If you are already bored with your current job, or if you are looking for an opportunity to earn a side income, here is your solution.
Here I will show you how to start a profitable online business that does not need to break the bank.
First, let us talk about the ingredients to create a successful online business. 🙂
First, you need to have around 100 to 200 dollars in your hand. A lot of people would say that you don’t need that much. But, if you need to kick things up a little bit, you need some money, trust me.
Then you need to have a computer with an internet connection. If you have basic computer skills, you will be able to handle things all by yourself.
If you are already working, you may need to check with your current employer about any agreements related to part-time employment. Also, you may have to check, if this leads to any conflicts of interest with your day job.
Then, you may have to manage your time to save up at least two hours per day to look after your new business.
That is all you need. Let us bake this money cake.
So here is my gameplan.
How to Start a Successful Online Business
You are going to make money by reselling stuff on the internet.
It is basically a buying and selling business.
Now, there are so many methods to earn money over the internet. But, a lot of these methods are either illegal or do not worth your time.
The method that we are going to talk about is a legitimate and serious business method.
Now, I repeat that this is not a get rich quick scheme. This is a serious online business, which needs a lot of effort. But, if you do that right, it is a worthy effort.
This particular business strategy is called dropshipping.
Dropshipping was around us for, I don’t know, ten years? But, now the overall process is much easier with all new easy-to-use platforms, tools and everything.
Ok, I heard you screaming, “what is dropshipping.”
Dropshipping is an online retail fulfilment method.
Let me show you how that works.
Dropshipping is an online retail fulfilment method, where the retail seller (You) does not maintain a stock of the products that he/ she sell. The retail seller only maintains an online storefront, and purchases items from a third party supplier (Dropshipper) and make them deliver the products directly to the customers.
In Dropshipping business the retail seller does not even need to touch or see the actual product. So, by doing this middleman job, you earn some money.
Why are we going to choose dropshipping?
Dropshipping is an excellent business model with lots of advantages. It is a unique business model that can help you to retire early, and become a successful entrepreneur.
So, is it perfect? No, this model has some disadvantages too.
Understanding both the advantages and disadvantages is essential to understand what you are going to deal with in the future.
The one thing you have to understand is that the Dropshipping is not a method to become an overnight millionaire.
Let us first go through the benefits of Dropshipping
Advantages of using dropshipping for ecommerce
It needs a less initial capital
Whenever we are going to start a new business, the capital requirement is going to be the first hurdle to jump. If you are not a hard-core businessperson, it is fair that you feel unsafe about spending your hard-earned money on a new business. No one likes to risk their money.
One of the main advantages of Dropshipping business is that we need a minimum capital investment to start our new business.
Imagine that you are going to start a physical cloths store. What would be the initial costs? You might have to pay an upfront fee for the lease for the building. You have to spend a whole lot of money to purchase a large inventory of cloths.
However, in Dropshipping business it will not be same. You do not need to have a brick and mortar store. You do not even need to purchase a single item unless you have already made a sale on that item, and you already got paid for that item.
It needs less running costs.
Most of the online retailers run their businesses at home sitting in front of a laptop.
So, in the beginning, the running cost usually consists of only the electricity bill and the internet bill of your home. And Yes, as you can understand, as your store expands, the running cost might increase as well. However, when you compare these costs with a physical retail store, it would be negligible.
It is easy to operate
If you are already working on a day job and thinking of a side hustle to get some additional income, this model would be the perfect solution. Also, once your store got the traction and became profitable, you might even quit the day job and earn fulltime only on Dropshipping. Unlike those traditional retail stores, online Dropshipping is much easier to operate.
When you Dropship,
- You do not have to manage a physical warehouse.
- You do not have to spend money and time on packing and delivering products. And,
- You do not have to keep track of the inventory and maintain stock levels.
Convenient Store location
When you operate a physical retail store, you have to find a suitable place to run your business. You might have to travel daily to your store.
