Just as you have textbooks for chemistry and math, so also does this article present as a dropshipping manual or guidebook to put you through the interesting business model of dropshipping.
The most successful businessmen around and in history were all readers.
And most of their reading was centered on the business they were involved in.
So also do you need explicit knowledge on dropshipping.
And we are going to take you through the A-Z of dropshipping.
First, we will start off with what it is all about.
What is dropshipping? How did it come to be? Who are the key stakeholders?
Next, we will take you through the benefits and how to get started with dropshipping.
We will also address all the frequently asked questions and misconceptions about dropshipping.
Giving you an all-round technical know-how on dropshipping.
So, without much fuss, let’s get to it.
What is Dropshipping?
Dropshipping is an order fulfillment business model where eBay store owners can sell to customers without owning any inventory.
To break it down further let us illustrate with this example.
Say Mr. A wants to get an item.
So he proceeds online to browse through extensive catalogs of different categories and finally gets one that catches his eyes.
He then requests the item from an eBay store run by Mr. B.
Mr. B then goes to a third-party website, liaises with a supplier of that item requested for by Mr. A, and then asks the supplier to sip that item to Mr. A’s address.
In a few days, Mr. A gets his item, Mr. B fulfills his duty, everyone is happy.
Mr. B here is a dropshipper.
Notice that Mr. B did not own the product outright nor does he manufacture it.
His job is to look for reliable suppliers to ship the item to the customer.
Simple huh?…well, not exactly.
If it was that simple, everybody will be a dropshipper and be good at it.
But in this simple business model lies roadblocks and episodes of frustrations and stagnation if it is not done right.
But don’t worry. We will teach you how to navigate through and be successful in this business model.
But first, you need to know how it works.
How Does Dropshipping Work?
The first thing you need to know is that dropshipping involves three stakeholders – the customer, the dropshipper, and the supplier.
Each one of these individuals is important in the success of a dropshipping business.
How this works is, the customer makes a request for an item.
Next, the dropshipper will be alerted by this action then proceeds to contact their supplier of that item.
The dropshipper will give the supplier the contact address of the customer so the supplier ships directly to the buyer.
The next question you might ask is… so where does the profit come in?
It is pretty basic.
The traditional method of buying and selling is for you to buy at a low price, maybe at wholesale price, and then sell at a higher price at the retail end.
The dropshipping business model follows this same route.
As a dropshipper, you buy the item at a relatively low price, then sell at a markup price.
Now you don’t want to be too greedy and sell at exaggerated prices.
For example, say you buy the item for $3.
A reasonable selling price will be $3.75 or at the very most, $4.50.
This is just a generic pricing model.
Later in the article, we will teach you how to go about the pricing of different kinds of products.
That margin between the cost price ( the price you bought the item) and the selling price, is your profit.
By doing this continuously for a number of items, you will be raking in six figures in a year ( if you do it right of course).
Why Start a Dropshipping Business
Dropshipping is a cool business model that comes with it a lot of benefits.
These benefits go to show that venturing into dropshipping is profitable.
Some of the notable benefits are listed below.
The business model of dropshipping calls for extremely low risks compared to other traditional or conventional modes of buying and selling.
For example, if you were to go about buying and selling the traditional way, you will be buying products wholesale in your physical store and warehouse them till someone comes t buy them at retail prices from you.
Several things could go wrong in this instance because anything can happen to your inventory.
A fire, flood, or even the products going bad due to unfavorable conditions they are exposed to (like heat).
When this happens you have incurred a huge loss and are back to square one.
Dropshipping eliminates this risk while still rewarding you in the process.
You don’t have to keep warehouse any item with the dropshipping business model, hence, there is no inventory risk on your hands
Decent Profit Margins
With dropshipping, you can be flexible with your profit margins.
Ideally, you can make it as high as you want.
But it is often advised to make your profit 25% of the cost price.
It could be more or less depending on the type of product you are listing.
But most times, it is usually more.
And this flexibility to control your profit is an advantage of dropshipping.
Low cost of setup and operation
If you were to start dropshipping right now without any perks or professional setup, you can start for free!
All you need is the internet and a laptop.
But anything worth doing at all is worth doing well.
If you want to go all out and get all the tools you will need to make your dropshipping business more profitable and less strenuous, you will be spending between the range of $30 – $70 per month.
One cool thing about dropshipping is market flexibility.
Though quite competitive, there is a broad range of product categories to dropship.
This flexibility gives dropshippers the opportunity to brand their stores around different product categories and selling niches.
The dropshipping world is large with endless possibilities.
Can be managed from anywhere
Dropshipping does not require huge dance buildings.
You can run your dropshipping business successfully from the comfort of your bedroom.
What’s even cooler is that you can take your business anywhere.
