The Complete Dropshipping Guide for Entrepreneurs

In this ultimate dropshipping guide for entrepreneurs, I will guide you on how to start, run and grow a dropshipping business. We will discuss the topics under these headings.

Starting as an entrepreneur is not a difficult task, the hard part comes when you have to stay in the run. If you are looking for opportunities to start your own business, dropshipping is a bright prospect. There are many success stories that will motivate you to step into the evolving colosseum of dropshipping where you attract customers.

So without any further ado, let's start with our dropshipping guide.

What is Dropshipping and How Does it Work?

Dropshipping is a business venture that follows an age-old traditional pattern of sale - customer, retailer, and supplier. Dive into this article to find out everything there is to know about dropshipping.

what is dropshipping

Dropshipping is a business process where a retailer provides goods to customers directly from the suppliers. This involves a third-party purchase where the customer only deals with the retailer and backstage is the retailer's responsibility.

In dropshipping, the retailer, that is you, will take orders from the customer, forward it to the supplier who in turn will deliver that good to the customer. You will act as the middleman and if history is what you believe in then the middleman earns a lot with little work.

Dropshipping 101

I will break it down for you using the fewest words possible. The business model works this way:

  • Company X, like Amazon or Walmart, stocks the items and you have your online store.
  • When a sale is made in your store, company X sends those items directly to your customers.
  • Usually, when you have an online store, you need to purchase your products and items. You then need to send individual products to your customers. You need to buy stock in advance.
  • Dropshipping lets you skip this step.
  • When a customer buys an item from you, you need to contact the drop shipping company (otherwise known as a dropshipper) and purchase the item from them. They will then send this item directly to your customer. This removes the risk of buying and selling online.

Before we dig deeper into the topic, make sure to pay attention to these points for they are the gems of dropshipping. You don’t need to have a degree to do this, you don’t need to give it a whole day to succeed, and lastly, you are not required to have a concrete shop.

Why Choose Dropshipping?

Dropshipping is an exciting and profitable venture that comes with its own pros and cons. If you are looking for a side income source and your employment agreement doesn’t bar you from making an effort in that area then you should think about this option.

Dropshipping is a non-tiring act, you will only have to work a couple of hours and you can easily squeeze those into your regular schedule. At first, you might not see the benefits reaping well but as you become confident with the system, you will see better results.

Dropshipping doesn’t require you to hold a business degree. Whether in the long run or even if you try it for a short while, you are not required to possess any qualifications.

You can do the dropshipping work alone, as a single individual or you can buddy up with a small group to do it. Keep reading this dropshipping guide to see how you can do it.

Remember that dropshipping is totally reliant on eCommerce, which has now been springing up in almost all sectors. Dropshipping is just one step in that field and don’t let the benefits of a blooming opportunity go to waste.

You can set up an online store with the help of web-hosting sites or platforms like WordPress, Shopify and Amazon. You don’t even necessarily have to own a store. You can either display goods of various kinds or stick to one and then just pick the supplier of that good.

  • Dropshipping is simple to start with. You don’t have to stock goods therefore you don’t need to have an inventory and pay for the warehouse. You can work alone and hence there will be no wages to pay as well. You will only need a laptop and an internet connection.
  • You require very little capital in the initial stages to start dropshipping. As mentioned in the first point, there are no costs to be incurred. Even if you scale up, the cost of production does not shoot up like a rocket.
  • You don’t require an established store on the ground and this provides you feasibility with location and rent. With an online store, you even get the freedom to have many products.

Thus, in total the dropshipping business is easy to manage and gives the retailer every flexibility.

Coin View of Dropshipping

The next step in our dropshipping guide is to understand how things work for both sides, customers and you.

Like a coin, dropshipping too has two sides to it.

One, the simple side that the customer sees, and the other, the retailer sees.

Prior to you making any decision on whether dropshipping is your game or not, it is best to understand the process.

The Customer’s View:

When you set up a store, whether online or offline, the most important thing will be to have a website. For you to direct traffic to your business, you will need a user-friendly website. You can either do it yourself or seek help from the readily available tools online.

