Want to start your business with a limited budget? Dropshipping is your answer. It is an extremely popular business model for new entrepreneurs, especially millennials, as it only requires internet marketing skills and little to no investment plan. You don’t need to stock or handle the items you are selling; it’s possible to start a dropshipping business with limited funds and products in hand.
Here are the five steps to start dropshipping today.
1. Choose Your Online Platform
Since you will be running your dropshipping business online, you must choose the right platform. The question is, should you have your own website, or should you instead go for an eCommerce platform?
Building your own website can allow for maximum customization, but it will also require more effort on your part since you have to specify exactly how it will be made. Also, website design does not come cheap.
To get started quickly and save costs, you can go for popular eCommerce platforms like BigCommerce, Shopify, Wix, WooCommerce, WordPress, etc. Do your research to find out the costs as well as the features that you will be getting in return for your investment. You can select basic plans that are invariably cheap and provide a depth of features that are good enough for new dropshipping businesses.
2. Decide and Register Your Dropshipping Business Name
Since your business will be known by its name, make sure that you decide carefully. This name will become your identity, so you want to make sure that you select one that will be perfect for your brand.
It should appeal to your target audience and be relevant to the niche you will be trading in.
When deciding on your business name, you may also want to pay attention to SEO since this will help interested persons find your brand online more easily.
3. Get Your EIN
You will need an EIN to fulfill a key legal obligation for operating an online business. You should visit the IRS website and follow the steps mentioned.
Having an EIN also shows that you are a legitimate dropshipping business, and it will thus help to build trust with visitors.
4. Get a Business License and Permit
You will need a business license to operate in your state. Take care of the business license and permit so that you can trade online without getting in trouble with the law.
Getting all these permits and licenses no doubt feels like a hassle. However, you can display them on your website to show that you are a legitimate business and hence build confidence in your customers.
5. Find Your Niche
You may have heard it many times already. Do something you love. However, you will also have to look into other factors instead of just jumping into something that you like. You will have to size up the competition and assess the profit-making potential of your niche to ensure profitability for your dropshipping business.
But what if you find a niche that looks profitable but is not something that you are truly passionate about? You should be careful before you decide to jump in just for the money. Make sure that you investigate the niche and gain basic knowledge. If you find that it does not motivate you after a week or two of research, then it may not be prudent to work on this niche.
A key step is to search for niches that are trending.
You can use Google Trends since it is a valuable yet free tool to get insights into what users want. You may also want to search Google for blog posts that tell you about trending niches. However, you should be careful and do your research. Don’t believe any claim without confirming it. If you are reading blogs to get an idea of good niches, check it on Google trends to confirm that it is indeed worth it.
Choosing your niche is critical since you can put in as much work as you can, but if you end up in the wrong niche, you are unlikely to get good results.
When looking around on Google trends, you should study different aspects of niches that interest you.
For example, check out how steady the demand is. It is better not to go for a niche where demand is fluctuating. A niche that has steady and high demand is ideal. For example, if you are targeting the pet niche, you are in luck, for Americans love their pets and demand for this niche is not going down any time soon.
What is the general trend of the niche? There will no doubt be drops in demand at certain points in time. However, the overall trend should be positive over the long term. SO you should choose products for which the demand is not just steady but increasing as well.
Also, be sure to check out states that have the highest demand for your niche. You may want to think of targeting these regions to build rapport with them, appeal to them, and thus induce them to buy your products. Pay attention to their customs and mindset and compose content accordingly. You will want to target users hailing from these regions to maximize the conversion rate on the social media front.
6. Find the Right Items to Sell On Your Dropshipping Site
You can visit eCommerce giants like eBay, Pinterest, Etsy, and Amazon to get an idea of products that are selling fast. For example, on Amazon, you can see “Most Wished For in Pet Supplies” to know what people desire in the pet niche if this is what you chose for your dropshipping business.
However, you will not want to limit your marketing efforts to just the hottest selling items since competition for them is likely going to be intense. You may also want to check out items that have slightly less demand but substantially less competition as well so that you can improve your chances of selling.
Using the six steps above, you can start your dropshipping business anytime and even make a good deal of money.