As a beginner, starting a dropshipping business can be confusing. The biggest problem is information overload. Chances are you’re receiving information from multiple sources which often contradict each other to make it more confusing which then causes you to get overwhelmed! Just breathe…
In this article, I’m going to walk you through each of the necessary steps and the need to know information in a simplified way. I’ll explain the decisions you will need to make in each step and how each decision will impact your business.
This is not going to be one of those “Build a fully profitable dropshipping business in 7 days with 3 easy steps” kind of scenarios.
This will not be a full course either, but I will explain the main points you need to know and provide resources and guides to more information. Much of the information I will link you to will be other articles on my website that will cover the topic in more depth.
I’m going to assume you’re new to dropshipping and I will explain the steps as though you’re a beginner.
But first of all, I’ll explain what dropshipping is and the different types of dropshipping you should be aware of before proceeding.
Dropshipping is a subsection of eCommerce in which the drop shipper sells products online without holding any stock. The drop shipper acts as a middleman and purchases products from a third party who then ships the products directly to the customer.
- The most common type of dropshipping generally involves creating a Shopify store and either sourcing products from China or domestically. This is the type of dropshipping I will be focusing on in this article.
- Another popular choice is to do POD (Print on demand). This can and often is still done using Shopify with products sourced from a POD platform such as, Printify or Printful. These platforms have several products such as, clothing and merchandise, where designs are printed onto. These companies supply the product, print designs directly onto them, and take care of the packaging and shipping.
- If you don’t want to create your own store, you can opt to dropship onto marketplaces such as, Amazon, eBay or Etsy. These marketplaces have policies in regards to dropshipping which you will need to review first. Personally, I prefer to be in control of my own business and not allow other platforms to tell me how to run my own business.
- Dropshipping arbitrage is another version you may not have heard of. This basically means you dropship from other marketplaces onto your own platform. For example, you might list products from Walmart on your own store at a marked-up price. You then put the buyers shipping details in when placing the order and you keep the difference.
Step 1. Should you Dropship High Ticket or Low Ticket Items?
Selling $20 items is very different from selling $500 items and you should be aware of the differences so you can make the right decision for you. Everyone has a different opinion as to what constitutes high ticket and low ticket so I’ll give you the basic guidelines.
Selling products under $50 is often considered low ticket dropshipping. Anything above $100 is considered high ticket and anything between $50 and $100 is the middle ground that can fall into either category.
Most dropshippers generally dropship low ticket items from China using AliExpress and Alibaba, however, there are differences between these platforms.
AliExpress is essentially China’s version of eBay and the most popular platform for entrepreneurs to dropship from. Alibaba is AliExpress’ sister company which sells products in bulk at wholesale prices.
Often with low ticket, you will focus on high volume instead of high profit margins. As a complete beginner, this may be a preferred option as you can afford to make some mistakes and still bring in a profit. For additional info, I suggest you read my article on good dropshipping profit margins.
High ticket dropshipping is often a better choice in the long run once your store is established. It requires more trust for consumers to make a large purchase so you need to create a professional store with a great customer experience and good branding.
Often with low ticket some of the products being sold are low quality. When it comes to high ticket you have to sell high-quality gear. DON’T dropship high ticket products from AliExpress as it will most likely lead to disaster.
For more information on the differences between high and low ticket dropshipping, check out this article.
Step 2. Which Kind of Dropshipping Store Should You Create?
You have 3 main options when it comes to creating a dropshipping store.
This type of store sells random products from any category and generally focuses on selling trending products. Branding is not as important with this type of store as you have no specific audience to target.
General stores can be an option as a beginner so you can test products from any niche. Once you find products with potential you can then create a niche or a one-product store based on the profitable products you have tested.
General stores are often the most work as it becomes a constant cycle of sourcing the next trending product and optimizing ads until that product has reached its sales limits. Check out my article here for some examples of general dropshipping stores.
A niche store focuses its entire store on a specific category of products and the niche can be as broad or narrow as you like. A broad niche will mean you will have a larger audience but it also means it will be harder to become an authority, it will be harder to rank on Google and you will have more competition.
For example, you may have a pet niche store that sells all kinds of products for every animal, this is a broad niche. Or you may narrow down and only sell fish, cat or reptile products. Or you may narrow it down further and only sell enclosures for specific pets or memory foam dog beds.
The further your niche is narrowed down the more of an expert you will be perceived as within that niche and the easier it will be for people to find you online but your audience size will also be much smaller. This article here will offer examples of niche dropshipping stores.
One Product Store
One product stores are stores that focus on selling a single product often with added variations and accessories used as upsells. These stores have become very popular in recent years.
