Each time we mention eCommerce, buying and selling goods online comes to mind but that is not always the case.
Remember a few days ago when I wrote about how to
With drop shipping, however, you don't need to buy and stock any product. Dropshipping is a unique way of retailing where the store owner passes a customer order,
along with the shipping details directly to a wholesaler and as such, it becomes the responsibility of the wholesaler to ensure the goods are delivered to the customer in record time.
It's very likely that we have all come across a dropshipping store at one point in our internet surfing lives and believe me,
you may never truly know if your favourite online store is actually of this category because dropshipping practically operates the same way with your regular traditional eCommerce website, having the exception of the administration activities which is behind the scenes.
Running an eCommerce business is not an easy feat to pull off neither is it cheap but all these ceased to be a problem the moment the drop shipping concept was created.
Are you one of those who loved the ideology behind online stores but was sceptical of the number of resources it required? You aren't alone in that school – several other people also have that mindset.
Normally, they would love to be the next Jeff Bezos but the thought of being responsible for such a tedious company operation scares them.
It's certainly a huge commitment as you have to buy and stock several quantities of certain goods from a wholesaler, partner with a good shipping company or setup up a shipping department, put up a high-quality eCommerce platform,
find customers and handle everything from processing the payment to delivering the goods to your customers. Fortunately, all that process is eliminated with the drop shipping business.
In fact, you only have to setup your store and find customers. Unlike the regular eCommerce business, your product supplier handles the rest.
You don't need warehouses, offices, packaging equipment and you may not need employees too. You could literally build and operate your drop shipping business from the comfort of your room.
As a drop shipping businessman, you are no longer just a retailer because you now act as a middleman between the wholesaler or manufacturer and the final consumer.
Your only job is to bring in the customers just like a real estate agent (You can learn everything about the real estate business here). One more benefit you have with drop shipping is the fact that;
You make a profit by buying it cheaper from a wholesaler and still make more profit in the absence of any actual operational cost on your side.
For instance, a typical dropship entrepreneur would resale a piece of Mifi device at $50 after getting it from his supplier at the rate of $25 per piece – making him approximately 100% profit without doing any of the actual work involved.
And other e-Commerce retailers selling at that price would likely make only about 20% profit after removing the cost of shipping, storage management, staffs and other operational costs.
As a dropshipping retailer, you no longer have to worry about managing your inventory as this is done for you by the wholesaler.
Also, the traditional retail setting demands that the products ordered by a store owner are purchased in bulk and stored in a secure location until a customer orders for it on the eCommerce platform.
This is never easy to operate as the cost of getting a good storage space, along with hiring staffs to maintain the storage area,
manage the goods and ensure that they are well-packaged and processed for delivery in a proven organized fashion, is capital intensive – except of course it's a very small store that is focused on a few products.
A typical traditional retailer practically needs to invest in a quality security system in order to prevent the goods from being stolen.
Sometimes, goods also get damaged during shipment and this incurs more costs and losses on the retailer. Thankfully, through dropshipping, most of these responsibilities are completely extinguished.
The fact that you don't need to hold vast stocks of products for your drop shipping business, is a major operational convenience. It results in you eliminating most of the business development and management costs.
Each time a customer places orders on your store goods, you simply order the same goods (using part of the funds) from your supplier, this means that you have little or no initial investment to make.
Your major challenge, however, will be to find a good supplier of some products with high relevancy. Yes, just like every other online business, there are some drawbacks to running a profitable
At first, you do not have any control over how your products are packaged since you do not own the inventory you are selling – It' s being managed by your supplier.
Managing the packaging process of your goods in a regular eCommerce business is great due to the additional awareness it creates.
You could completely brand the shipping materials with your logo and website address as well as what you sell.
These alone could bring in more customers but sadly, this benefit is not always included in a drop shipping business.
However, you are advised to strike a deal with your supplier to brand your orders with your store details but there's still no guarantee that it will be done right.
Also, you are likely going to receive fewer discounts since you are only ordering one item at the time. Huge wholesale discounts are usually reserved for those buying in bulk.
Another disadvantage is that not all manufacturers/suppliers work with
It is fairly easy to get your dropshipping business up and running as the barriers which will prevent you from getting started are very limited.
The cost of starting out is very low as you won't need to invest much money up front initially. And if funding is your problem, here are 12 major ways you can raise funds for your business.
In fact, the major piece of equipment you will need is a good computer that has a quality internet connection.
The first step to building a drop shipping business is to find a relevant product that is in demand, get a quality supplier of the product, then, you are expected to set up your dropping e-commerce store loaded with your products and a good payment processor or simply sign up as a vendor on any of the available third-party eCommerce platforms.
