Best realistic dropshipping business to make money fast in 2020. There is no end to the number of debates trying to categorize 2020 either as a boon or curse for all the businesses around the world. While these debates remain in oscillation, all the people just want to earn money and get their livelihood back. The answer to this problem though not simple, but is generally the internet i.e. the online medium. It is the various online platforms which are proving the much needed solace to many who lost their jobs this year. Today, there are many ways in which a person can make money online and one such way is drop-shipping.
Before delving into a guide of dropshipping businesses to make money in 2020, let’s understand what dropshipping actually is and its various benefits.
What is Dropshipping?
Drop shipping is an order fulfilment method in which the retailer or the shop keeper does not keep goods in stock. Instead gets them delivered directly to the customers either from the manufacturer itself or through another retailer, or a wholesaler. This method of ecommerce can be very profitable if approached smartly. It is a great business idea to make fast money in 2020.
Advantages of Dropshipping Business
Though before starting one must ask themselves, ‘Why Dropshipping?’ Instead of answering and explaining, let’s look at the various benefits of Dropshipping:
- Low capital Investment: It is a really cheap business to start, if you want you can start as small as sharing. Promoting on your own personal social media pages and expand if and when ready. Most of these businesses therefore do not require large capital investment.
- Easy to start: In continuance to the above point, dropshipping isn’t a very difficult business to start. And has exponential scope of growth. It lets you be free of any worries of managing a warehouse, packing, shipping, handling the shipments, etc.
- Low overhead: Since, the business doesn’t include handling or managing the warehouse or shipments, the overhead cost automatically decreases. Even though the expenses will increase, they will still be much lower than traditional methods.
- Flexible: Dropshipping like most online businesses is very flexible in its nature. With internet connection it can easily be operated from anywhere no matter the time or place. The only important part is the communication with your customers and suppliers and you are good to go.
- Wide collection of products: Unlike traditional methods where you can only sell the products which you have in stock. This allows you to send multiple products as there is no stock. This increases the variety and therefore affects the customers.
- No commitment: Unlike the stock methods dropshipping is easier to test without incurring losses. Losses are prevented as there is no commitment as one doesn’t have any stock or inventory of any of the products that they are selling.
- Easier to manage: Dropshipping is compared to traditional ecommerce businesses. It is easier because the amount of work is less in comparison. When the sale in dropshipping increases, the work usually increases in terms of customer support and not in terms of shipping, packing, etc.
Now, you have so many reasons to choose dropshipping as a business opportunity in 2020.
Let’s move to the next step i.e. to know how to start dropshipping business and make money in 2020.
Without further ado, let’s delve right in!
Step by step guide to start a drop-shipping business in 2020
Step 1: Choose a niche
Even though this is just step one in the business, it is a very important one. It matters what you decide to sell as not every product has a large market or audience. That’s why it is advisable to choose a product/niche you feel passionate about. When a person feels strongly about their ideas, it is easier to work. As then it is not just about profit or business, but it is about passion and love. While keeping your interest by your side, there are other criteria which should be considered before choosing a dropshipping business ideas, such as the following:
- The product has low shipping cost so that customers are more attracted to it.
- The product should be appealing to the customers with disposal income.
- Choose a product which is being looked up by the buyers, actively. Use tools like Google’s keyword planner and trend.
- Choose a product which is a symbol of your own brand and not just ordinary products everywhere.
- Try to choose a product which is not available locally as to give buyers more reason to buy it online.
Step 2: Perform competition analysis
After deciding the product it becomes crucial to know your competitors. The businesses with whom you’ll be fighting for customers, this step if done correctly gives your business and product an edge over your competitors. They doing their thorough analysis gives you an understanding of their strategy. This strategy can then be used to formulate a counter strategy. Or a better one in order to attract more customers to your business.
There are many ways to analyse your competitors and they must be done to move ahead. One such way is simply entering the name of your product and researching the top searches on Google page. The first ten results will give you an idea about the competitions, their product, strategies, etc. in your locality. This same should be done on social media as well, since it is one of the fast growing platforms. Once you find these competitors, study them and find out their techniques. You can start by comparing them to each other and looking for things that work and things that don’t for their brand. Then later utilize it for your marketing.
