What is drop shipping? This is the same question I was asking a few years ago...
Now you have the same problem, looking for an answer.
The business model sounds amazing! Sell loads of products without you ever having to touch them... no inventory, no problems!
That juicy sweet sales pitch sounds all fine and dandy, and it has its pro's and con's.
Today, we're going to be diving into the NO-BS guide to exactly what drop shipping is, and how you can get started selling products online.
Are you ready to begin?
Dropshipping Guide: What Is Dropshipping?
First, you need to understand exactly how the drop ship model works. If you watch the video above, you'll get a basic idea of drop shipping for dummies.
Definition: According to Wikipedia drop shipping is: "a supply chain management method in which the retailer does not keep goods in stock but instead transfers the customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer."
Look:
To put it simply, you're operating as a middle man between the customer and the supplier. You make the profit on the difference between the wholesale price and retail price you sell it for in your online store.
Benefits of Drop Shipping (+)
No Upfront Cost -- The best advantage to drop shipping is that you're able to launch a fully functioning eCommerce store without having to invest thousands of dollars into inventory up front.
Traditional retailers have to tie up loads of capital purchasing inventory.
With the drop shipping business model, you only purchase a product when you've made a sale and have been paid by the customer. With that said, it's possible to start a successful dropshipping business with very little money.
Easy to Get Started -- As a matter of fact, it's much easier to run an eCommerce business when you don't deal with physical products. Uniquely with drop shipping, you are able to:
- Never need to pack or ship orders
- Avoid managing or paying for a warehouse
- Sell a wide variety of products easily
- Design your business in your underwear
- No previous experience necessary
Low Overhead -- Whereas a physical business has to deal with inventory or managing a warehouse, with drop shipping your overhead expenses are relatively low.
In reality, many drop shipping businesses are run from a home office and laptop for less than $100 per month.
Disadvantages of Drop Shipping (-)
Of course, with every advantage there come some down sides. Unfortunately drop shipping isn't all sunshine and rainbows. All the convenience does come at a price.
Inventory Issues -- If you stock your own items, it's very simple to keep track of what items are out of stock or not.
When sourcing from multiple different warehouses or merchants, inventory changes on a daily basis.
You can keep your products in sync with your suppliers typically. Yet sometimes, things get out of hand to where you may need to change your supplier on the fly.
Occasionally a product may not be available anywhere and you have to refund your customers that were expecting a particular item.
Shipping Complexities -- The most common complaint of many customers is the long shipping times you may face with some suppliers.
When drop shipping, you don't 100% control the shipping method and packaging.
Additionally, products are being fulfilled from a number of different companies. Some products will be sent separately and not in one package altogether.
However, this isn't typically a major issue since Amazon does this with many of their orders and people are used to it.
Moreover, the shipping charges also vary from product to product based on the customer and supplier location.
Supplier errors -- Have you ever been blamed for a mistake that wasn't your fault, yet had to take responsibility for it?
Occasionally even the best suppliers may make an error with an order. These errors are typically the wrong color variant, or a slightly damaged unit.
This can cause frustration, or potentially hurt your business's reputation.
Is It Worth It?
Yes, of course. With some careful planning most of these problems can be resolved. When adding drop shipping as a method of fulfillment for your online store, it opens up a massive range of opportunity to get started with low cost.
Not to mention, you can offer a wide range of products to your visitors without any hassle and through a simple process from your suppliers.
Why wouldn't someone just order directly from the supplier then?
Dropshipping Product Example - The Dropship Model:
Take a look at these two gardening hoses...
Hose 1 sells for only $8.93 on AliExpress
Hose 2 sells for $29.99 on Amazon
How do such similar hoses sell for different prices?!
Simple.
Hose #1 is directly from the wholesale supplier and hose #2 is at retail price.
How do you make money then?
You create your own online store and sell these products directly from the suppliers yourself for a markup. That way, you own the customers and the relationship.
If you sell hose #1 for $29.99, when you get them for only $8.93:
That's a profit of about $21.00!
Then the orders of products are then fulfilled by your supplier via drop shipping, and you just market the products to get people interested in them... it's simple!
How do you create an eCommerce store?
That's the next step to start selling these dropshipping products for profit.
Dropship Program and Software To Build Your eCommerce Store
As a beginner to drop shipping, you may not know what platform to use for your eCommerce store.
The best platform I personally use and recommend is Shopify.