Selling a single product has many advantages:
- Products can be ordered in bulk for a lower price and domestic shipping can then be utilised for faster delivery times. (Please note: Ordering products in bulk does come with risks regarding onselling.)
- Less time consuming to create an eCommerce store.
- Perception of being the original creator of the product.
- Once store is optimized it requires little ongoing maintenance.
The biggest downside is one product stores frequently fail in the early stages, particularly when you are first starting out with dropshipping.
For some examples of how to create a one product store the right way, check out my article 22 One Product Store examples!
Step 3. Check your Competition
Don’t let competition deter you, you’ll have competition no matter which niche you choose and competition means there’s money to be made.
The best tactic is to check your competitors on the platform you plan to advertise on. If you’re planning to use Facebook ads, review what other stores are running ads by utilizing the Facebook ads library.
Go through these stores and ask yourself, can I improve on these stores? Can I differentiate myself? Can I create something better?
Check out there:
- Website design
- Images and videos
- Offers and discounts
- Sale angles
- Product selection
There are endless possible ways you can separate yourself from the current stores. Remember, most stores are simply copying each other. By being creative and thinking outside the box, you’re doing more than most stores.
I suggest you read my article, “How to Tell if a Product is Too Saturated” so you can avoid facing too much competition.
Step 4. Select the Best Products to Dropship
This step affects most of the other steps so when choosing products to dropship you need to take other steps into consideration. For example, the products you choose will affect whether your store is high or low ticket, the store type you create, the suppliers you source, your target audience, your advertising method and the list goes on.
I will cover product selection briefly as I could easily write an array of articles on this, and I have. For more information and some ideas, I suggest you check out these two articles; “400+ Dropshipping Niche Ideas” and “300+ High Ticket Dropshipping Niches“.
If you plan to dropship products from AliExpress, make sure they are; relatively low priced, unique, solve a problem and can be sold for around 3x the cost price. Check out some examples of profitable AliExpress products in this article.
Purchasing products from Alibaba in bulk can be far riskier than dropshipping individual products from AliExpress. For this reason, if you’re buying in bulk you want to sell products that are higher quality which you can private label and create a brand based around the product/s. Here are some examples of stores that have private labeled products to build their brand.
As a whole, if you plan to dropship from China your products need to be reasonably small, light and ideally have a wow factor that allows them to catch attention and stop people in their tracks.
High ticket dropshipping products are a completely different ball game. As these products are usually sourced from domestic suppliers and are advertised on a different platform, the ideal products you sell need to meet a different criteria.
Products from China are generally unbranded. With high ticket you can sell other brands products, smaller lightweight products are preferred but not essential. Check out this article for more information on dropshipping oversized products.
Personally, I find high ticket products with a passionate audience in the sports and hobby niche very profitable. People are willing to spend a lot of money on their passions and they want the best quality gear. Think about products in the following niches as an example; fishing, MMA, golf, snowboarding, music, hunting, and the list goes on.
Step 5. Source Suppliers
If you plan to dropship from AliExpress always contact several suppliers who stock the products you plan to resell. Often suppliers on AliExpress can be very unreliable and this reflects poorly on you.
Order a sample product and compare the difference in quality as sometimes paying more for higher quality can end up saving you more money in the long run. You’ll find suppliers will run low on inventory therefore having a backup is important.
I suggest you read this article “9 Most Common Problems with Dropshipping from AliExpress” to know what to be aware of before using AliExpress.
Working with Alibaba suppliers is a step you should look into as your store starts making consistent sales. Check out this article before you work with an Alibaba supplier so you only work with trustworthy and reputable suppliers.
A great option is sourcing domestic suppliers so you can dropship from your own country with fast shipping. I suggest you read this article where I guide you through how to find dropshipping suppliers in your own country. I have written it targeted towards the US although it applies to all countries.
Here are a few other options worth considering:
- Salehoo – Provide 2 main options, a directory with over 8,000 suppliers or Salehoo Dropship.
- Spocket – A marketplace of products for you to dropship from with most of their suppliers located in the US and EU.
- CJ Dropshipping – A good alternative to AliExpress, a smaller choice of products to sell but the shipping is often faster than AliExpress.
- Zendrop – Most of the same products available on AliExpress can be sourced here at a similar price. Zendrop also has many additional sales features that some platforms don’t offer.
These platforms generally charge a monthly fee to use their service and are essentially middlemen between yourself and suppliers. You may wonder why even use them at all?
