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How Dropshipping Works

In the simplest terms, the dropshipping process is a cycle of buying and selling goods. But the difference between the usual reselling is the absence of stocks.

Dropshipping process as it is

A customer makes a purchase in your store. You accept payment for the product for your retail price and shipping costs. Then you send the order to your supplier and pay for it. The seller delivers the item directly to your customer.

Now the cycle is over: the supplier takes his money, the client gets the product, and you take the money from the profit margin.

Let’s look at the process in more details. To start selling things, you need to have some platform to place your offer. So, initially dropshipping begins with making a store.

Main steps to begin dropshipping

Market analysis and choosing niche

Every business should begin with careful market analysis. To find promising niche, you’ll have to study the latest statistics and use online analytical tools.

Search of suppliers

Reliable suppliers are a must for any dropshipper. Study the seller’s information and customers’ feedback to find really trustworthy suppliers.

Launch of an online store

If you already have your own website, a blog or an account in Facebook, Instagram or other social networks, you can offer your products there. Most dropshippers prefer to make a specialized website. Online stores look more presentable and can attract lots of clients.

Promotion

Online promotion is necessary to get sales. Try to use different marketing channels: paid ads, SMM, SEO, etc.

Why it works

Dropshipping works because it is beneficial for all parts of the process.

Dropshippers can run their businesses without large investment. They can work from any place of the world – they need only Internet to stay in. They don’t have to organize warehouses, like in traditional retail trade. It minimises risk of excessive stock or lack of goods. They are not limited in the increase the range of offered products. They are free in questions of promotion. All ideas and products can be tested and evaluated very quickly. In other words, dropshipping makes them fully independent.

Customers greatly save their time and effort when looking for necessary products in the conditions of the overstocked market. They can do their shopping comfortably and enjoy overall support in the process. Besides, dropshipping webstores usually have easy and user-friendly navigation.

Suppliers can get huge sales volume and don’t have to spend their money for additional promotion.

What Is Dropshipping

Dropshipping is a business model of sales without stocks. It is also known as “direct fulfillment” or “pack and ship”.

The dropshipping retailer offers some products on an online platform (usually in an online store, your own website or blog, in a social network etc.). The posted goods are not his own – he uses the supplier’s pictures and product descriptions.

The retailer collects orders from customers and transfers them to the actual manufacturer, wholesaler or another retail supplier. In other words, he buys the items from a third party that ships them directly to the customers.

In this model dropshipper doesn’t keep the products in stocks. He never handles and even sees the product. He focuses only on marketing the goods.

The greatest advantage of dropshipping over the standard retail model is that the seller doesn’t stock or own inventory. All goods are stocked at a third party – a wholesaler or manufacturer.

Another great benefit is zero cost of the products’ purchase. It means that a dropshipper spends no money on the supply of goods. He pays for all products with the customers’ money.

In this scheme the source of your income is the margin – the difference between the initial and final prices. The price in your webstore is higher than the supplier’s price. This is why dropshipping can be very profitable

How to promote dropshipping store

Sometimes it happens that talented and smart people live in the shadow and nobody knows about the superpowers except perhaps their mums. At the same time unremarkable people can be the brightest stars and fill up the biggest stadiums. Why does it happen? Are people blind? The answer resides in the fact that some people promote themselves and others do not. The same story is with dropshipping stores. If you will promote your store, you will get traffic and clients. In other cases your dropshipping business can fail.

What to dropship

So you have found the nicest niche for your dropshipping store. It’s high time to start hunting for the best products to sell. Before digging in a great variety of dropshipping products, read this step-by-step guide and take into account our advice. 

5 steps to choose the right products for dropshipping

STEP 1: Examine products’ popularity

The first step is always a doozy, but you need to take it. Ask yourself why this product is good to sell. Is it trendy or something people cannot live without? What are the reasons to buy it? If you don’t know exactly, you should go on Google Trends. This free tool allows you to find out the hottest search trends and compare the popularity of selected products. It is easy to navigate and has a large number of different features.   

