Best reasons to start a dropshipping business
Dropshipping is an ideal addition to your business but may prove difficult to run as the main business model. Dropshipping loopholes such a lack of product control make it hard to support a business on its own but it still offers enough benefits to help ecommerce entrepreneurs improve their existing business substantially. Here are a few ways to use dropshipping effectively:
1. Performing a thorough Market research
Dropshipping products rely heavily on current trends and demand. While a long-term commitment to dropshipping is unviable, using it as means to gather market insight can be extremely useful. This comes in handy if you want to use dropshipping to mitigate the risk in trying out new products. Rather than raising your capital and inventory costs with an unpredictable product, test it out with a trial period using dropshipping.
Dropshipping will help you discover if your product ideas sell or not. You will also have a better estimate of how much to price it for. Dropshipping also gives you more accurate numbers of what quantity to buy for your initial stock. This is the kind of information that makes or breaks long term businesses. Dropshipping is a great avenue for trying out new product types and feel out your business presumptions without the inherent risk.
2. Protection from unforeseen circumstances
Similar to other business models, market fluctuations in ecommerce aren’t always predictable. Realising too late that you have been raising your inventory costs by overstocking as well wasting premium warehouse space can be detrimental to a business. Dropshipping becomes a great mitigator for such losses. You can easily fluctuate your supply to meet your demand without losing money.
This is especially useful for seasonal sale periods such as the holidays. You can easily navigate the types of products you offer to meet seasonal demand and even if it is not as big a sales period as you thought, you don’t end up with dead stock. You can also quickly switch up your offering to meet an unexpected demand for a particular item.
Dropshipping is also the ultimate insurance against extreme circumstances. You don’t risk losing your business to a natural disaster hitting your warehouse and you can still fulfill pre-made orders by dropshipping the products from a different location if need be.
3. Strategic shipping systems
One gigantic disadvantage to a brick and mortar business when considering expansion is shipping complications. The farther out you are from your customers or fulfillment center, the more shipping costs you incur. Dropshipping can be the perfect solution for shipping that hinder access to locations that fall outside your immediate regions.
Dropshipping can mitigate warehousing costs or the need to set up a new shipping center. It can also be the solutions for issues arising from taxes or extra fees when shipping out of state or country. Relying on dropshipping for these select areas could be the determining factor in keeping you out of the red.
An added advantage also becomes location insight: A business can use dropshipping for a trial period in a new location to see if it’s worth venturing into. Dropshipping can help you test out different markets before fully engaging.
4. High-maintenance products
Some products cost more to stock and ship than others. In these circumstances, it may be more profitable for you to use dropshipping versus storing them yourself. Any products that require extra fees for storing or shipping, such as products that take up lots of space and their sales don’t make up the costs of the excessive storage room they need.
Perhaps a product’s weight makes it cost more to ship, dropshipping directly from a manufacturer or wholesaler can be the best move. Fragile products that require special care when shipping. Dropshipping from the supplier or manufacturer who are better equipped to meet these requirements than you are a good solution. You should also use dropshipping for high-value items such as fine jewelry and antiques that will require additional security to avoid the risks of theft.
Unless your entire business specializes in these types of products and creates enough demand to not have overstocking, it doesn’t make sense to pay additional storage and shipping fees for a small subsection of your business. Dropshipping becomes the best choice for your business.
How to set up your dropshipping business
1. You first need to come up with a domain name
You need to establish your own unique domain name that is not used by anyone else.You can use websites such as Shopify, GoDaddy and WordPress to confirm that it is free to use. Make sure it’s original and catchy.
2. Set up an online ecommerce channel
Once you have a domain, you need to open a dropshipping online store. Platforms such as Shopify or WordPress via WooCommerce where you can easily publish and market your products is key.
Design your store. Platforms like Shopify provide easily customizable templates to jumpstart your web design and creative process. Use them to create a decent website for showcasing your products to the world.
Setup your sales channel. You need to set up processes such as payment, shipping, contact details, links your domain create a straightforward channel to run your business. You may need some time to make sure you have the proper solutions for these processes, so don’t rush it. Make sure you cover your bases before making your site go live. You may want to create a setup checklist with due dates to have your shop up and running in due time.
Select a dropshipping partner (MutualDropshipping), and start populating your shop with your awesome products.. After uploading the products you want to sell, marketing them is the next vital step to create demand for your dropshipping business to be successful.