therefore, when you are starting a dropshipping business, you also have to work on a content marketings strategy to build an audience in your reach.
What is content marketing
Think of all the Facebook pages or Instagram accounts you follow just because you like to see what they post. Think about all the blog posts or YouTube videos you read or watch to find some information. Similarly, you can create content (blog posts, videos, photos, memes, etc.), which your potential customers are most likely to follow.
By doing this, you can build an audience at your reach to promote your products without paying anyone else.
How to start content marketing for dropshipping
Your content marketing strategy should depend on what you sell. For example, if you sell clothes or cosmetics, you can use Instagram for content marketing. Or else, if you sell some kitchen equipment, a Facebook page with video content might be a good idea.
If you have used Semrush to spy on your competitors, as we have described earlier, you already know how your competitors generate traffic to their online stores. So, you can start building your content marketing strategy on those platforms.
Content marketing on Facebook and Instagram
If you are planning on starting a content marketing campaign on Facebook and Instagram, I strongly suggest you to use Canva to create your posts. It has some great social media post templates, fonts, and pro photos that you can use to create beautiful posts.
Starting a blog to market your dropshipping products
Blogging is a slow yet extremely sustainable way to promote your products. For example, this blog generates over 1000 unique visitors a day from Google search without running a single paid advertisement. If I start promoting some products on this blog, I can have 1000 store visitors a day.
Likewise, if you can create a blog for whatever you sell, you can get a massive target audience visiting your store without running ads.
For example, if you are selling pet toys, you can start a blog targeting pet owners. Recently I have created one called OneBigPetBook, which has posts about pet care. And my target is to launch a dropshipping store after some time.
If you are not a good writer, you can hire a freelance writer to write blog posts for your website. Otherwise, if you use a writing tool like Grammarly, you can improve your writing to create super engaging blog posts for your dropshipping business.
A few other things to know when starting a dropshipping business
So far, we have discussed the essential stuff that you should know when starting a dropshipping business. And next, we are going to talk about some additional tips that might help you to boost the profits of your business.
Up-selling and Cross-selling in dropshipping
Whatever the marketing channel you use, every visitor to your dropshipping store costs your money. Therefore, you should try to get the best amount of revenue from each visitor. And, up-selling and cross-selling is a proven way to boost your sales value.
Dropshipping product pricing
Many dropshipping startups make a fatal mistake when it comes to product pricing. Since they can source these products for a low price, they tend to use very low selling prices to get more sales.
Remember, that pricing strategy will never work! In fact, rather than making profits, it can cost you money.
So, always decide the dropshipping product prices after calculating your costs to maintain a healthy profit margin. You don’t have to undersell when it comes to dropshipping. When you sell cheap, your business might not look legitimate, and you will only attract cheap customers. And, they are the hardest people to work with.
Get a pro looking website
I cannot stress this enough; the look and feel of your online store play a significant role when it comes to making sales. There is no point in getting thousands of visitors to your store unless your store can convert them for sale. So, follow a good UI/UX design for your online store.
Start your dropshipping business right now
Start now! Of course, you can keep reading to learn “everything” before starting a dropshipping business. But, trust me, that won’t work.
The best way to learn how to start a dropshipping business is by actually starting it. Many problems and difficulties will arise, but don’t let them put you off. Google your question, and you will definitely find an answer. Keep in touch with us. We share the best tips, tricks, and guides to teach you how to better your business.