They basically simplify the whole process, these platforms vet their suppliers so you reduce the risk of being scammed and they have additional features to make your business easier to run. Such platforms are better suited for beginners and if it meets your budget.
Step 6. Contact Dropshipping Suppliers
Communication between suppliers in China can get messy. The vast majority of them don’t speak English but will tell you they can (or their English may be poor). Instead, many use a translator app which for the most part is effective although there will be some miscommunication issues.
You can simply communicate through AliExpress and Alibaba, however, some suppliers will prefer to use WeChat as it’s a faster and simpler method of communication.
Always notify Chinese suppliers that you are a dropshipper and confirm that they offer blind dropshipping. This means they ship the product without marketing materials, with neutral packaging and without the price you paid for it. Otherwise, you’ll have some unhappy customers.
If you’re contacting domestic suppliers you have 2 main options, phone or email.
I believe phoning is the preferred option but for some, this can be a little nerve-racking. If you call suppliers many people prefer to use a phone script so they don’t fumble and remember to ask specific questions.
I prefer to have a few key points written down that I want to talk about and a few questions I need to ask. If you read from a script it can be obvious and if the supplier knows you’re reading from a script, you’re done!
Just be yourself, people want to talk to a human, not a robot. Remember, you’re offering them an opportunity that will benefit their business too!
When it comes to emailing a supplier, I suggest you read the following article. In the article, I provide multiple free email scripts that you can use for contacting dropshipping suppliers as well as AliExpress and Alibaba suppliers.
Step 7. Create your Dropshipping Store
Don’t be intimidated by this step, even if you’re not tech-savvy. You have several great options when it comes to creating your own online store.
- Wix – Very easy to use, drag-and-drop interface.
- Shopify – Easy to use and the best all-round performer.
- WooCommerce – Free to use although you will need to pay for hosting.
- BigCommerce – Slightly steeper learning curve but offers professional looking websites.
These 4 examples are what is commonly known as website builders. They essentially give you a theme or template to choose from and you can then alter, change and add certain features to create a store that suits your business.
There are endless tutorials online which will guide you through step by step on creating your own eCommerce store. Once you have had a play with the features and the settings and really learn to navigate around the platform, you can create a store filled with products within a few hours.
If you plan to dropship from China you can import products to your store easily using tools such as, Oberlo or DSers. Oberlo can only be used with Shopify stores whereas DSers is an AliExpress partner. Personally, I prefer DSers and it has a much better free plan.
Each website building platform will have several free themes to use as well as paid themes. If you’re creating a general store you can get away with the free themes. If you plan to create a niche or one product store, I recommend paying for a theme if you can fit it into your budget.
Free themes are extremely common and therefore a lot of dropshippers use them and consumers are finding it easier to recognize dropshipping stores. A paid theme will stand out more and look far more professional.
Step 8. Creating a Store Name
A store name is not nearly as important for SEO purposes as it was several years ago. This means you don’t need to come up with a store name that you think people will type into Google. For example, if you were selling dog beds, you don’t need to call your store “Dog Beds Online Store”.
Just come up with a name that suits the type of products you’re selling. I prefer a store name that is easy to remember and rolls off the tongue. In general, these are usually 2-word names with at least one of them relating to the type of products you’re selling.
With a one product store, however, it’s very important to name your store after your product. This way your customers will assume that you are the original creator of the product.
The store Blend Jet is a perfect example of this. Their store and product are named after their portable blender. This gives the perception to many shoppers that this is their product and they created it.
Check out a website called Brand Crowd for a very effective AI-powered business name generator if you’re having trouble coming up with a name, it will give you a heap of store name suggestions.
Step 9. Branding your Store
Even with no marketing experience, branding doesn’t need to be complicated and can still be very powerful. I have a full step-by-step tutorial on how you can brand your dropshipping store.
Branding provides your store with trust, makes you stand out among your competitors and enables you to charge high prices and your customers will assume it’s worth the money.
People don’t always buy products because of practical reasons, they often buy them because of how the product makes them feel.
For creating a compelling and persuasive product page, check out my guide which will help your conversion rate.
People don’t spend thousands on a Rolex watch because it’s the best at telling the time, they buy it because of social status and the positive emotions it evokes to wear. Consumers visualize themselves with the product and how others will perceive them which may make them feel validated and worthy.
Consider the Blend Jet example I used above. If other people are making their smoothies at work and the gym or moms are blending up baby food in front of other moms, people feel excluded. This is often why products go viral, people don’t want to feel excluded from their tribe of people and therefore, if someone else has this cool product, they feel like they need it too.
For more information on branding, read this article.