  1. The customers will look for the stores online that offer the product they want to buy. After going through many sites, they will land on a final one.
  2. They will place the order by following the instructions given on the site.
  3. The customer receives an email regarding the confirmation of the payment made. The customer then receives emails about the product being inbound and out for delivery.
  4. The process ends as soon as the customer receives the product at their doorstep.

As mentioned above, the whole process was as simple and similar to the common purchase you make online.

The Retailer’s View:

The retailer’s view can be subcategorized into two parts, the first being the normal steps the retailer witnesses like the customer. The second being the process the retailer needs to start and keep the dropshipping moving forward.

  1. The customer lands on your retailer's website and places an order. Both the customer and the retailer receive email confirmations.
  2. The retailer will then send a notification to the supplier regarding the product - quantity, address it needs to be delivered to, the time, etc.

The retailer will always charge a price that will be a little higher than what the supplier is charging from the retailer. This will be the profit margin of the retailer.

  1. The supplier will pack the product and send it out for delivery to the customer. The packaging and the bill will contain the stamps and details of the retailer and not the supplier.
  2. The customer will receive the product.

The retailer initiates a smooth buying and purchasing of goods and avoids the confusion that might come with the direct dealing with the supplier.

How Does Dropshipping Work?

To be a successful dropshipper, follow these steps and make your experience count.

  • Select a particular niche. While you can have multiple goods at your store as well, sticking to one product will help you manage well in the beginning. Pick a niche after analyzing the profits you can earn, the shipping costs, demand for it, and its availability.
  • Look for the competition that is there in that particular niche. You might be tilted towards a less competitive product but that is a mistake. Go for the product that has competition for it signifies that the product is in demand. Keep tabs on how the competition offers services.
  • Your next research needs to be about the supplier. Make sure to collaborate with an honest supplier for the customer will hold you responsible if there is any problem with the product. A just supplier is your ladder to success.
  • Lastly, the website is the key. Make an efficient website that is fast and mobile-optimized. Work hard on developing a good website and then plan your calendar. Plan your strategy to acquire customers and campaigns to draw attention to your site. Implement the plans and check the targets and results to customize it as per the needs.

Yes, Dropshipping is for you!

Have faith. If you are giving your 100 percent, dropshipping is for you.

You are now ready to run on this path and make it big. You can either do dropshipping for a part-time job or make it your full-time employment. That is your decision. Perhaps you can start with a small-scale business and then head towards the big picture.

As a person in the supply chain of dropshipping, you might encounter troubles like problems in shipping, customer service, low margins at first, and not being able to track and customize products.

Some of these cons are short-lived and wash off as you progress and others can be dealt with the experience you gain. You can develop your own brand as well and highlight everything as some negative aspects.

Dropshipping has disadvantages that are eventually overcome, so you need to take a pen in your hand and plan. A clear plan is how you will win this race. Don't worry, I am here to help with this.

I am still writing this piece along with my editorial team but for now here are some great tips to help you start. Use these inputs to create your own plan and start following your instincts.

Use Video Marketing to Grow Your Dropshipping Business

Video marketing is a very useful method to help out any business, including dropshipping business.

One of the biggest advantages of video marketing is that it facilitates better customer service and product awareness through body and facial expressions that are helpful in helping the customers and viewers understand the right meaning of your message in ways that written words cannot. Moreover, business promotional videos can easily be created as and when required and sharing videos through social networking and business networking sites is extremely easy and rewarding.

If that was not all, this form of marketing can be used for creating and optimizing a purchase funnel for products and services offered by the business along with engaging more customers and building brand awareness in an affordable manner. Moreover, it can also be used for generating more leads and directly informing existing and potential customers about business aspects, products, and services to improve website traffic, sales, profits, SEO rankings, website links, and return on investments.

We had our own bits of experience and found out these 3 of the best ways to use video marketing to grow your dropshipping business.

dropshipping business photos

But before I skip to the list, one of the big questions that always comes up is what kind of videos should I be producing? What kind of videos should I really spend my time and energy on?

