Drop shipping is fast gaining widespread popularity among most start up entrepreneurs, especially those with excellent internet marketing skills and limited funds. However, building a successful online drop shipping business requires a lot of effort due to the nature of the business model.

For instance, an e-commerce website which operates a drop ship model, purchases the items displayed on its website from a third party manufacturer or supplier, who in turn fulfills the order and ships to the address provided by the drop shipper. This system is very beneficial, as it not reduces operational costs, it also gives you more time to focus on other aspects of your business like customer acquisition and expansion.

Setting up a successful online drop shipping business don’t require a lot of startup funds to begin with, you can do so on a tight budget. But what you lack in startup capital, you need to make up for it with some hard work because you will have to compete with fellow drop shippers and renowned retail giants. To help you get started with building a successful online drop shipping business from scratch, i’ve listed six steps below. Let’s check them out.

DROP SHIPPING TIPS

1. Niche Selection.

Niche selection is the very first step if you want to build a successful drop shipping business from scratch, and your chosen niche has to be something that interests you. Picking a niche which you’re not very passionate about will make it increasingly difficult for you to market your items. You can easily get discouraged , because drop shipping requires a lot of hard work to succeed. Checkout these points to help you with choosing the right niche;

• Be Unique: Your drop shipping business needs to have a unique touch if you do want to be successful. Whatever you decide to sell, re-branding it as your own will add to it’s value. This can be achieved by looking for white label products and repackaging them with your own custom branding before selling.
• In Demand Products: Finding hot in demand products, items which people are actively searching for is key to being a successful drop shipper. If no one is searching for items you plan on selling, then you are already starting on the wrong footing. You can find hot in demand products by using keyword’s checker tools like Google Keyword Planner, SmallSeoTools, Ahrefs, Moz and many more.
• Find Low Shipping Cost Items: High shipping cost items are not customer friendly, even if your supplier or manufacturer takes care of product shipment, the customer might not be pleased if the cost is too high. Try to find items with low shipment cost, this strategy also creates the option of providing free shipping to your customers, and takes care of that cost as a business expense. It can also be used as an incentive to attract more sales.
• Make Your Products Appealing: When it’s time to drive traffic to your website, your aim should be to have high conversion rates, because most first time visitors might never return. Your items should be very appealing, and trigger impulse buying to those who can afford to pay for it on the spot.

2. Research On Your Competitors.

Drop shipping is very competitive, make no mistake about that. When building an online drop ship business, you need to have it at the back of your mind that some of your competitors have been in the business before, and are household names which people trust too. This where competition research comes in handy. Many potential drop shippers fail to do this, and skip this very important step, instead they look for products with little or no competition, an obvious sign that the demand for that particular product is low.

Some of the reasons why a product might have fewer competition include; Poor profit margins, supplier & manufacturing problems or high shipping costs. As a start up drop shipper looking to build a successful online drop shipping business, try to find products that have high competition, this is a clear sign the demand for that product is high and sustainable.

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3. Find A Supplier.

Entering into partnership with the wrong supplier is a recipe for disaster, it can ruin your business. This is one aspect of building a successful online drop shipping business that you need to be careful about.

A vast majority of drop shipping suppliers are located overseas, thus making it important for communication, an important aspect in terms of the ability to understand each other and response speed. If you have issues communicating effectively with your supplier, move on and a capable replacement.

Amazon is one of the biggest online platforms to find and connect with potential manufacturers and suppliers. Endeavor to ask lots of questions and find out what their production capacities are in view of your business expanding. You need to be sure that they have what it takes to meet up with your demands when your business expands.

You can also learn a thing or two about finding the right supplier from successful drop shippers who have passed through this stage before. Other resources which can help  with relevant information to prevent  you from making avoidable supplier mistakes.

4. Design/Build Your E-commerce Website.

You can’t build a successful online drop shipping business without an e-commerce website, and thankfully there are several ways through which you can achieve that even if you have no prior knowledge about web design. With E-commerce platforms like Shopify, you can build a simple website for your shopify store. Other alternatives include WordPress, Opencart, Magento & Prestashop.

However, the downsides to this is that you might miss out on potential sales due to poor SEO(search engine optimization) and other issues. So, if you can afford it, hire a web design expert/developer to help set up your e-commerce website. You can find affordable ones HERE

5. Set Up Customer Acquisition Plan.

Having high in demand products and a cool e-commerce website is good, but without customers looking to purchase your items, then your business will be out of business in no time. There are lot’s of ways to secure potential, regular customers, and starting a Facebook Advertising Campaign is the most effective and widely used option.

This enables you to start making sales and generate income immediately, a good way to scale up quickly. It’s no secret that Facebook is the biggest social media platform with over 1 billion active users; this allows you position your offer directly in front of a highly targeted audience, with the a strong chance of competing with larger brands and retailers as well.

Email marketing and using automated Chatbot’s are also other areas which you can exploit to your advantage. Set up an email optin form on the landing page of your e-commerce website, and create automated email sequences which offer periodic special offers and discounts. It’s a cost effective way to leverage on your existing customer base, and increase your revenue.

6. Analyze and optimize.

Keeping track of all your data helps you monitor the level of growth for your business. Tools like Google Analytics, and Facebook Pixel can help you do this for free . Your ability to track every single conversion helps to identify where the customer originated from, and what path led them to your website that eventually led to a sale. With this, you can easily scale what works and delete what doesn’t.

Drop shipping is fun, and really profitable if you’re ready to put in work. Do you know of any other step for building a successful online drop shipping business? Kindly let us know in the comments section.