Dropshipping is a lucrative business for entrepreneurs. When a customer orders an item from your dropshipping store, the supplier ships it directly. You don't need to hold physical stock, keeping your overhead costs low.
But succeeding in this niche requires careful planning and execution, which you’re about to learn. This guide covers everything a beginner needs to know about starting and scaling a successful dropshipping business.
Dropshipping is a model in which companies sell products without maintaining an in-house inventory. When a customer orders an item, the company passes the order to the supplier, which fulfills it for the customer. The dropshipping business is an intermediary between the customer and the supplier.
Dropshippers sell items at a markup from the supplier’s price. For example, the supplier can charge $10 for a product, but the dropshipper sells it for $15 and keeps $5 as their profit. Because the dropshipper maintains no inventory, they can sell products more cost-effectively than brick-and-mortar retailers. This model also prevents you from getting stuck with inventory that may not sell.
Entrepreneurs often ponder how to start dropshipping. Many are interested in the idea but don’t know how to proceed. Fortunately, we’ve compiled a guide showing you how to start dropshipping.
Choosing a niche is a major pain point for entrepreneurs wondering how to start a dropshipping business. With endless product categories out there, choosing the right niche understandably gets complicated.
There are two main ways to choose a niche:
1. Find something you’re passionate about.
Selecting a product category you’re passionate about helps a lot. Your knowledge of the niche makes it easier to source high-quality products people will be interested in. Your passion also motivates you to strive amid the business challenges dropshippers face. For example, if you’re passionate about basketball, you can build a dropshipping business selling basketball jerseys, shoes, gloves, and accessories.
2. Based on market research.
However, passion doesn’t always translate to sales, so you need market research to validate your dropshipping ideas. You might be passionate about a niche with little sales volume, necessitating you to pursue something else. Market research is an essential skill to become a dropshipper.
Niches with high demand and low competition are the most profitable for new dropshippers. Everyday products, such as home decor, school supplies, and cleaning equipment, are also profitable and help you build a recurring customer base.
Seek trendy products that are difficult to find locally, helping you stand out from competitors. You can also sell consumable or disposable products to increase your chances of getting repeat customers. These ideas help you find a profitable niche when considering how to become a dropshipper.
Dropshipping is a model in which companies sell products without maintaining an in-house inventory. When a customer orders an item, the company passes the order to the supplier, which fulfills it for the customer. The dropshipping business is an intermediary between the customer and the supplier.
Dropshippers sell items at a markup from the supplier’s price. For example, the supplier can charge $10 for a product, but the dropshipper sells it for $15 and keeps $5 as their profit. Because the dropshipper maintains no inventory, they can sell products more cost-effectively than brick-and-mortar retailers. This model also prevents you from getting stuck with inventory that may not sell.
Entrepreneurs often ponder how to start dropshipping. Many are interested in the idea but don’t know how to proceed. Fortunately, we’ve compiled a guide showing you how to start dropshipping.
Choosing a niche is a major pain point for entrepreneurs wondering how to start a dropshipping business. With endless product categories out there, choosing the right niche understandably gets complicated.
There are two main ways to choose a niche:
Selecting a product category you’re passionate about helps a lot. Your knowledge of the niche makes it easier to source high-quality products people will be interested in. Your passion also motivates you to strive amid the business challenges dropshippers face. For example, if you’re passionate about basketball, you can build a dropshipping business selling basketball jerseys, shoes, gloves, and accessories.
However, passion doesn’t always translate to sales, so you need market research to validate your dropshipping ideas. You might be passionate about a niche with little sales volume, necessitating you to pursue something else. Market research is an essential skill to become a dropshipper.
Niches with high demand and low competition are the most profitable for new dropshippers. Everyday products, such as home decor, school supplies, and cleaning equipment, are also profitable and help you build a recurring customer base.
After choosing a niche, the next step is finding reliable product suppliers. A supplier can make or break your dropshipping business, so choosing the right one is crucial.
