How to Start a Dropshipping Business in 2024

ECommerce dropshipping business can be an ideal starting point to enter the world of entrepreneurship. The greatest thing about this business type is that you can sell the products without paying for inventory costs.

However, a potential startup idea needs a carefully considered plan to make a new venture become a cash cow business.

If you’re truly serious about your venture and willing to put in the work, this post has what you need as a comprehensive guide for starting a successful dropshipping business. Before dive into it let’s check this video for an overview

What is an eCommerce Dropshipping Business?

Definition of eCommerce dropshipping

It’s really critical for you to understand the kind of business you’re about to embark on before genuinely investing your time and money into it.

In essence, the eCommerce dropshipping business in 2024 is basically an online business model where you can run a store without owning any actual inventory.

You will play the role of a connector between sellers and buyers. Once your store gets orders from purchasers, the supplier you cooperate with will ship the ordered products from their warehouse straight to the buyer’s doorstep.

3 Key Components of The Dropshipping Businesses Model

There are 3 components included in a dropshipping business model:

• The retailer (you): You sell the manufacturer’s products on your online store, handle marketing, and cover shipping costs.

• The manufacturer: They own the products, manage production and inventory, and handle shipping under your business name.

• The customers: They buy products from your store at retail prices.

Dropshipping is a low-risk and cost-saving business model compared to the wholesaler. It’s easier for you to earn a good profit margin with the right suppliers.

Why Would It Be a Good Idea to Start an Online Dropshipping Business?

The dropshipping model accurately addresses the demand for reducing the burden of post-sales activities, from order processing, picking, packaging, and delivery, allowing businesses to focus solely on marketing and promotion. This is why dropshipping has quickly become one of the hottest trends in eCommerce today.

Some reasons behind the eCommerce dropshipping model’s appeal:

• Low Capital Requirement: You don’t need a large upfront investment in inventory.
• Cost-Effective Operations: You only incur costs when you have orders, saving on labor and operational expenses.
• No Inventory Hassles: Avoid the costs and risks of managing inventory.
• Easy Start: It’s accessible for entrepreneurs with limited capital and experience.
• Flexibility: You can run your business anytime, anywhere, taking advantage of eCommerce’s reach.
• Scalability: You can easily handle increased sales without significantly more effort.

What You Need for the Realisation of Your Dropshipping Ideal?

It’s great when you have a strong commitment to your new business venture, but a positive attitude and good work ethic might not be enough.

Considering these essential requirements below to open a dropshipping store:

• One or more products to sell

• A dropshipping supplier of that product

• A website to sell your products

• A sales tax ID

These are 4 necessary conditions you need to reach before actually putting your business into reality.

The Best Places to Find an eCommerce Dropshipping Business for Sale

In 2024, you won’t have to build an eCommerce dropshipping business from scratch.

If you don’t want to invest time in creating an online store with all the complex steps involved, from conceptualizing and mapping necessary features to designing an appealing website, there are readily available dropshipping eCommerce businesses on marketplaces that are worth considering to buy.

Where can you find an online pre-built store that might match your needs?

• Flippa: a marketplace of websites which have lots of online dropshipping shops in different price ranges and types. You can pick one that fits your budget and what you like.
• Shopify’s Exchange Marketplace: Focus only on eCommerce businesses with many options. Most listings include the company name, which helps you make an informed choice when buying.
• Ecommerce Platforms: A top site that creates custom Shopify dropshipping stores for a one-time fee.

7 Steps to Start an eCommerce Dropshipping Business

Begin with a potential dropshipping niche

Needless to say, what you sell matters. However, the market you choose to target is even more critical. The more highly-targeted your niche is, the better.

Why should choose a good niche for starting a dropshipping business be the first step, rather than product research?

As a newbie in the eCommerce dropshipping market, you have to compete with already existing and even giant retailers. That’s why you should avoid an uphill battle with countless competitors by finding your matched niche. Here is what you should do:

• Pick a niche you’re passionate about: Choose a viable niche that you genuinely love and have extensive knowledge about.

• Scratch your own itch: Put yourself in your ideal customers’ shoes and define the problem others might have. Then identify a product able to solve that problem.

• Define the competition level: Make a quick research of the existing sellers on the niche you’re interested in to make sure it’s not over-saturated. Then, ask yourself some questions like “Are the competitors easy to beat?” or “Is it worth beating them” etc.

• Is the niche profitable?: The ultimate goal of any entrepreneur is to make a profit. So you need to check the profitability of ever dropshipping niche and product idea in order not to throw money out the window

Spend some time diving deeper into different ideal niches where you can startup as well as scale your dropshipping business.

