How to Start a Drop Shipping Business: 6 Simple Steps that even the Beginners can Easily Do

Do you want to start a drop shipping business, but still have no idea how to do it? Do not start the business before you read the following tips on how to start a drop shipping business.

How to Start a Drop Shipping Business
How to Start a Drop Shipping Business

1. Understand the nature of a drop shipping business
Drop shipping is actually a term that is used to refer to the process of finding products (usually the lower cost ones) and then sell them at a higher or a more expensive price in order to gain the profit. In conducting the drop shipping business, the drop shipper do not have to provide any cash or storage space. What he/she should do is simply setting up the store, listing the products he/she sells, and focusing on marketing segment.

The process of drop shipping can be summarized into the following schema:

1. Finding  low price products
2. Placing the products on your own store at a higher price
3. Taking the customers’ order
4. Requesting the ordered products from the supplier
5. Having the supplier sends the products to your customers

2. Decide your niche
The idea that you will be able to be successful in any niche you choose even though you do not have any interest in them is completely wrong. This kind of misconception will only lead to the failure when you are doing the drop shipping business. You are suggested to choose the niche that suits your interest, and that you know of. If you do not have sufficient knowledge about the niche, you will not be able to select the products well, promote them effectively, and anything that related to the drop shipping process.

On the contrary, if you choose the niche that you know well and have a full understanding about, you will get some advantages, one of them is being one step ahead of your competitors. In fact, not all of your competitors have sufficient knowledge about their product and personal experiences. Then, what are the tips on choosing the right niche that suits your style and interest?

First, you have to identify what your passion and interest is. After knowing your passion, you also need to identify the problems that may occur and that you are sure you can solve. Third, you have to research your competitors. And lastly, you have to predict whether or not the niche you choose is profitable. 

3. Find your supplier
In choosing the right supplier, you have to consider the following aspects:

1. How long an order will be shipped to the customer.
2. What shipping method the supplier will use.
3. What the supplier tracking method is.
4. What the system of quality control that your supplier has.
5. Whether or not the supplier provides warranties.
6. Whether or not you can use the product photos from the supplier.

4. Apply for a tax ID
Tax ID – which is also known as the resellers license – is actually the tax that is levied on every physical goods sales to consumers. Most of the suppliers will usually require you to have a tax ID before they agree to do business with you.

5. Determine your selling platform
After having a legal tax ID, you can start to determine what your selling platform will be. As we know, there are so many selling platforms that are easily used by the beginners. One of the best platforms known is e-bay. Or, if you want another option, you can also use Amazon, which is known as the largest online marketplace. There is still a wide range of options that you can choose based on your preference.

6. Promote your business
The last step that is very important to determine whether or not your business will run well is promoting the products. There are several strategies that you can apply in order to gain traction to your new online store.

1. Give referral discounts

Actually, the referral discount is not a new tactic in the world of marketing. This strategy can so much help you to reach new customers instantly, which will lead to a good promotion of your store. You can offer something that may attract the new customers to try your products by saying that they will be given a 10% discount off their first order if they are willing to sign up for your email list.

2. Use the influencers’ popularity

One of the most effective promotion strategy is by sending the sample of your products to some famous influencers. These influencers’ review will definitely attract their followers or subscribers to try your products, as well.

For example, if you are a drop shipper of a beauty or skin care products, you can send some of the products you want to promote to the beauty influencers that have enough amount of followers. All you have to do is simply send an email to the influencer that you want, explain about your product to him/her, and ask whether or not he/she wants to use and promote it. If the influencer accepts your offer, then you can directly send the sample to him/her.

Those are some tips on how to start a drop shipping business that even a beginner can easily do. If you follow the steps carefully, the drop shipping business will no longer become too complicated to do.

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