Most dropshippers need suppliers with fast shipping, high-quality products, and low prices. Pricing is especially important because buyers are very price-sensitive. Zendrop links you with suppliers offering high-quality products for the lowest prices with industry-leading shipping times.
Dropshippers can use many apps to connect with suppliers and automatically process orders to be shipped to customers. AliExpress is a platform that connects you to a vast network of suppliers across China. Spocket is another popular platform that connects dropshippers with a broad network of global suppliers.
Part of knowing how to dropship is valuing quality over quantity. It’s not how large your suppliers are but how well they can deliver. Zendrop connects you to a curated network of manufacturers with high product quality and speedy delivery. We connect you directly to the origin factory for your dropshipping inventory and resolve issues quickly because we own the supply chain. Our users benefit from fast shipping, high-quality products, and low prices owing to our control of the supply chain.
With your suppliers set, the next step is building an online store to list products and receive payments. Store creation is often dreaded when considering how to start a dropshipping business, but this process has become as easy as possible. Many platforms already provide the backend tools to host your online store while you focus on designing and branding.
Shopify and BigCommerce are platforms that make it easy to create your dropshipping store. They provide the backend infrastructure to list products, create catalogs, and receive orders. These platforms have plugins that automate passing orders to suppliers that’ll fulfill them.
Cost, ease of use, and features are the main considerations when choosing a platform. How much can you afford for monthly or annual hosting costs? How user-friendly is the platform, and what are its unique features?
Shopify is easy to use and offers excellent customization and scalability. Zendrop offers custom-built Shopify stores to fast-track your store creation instead of building it from scratch.
Good design is critical to drawing customers to your dropshipping store. Keep things as simple as possible: the more elements in your store, the more distractions that can dent sales. The store should be easy to navigate, with products sorted in as few collections as possible.
Use color to your advantage because different colors inspire different feelings. For example, the purchase button should be bright-colored, provoking excitement and passion. A white background makes it easier to see different elements and navigate your store.
Use high-quality product images, which have a proven effect on sales. 75% of shoppers rely on product images for purchasing decisions. Overall, your store should use a professional theme that is on par with popular online retailers.
Designing a store might feel complicated, but Zendrop offers a storebuilder that automatically creates one based on your preferences. The store's custom theme is based on other premium themes that typically cost $200+. Our theme seamlessly integrates the best features from different themes. To make things better, you'll get this theme for free.
The storebuilder harnesses AI to create a store from scratch, and you’ll make the final touches to fit your taste.
A dropshipping store needs important pages that provide crucial information and allow easy navigation. These include:
Payments and shipping are essential aspects of learning how to do dropshipping. You need a payment processor to receive money from customers. If selling internationally, you can collect payments in different currencies that’ll be converted and sent to your domestic bank account. Payment processors also assist in collecting and remitting sales taxes for various jurisdictions.
You need a robust shipping system to cover the supplier's cost of delivering an item to a customer. There’s no perfect approach to this system: it depends on location, type of goods, and the logistics provider.
Many payment gateways, such as Stripe, PayPal, and Authorize.net, let you process and receive customer payments. Each gateway has unique fees and conditions, so note these details before choosing.
Stripe charges 2.9% plus 30 cents per transaction, PayPal charges 3.49% plus $0.49, and Authorize.net charges 2.9% plus 30 cents per transaction and a $25 monthly fee. These gateways are easy to integrate with your e-commerce platform, requiring just a unique public and private key generated by the gateway.
Payment gateways require identity and bank account verification, so expect to provide various documents before getting approved. They also often require proof of business registration to process payments above a specific threshold.
Dropshippers can choose various shipping strategies, including:
Each shipping strategy has its pros and cons. As a dropshipper, be aware that all your shipments may not be profitable, especially for single items. However, the aim is to have more profitable shipments than unprofitable ones over a long period.