By the way, Google trends allows to filter the search results. You can use the Seasonality filter to analyze the product demand. Some goods have a seasonal nature and are sold well during a particular period of time. For example, Christmas decorations will be sold like hot cakes in winter, not in summer. So if you want to sell the seasonal things, you should be also ready for dead season.   

STEP 2: Choose unique products

Nobody will order a product and be waiting for it during 45 days, if the same one can be bought in the nearest supermarket. The rarer the product, the high the customers’ interest to it. A good product helps you stand out in a crowd and create a memorable store identify.    

STEP 3: Check the prices

Follow the golden rule: the lower is the price, the higher is my potential profit. So check and compare as many as possible retail and supplier prices to find the best products for dropshipping.

STEP 4: Eliminate risky categories

Some categories are better to avoid, because they will plague you and your customers. Let’s look at the “stay away” dropshipping products:

–          Bladed or sharply pointed articles;

–          Fragile items;

–          Spying devices;

–          Chemicals and toxic agents;

–          Fake luxury goods.

It isn’t necessary to explain why the categories are forbidden to any kind of business. If you don’t want to get in trouble with the law, stay away from these products.

STEP 5: Contact suppliers

A good seller must have:

–          good or excellent reputation;

–          Mainly positive reviews;

–          Lots of orders;

–          Informative descriptions;

–          High-quality images.

In other cases, you will offer your customers to buy a pig in a bag.

You can follow all these steps while checking the potential of different dropshipping niches in this free test.It can be useful if you have several variations of niches and don’t know which one to choose for your future dropshipping store.

What to dropship in 2018

Every year (season?) people make lists of the most popular products to dropship. We’ve selected 5 items that are worth paying attention in 2018.

1)      Wireless devices

Almost everything is becoming wireless these days. Wireless technology has been one of the fastest growing areas of science in recent years. The number of wireless devices is increasing massively. Healthcare devices, smartphone accessories and gadgets for smart homes are the hottest-selling products now.  

2)      Sportswear

Sport is life! A coach-potato lifestyle is a thing of the past. People want to be fit and healthy, so they buy sportswear and work out. Comfortable and stylish T-shirts and pants are a great choice for dropshipping business in 2018.

3)      Watches

Every year people buy around 1.2 billion watches. Smartwatches, men’s and women’s watches are selling very well.

4)      Antistress toys

How often do people feel stress? According to research, every day. That’s why people need something to bring their nervous system back into balance. Antistress toys are a good solution.

5)      Art materials

Lots of people have hobbies and invest much money in them. The global handycrafts market is increasing rapidly and expected to show growing at a tremendous rate of 12 % during 2015-2019.

Dropshipping Niche

If you are going to sell online, the first question should be how to find the best dropshipping niche. In other words, you should clearly understand what type of goods you want to sell.

Dropshipping niche is a set of products which have similar features and usually one general idea. Besides that, they are unique, hard to find, and interesting to the buyers. Some of them are not recommended by the experts to try out, others bring profits and have a high potential. To be sure, searching for the “perfect” niche is irrational. Every group of products has its own pros and cons and only you can decide if it ticks all the boxes.

However, if you will be well informed about the main strengths and weaknesses, you can avoid the biggest mistakes while choosing your dropshipping niche.

Brainstorm dropshipping ideas

The first thing you should start with is looking for a great dropshipping idea. This affects all your future success. Take a piece of paper and a pen and write down all possible ideas coming into your mind. If you have some difficulties with it, you can focus on the following things:

1)     People’s passions and problems

Look around and double down on what people are talking about. You can look up forums, social nets and websites to see what kind of problems people are discussing or what they are grumbling at. Your aim is to identify holes and gaps in the market and to fill them. Make a list of the most popular troubles and try to find problem-solving products.  

Besides that, people’s passions can become a great source of inspiration to you. People usually tend to spend tons of money on their hobbies and you can profit from it. Think about what people like doing in their free time or ask your friends what hobbies they have. The answers will give you some ideas.