Traveling? On vacation? Anywhere at all, once you have your laptop and connectivity to the internet, you can keep taking and processing orders.
More Free time
Speaking of vacation, dropshipping gives you that luxury to up and leave for a weekend getaway in the Bahamas.
This is not possible for other conventional jobs like a 9-5 for example.
As a matter of fact, you can even place your dropshipping business on autopilot.
This is where the services of virtual assistants come in.
When you employ cheap virtual assistants, you have even more time on your hands to improve other aspects of your life and plan for your future.
How To Get Started With Dropshipping
Up until this point, we have explained the foundation of dropshipping.
Now we want to go deeper into how to actually start dropshipping.
So follow closely.
First, you need to understand that, to be a successful dropshipper, you need to focus on three key aspects – the product, the supplier, and the operational logistics.
Having knowledge about how to work with these three aspects will improve your chances of success.
So let us dissect them one by one.
Your product is the item you list on your eBay store and sell to your buyers.
It is the one thing that connects you to your buyers.
knowing how to work with your product to give you the best outcome must be thoroughly understood.
When it comes to your product, the following tips apply:
1) Choose your Own Niche
The major problem beginners have with dropshipping is that they want to rush into everything.
Doing this will stretch you thin as you will be managing a lot of moving parts.
Let me explain.
An attribute of a successful dropshipper is knowing how to manage suppliers.
And having too many suppliers can lead to error.
You want to know that your supplier is trusted so there will be no hiccup during transactions.
But if you have too many to keep an eye on, you might lose track.
Also, having a niche (or a select few niches) will make it easier for you to grow and dominate in that niche.
Such that any individual willing to buy a product in your category will be looking for your store.
2) Do Market Research
This links to the first point mentioned above.
You want to do your market research before you choose a product niche.
If you choose a niche that is overly saturated, you will have to work extra hard to be able to get market share.
Thorough market research will bring up data highlighting the saturated product niches and the ones that little activity.
Now when choosing a niche, you want one right in the middle of these two extremes.
You do not want a niche that is supersaturated, neither do you want one that is bone dry.
A supersaturated niche is one where too many dropshippers are selling.
And like we said earlier, it will be difficult for you to get any market share.
You might end up frustrated.
On the other end of the spectrum is the one where there is little to no selling activity.
You also do not want to sell products in that niche.
Most times, what it means is that people will prefer to buy these products in a physical shop than online.
So you will more or less be wasting your time by listing them on your eBay store.
You want that sweet spot in the middle.
3) Optimize your Product
As a dropshipper, you will always be in competition with other dropshippers on eBay selling similar items.
You have to beat these competitors and rise to the top.
To do that, you need to increase the visibility of your product.
Increasing the visibility of your products simply means optimizing your product title to make it rank for keywords peculiar to that item.
The best way to go about this is to use an optimization tool to suggest primary keywords that will force eBay’s algorithm to rank your product higher than those from other stores on eBay.
There are tools for this, some of which are free to use.
Get them and optimize your product’s title.
After working on the product end of your dropshipping business, the next is to focus on getting your suppliers.
This is an important task because your suppliers are fundamental to the success of your dropshipping venture.
A bad supplier can leave your customers unhappy, who can, in turn, leave negative feedback on your eBay store thereby damaging your credibility.
It is for this reason you need to be careful and deliberate about choosing your suppliers.
When choosing a supplier, you need to look out for the following things:
- Diverse Inventory: This is quite obvious, you need to look for suppliers that sell a range of products in a range of product categories.
A supplier with diverse inventory gives you endless opportunities to work with as many items as you desire.
- High-quality Products: This is important too.
Remember the instance we gave earlier on?
That a customer’s negative experience translates to negative feedback
If a customer gets a mediocre item with crass quality, they might go on eBay to voice their displeasure thereby costing you your reputation and future customers on eBay.
- Accessible Customer Service: Issues will come up from time to time as you get in business with suppliers on certain platforms.
It is important their customer service is reliable in addressing this issue without delay.
In addition to being reliable, they must be accessible at any time you want them.
The issue might be urgent which calls for an urgent response.
So you are not left hanging in the middle of a mess.
- Fast and Reliable Shipping: You need a supplier who will make do on their word.
Their yes is yes and their no is no.
When they say the item will be shipped and get to your customers on a particular date, it must be so.
Because it is this shipping information you will convey to your buyers.
And if the item does not arrive on the due date, there might be concern from the buyer.
Also, fast shipping is preferred.
This can influence a buyer’s decision whether to buy from you or not.
These days most people prefer fast shipping over anything else, and this can attract a lot of buyers to your store.
The next question that surfaces is where then can one get reliable suppliers with the aforementioned attributes?