Once your store is set up, your next focus should be promotion and brand awareness. Marketing is an essential aspect of knowing how to start a dropshipping business.
Over 5 billion people, or most of the population, use social media. This massive user base makes social media one of the best mediums for promoting your dropshipping store. Popular social media platforms include Facebook, Instagram, TikTok, X (Twitter), and Snapchat.
You can create brand pages on Facebook, Instagram, and X to post product highlights and build awareness. These platforms let you pay money to boost posts to a wider audience and broaden your reach. You can also use hashtags and seek mentions from established social accounts to expand your reach.
Instagram and TikTok have popular accounts in different niches known as influencers, ranging from micro-influencers with less than 100,000 followers to mega-influencers with over 1 million followers. You can collaborate with influencers to advertise your products depending on your budget. A good way is to send free product samples in exchange for mentions. You can also pay for a full-fledged partnership with an influencer to promote your products consistently.
Content marketing involves creating written and visual content to draw attention to your dropshipping store. An effective strategy is to add a blog section to your dropshipping store. On this blog, you’ll write articles relevant to your niche, e.g., a clothing store with articles like “10 Smart Outfits For Your Wardrobe” and “5 Tips To Up Your Fashion Game.”
When people search for queries related to smart outfits and fashion tips, your blog can appear on search results and draw new visitors. A visitor can read the post and then check out the products in your store. Many visitors can convert into buyers this way.
The above strategy falls under search engine optimization (SEO). Other SEO tenets include adding meta descriptions and tags to your product pages, using internal links to encourage indexing, building backlinks from similar sites, and adding alternative text tags to all product images. These strategies, combined with creating relevant content, build brand awareness and increase sales.
You can pay for ads on search engines and social media platforms. Search engines like Google and social platforms like Facebook let you hyper-target ads according to income, interests, location, gender, relationship status, and other demographics. Hyper-targeted ads generate effective results because you advertise exactly to your desired audience.
Suppose you run a dropshipping website selling stiletto heels. Your ideal target market is working professional women aged 20 to 50. You can create a Facebook ad targeting this exact audience. You can also create search ads targeting the “buy stilettos” query. When people search for stilettos to buy, your site will be advertised in the search results, giving you a potential customer.
Paid advertising lets you reach the exact audience interested in your products. A little investment in this strategy can generate a high return on investment.
Customer support and management are crucial parts of knowing how to get into dropshipping. Because of their low barriers to entry, dropshipping businesses are intensely competitive, so excellent customer service is required to outperform competitors.
Speedy order fulfillment and delivery are hallmarks of a successful dropshipping business. You’ll achieve this by choosing suppliers who package and ship products quickly. Zendrop helps by connecting you to world-class manufacturers with automated order fulfillment. We offer warehousing services in China and the U.S. to large sellers, ensuring faster shipping times, higher product quality, and lower stockout risks. Likewise, we offer custom branding and packaging services to help you outperform competitors.
Automated order fulfillment means you don’t waste time repeatedly sending order details to different suppliers. Once a customer places an order, it’ll be immediately given to the relevant supplier to fulfill, giving you more time for other tasks. However, you still need to communicate with suppliers and customers to ensure smooth orders.
Suppose an order gets delayed, and the buyer inquires about this issue, you have to follow up with the supplier and ask why the order hasn’t arrived. Then, you’ll relay the information to the buyer to satisfy them. Be attentive to customer complaints and try to resolve them quickly. Be truthful when there’s a problem the buyer needs to know. The better your customer service, the higher your chances of getting repeat customers.
Returns are a mandatory part of running a dropshipping business, which you should manage efficiently to minimize losses. Before creating a return policy for your store, look at your suppliers' policies. Some suppliers might not accept returns or may charge stocking fees for each return. They might also have a limited time window for accepting returns.