2)     Pop culture

It’s not a secret that some products are more popular than others. They are the hottest topics of the day and usually discussed by lots of people. Concentrate on the things that are extremely attractive to people at the moment and seek for your own business idea. It will be far easier if you are a big fan of something.

3)     Random browsing

Sometimes it makes sense to explore as many online stores as possible to find the unique product category. For example, the biggest platforms like AliExpress or Amazon make giant lists of bestselling or highly promoted products. You may be surprised that people are interested in wares you have never heard before. For example, one of the most popular goods last years was a selfie spoon that lets people take photos while eating.

Consideration of niche ideas

Probably, you have found hundreds of dropshipping ideas. The next step is choosing the best from the wide range of them. Take into account the following aspects:  

1)     Target group

Who is your potential client? He or she? Age? Marital status? Country? You should clearly understand what your target group is. Is it numerous? Are your clients solvent? Imagine your future customers and try to think about their shopping preferences. The better you know your customers’ intents and expectations, the more successful you organize your business.

2)     Quality

There are many factors influencing the customer’s choice, but one of the most critical is product’s quality. If you want to get repeat customers, you should offer them high quality goods. Satisfied clients recommend your store to their family and friends and you get more profit. Low quality products will be your big problem. If you know that all the suppliers in this dropshipping niche can offer you only poor quality wares, it’s time to scratch it from the list.   

3)     Delivery time

People are impatient, especially if they want to get an ultrafashionable dress or a new digital device. If your delivery time will be extremely long, you can easy lose your customers. The best solution is to find suppliers that can offer different shipping options.

4)     Seasonality

Some kinds of niches are affected by seasonality. It means in winter people often buy snowboards and mittens and in summer they prefer sunglasses and shorts. If your dropshipping niche depends on the season you will sell the products during the particular period of time.   

5)     Price

All products are usually in different price brackets. What kinds of wares do you want to sell – low end, mid-range or high end? Maybe all of them? You need to set a price point and focus on it. Besides that, keep in mind, that the price is fully connected with a target group. Some people can well afford to buy 3 pairs of expensive training shoes at one time, others are aimed at low-end products or buy something only for the most compelling reasons. If you guess that your target group consists of 13-year-old girls getting pocket money from their parents you should understand that the price is of a great importance for them.

Competitor analysis

Perhaps your niche is chosen and now it’s high time to analyze your potential business rivals and gain useful information.

First, find the best stores in your niche and browse the websites. Try to see your competitors’ stores through the customer’s eyes and write down all advantages and disadvantages you’ve found out. You can also make a comparative table that will help you analyze different dropshipping stores. Don’t avoid reading the reviews or comments on the websites, because they pretty well illustrate the level of customer satisfaction.   

Secondly, pay attention to SEO tools. With their help, you can rate how strong your competitors’ websites are or which tricks they use to get more traffic to the store. The most common tools are Google Keyword Planner, SEOquake, SEMrush. Using all of them, you can see which keywords are the most profitable and what content is superb.          

And thirdly, remember, your competitors are not your archenemies. It’s a tough thing, but stay off writing negative feedbacks or fake stories on their websites. Instead of this, rate your chances of success and focus on your own webstore development.  

The best and the worst niches

As it has been mentioned above, nothing is perfect and every niche has some advantages and disadvantages. However, from year to year many people publish different lists of the best and the worst dropshipping niches to attract attention to particular products. Despite of differences, all these lists have common features. Let’s look at them.     

Features of the most profitable dropshipping niches:

–        Let you make much money;

–        Have high profit margins;

–        Require low customer support;

–        Are greatly demanded by the audience.

Features of the worst dropshipping niches:

–        Have no sales and many problems;

–        Need high amount of customer service;

–        Have small margins;

–        Are not popular among the customers.

As you see, the most profitable niches stand in contrast to the worst niches. It’s quite simple – the first will bring you time and money, the second will take them.