Finally, you are to promote it with all you've got. Do these well enough and your profits will start rolling in almost immediately.
Similar to affiliate marketing, your job is mainly to bring in customers for a third-party product.
The difference, however, is that affiliate marketing demands that you convince potential buyers to get the product directly from the manufacturer/owner and it works best if you have used the product yourself.
But in drop shipping, you are more of a retailer. You certainly may not need to do any persuasion as buyers who need the product are already shopping for it online.
Your main job will be to let them know you have it and it's ready to be sold. Also, you are certainly going to be selling the product yourself directly on your website which makes you a brand instead of just a marketer.
And more importantly, drop shipping is more focused on tangible products but affiliate marketing is good for digital products and services (although some companies such as Amazon, also offer an affiliate program for the sale of their physical products).
As a beginner, when starting out, it's best to sell only a select few related products that can be targeted and sold to the same market.
It is important that you do not try to sell every dropshipping product that you find, as this will help you concentrate more on marketing your goods, as well as keeping your own costs to a minimum.
And when you focus on a niche market, you are more likely to find it easier to make an impact.
Unfortunately, not all the hassles associated with running a normal retail business can be eliminated from your drop shipping business.
Dropshipping or not, as long as it's e-Commerce-based, you will still need to deal with the problems associated with back orders and returns.
Drop shipping is not a get rich quick scheme and as such, you should be ready to put in a lot of time, effort and dedication to see it blossom.
Anyway, as long as you start off with a positive attitude towards making the business profitable, I'm sure you will have a testimony. Just remember that success starts with your mindset.
Steps to take…
Just as I already outlined on my online store setup guide, setting up your drop shipping business is not alien to other e-Commerce businesses but just in case you are yet to read that article, I will briefly retouch the major areas relating to dropshipping right away.
Although you could literally operate your
Get a product supplier – This should be the first step for every aspiring
Where do you plan to get your products from? Are you buying it from a wholesaler or the manufactural?
Wherever you plan to get your product from, you should probably get the
Get everything ready first! While there are several options on how to get a good supplier, you could always find a wholesaler on platforms like Alibaba.
Set up your store – It's true that you could sell your products on auction sites such as eBay or other classified ads websites but if you want your customers to take you seriously and want to appear as a brand/business (which brings in more sales and trust),
you should set up a standard e-Commerce website or at worst, create a store as a vendor on other third-party eCommerce platforms that permits it.
If you have no experience in website setup, it's advisable to get a professional but then again, if you are tech savvy, you can always do it yourself using any of the free website builders available online today.
Once you have your online store well configured, running your dropshipping business will be a lot easier.
Promote your store – After setting up your store, you will need to inform your target market about it.
It doesn't have to be a multimillion-dollar marketing campaign but you need to create some form of awareness.
Your job now will be to promote your store to your target customers, letting them know of your great products and customer service.
Once you are able to promote your store well enough, you will start receiving orders for your items and your business operations will officially kick off.
Process your orders – This is the stage where you have to make sure everything goes smoothly otherwise, you may lose that customer forever.
The moment an order is placed on a product in your store, you are expected to quickly process it.
Find out who placed the order, where he wants you to ship the item, the quantities he wants, the specs/features (including colour) of the product he wants and if he has paid for it.
Then you should immediately forward all the details to your supplier to ship the product directly to the customer in record time.
How to find a drop shipping supplier
A large number of manufacturers now welcome the dropshipping concept because it practically reduces their operational cost and they are gaining an additional sales person that is not on their payroll.
They save themselves more money as the delivery of large quantities of their goods to wholesalers/retailers are greatly reduced.
One of the best ways of finding a reputable
However, you could just do a Google Search with terms such as "product X drop shipping wholesaler" or "Product X
Normally by doing this, you will find some good results that highlight wholesalers of that product that is willing to allow
However, you should be mindful of any website you enter that claims to help
There are also
At one point, you will come across several dropshipping companies and networking communities which most times, operate like a multilevel marketing platform that offer several products at an amazingly cheap rate which you could resale and make over 300% returns.
The catch, however, is that most of them require you to pay a membership fee to join while others only demand that you have a business license before you can apply for membership.
You should also consider joining a dropshipping forum to enable you to interact with other like-minded people who can provide you with relevant details and information on the best wholesalers/manufacturers for the products you are particularly interested in.
Wherever you find a supplier, there are several things you need to negotiate. Does he allow a single product purchase? Can he offer you a special discount?
Is he willing to brand the product packaging with your business information? How fast can he deliver the product to your customers?
Just as I already stated on my e-Commerce business setup article, the fastest way to get this done especially if you are a total newbie to website setup and have no tangible design/development skill will be to hand it over to the professionals.
