Getting started in a business using the Dropshipping model is very easy.
What is Dropshipping?
Dropshipping is a retail model where a store doesn’t keep any inventory. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.
What are the benefits of Dropshipping?
- Easy to get started. You can visit Shopify and have your store set up in 10 minutes.
- Low Risk
- Low Capital
- No inventory to worry (the suppliers will handle all shipment and delivery)
- Low overhead
- Dropshipping business can be done anywhere with an internet connection.
- No website required.
- No physical store required.
- You can fulfill dozens of orders without leaving your home (you can even fulfill orders while sipping pina colada).
The idea of dropshipping is to make sales to customers by possessing a system in place where goods are shipped directly to your clients from a manufacturer or a distributor.
As the store owner, you create your very own platform with clickable links to the goods you would like to sell. When customers purchase the items in your store, the goods are shipped directly to them, and the difference of your store price vs the manufacturer price is your profit.
This is one of the simplest and most profitable way to make money online as the concept is extremely low risk, easy to manage and you just have to focus on one thing and that is advertisement.
AliExpress makes it convenient to find products to sell on your store, without having to worry about inventory or shipping.
With this model, you create an online store, set your very own prices and set up a shopping cart system that accepts credit card payments. See photo below for order flow:
You only order products from your suppliers when the customer placed the order on your website. You place the order to your suppliers with your customer’s shipping information.
The supplier then ships the items directly to your customers (again, no worries about inventory and delivery as your suppliers will manage everything for you).
Things to note:
- This concept is attractive primarily because your capital reserve can be geared towards advertisement instead of inventory.
- Carefully choose suppliers. If you go to Aliexpress, I suggest for you to contact the suppliers first as this will give you a better understanding on how they run their business. I even bought a few samples first to check the quality.
- Once your store is up and running, you can now focus on advertising your store online. I will post a separate article in the future about tips in maximizing conversions on free and paid advertisement to get your first sale online.
- Read product reviews before including it on your store item list.
- Decide whether you want to set up a general store with various items or a specific niche store (e.g baby toys)
- Always use ePacket for U.S delivery
- Shipment can take 2-3 weeks (I know that’s too long!). The key here is to set proper expectation to your customers. Most customers are fine with it given that the shipping is free.
- Set up several gateway channels (PayPal, Credit cards, Stripe, Bitcoin etc.).
Are you ready to set up your own dropshipping store? Let me know what you think by dropping your questions and comments below!