After starting the business, you cannot know exactly if it is doing well or not, but if you see the features of the worst dropshipping niches, it’s time to change something.

To sum up, the dropshipping niche selection is a complicated process with many aspects to consider. All your next steps will depend on it.  If you will act responsibly, you can avoid the biggest mistakes that the majority of first-time entrepreneurs make.

We hope that after following our short guide, you will get a clearer idea about the process of a niche evaluation and the parameters that should be considered – it will surely help you make the right choice!

    

Dropshipping software

So far as dropshipping business will be run, so far will be created new software for it. Today there are many programs to make the entrepreneur’s life easier and the dropshipping business more profitable. Among the large variety of the dropshipping apps, we have picked out the best and have done a short review of them.

1) Oberlo

Oberlo is a popular dropshipping application for the ecommerce platform Shopify that works solely on it. The app has a user-friendly interface and is available only in English.

Oberlo allows you import products directly from AliExpress or Oberlo Marketplace at the click of a button. It automatically updates prices, controls out-of-stock products and has an integrated order tracking.

For using Oberlo your geographical location is irrelevant, because the app is available in any country. You need only a computer and an Internet connection to start and do your dropshipping business. Besides that, Oberlo provides resources such as blogs and guides to help new store owners run their business with ease.

The program is shareware. Its developers offer 3 pricing plans:

–        Starter

–        Basic

–        Pro

Starter plan

The Starter Plan is free, but some functions are limited – you can receive only 50 orders per month and have no more than 500 products in the shop.  Besides that, you cannot monitor parcel tracking status or check how your orders are being fulfilled. All other options are available. This plan is perfect for those who are just starting out.

Basic plan

It costs about $30 per month. This plan is designed for people who get about 500 orders on a regular basis. The products limit is 10000. The Basic plan has all available features except “multiple users”. It means you can manage your store only in-house without outsourcing.

Pro plan

Pro plan offers the best feature package without any order limits, but it will set you back about $80 per month. It is the best option for the flourishing dropshipping business.  

2)     AliDropship

AliDropship plugin runs on WordPress and transforms your website into an online store. The basic idea is the same – it imports unlimited number of products from AliExpress straight to your website. The plugin has a huge set of features for the successful running of your dropshipping business. They can be divided into 4 groups:

  • automation
  • customization
  • marketing
  • managing

Automation

Process automation is a great way to save entrepreneur’s time and money. If in previous years many things were carried out in manual way, nowadays they are done automatically and don’t need human participation.

AliDropship plugin allows to forget about manual ordering of products and checking their tracking status. The plugin updates information about the orders and sends email notifications to every client automatically. Besides that, it monitors stock changes and hides out-of-stock items.

Customization

AliDropship plugin comes with knockout and easy-to-customize templates that are improved and updated frequently. You can create all necessary pages, change theme’s colors and pictures, add your own website logo or some social media links. Built-in image editor allows to modify product images before importing them into the store. All changes can be made directly from WordPress admin panel.

Marketing

The Plugin provides some services that can create and keep customers. It gathers emails of the existing and potential clients (people who left their contacts on your website) and forms opt-in lists that allow to attract more customers to the webstore.

The option of importing reviews directly from AliExpress increases the sales of products and helps win loyalty from the customers. For this purposes AliDropship plugin also allows to create discount coupons for anything in the store.

What’s more, all product pages can be optimized with meta tags, titles, descriptions and keywords.    

Managing

The biggest advantage is getting life-long free updates and full support. New options and features are keeping available during the whole lifetime of your online store. Apart from that, AliDropship plugin supports the most popular online payment systems like Paypal, 2CO, Stripe and so on.  

More importantly, for each purchase you can receive 12% cashback as an additional source of income.

AliDropship plugin costs about $90, but it is a one-time payment. There are no additional fees. You may buy the plugin and set it up to your WordPress website on your own OR order a custom store.

A ready custom store is created by a professional team that takes care of everything. Your personal manager will solve all emerging problems to save your time and efforts.