Lati Codes is a quality company that is ready to
CMSs such as Opencart, PrestaShop, AbanteCart Magento, Joomla! or WordPress are top picks for many eCommerce website designers and the fastest (and easiest) way to learn
Joomla! will be to follow my step by step guide on how I built Ghavoch without coding (Ghavoch is a profitable membership website built on the free Joomla! CMS.
After the tutorial, you will be able to
Anyway, whatever platform you decide to build your store on, you will need to follow the same steps in the setup stage and would probably arrive at the same result at the end.
1. Get a domain name and hosting package
Note that your domain should be the name of your store. Just as domain registrars give you a web address, web hosting companies provide the resources (web space, data transfer,
processor, database handlers, scripts etc) to help you store, run, manage your website data and make it available to your end-users online.
This is from someone who has spent half of his life using several web hosts while running his numerous online businesses.
I'm emphasizing this because some web hosts are only out there to frustrate your business with poor services. It's not as though A2 Hosting is the only good one.
There are probably several others but believe me when I say you don't want to be doing trial and error with your dropshipping website.
If you are in Nigeria and you want to use a local web host, you could use
If you bought your domain elsewhere other than A2 Hosting, you will need to point the domain to your hosting account by changing the nameservers.
A2 nameservers can be found on your account hosting package management area or you could simply check your email as they usually send this along with your account details.
You can change your nameservers by selecting the custom nameservers option on your domain management page in your GoDaddy or NameCheap domain account.
2. Setup email accounts and install a good CMS
Log into your A2 hosting cPanel (the login link can be found on the left section of your hosting account dashboard) and choose 'email accounts' under the email settings section to create some professional email accounts for your store.
You can access it,
As stated earlier, you probably need to use a CMS for setting up your store (except you plan to build it from scratch, in which case, you will need to know how to code PHP, HTML, CSS and run it through
Thankfully, you have a host of options to choose from and the processes are the same., scroll down to the software section and open up Softaculous.
Simply make your choice among the e-commerce apps and click on it, open up the installation page, briefly fill in your shop information and click install.
3. Setup and Customize with a template
Login to the admin area of your newly installed e-commerce website builder through the dedicated URL (you will be notified of this link right after the CMS installation on Softaculous.
E.g www.your-domain-name.com/admin) and navigate directly to the configuration page. Don't worry – as long as you can read this article,
you should be able to find your way around the admin sections to easily locate the settings/configuration pages as each section are always fully labelled. The above is an image of AbanteCart's configuration pop-up.
You are to quickly complete this setup phase by entering the required information such as the name of your store, contact details as well as how you want your store to operate etc.
To easily customize the look and feel of your store, you will need to use a template (or theme as the case may be) and luckily, every website builder comes with this option.
You can easily customize your default template or simply install a new one. All you have to do is head to the template management section to tweak as many attributes as possible including fonts, colours, images, layout etc.
Do not also forget to change the logos and favicon to yours. This is necessary to make your store unique. You don't want your store to look like every other store out there.
A brief Google search will reveal a number of quality themes/templates from the open source organization or individual developers.
Some of these CMS also make their template directory available directly at the admin section of your website builder which can be installed with just a few clicks. Full details on how to customize these are usually found on the developers' websites.
4. Add your products and payment details
Once you are done designing the appearance of your shop the way you want, you probably need to start stocking your inventory with the details of the products you intend to sell.
Navigate to the appropriate section and take your time to list each product with the price, quantity and description till all your
Note that it's a necessity to use clean and clear images on a white background when displaying your products in your store.
You can get these images directly on the website of your product supplier (with his permission, of course) or through a simple 'free product stock images' Google search.
The product setup process is very self-explanatory and easy to follow. So, you should take your time to list your products one after the order into their right categories (you should create the categories too!).
2Checkout is a good payment processor you can use to handle all your transactions including PayPal payments.
I have been using them since time immemorial and I completely recommend them. Another option is a PayPal business account. That is if you want to make things easier by handling all your payments on a single merchant account.
There are also several other options such as the popular Stripe (you need some technical know-how) and in time, you could also add a bitcoin payment option.
Start by creating a 2Checkout account and getting it approved. Then, navigate to the payment section in the Admin area of whatever CMS you are using (they always permit 2Checkout) and you will find some preloaded payment gateway plugins.
Locate 2Checkout (or any other one of your choice), click to open it up, install and activate. This means you will have to input your 2checkout account ID, secret word and ensure you disable the test mode before you launch your store.
Launching your drop shipping business
To successfully build a profitable
Therefore, it is important that you try to determine what the demand for the product is, and also what competition, if any, there is for this particular product. Also, if you can, take a look at what your competition is charging for it.