We have collated a list of suppliers we have found to be attested and dedicated to serving their users.
AliExpress is like the go-to source for every dropshipper.
And it because they have proven themselves reliable over the 10 years of their existence.
They have millions of products and hundreds of product categories so in terms of inventory, AliExpress is packing.
Their items are quality, and their customer service is dependable.
With a live chat feature, a phone number, and an email all provided so you can reach them, you can make your issues known to them as fast as possible.
And they reply swiftly too.
DHgate has been around for quite some time now ( for over 15 years).
It is also a Chinese B2B platform where individuals, including dropshippers, can buy items in different product categories.
They ship and sell to over 220 countries and regions around the world.
Their shipping is quite fast too.
3) CJ dropshipping
CJ dropshipping is another platform that sells items you can source for your dropshipping.
It is a versatile online market platform with several product categories to choose from.
The products sold on CJ dropshipping are of high quality.
There are other online platforms to source products from such as Cocos fashion, Alibaba, and so on.
The next thing you want to talk about easy operational Logistics.
It is equally an important part of dropshipping because the efficiency of your operation determines the success of the business.
This is where the effect of dropshipping operational tools comes into play.
These tools improve the efficiency of your business and increase productivity.
A righteous combination of these tools births a seamless operation the improves profits and reduces stress.
There are several of those tools and go into them one by one in great detail.
The first one we want to talk about is KalDrop.
KalDrop is in a Non API eBay Lister.
It helps you list items on eBay with ease.
All you have to do is look for the product on any of the suppliers’ websites and use the pre-installed KalDrop icon to grab all the information on the item mean description pictures specifications e t c.
It lists any number of items in Split seconds. Therefore you do not have to worry about listing hundreds and thousands of items manually from eBay.
It is also in a Non API software so you will not get flagged during this operation.
It has some other good pictures as well such as VeRO protection, variation support, unique templates, a live chat feature, and so on.
To learn more about KalDrop’s features and sign up, visit our website here!
You know we talked about market research earlier in this article?
Well, this tool does the perfect job of analyzing products and how they are doing in the market.
Zik analytics also suggests hot selling products that will bring you huge profits in no time.
In addition to this, Zik analytics also provides other tools to improve your experience o dropshipping.
For example, Zik pro tools scan sellers on eBay and give you a list of what they are selling from any online market platform, including Amazon and Walmart.
It also gives you access to 500 of the best-selling products on eBay, which is updated every 48 hours.
So you have a pool of products to choose from every single time.
Fire Title Builder
This amazing tool is also a huge plus to your dropshipping arsenal.
Fire title builder helps you optimize your product by suggesting trendy keywords to force eBay’s algorithm (Cassini) to rank your products higher on search queries.
It is completely free and easy to use.
All you need to do is input the product name and it will suggest optimized keywords to improve your visibility on eBay.
You need to be careful to pick a few keywords that, when joined together, will give you the best optimization possible and will still make sense, be catchy, and contain the meager 80 characters available for your product title.
It needs to be catchy enough to draw the attention of buyers on eBay as well.
Most online shoppers do not have the patience to try to find out if your product is exactly what they are looking to get.
So it will be wise to give them a mini description of what the product is about in your product title.
FAQs On Dropshipping
Here are the answers to some commonly asked questions concerning eBay dropshipping.
How Do I Become Successful in Dropshipping?
You become successful at anything by doing the right things.
In dropshipping, doing the right things means using the right tools.
First, you do your market research with Zik Analytics.
Here, you get the best products that will sell almost immediately you list them.
Next, you list the product on your eBay seller account.
Take note that prior to this, you must have opened an eBay seller account, and have a PayPal account.
You then use KalDrop to list the product(s) on eBay without stress.
But before you do, you make sure you optimize your product title.
Using the fire title builder, you can optimize your eBay titles to improve visibility.
Is Dropshipping Legal?
Yes, dropshipping is completely legal.
You might run into some legal issues by doing some things you are not supposed to like listing VeRO items for example.
What is VeRO?
VeRO simply means Verified Rights Owner.
It is a program that gives special privileges to owners of intellectual property (IP) and they have the right to report eBay listings that may infringe on those rights.
There are some items that are protected by VeRO.
And KalDrop alerts you when you are about to list them so you do not get into legal issues.
What is eBay selling limit?
When you first start dropshipping, eBay will place a restriction on your account to control the number of items you can sell at a time.
It usually starts small.
Say around $500 or 10 items what you just begin.
And it increases each month as you keep dropshipping with their platform.
eBay dropshipping is both profitable and worth it.
It is especially easy when you have the right knowledge at your fingertips.
Knowledge, they say, is power.
Ans we have just given you that power as a dropshipper with the knowledge contained in this extensive expo into dropshipping the business model.