However, when it comes to the online stores, as long as you have a good internet connection you a good to go. Apart from your conveniences, having an online store opens up your store doors to a large number of people that are not limited by geographical boundaries. Not only the people in your town can buy your products, but also someone from another country can see your products and purchase them.
It is Easy to expand
Let us assume we have started a traditional retail store. As we were not willing to take too much risk, we have started that small.
Recently our business has gained some traction, and it seems we can expand now. All right, what would happen if our warehouse is not big enough to cater to our expansion? What if Our store is filled with products and running out of space?
We might have to move to a new place. How much would that cost? Also, people know us by location. If we move to a new place, are we going to lose our existing customers?
Well, that is the nature of traditional businesses.
However, when it comes to the online stores, scaling up is a matter of adding more products to the online listings, and hiring someone to help us manage the increasing customer support requests.
Now that we have discussed some advantages, you might be thinking like, “all right, what’s the catch? It cannot be just a pot of gold. If so, why everyone can’t do that and get rich?” That is a valid argument. Let us see why.
Why you shouldn’t use dropshipping for ecommerce
first, It gives low margins
When it comes to the Dropshipping, most of the niches are highly competitive. There are many people in the business, well at least for some time, until they get closed down by running those stores without a good strategy. Hey, But don’t worry, we won’t be like that! I will teach you how to create a sustainable business, step by step.
Since the overheads of running a Dropshipping store is low, some people try to price their products with a minimal margin to attract customers. Even though this is not a good strategy to have a sustainable store, the customers still use these sites to compare the prices.
However, there are some methods, which you can use to avoid this cutthroat price competition. Selecting the optimum price for dropshipping products is one of the most important decisions, which you have made when dropshipping.
The Supplier issues
As we have discussed earlier, most of the time you do not even get to see the actual product. So, in Dropshipping we have to depend on the suppliers a lot. But as the retailer, we should take the responsibility of what is sent to the customer. Sounds weird right? That is a risk, which you have to take when running this business. Sometimes suppliers might provide us with misleading descriptions. Or, sometimes they can be careless and ship a defective or a completely different product to the customers.
But, you can minimise such unfortunate events.
Most of the legit suppliers tend to be careful and do their best to avoid a bad reputation. At the end of the day, they are also doing business, and they need to sustain their business too.
Therefore, by proper communication and proper selection of dropshipping suppliers you can mitigate such events.
Next, Losing track of inventory
If you maintain your own stock, it is relatively easy to know which items are running out of stock. However, in Dropshipping business you should depend on your supplier’s information.
There are methods, which you can use to automatically synchronise your stock levels with your supplier’s in real-time. So, you don’t have to spend time checking the supplier’s stock levels and update yours periodically.
But Then, you have to find suppliers who support technical integrations. Well, We will discuss this in detail in this article of How to select dropshipping suppliers. This article is created just to provide a basic background.
Next, dropshipping has a Complex cost calculation
Even though I have added this as the last point, cost calculation plays a major role in Dropshipping. In a traditional retail business, you have to incur the costs before you sell the product. So, you can calculate the costs easily and price your products accordingly.
However, in Dropshipping, you have to foresee the expenses beforehand. Sometimes the shipping complexities, additional charges or taxes can inflate your cost of the product, draining out your profit margin.
Most of the start-up online retailers fail at this point, without knowing how to price their products accurately, to calculate the total costs. But, we are not going to fall into that trap! We will discuss how to estimate expenses accurately in another article.
Now that we have gone through the advantages and disadvantages, you might be having some picture of what we are going to deal with in the future.
If I repeat what I did say before, Dropshipping is not the solution if you are thinking of becoming an overnight millionaire. Most of the people drop their Dropshipping business after a couple of months without realising this.
These days, this business is much easier than it was in a few years ago. Nowadays, there are so many platforms, tools and resources to ease the Dropshipping business process.
E-commerce is not rocket science! Millions of people do that across the globe, and you can do that too.
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We hope you would make a life-changing decision right now, and decide to get into this business!
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