A lot of people consider kickstarting a drop shipping business, however, for many of them, it seems to be a mysterious world. They don’t know how to jump into this. In this article, we are trying to clear everything out for those who are unsure about how to maintain this process.
First of all, it is the best to explain what drop shipping is in case you can’t see through this model. This retail fulfillment method means, briefly, that the retailer doesn’t have to invest money in product inventory. They have virtual ones from data feed files in formats like CSV, XML, XLS(X), JSON or TXT. Through file sources like Google Drive, Dropbox/OneDrive or (S)FTP if they do the management process with an e-commerce application. Retailers have to ask for these files from the supplier.
How drop shipping works
This product fulfillment method consists of three parties: customer, supplier, and online retailer. The customer orders products from a retailer that doesn’t have a real stock. Then the retailer orders those products from the supplier. Money moves between the customer and the retailer, then between the retailer and the supplier. Suppliers deliver the product directly to the customer.
As the retailer doesn’t have real stock holdings, they don’t have to pay for the products in advance that they want to have in the store, and there is no need to pay for a warehouse. As a result, the online store owner never sees or handles the product — but at the same time, they can’t even check the quality of them. There’s no need to invest too much money into the business and the selection can be wide ranged in newly created virtual stores too.
Usually, the supplier is far away, customers have to wait a lot for their products. When they order more products from your online store and you have those from different suppliers, the customers will get more packages at different times.
Using drop shipping usually means that retailers import items from marketplaces like AliExpress or eBay. However, in this way, the product quality most of the time is not the best, and the delivery time is also not pleasing. But they can order items from real wholesalers too
Our recommendation for people is to get products from local suppliers but stick to have virtual inventory. We call it remote warehousing, the newer form of drop shipping. Moreover, in this case, products arrive at your place, not directly to customers. The advantage of this is that you can check the quality of the products. Also, that if you work with more suppliers, and the customer orders more products, they won’t get as many parcels as many products they gave money for. The solution is to let every product arrive at your place (your garage or living room) so that the items can “wait for each other”, and you can repackage them in one box.
Please note, that in the following, we won’t make a difference between the two models. As for the simplicity, we only use the expression “drop shipping”.
Steps you need to take
Following this guide may help you to get started with your drop shipping business as an online store owner. We gathered every necessary point and we recommend you other relating articles with links if that seems to be helpful for you all. If you will see now what you have to do, you are going to realize that it’s not that difficult as you thought, it just takes time.
The official to-dos
If you are serious about your venture, you probably want to think deeply about business and financial steps, taxes. We are not lawyers and we can’t offer total legal advice about this topic but we don’t stop here.
You have to create tax and other required numbers and accounts and think about what business structure would be the best for you. For example, in the United States, you can have an EIN (Employer Identification Number) number. However, it won’t apply to any other countries. You have to talk with accountants in your own country about establishing an online store and doing official steps about it. We say it because things are different in every state.
What we recommend you now is to check Shopify’s own article about these required elements. If you click on the link, scroll down to the Deciding on a Business Structure chapter. Read that until the end of the post.
Find a niche, find a product
After getting to know the official parts of the business, it’s time to do the exciting steps. You have to find something to sell. If the product idea was not the first that popped up in your mind when the thought came that you want to open an online store, do not worry. There are many ways how you can find a product niche and a winning product. This is up to two criterions. One is that you have to choose a field that you are passionate about, however, it is not enough. It has to be a profitable one, that makes people satisfied or happy. You can do well if you fill a specific market niche.
How can you do it? In another article, we show you a list of 12 essential steps that you can consider to take if you want to find a winning product for sure, check it.
The product has to be something that people really want or need, something that makes your business unique.
Find a supplier
Now that you know what you want to sell, you have to look for an adequate supplier. There are many ways how you can look for them. Also, there are a few criterions if you want to make the best decision.
In general, you can ask others in real life, or in forums, Facebook groups. Another way is to order from the competitor and give it a try to get to know where they get the products from. The other way is to browse supplier lists — you can find many only —, or try the Syncee Supplier Exchange. There we only list quality wholesalers, drop shippers.
If you don’t choose a company from directories, you have to ask for a data feed file from the supplier you have found somewhere else and ask whether they do drop shipping. If you want to run a remote warehousing business, you can tell the supplier to always land the ordered products at your place, always on that one address you tell them.
We have already created a post about how you can find quality suppliers, please check that for a detailed information. There, you can read about what to avoid, what is a quality supplier like and where you can find them.
Set a domain
The next step is to think about a store name that is appealing to people and refers to your service. In another article, we gathered all the necessary information that you should know about when you are about to find out a name, scroll there down to the Name your online store paragraph.
After you decide on a cool name, you have to set a domain. You have to do this so that you can have a unique URL with a basic .com ending, for example. Look for what is the best company to work with as for it, in your country.
Join Shopify, open a store
It’s time to build your store. You can do it on the official site of Shopify. Click on the blue Get started button on the top right corner. There you have to fill out a short form and just simply register for the 14-day free trial. When you will want to subscribe to a plan, you can choose from 3+2 plans that are the followings: Basic Shopify, Shopify, Advanced, Shopify Plus, Shopify Lite.
It’s useful to have an application that can manage your virtual product inventory. One that can do automated product import and update into your Shopify store. It is an optional but a highly recommended step to take. So that you can use Syncee, you have to find a supplier that can give you a data feed file in a recommended file format and structure.
Benefits of using this app, without being exhaustive are the followings. Your products can be always up-to-date in your store, you can save money and time, you don’t have to do anything manually anymore, you can have more products than before.
Planning the shipping method
As for the remote warehousing model. It is your job to find out how you want the products to be delivered to the customers after the supplier shipped the parcels to you. There are many courier services all around the world, for example, the DHL, that you can work with. Check what is the best solution for you in your location.
Run efficient marketing
It’s very important to maintain a good marketing strategy. You have to be visible. Building a good social media presence means that you are more likely to reach your goals with your online Shopify store.
What social media platforms can you pick to be present on? Facebook, Instagram, Twitter, YouTube, LinkedIn, Pinterest, Tumblr. You have to post content there regularly.
What other advertising solutions can you use? Facebook Ad, Instagram ad, Google Ads, newsletters, blog, and other marketing Shopify applications.
Don’t forget about having a good design, being visually attractive, and steer clear of typos.
Content manager and e-commerce adviser at Syncee. Her passion is strong for e-commerce novelties, online stores, and Shopify. She is committed to helping others succeed by her writings.