Step 10. Advertise your Products
For the most part, you will need to pay for advertising in the beginning stages of your store. It is important to know which platform is best for advertising depending on the type of products you’re selling.
This is the most popular method of paid advertising for dropshippers. The important thing to understand before you advertise with Facebook is that this type of advertising is often called “interruption marketing”.
This means you’re advertising to people who are not typically looking to buy something. Most people are on Facebook for other reasons so it’s your job to interrupt them and make them take notice of what you’re selling.
For this reason, Facebook ads work best with very unique products or products that have a “wow factor”.
The Google Shopping ads are the images of products that show up across the top of your screen when you type in a related keyword.
Whilst Google text ads are the usual websites you can click at the top of the Google search engine but with the word “ad” in front of the website.
Google is another very effective method of advertising and is especially popular with anyone selling higher ticket products. This type of advertising is typically known as “search intent advertising” because most of the time the person is actually searching Google for the product.
This often means the conversion rates for this type of advertising are higher but can often cost more depending on the product.
Instagram influencers can be an extremely effective and often underutilized method of marketing your products. You reach out to a person on Instagram who has a reasonably large following and request that they make a post of them using or advertising your product.
This is effective if your product is very specific to a niche and if you’re trying to create a brand around the product. I’ll use the Blend Jet example again, you could reach out to moms and fitness influencers on Instagram showing themselves using the product in real-life situations.
You need to reach out to influencers within your niche. Often influencers with under 100k followers still have a broad reach and will cost you far less than influencers with followers in the millions.
Step 11. Optimize your Dropshipping Store
Once your store is up and running you will need to optimize your business to maximize profits, so how do you do that?
There are important metrics you need to monitor which will allow you to accurately assess which changes are required to fully optimize your store:
- Conversion rate – This is the percentage of visitors who make a purchase after visiting your store.
- Average order value (AOV) – This is the amount of money each customer spends when making a purchase.
- Return on ad spend (ROAS) – This is the amount of revenue generated for each dollar spent on advertising.
- Click through rate (CTR) – The percentage of people who click through to your store after seeing your ads.
There are many other metrics you can monitor, these are some of the essential metrics that will have the largest impact on your overall profitability.
To optimize all these metrics you need to make changes to your store and ads. Each change you make will provide you with information as to your next change until you fully optimize your store.
For example, if you’re running ads for a product that is losing money consistently you need to make large changes such as, changing the ads, changing the audience you’re targeting or changing the offer.
If your product is making some money you should only make small changes such as, improvements to your content, images or your ads. The key is to change one aspect of your store at a time so you know which change impacted your metrics.
Dealing with customers, order fulfillment and offering returns and refunds are all part of the process of running a dropshipping store. Many of these tasks can be completed by a virtual assistant as your store is up and running.
Step 12. Buy your Products in Bulk
Once your store is making sales and is optimized it may be worth buying your products in bulk. Having your supplier ship your products individually to your customers is great, but think of it as a stepping stone in your business.
If you’re making consistent sales from AliExpress or any of the other suppliers I mentioned, try ordering in bulk from Alibaba instead. This is riskier due to the upfront cost, however, it will provide lower product costs for you.
You can have the order shipped to a fulfillment center (3PL) that can pick, pack and ship your products individually to your customers as orders are made in your store.
If you’re already dropshipping from domestic suppliers it’s worth reaching out to the manufacturers and asking them if you can order their products in bulk for your online business. This way you’re eliminating an extra middleman and maximizing your profits.
Dropshipping is a very appealing business model. For this reason, some online gurus make it seem like an easy way to make money and people often fall for it.
I don’t know what the actual failure rate for beginners to dropshipping is, but I’m guessing it’s high! Dropshipping is not easy and as it’s becoming more and more competitive, you can only expect it to be more and more difficult to become successful. I have a guide on the best way to make money dropshipping as a beginner if you are interested.
Take the time to learn each aspect of dropshipping in depth before getting excited and proceeding without the required knowledge. This will only increase your chances of some kind of success.
Another important factor is to have realistic expectations. Just because some YouTuber is claiming he made a million dollars in his first year dropshipping doesn’t mean you will. Chances are they are lying and if it’s the truth, it’s an anomaly.
Be prepared to spend a few thousand dollars and make nothing in return for the first 6 months whilst you’re still learning.
If you’re a beginner and want me to cover an aspect of dropshipping in more depth, send me an email at [email protected]. I will try and cover the topics I receive the most requests for.
Dropshipping Hustle provides a one-stop FREE resource guide for dropshippers so be sure to have a look around my site for articles and guides for where you’re at along the process. All the best!