If you, as the owner of a small or big business, want to improve business communication to create strong relationships and promote sales, video marketing can be helpful to promote the prospects of your business in limitless ways.

I'm not going to talk today about how to produce those videos, there's a bunch of different articles out there, including one of our own, you could really just do things on your own, if you've got a team use your team otherwise if you've got a cell phone just use that and record videos that way.

What we're talking about today is more about the content and the strategy behind it. What kind of content? What kind of videos should you create and why?  I've got 3 types of videos to talk about.

Introduction video for your dropshipping business

So the first video you can create, and this is really a great starting point  is just an introduction to your business. Now usually these videos are tied very closely to your mission statement.

The point of these videos is not to talk about your features, talk about your services, or your products or things like that, that can all come later, what this is really for is:

  • connecting with your customer
  • giving them an idea of who you are
  • what kind of experience are they going to have if they work with you?
  • how are they going to feel afterwards?
  • how are you going to treat them?
  • how do they feel about you and your business before they've even decided to do business with you and to work with you?

So this kind of video is just that introduction. It's kind of like your elevator pitch, it's like the shaking hands and kissing babies of videos, right?

All you're trying to do here is showcase who you are, the heart of your business, your mission, and why it's in the customer's best interest to work with you.  

Commercial/promotional video

Now the second video is explaining your offer. And this is honestly probably one of the more common types of videos that you find. 

This is what you'd consider to be more of a commercial, a commercial type, you're expressing, and showcasing the different features and products the services that you have, this is where you're translating what you have into what the customer needs, and what are the next steps to get it, right? If you’re in the dropshipping niche, a common video title would look something like this: “How to find out what shopify theme a website is using?”

If you've ever seen a commercial, this is what it is. It's really about trying to connect the features and the benefits and the advantages of whatever product or service that you are selling to your customer and what they're trying to achieve. 

Now you can go really high production with this, or you can go low production with just a cell phone kind of showcasing what your product is or your service.  

A lot of times you can use these videos on social media, this can be a really behind-the-scenes kind of video. If you're a landscaper maybe it's the behind-the-scenes work that's being done, and then showcasing what it looks like afterwards. You're showing your product and your features, and showing the customer what they can expect.  

Customer profile

Number three is the customer profile. You might also call this a testimonial video, or a customer review or something like that.

At SaleSource one of the things that we really love to do is tell our customers stories and their stories are ingrained in the story of SaleSource (leading dropship spy tool) also.

We're a small business, we work with small businesses, we're passionate about small businesses. So for us it makes sense to tell the story of the small businesses that we work with.

For you this may be more of a customer side yeah, B2C, maybe you don't work a lot with businesses, maybe it's with actual consumers or customers or something like that, it really doesn't change the theory behind the video, and the strategy that you're going to employ.

What you're doing here is telling your customer's story, and allowing that video to showcase what another customer, a new customer or potential customer might also experience. You're tugging at the heartstrings a little bit,  you're having a conversation, you're showcasing, what was the experience of somebody just like you?

Someone just like you with the same wants and desires and same goals and goals for working with us as a business, by showcasing that you're able to connect with a potential customer emotionally by showing them the true experience that another customer had before them.

Everybody wants to walk a path that's a little bit easier when someone else has already walked it. You never want to be a customer, you never want to be that first penguin off the iceberg into the water because there might be a whale down there, something ready to eat you. You never want to be the first lemming off the cliff.  

So by using these videos you can show that other people have been here before you, and other people had a great experience, and you can tap into that herd mentality of if someone else similar to me had this kind of experience,  I can expect to have an experience similar to that. It's a great way to showcase your business, showcase your product, showcase your customers, and earn some new ones.

I really hope you liked this dropshipping guide. Let me know if you have any questions or concerns via comments.

About Gaurav Tiwari

Gaurav Tiwari is a blogger, influencer and designer with expertise in brand regeneration and growth hacking. He is the co-founder of Gatilab, a successful digital agency focused on content and design.