Now, do not think just because competitions cause trouble they are bad for business. On the other hand competition for any product is actually a sign of demand for the product in the market making it a good business model.
Step 3: Find your Supplier
Choosing a supplier is very important as it determines the kind of product, delivering, service, and packing your buyers will be receiving from you. You and your supplier can be miles and miles apart and therefore your mode of communication becomes important. Choose a supplier who is compatible to you, your business and your ideas.
There should be proper communication between the two parties and a level of trust to be able to conduct this business. Your supplier should be able to understand you and should have a quick and accurate communication channel of delivery. One way to have the supplier which suits your business is to ask a lot of questions. These questions will help you understand them, their capabilities, strengths, weakness and the over functioning of their organisation.
After going through this process, make a list of 5-6 potential suppliers. Start talking business, seeing samples, customer support, communication compatibility etc.
Step 4: Build your Dropshipping website
Developing a website for your dropshipping business is a step towards attracting potential customers to your business. A website store is a place from where people get to know about your products. You can either use an ecommerce platform such as Shopify or hire a professional web designer depending upon your budget and needs.
While making the website be very sure of choosing an appropriate domain name as they are essential to your brand name. One must always try to get a .com domain name. Try and not use your very specific domain name rather use umbrella terms. This way even if in future, you decide to expand your business you won’t have to change your domain name. These website stores take your business to the next level if used properly as they sometimes act as your primary consumer base.
Step 5: Create customer acquisition plan
After all the steps from choosing a product to creating a store, now comes the actual selling part which will kick-start your business. This step consists of strategies, plans, and campaigns etc. This ensure that buyers want to purchase from you, basically marketing your dropshipping business plan. There are several ways to attract potential buyers, here are some of them:
- Facebook advertising is one of the most effective one due to Facebook’s large user base.
- Retargeting Ads are used when you are low on budget but still have a plenty of traffic on your store.
- Influencer marketing is one of the most common and effective marketing techniques today, all thanks to the various social media platforms.
- Email marketing is great for customer acquisition especially in long term bases as it generates interests in the product.
Step 6: Optimize
Now that all the work of setting up your business is done. It is time for analysing all that you have done. This means tracking all the data available from Google Analytics traffic, Facebook conversion pixel data and other customer acquisition channels used by your business. For example this lets you see the origin of a buyer or a visitor, from when they got to know about the website, whether or not they bought anything, etc.
Basically telling you which strategies proved to be more successful than others. Once you have identified and analysed this data, only the task of optimizing is left. So you start optimizing, because this is not a onetime thing and needs to be done regularly in order to keep with the advancements and trends.
These steps are simple to follow and with a little bit of help you’ll be able to kick-start your dropshipping business easily. However, before you start it is also important to know the shortcomings of dropshipping business as it will prepare you for the future.
Disadvantages of Dropshipping Business
No business comes without its own share of drawbacks and dropshipping is no different. Here is a list of problems that one might face in a dropshipping business:
- Competition: Ever since dropshipping became popular it has attracted large crowds which one might have to face while selling their products.
- Stock Shortages: Drop shippers often face this problem at a large scale and leave you in a situation with placing orders but no means to fulfil them.
- Customer Service Issues: This is one of the most faced issues in dropshipping and it causes tons of inconvenience to the buyers hence the business. This problem becomes more frustrating as it is not completely in your hands due to dropshipping.
- Difficulty in processing orders: Each supplier has its own pre requisites for delivering the package which can make this very tedious and long.
- Higher Fulfilment Costs: Dropshipping makes you pay the real cost of stocking, picking, packing, and shipping along with a large mark-up. Which ultimately means that costs rise as sales grow.
Now we are again back at the original question, is Dropshipping Business a good Option in 2020? Well, yes. It is an amazing option but like the many other business opportunities it also requires hard work, knowledge and a little bit of patience.
Now you have all the information you need to start the Dropshipping business.
So, what’s all the waiting for? Take the first step today!