How I Started My First Dropshipping Business in Less than a Month
Starting a dropshipping business was always a dream of mine, but I never knew exactly how it was done. While I’d love to tell you that there was some magic secret, that couldn’t be further from the truth, as the reality came down to simply just getting up and doing it. However, as I understand what it’s like to be lost on where to begin, I’ve compiled a few helpful points that got me going. Here’s how I did it:
Knowing My Budget
I knew that if I was going to be starting a dropshipping business, then establishing a budget was going to be one of my first steps. Although I knew that the overhead for dropshipping is relatively lower than most eCommerce operations, it was also something I knew I had to invest some capital into if I was ever going to compete. The problem was not only knowing how much to set aside but also how long it would take to achieve a number where I could dedicate more time.
According to the Small Business Administration, it costs between $1,000 to $5,000 to start a small business, which while was within my range, didn’t factor in the other aspects that are important as well, such as marketing, branding, and even overhead to live. After all, something that’s pretty attractive about dropshipping is how accessible it is, which also means there’s a significant amount of competition out there, meaning I needed a competitive advantage. By investing more upfront, I was able to compete on a larger scale, giving me more breathing room to work with as well.
Doing My Research
Once I was able to establish my budget, it was time to start diving into research. A significant part of setting myself apart was figuring out what my niche was, including where exactly I fit amongst the spectrum. As noted by Statista, with eCommerce expecting to make up 17.5 percent of total global retail by 2021, only those with a particular line of products will be the most successful. Items like sales strategy and shipping also play essential roles in helping my customers achieve the best bottom line. But to produce premium numbers, I also had to back up for a second to gain an understanding of the dropshipping industry as a whole.
The name of the game for dropshipping is sourcing, which essentially boils down to how you’re able to bring your customers what they want on the shortest journey. For example, if I find the same product from two different suppliers, where one is cheaper but takes much longer to ship versus a slightly better than the normal rate with short ship times, which one do you think I’m going to pick? Customer satisfaction was always number one, which is what I used as our guiding principle.
Paying Attention To Pricing
In elaborating a little bit more on pricing strategy, it was imperative I paid very close attention to the numbers game. This meant not only looking at things like how shipping costs from wholesalers compare but how I was going to cover things like incidentals or chargebacks. As noted by PreferredCFO, 82 percent of businesses fail due to poor cash flow, which goes to show why it’s important to think a step ahead. Which, for us, meant always being on top of our pricing strategies.
Once a week or so I’d garner feedback reports on what type of pricing strategies were working for us, including if putting certain items on sale or seeking out new suppliers might play more of a beneficial role. Another factor here was seeing which items I should cut altogether versus what I should consider reorganizing for long-term. Although it requires quite a bit of knowing what’s hip to your industry, it’s also about being able to study the numbers and improve upon them. No matter if numbers are your strong suit or not, having someone that’s an expert in that regard will be crucial, as it played a role for us.
Getting Smart With Social
Finally, once I got a good grasp on all the moving pieces that make dropshipping function, the final step was to figure out how to market our products. Although I knew that I needed to keep a mix between different techniques such as email, SEO, or content, social media, by far, was our most useful channel. Not only were we able to advertise our products, but engage with fans and drop them into our pipeline to close the deal. Before any of that was possible, first we had to figure out who exactly our audience was.
From my use of social media I knew that the industry was primarily on Twitter and Instagram, what I didn’t know was how to expand beyond just my immediate base. That’s why I started to focus in on demographics, for example, as noted by Pew Internet, 71 percent of 18 to 24-year-olds are on Instagram, which shows that in targeting a younger demographic, that’s a primary place to go. Another significant portion of this was engagement, which was how often I interacted with our audience. Overall, with enough practice, I was able to master social by treating it with an organic approach, but one that held consistency, putting myself on a strong foundation for years to build an audience.
Why do you want to start a dropshipping business? Comment with your answers below!