HOW TO START AND MANAGE A DROP SHIPPING BUSINESS
Business Growth Business Ideas Online Business

How to start and manage a drop shipping business

Let us start with a conversation between Danny and Angela

Danny: Hey Angie, I like your watch, where did you get it?

Angela: Wow thanks. I paid a seller who help me ordered it directly from the manufacturer and got it shipped to my doorstep.  

Danny: Seriously, that’s cool, can I also have your seller’s digit? 

Angela: Sure you can.

From the conversation above between Danny and Angela, you will see that Angela got her watch through drop shipping. Well you should also know that you can start a drop shipping business as well like Angela’s seller.

So we are going to show you how to start and manage a drop shipping business. First let get you familiar with the terms in drop shipping business. 

what is drop shipping?

Drop shipping is a process by which a seller do not hold a product in stock for customer order, instead order from a third party (manufacturer/wholesaler),who shipped the product directly to the customer.

You see how simple it is, right? don’t get carried away we are still going to explain how you can start and manage a drop shipping business.

We are going to share  more light to the following highlighted points

  1. How to start and manage a drop shipping business 
  2. is drop shipping profitable?
  3. How much do drop shippers make on average?
  4. starting drop shipping with no money
  5. How efficient is drop shipping in year 2020?
  6. How to drop ship for free
  7. Is drop shipping illegal?

HOW TO START AND MANAGE A DROP SHIPPING BUSINESS

The age of world we are now speaks through knowledge gotten from information, So if you are thinking of starting a drop shipping business, you need to understand these following steps:

Choose a product category/niche

To start a drop shipping business you need to look into product that’s has higher demand rate, locally unavailable, quality, profitable, low cost of shipping and so on, using different ecommerce platform such as Amazon, Aliexpress, Shopify, etc.

When you are choosing a niche/product for your drop shipping business be mindful of your targeted audience on the basis of price.

Do a feasibility study on your niche 

Once you have your niche/product category intact, the next step is running a feasibility study of the products to confirm their profitability as well as competitive market analysis.

Be it physical market or virtual, you are bound to have competitors, which is mostly base on price, quality, nearness etc.

So from all these research you can find a weak link or loop hole you can leverage on for example, you can create your own brand, you can set a new price but that will be after you source for a resourceful supplier.

Source for good and resourceful supplier

Through your feasibility studies on your niche, coming across a good and resourceful supplier is important because that will determine your success in drop shipping business and if bad, hmm it is catastrophe, so watch out.

Build an ecommerce website

Starting a drop shipping is not totally free, well the paid part of it is you building an ecommerce website comprising your product category and also to make it easier for your customer to make their order on your website in which you send to your supplier for fulfillment of their order.

I know you already thinking of backing out since you heard paid website, well you can skip that part by using various social media platform such as WhatsApp business, Instagram, Facebook pages, Twitter and the rest.

All these platforms offer means by which you can display your product to facilitate your customer order. You can also read on affiliate marketing for more understanding.

Promote your customer locality

In all business and beyond customer acquisition is paramount especially in drop shipping business, you always need to work on extension of your customer locality which can be actualize through running or boosting your business page on Facebook, Instagram and so on.

Through all these promotion your business page and product details reach various potential customer beyond your reach and most importantly beyond your location.

Make use of google analytics to focus on your customer acquisition plan 

Customer acquisition is different from customer retention, so if you want to retain your customer acquisition you can make use of google analytics on your ecommerce website to see the location from which your customers are from for promotion reference.

How profitable is drop shipping business?

Starting and managing a drop shipping business is highly profitable, its profitability depends on the type of products involve as well as the quantity needed to be to supplied.

For example if Danny order for  5 Luis Vuitton shoe at the rate of $20 each a drop shipper can get 1 Luis Vuitton shoe at the rate of $12-$15 from supplier which means $5 *5 =$25 profit on those Luis Vuitton shoes goes to the drop shipper.

Now imagine a drop shipper having like 10 of such order in a month i.e 10* $25=$250 in a month at minimum in which more orders could come in as well.

Its funny you are not even using your money and you are getting paid, how cool is that? Yeah, so cool.

How much do drop shippers make on average?

Deducing from the above analysis, if you want to know how much a drop shipper make on average actually the margin would be 5-15.5% looking at the current situation of people staying at home due to pandemic, online shopping rate is high. So if your revenue is $10000 monthly your net profit for that month is $500- $1550.

How to start a drop shipping business with no money

Starting a drop shipping business with no money sounds interesting, however it implies some hard work.

If you have read on affiliate marketing on our website you will have the different ideas on how you can market a product without having to stock it. Which means you can drop ship with no money. All you need to do is

  • find a niche or product category from any ecommerce store front such as Aliexpress, Amazon and so on
  • screenshot the product or download the image for marketing 
  • create a promotional page on various social media platforms such as Facebook, WhatsApp business (status updates), Instagram etc. 
  • Tell people about your business and your product 
  • Get customer to pay in advance for their product order  
  • Set a delivery date for their order as regard order fulfillment from your supplier
  • Once the goods is delivered everyon, your customer get their goods you get your return (profit) on money they paid.

How efficient is drop shipping business in year 2020?

If you are concern about how drop shipping business will be in this year 2020 because of covid-19 pandemic, then I will tell you not to worry, your business is safe in as much as your supplier can still deliver in short time.

Also, people shop more online these days due to stay at home order for their safety. Most ecommerce website store front still offers door-to-door services such as Jumia, Aliexpress and so on.

As a sales consultant for Jumia store front you can also contact us on whatsapp/phone +2348136592885, +2349066705680

Email- asimiyukayode@gmail.com

for any order to any location in Nigeria, will be delivered directly to you…

 

How to drop ship for free 

As you know shipping cost of goods is important, however not necessary in some case, where some goods can be shipped for free.

You can drop ship for free as regards your niche or product category as well as the condition of your suppliers terms or store front where you shop.

Some goods can be shipped freely without cost which is plus for drop shipper. To drop ship some goods for free all you need to do is 

  • Once you are in the store front, filter your product search to ‘free shipping’ as well as range of price
  • All your product category will be filter to free shipping and also have your price range
  • All goods on cart if purchased will be charged only on rate of goods bought and shipped freely.

Is drop shipping illegal

Thinking you are into bad or illegitimate business, well you are wrong. Drop shipping is a legal business, you pay tax whether direct or indirect on all your order so no back door deals in drop shipping.

However, drafting out a drop shipping Agreement Contract is advisable, should in case any form of dispute erupt the drop shipper can be fully indemnify.

After reading this you can read on poultry farming business on our page as well. Thank you so much for your undying audience, do have a wonderful life.

ARK

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