This doesn't mean you should
Sometimes, you could even find a supplier that distributes most of the products you intend to sell. This is actually easier if your store is focused on a particular niche.
For instance, if you plan on setting up an electronic store, the chances of finding a wholesaler who sells most of the electronics is very high. You could just find a supplier in your target market and list only his products.
This way, your store is stocked with several products and whatever product your customer orders in your store, will likely be available to ship from your supplier.
However, you could list products that you have no supplier for and if someone orders it, worst case scenario, you cancel the order and refund the customer.
Best case scenario, you quickly connect with your suppliers to link you with someone with such a product and you they ship it right away.
Whatever happens at the end of the day, you still win because you now know people want that product and you can make it a priority.
Note that this does not mean you should wait for an order before getting a good supplier for your product and as a matter of fact, it's highly recommended you get multiple suppliers for your product to reduce the chances of being disappointed by a supplier.
It's also very important you build a good relationship with your suppliers and you should always keep in touch with a supplier to know what products are still available.
If a product is out of stock, you simply contact the next available supplier. If possible, you should focus on selling products with less competitive sellers.
Just do some research on the product to ensure it's not already saturated in your target market and that it has very few sellers competing for the customers.
For your pricing strategy, you should implore the right pricing idea by doing a research on what your competitors are offering.
You should try not to sell yours too cheap or too expensive especially if it's of the same quality. A thorough industry analysis will reveal the right prices for your products.
It is also as equally important that the description you provide for each product helps it stand out from that of your competitors. Remember that the description alone determines if your visitor will place an order or not.
As with any business, you should ensure you sell only products of great quality as anything otherwise will bring in serious complications –
Starting with customers requesting refunds, product returns and even giving you bad reviews which could ruin your chances of making any more sales.
You should simply provide the best possible customer service that you can. Soon you will find that by being able to provide a quality service, these customers will return time and again to purchase from you.
Promoting your drop shipping store
As you know, setting up your store alone won't make you money until people shop on it. To make money from your online store,
all you have to do now is to promote your store to your target customers and once they place orders, you quickly process it and get your supplier to ship the product to your customer's address and that's it!
You've sold your product and made your profit from the sale. However, getting quality paying customers to acknowledge and shop at your store is not child's play.
It takes some efforts and dedication from you, money for paid adverts or some manual promotion strategies which will consume a lot of your time.
To make people know about your store, you will need to do a bit of marketing for it. Marketing has to do with promoting your store to the public.
If you already have a large following on your social accounts, great! (Meanwhile, you should also create unique social media accounts for your store.) You can start promoting it there.
How about an email list? Do you have emails of some potential prospects? Perhaps, people who previously subscribed to your other businesses/services.
If you do, you should consider letting them know of your new store through some quality email campaigns. Otherwise, you have the option of using social influencers to boost the publicity of your store.
You can do this by searching for a good influencer on Twitter especially, to advertise your store through him.
Simply head to twitter and locate someone with a large following (above 300k followers) within your niche and study their social engagement to ensure their tweets are loved.
This is to say, if the person has 400k followers, his tweets should have above 50k likes and retweets. This shows that his fans are checking out his tweets.
Once you find a profile of someone like this within your niche (if your store is a fashion store, ensure the person is a model, stylist, fashion icon etc.),
then proceed to send him a private message requesting for a shout-out tweet about your store (which should include the link and an attractive picture).
Also, ensure his followers are mostly fans from your region (targeted customers). Most times, you are likely going to get a reply with a fee (yes, it's hardly a free service) and the moment he receives your payment, you are sure to see his tweets about your business in no time.
Remember, while you are striking a deal with the social media influencer, try to make sure you also bargain about the right time for him to send his shout-outs.
Just make sure he tweets at that hour when his tweets get seen (liked and retweeted) the most. Doing this a few times is certain to get your business operational and generating revenue faster.
Use the above tips and you will start to generate some good returns on your investment in no time. Here's how to generate more sales for your business.
The fact that it is a less capital-intensive option compared to the regular e-commerce business, is a go-ahead sign. Dropshipping practically doesn't need many resources other than a few internet connection data and your time. No actual operational cost as well as initial setup fees.
The products you sell on your store don't even need to be paid for until they have been actually sold. All you have to do is use part of customer's money to order the same product from your supplier.
Along with not having to make any outlay to the supplier in order for the product to be sold on your store, you also never have to worry about storage and handling costs, as this is all taken care of by your product supplier.
One other positive sign is the that you can offer a much wider variety of items from several suppliers on your store and your customers will never notice any difference – as far as they are concerned, they are buying the product from you.