Your suppliers’ return policy should guide yours so that you don’t make promises that can’t be fulfilled. For example, if most suppliers accept returns within 14 days, you can play safe and set yours as 10 days. If the supplier doesn’t accept returns, you can tell customers to return items to your address and cover the cost. If the cost of processing a return is high, you can let the buyer keep the product and still offer a refund.
Set concise refund policies for your store. Customers should know what time frame and conditions make them eligible for a refund. When a customer requests a refund, you can offer another product or an in-store credit. If the customer persists, you’ll offer a full cash refund.
Minimizing returns is as crucial as handling them. To do this, provide accurate product images and descriptions, implement size guides and fitting tools, and showcase reviews to help customers make informed decisions. The more informed someone is when buying your product, the less likely they’ll seek a refund later.
Dropshipping entrepreneurs often make mistakes that cause business problems in the long run. People understandably make mistakes when venturing into new areas, but it’s better to learn from others and minimize the mistakes.
Selecting an inappropriate niche leads to long-term disappointment. You can invest considerable time and money into your dropshipping venture, but the wrong niche makes your efforts futile. Often, people venture into niches they’re passionate about without researching their competitors, market size, and growth potential.
Market research is the most effective way to avoid choosing the wrong niche. Conduct a long-term study before settling on a niche. You should have data that indicates a large market size and growing prospects for that niche. If your desired niche lacks good prospects, don’t hesitate to find a more profitable alternative.
Suppliers can make or break your dropshipping business. Unreliable suppliers can provide low-quality products that dent your reputation or have slow delivery times that anger customers. To avoid this issue, conduct in-depth research before choosing any supplier. Check past reviews and inquire from other dropshippers who have previously worked with that supplier.
Zendrop simplifies the process of getting reliable suppliers. We connect you directly to product manufacturers and handle fulfillment globally. We control the supply chain and strictly vet our manufacturers, assuring you of product quality and speedy delivery.
Customer service is inseparable from an e-commerce business, but many dropshippers neglect this area. A neglected support system makes customers unhappy and reduces long-term sales.
Invest considerable time and effort in customer support to avoid this problem. Low overhead cost is a major benefit of running a dropshipping business, so you have more time and money for customer service. Customers should be able to contact you via email, live chat, or telephone, and you should provide speedy answers. Try to resolve every customer problem even when it seems stressful.
The global dropshipping market is currently valued at over $200 billion and is expected to surpass $900 billion by 2030. It presents many opportunities for entrepreneurs to build formidable businesses and make money. This guide shows how to start a dropshipping business and position yourself for excellent results.
Zendrop is your trusted dropshipping partner with benefits including access to a vast network of Chinese manufacturers, automated order fulfillment, fast delivery, and custom branding. Sign up today to build a profitable dropshipping business!
You can start a dropshipping business with as little as $100. Dropshipping doesn’t require much money to start, making it a stellar option for entrepreneurs seeking to bootstrap a business.
You can’t technically start dropshipping with no money. However, you can use free trial offers to build your store and use credit cards to buy products from suppliers (after customers place orders), risking little money initially.
Dropshipping can be very profitable, depending on your niche and product collection. However, it’s not a guarantee of making easy money. Dropshipping success requires considerable time and effort to build a loyal customer base and leverage it to sell high-margin products.
Zendrop is one of the best platforms for kickstarting your dropshipping business. It connects you directly with manufacturers that fulfill orders globally and gives you access to a diverse assortment of 1 million+ products.
You can offer refunds while letting customers keep the products. You can also use a local PO box to receive returned goods instead of directing customers to send them far away. To minimize issues, have a clear returns policy in line with your suppliers’ policies.
The biggest dropshipping challenges are finding reliable suppliers, long shipping times, building brand awareness, and handling customer returns. However, these challenges have practical solutions.
The best tools for managing a dropshipping business include Shopify for hosting the store and receiving orders, Zendrop for sourcing high-quality products, Stripe for payment processing, and Google Analytics for website audience insights.