3)     ShopMaster

This tool is useful for everyone who wants to import products from the wide range of websites. The number of suppliers is more than 32 now, among them are AliExpress, Alibaba, Amazon, eBay and Walmart.

The main options:

  • Product sourcing;
  • Bulk import of products;
  • Automatic Order Fulfillment;
  • Daily inventory and price monitor;
  • Sales and orders statistic;
  • Auto-translation from Chinese into English;
  • Different pricing plans.

To run dropshipping business with ShopMaster you need to select one of four available pricing plans:

  • Starter
  • Basic
  • Business
  • Enterprise

Detailed description of every plan you can find on the official ShopMaster website. The Starter plan is free, but for others you need to pay from $20 to $80 per month. The more expensive the plan the more options it offers. Starter and Basic plans are created for the beginners at dropshipping, Business and Enterprise plans are targeted to the big dropshipping stores.

As you see, all dropshipping apps have very similar features. They can import a large number of products, monitor prices or stocks and give daily reports. To choose the best dropshipping software you need to understand the purposes you pursue and to answer the following questions:

  • How much money can I spend to my dropshipping business?
  • What sites do I want to use as suppliers?
  • How many orders do I consider to have every month?
  • What options do I really need?

Honest answers will help you to make the right decision and not to get lost among the dropshipping software.

 

Dropshipping directory

If you do not have a clue where to find suppliers, you can try to consult dropshipping directories.

A dropshipping directory is a database of wholesalers. It is composed as a catalog where wholesale suppliers are grouped by market, category or niche.

The structure of directory allows to search by product name or type, by its distributor or manufacturer.

What information can you find in dropshipping directories?

Dropshipping directories are really a valuable source of information. Here you can get:

  • list of wholesalers;
  • contact details;
  • branches;
  • product names;
  • financial position;
  • sales value;
  • manufacturers;
  • materials and components, etc.

To ensure that the suppliers are legitimate, most directories have special verification. So, they can guarantee that the wholesalers listed in their databases are genuine.

Usually directories provide paid access to the catalogs. To get the access, you must charge a fee every month or year. Sometimes you pay only once and get unlimited access. Payments may vary from $60 to $299. There are also some directories with free access, but they are rare.

Most reputable and popular dropship directories

  • SaleHoo
  • Worldwide Brands
  • Wholesale Central
  • Doba
  • A Better Lemonade Stand
  • Drop Ship Access
  • The Watchman Advisors
  • Free Drop Shipping List
  • Top Ten Wholesale
  • Is it worth using directories?

You can get the following benefits

Safety
If the directory is large, well-known and reputable, it can be a good protection against cheaters. So, it is a kind of insurance that guarantees legitimate and high-quality wholesalers presented in their database.

      Wide choice
Large directories have information about hundreds and even thousands of suppliers. You can find millions of various products here.

      Source of inspiration
Dropshipping directories are good tool for brainstorming. If you haven’t selected your niche yet, they are great to find plenty of ideas for various niches and products.

      Easy search
As a rule, the information in the directories is so well-structured that you can quickly and easily find whatever you need. Directories really simplify the task of looking up lots of suppliers at once.

But you should be ready to some pitfalls:

      Bad pricing
Many suppliers mentioned in the directories are retailers selling to the public at “wholesale” prices, but in practice their pricing is far from real wholesale.

      Poor data
Smaller directories update data not so often, this is why they may provide outdated information.

      Paid access
If you have already selected a niche, launched your store and found suppliers, what’s the use of unlimited access to the database? Maybe you’d better spend your money on something more useful?

      Limited options
Unfortunately, there are few wholesalers that are ready to start working with a small online store. So, if you are a newcomer in dropshipping and who don’t plan a large number of orders at the start, you may face difficulties in finding a supplier.

      Lack of reliability
Some minor directories don’t have a proper verification procedure. In such case you risk to meet a tricky partner.

As far as you can see, sometimes it may be useful to consult a dropshipping directory. But nowadays there are many other ways to find a reputable supplier – free, quick and easy.