Their store builder is super simple and easy to understand.
Additionally, they've got the best support team that will help you with any technical issues you may come across.
Not to mention, Shopify also gives you a 14-day free trial to get started and build your online store and get everything set up.
They're the only eCommerce platform on the market I trust and recommend you use.
In this video, we also go over the potential costs of different eCommerce traffic sources. In addition, there are many options for traffic such as SEO, Facebook Ads, Instagram Marketing... we will go over more about marketing later in this post.
Let's get you setup with Shopify: https://www.brennanvaleski.com/shopify
The next step is to install some apps to optimize your eCommerce store for starting your drop shipping business.
By far the most important step to creating a fully functioning drop shipping eCommerce store is the apps you choose. They allow you to get more functionality out of your website.
Here's a short list of best Shopify apps to use for your online store.
#1 - Oberlo Dropshipping - Easily Import Products To Sell On Shopify
Whether or not you decide to use Oberlo is not a question. This app is absolutely essential for your drop shipping success.
In order to import your products from your supplier, you need a way to do it quickly and efficiently.
The first time you get started with drop shipping, you may find yourself manually saving pictures and pasting over everything. That's a flat out waste of time.
Instead, Oberlo allows you to easily and automatically import products to your eCommerce Shopify store. Not only that, with Oberlo you can also fulfill orders automatically when they come in.
To get started with Oberlo, all you have to do is install the chrome plug-in (which gives you the blue button you see in the image above). Additionally you install the Oberlo app to your apps section in the Shopify dashboard.
#2 - Privy Email Pop-Ups and Email Marketing
Equally important to growing your online business is building an email list. An email list is your primary method of distribution to reaching your base of people.
Is it easier to talk to someone you already know, or someone brand new?
It's the same way with customers and people that are in your business ecosystem. You want to maintain that relationship and communicate with your audience.
The best way to do this is in your eCommerce store is to give people a 10% off discount or give something of value to your audience. Privy makes that incredibly easy on your Shopify drop shipping store.
Effectively, Privy allows you to create and design an email pop-up that offers the chance for your visitors to get something in return for their email address.
After they enter their email, a discount code can pop-up and you can easily sync those people who "opt-in" to your email service provider.
Privy allows you to collect emails, you can find Privy here.
Then, you need an actual email service provides to connect Privy to and save those email addresses for future communication.
The best email marketing platform you should use is GetResponse. With GetResponse you can easily connect it with Privy and automatically import your people into your email list.
Let's get you setup with email: https://www.brennanvaleski.com/getresponse
#3 - Free Persistent Cart App - Prevent Cart Abandonment
Certainly people are busy, and constantly swapping devices. The free persistent cart app solves that problem and saves someone's cart when they leave your website or change devices.
It's a pretty simple app, yet very helpful. Then your visitors don't forget what they were planning to order in case they leave and come back.
You can find the Free Persistent Cart App here.
Understanding Shopify Payment Gateways - How To Get Paid
The next question you may be having is...
How do you get paid?
Of course, this step is essential to maintain a functional eCommerce store and accept payments for the products you sell.
To sum up, you need to have one card processor at minimum.
When someone makes a payment on your store, the payment then goes through to your card processor, or other payment method.
There are other alternative payment methods as well, like PayPal or Google Pay.
Ultimately, you want to offer your customers as many different payment options as possible to limit cart abandonment and make things quick and easy.
The more payment options they have, the better chance you have of making a sale.
You can learn more about Shopify payment gateways here.
Best Products To Dropship - Finding Items To Sell In Your Store
Now that you have your Shopify eCommerce store all setup, the next step is to start adding some products! This section shows you all of the best products to dropship and what to keep in mind.
There is no secret sauce to finding the right products. All you need to do is find and study other successful products and sell them in your eCommerce store.
Instead of wasting time trying to find the next trendy dropshipping product...
...focus on what matters. Which is to serve your audience.
Truly your duty is to help people in your niche, and show them the products they are looking for. You are finding products that solve a problem for a specific person.
Once you've got your store loaded up with about 20-30 products, and they're organized by collections, you're ready for the next step.
In short, you're ready to start marketing.
Marketing Strategies For Your Drop Shipping Store
Look.
Without traffic, your business dies.
You need people to actually see your products in order to sell them.
Make sense? Great, let's continue.
This post may contain affiliate links. Please read my affiliate disclosure for more information.
