Drop shipping is one of the most popular business models for young entrepreneurs, especially millennials and Gen Zers, because their internet skills outweigh their financial capacity by far. You don’t have to handle or stock the items that you are selling and hence you can set up this business with limited funds. An e-commerce site that runs a drop shipping business purchases the goods that it sells from the manufacturer or a third-party supplier who fulfils the order. Apart from cutting down on the operational costs, it will free up your time and allow you to focus all your energies on the acquisition of customers. You can start the drop shipping business and compete with real giants in the industry by following the simple steps discussed below;

1. Choose a Niche

You need to select a laser-focused niche and something that you have a genuine interest in. It will be very hard for you to market a non-focused product range. If you don’t have the passion for the niche that you choose, you may end up being discouraged because you have to put in a lot of effort to successfully scale up the drop shipping business. Some of the points to consider when choosing the niche include;

Search Attractive Profits: When operating a drop shipping business model, your attention is on customer acquisition and marketing. Therefore, the amount of time you need to sell an item that is worth $20 is equal to the amount of money you will need to sell a product that is worth $1500. Therefore, it is good to go for a niche that has highly-priced products.

Low Costs of Shipping: Even though the manufacturer or supplier handles the shipping, shipping costs that are too high chase away customers. Get products that are cheap to ship because it may give you the option to offer free shipping to your clients and absorb the cost as a business expenditure to attract higher sales.

The Product Should Be Appealing to Impulsive Buyers Who Have a Disposable Income: When you pay attention to driving traffic to your site, you should aim to experience a high conversion rate because most visitors won’t come back. You need to sell products that trigger impulse purchases and be appealing to those who have the financial ability to buy them.

Let People Search for Your Product Actively: You can use Google Trends and Keyword Planner to check for some of the common search terminologies that are closely related to your niche. If no one is searching for what you intend to sell, you could be dead in the waters even before beginning.

Create Your Brand: The drop shipping business will have a higher value if you re-brand your products and pass it across as your own. Look for a line or product and white label and sell as a personalized brand and make your custom branding and packaging.

Sell a Product That is Not Readily Available Locally: Customers should not be able to find the product you are selling easily down the street. It will help you to attract more potential clients.

2. Perform Competition Research

You will be competing with retail giants such as Amazon and other drop shipping businesses. Most people who are new to this business go for products that have no to little competition which is the mistake that they make. It is a clear indication that the product is not on demand. Several reasons can make a product to lack competition such as manufacturing and supplier issues, shipping costs, or poor profit margins among others. Go for the competitive product because their demand makes the business model sustainable.

3. Secure a Supplier

You can ruin your business if you decide to partner with the wrong suppliers. Therefore, don’t be in a hurry when choosing a supplier and do the right due diligence. You will get most drop shipping suppliers overseas and hence communication is a critical element in terms of the ability to understand one another and speed of response. If you don’t have maximum confidence in the communication capabilities of the potential supplier, you need to move on with your research. Ask as many questions as you can that will assist you to learn the production capabilities of the supplier in case you drop shipping business experience exponential growth.

4. Build an E-Commerce Website

A simple e-commerce website like Shopify is the fastest way of launching a platform for your drop shipping business. You do not require technical assistance to be up and running. The site should have several apps that can help you to increase your sales. However, if your budget can enable you to hire a web development expert, it will be the best way forward for your drop shipping business.

5. Create a Client Acquisition Plan

You can have a great website and product but you won’t have a business unless customers are looking to purchase. You can attract potential customers in several ways but Facebook ad campaigns is an excellent starting point for the drop shipping business. You will be able to generate revenue and sales right from the onset leading to quick scaling. Facebook will help you in placing your offer in front of your target audience. You will develop the ability to compete with large retailers and brands with immediate effect. You should also focus on email marketing and SEO as long-term marketing efforts. You will not spend so much on these marketing campaigns.

Analyze and Optimize

You should track all the available metrics and data to grow your drop shipping business. To comprises of Facebook conversation pixel and Google Analytics traffic data if it is your primary platform for acquiring customers.  If you are in a position of tracking all conversions, to know the origin of your customers and the route they followed on your site leading to the sale, you will be able to scale what works and remove anything that doesn’t work. You will never have marketing or advertisement solutions that you set and forget. You should test new opportunities regally and also finetune your current campaigns. This information will assist you to know where you need to optimize or shift your campaign expenditure.

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