Brainstorm Ideas for Your eCommerce Dropshipping Business

Once you define the criteria for a potential dropshipping niche, it’s time to narrow it down into a practical product idea for your startup.

There are thousands of products to dropship from smallest to biggest. However, some are more suitable to become a dropshipping product than others.

• Your dropshipping products should not be dominated by giant retailers so that you can have a greater chance of getting a chunk of the market

• Choose products that are small and lightweight. You are recommended to pick the item that fits inside a shoebox and weighs less than 2kg. This will help you save a bunch of shipping cost, hence ensuring your profits

• Make sure what you’re about to sell isn’t readily available locally. You will have a higher chance to make sales if your target customers can not find it down the street

• Your product’s price range starts at $15. Anything cheaper than $15 might not bring you much of a profit margin

My advice is to note down at least 10-15 product ideas and then use a list of standards above to get rid of ones you think are highly-competitive and less profitable.

After eliminating all the impossible plans, you can use some keyword search tools to filter the most potential dropshipping products that can be put into reality. For instance, you can take Google Trends as a simple way to know:

• Whether your ideal products are on an upward or downward trend

• What’s the search volume of the keywords related to any products on the chosen niche

By doing this, you create yourself a much safer launch pad to start a business.

Do competitive research

When you have determined what to sell, your next step is to educate yourself with the following questions:

• How many competitors are there for each product? (Considering top rivals selling the same products to you on 2 big players - Walmart or Amazon)

• How do they sell their products? (How they set up their product listings, organize their selling webs, use sales copy, and perform promotion campaigns, etc.)

• How do they promote their products on social media?

• Which platforms, channels are they using to market their content?

• The average price your competitors set for the products you want to sell

Even though your eCommerce dropshipping products are among the most unique in the market, competition is unavoidable. And competitive research is the easiest way to help you get an accurate picture of the trends occurring in the marketplace.

Here are some tactics you can use to do competitor research:

• Enter the product name that you intend to sell into Google and do a quick search on how many websites are offering it (focus on top 10 search results)

• Search for the product reviews on your competitors’ websites, social media, and giant eCommerce sites like Amazon

• Try some tools like SEMRush, SimilarWeb, or Alexa to get an indication and keep track of competitors’ online activities

• Learn more: Best Dropshipping Product Research Tools

• Explore: Best products to sell online

Your final goal is to find ways to make yours better than other competitors, then identify impressive selling points that will make your product more attractive for prospective buyers.

Find a dropshipping supplier

Whenever you decide to start a dropshipping business in the eCommerce world, it means that you’re stepping into a win-win relationship with at least one manufacturer.

However, it isn’t easy to find the right dropshipping suppliers, especially for newbie dropshippers. A wrong decision can ruin your whole effort on starting out your store.

Criteria of an excellent dropshipping supplier:

• Make sure to work with the right supplier, not the middleman to get the best possible profit margin

• Offer high-quality products. Good products are much easier to sell as well as to build brand trust, hence increasing customer satisfaction

• Fast and reliable shipping service. No customers love waiting. Slow product shipment is usually the primary roots for losing customers and generating more bad reviews

• Responsive customer service. Even though being a business’s retailer, you’re also a customer. And the way they treat you will illustrate their professionalism

• Good return policy.

• Willing to provide product samples. It’s good to have on hand a real product and experience it before making your choice about the cooperation.

Build your eCommerce dropshipping store

You have already been halfway through the process of starting your eCommerce dropshipping business. Your next job is to build an online store where you could lead traffic to, promote your content and sell products.

This step can be a little bit difficult for those who have no knowledge of web building. You can consider some primary components required to create a dropshipping eCommerce business below:

• Get a domain name for your store

• Choose a perfect eCommerce web builder platform (Magento 2, WordPress, Shopify, Wix, etc.)

• Select your wanted store themes

• Finish required setups such as adding products, payment methods, and so forth

The type of builder platform to build your e-store depends on several factors, ranging from your business’s size, financial capability, customer target, and so forth.

So you might need to take into consideration 3 options:

• Build the web by yourself with no support from coders or those who have experience.
  • Pros: save you a bunch of money
  • Cons: require more time and effort.
  • Considering using some free web builders like Wix, Shopify or WordPress if you want a simple site and not sell to many products
• Hire a web development company to create the store based on your ideas.
  • Pros: You will have a team of professionals with knowledge in web development area to help build a more polished and functional online store
  • Cons: Not cost-effective, especially for custom projects
  • You should choose this option only when you have enough budget and want to leverage their expertise.
• Start your dropshipping business with the most popular online marketplaces for eCommerce like eBay, Amazon, or Etsy.
  • Pros: saves more time and effort compared to other platforms
  • Cons: At a certain point of competitiveness and have little control over if you do not have extensive coding knowledge
  • Entering the market with a well-thought-out strategy, dependable suppliers, and a clear understanding of your target market is crucial.

Our advice is to use one of the plug-and-play options. Once your dropshipping business is established, and the revenue comes in, you can explore additional website customization.

Build a long-term strategy to market your dropshipping store

As mentioned above, you will take charge of the marketing process in order to lead customers to your website and buy your products. Of course, you should get ready to accept that the first period of starting your business won’t bring you much profit.

To differentiate from your competitors, you need to put extra effort into your marketing strategy and have a reasonable advertising plan that suits your budget.

Some components that should be put into consideration when building your marketing plan:

• Content marketing: To build a long-term stream of traffic for your site, build your content from customer personas, focus on writing compelling product descriptions, attractive photos, etc. are all crucial).

• Social media: Social networks are a great environment you can use to get involved with groups of people passionate about your niche and take them down your sales funnel.

• Paid ads (Facebook ads and Google ads): Reasonably use PPC campaigns to reach your target customers on Facebook and Google platforms easily.

• Retargeting ads: This tactic will be extremely cost-effective if you already have a store with tons of traffic.

• Other marketing strategies you can try:

  • Email marketing
  • Mobile marketing and
  • Influencer marketing
  • Affiliate marketing
  • Customer loyalty programs
  • Community building

Different stages of a sales funnel will require specific marketing tactics that help you reach your target goals.

Related Posts:

• Top 7 Email Marketing Trends in 2024
• 10 Excellent Affiliate Marketing Courses to Learn
• Top 10 Dropshipping Websites: Begin Your E-Commerce Journey

The best way on this step is to map out the path your target audience needs to go through until they make their first purchase. Then decide which kind of strategies are useful at each stage. As a result, you will know what to do, which tactics can be used in each period, and how to successfully close the sales.

Analysis and optimization

You have gone a long way to this stage, which is also the last step in getting your dropshipping business ready to be launched.

Regardless of the business type you choose, you may want to create a data analytics system that helps you measure all of the essential metrics on your website. This will allow you to see how your marketing activities are performing, with some showing impressive success while others may not be as effective.

Below are some of the suggestion for your optimization activities:

• Create clear KPIs to assess your marketing effectiveness on different aspects

• Use Google Search Console or Analytics to evaluate your online traffic over time and improve SEO efforts

• Take advantage of third-party tools to get weekly or monthly automatic reports on any channel you work on (social media or email marketing)

Don’t just limit your optimization to metrics and data. While metrics are very important, true optimization requires a holistic approach. Some top dropship automation tools include Mailchimp for email campaigns, Zapier for task automation, and LiveChat for customer service and relationship building. So an end-to-end automation platform that helps with product management, order fulfillment, and update tracking.

Get your finances for starting a dropshipping eCommerce business

Then, Is dropshipping profitable? The answer is yes!

However, this is still an investment, and there is no free way to launch an eCommerce business.

Even though dropshipping is a low-risk investment, there is no insurance about how much your returns will be or how long it takes for you to recoup them.

Here is an essential cost breakdown of starting a dropshipping eCommerce business:

• Maintenance domain cost and hosting cost

• The subscription fee for the eCommerce store platform you choose to start the dropshipping store (including apps, plugins, themes, or extension costs)

• Specialized dropshipping automation apps/ extensions that power your fulfillment tasks

• Advertising costs

Regularly, most ship vendors don’t charge the supplier and product sourcing costs. These fees will change depending on your budget as well as the requirements for each task.

However, your costs will be affected mostly by the eCommerce platform you choose to run your store. Make sure to do research into each of the platforms before pumping your money into it.

Start your own dropshipping business in eCommerce today!

We hope this post can give you some illustration of the building process for an eCommerce dropshipping business.

However, when it comes to practicing your eCommerce business model in real life, the difficulties you need to face can be more daunting than what is written on the paper. But don’t worry!

As long as you have a well-prepared plan and determined mind, plus with the support from third-party apps and automation tools, you will have a thriving dropshipping business for years to come.

Related post:

10 Best eCommerce Platforms for Dropshipping in 2024

Read more: How to Dropship on Amazon? The A-Z Guide