How Does Dropshipping Work: A Guide For Dummies 


If you’ve been looking for a side hustle while still keeping your day job, it won’t be a surprise if you’ve stumbled upon dropshipping and know about How Does Dropshipping Work?

Though not a relatively new concept, dropshipping is one of the best ways to earn on the side or start your entrepreneurial journey without taking significant investment risks. With the advent of technology, it’s been relatively easy to go now to online seminars and access information to learn more about this business model.

But for those who want to know the basics without committing to joining any dropshipping course yet, you may want to read through this dummies guide to understand how dropshipping works.

Before Anything Else

Before the discussion about How Does Dropshipping Work, it’s best to run through an overview of how traditional retail businesses go about their order management process.

Order management is the process of delivering a product to a client successfully. This process includes all the actions needed to ensure product delivery success. Doorshippping

Traditionally, businesses must include production, warehousing, revenue collection, delivery, and after-sales support in their order management process. Fortunately, with the rise of the internet and e-commerce, entrepreneurs found a way to make order management more straightforward, cheaper, and more convenient by adopting the dropshipping fulfillment method.

What Is Dropshipping, Then?

How Does Dropshipping Work? Dropshipping is defined as an e-commerce retail fulfillment method where a brand can market and sell products without keeping a physical inventory. The seller purchases the item as needed from a supplier, usually direct from a wholesaler and manufacturer, and has it delivered directly to the customer. door

Much like how affiliate marketing works, which you can learn more about if you click here, a seller can profit from someone else’s product without getting involved in the significant parts of the order management process.

How It Works

You need to see things through if you wish to start your dropshipping business.  This industry is relatively saturated, so it’s best to manage your expectations and remain passionate as you ride through the ups and downs of this business model.

Choose Your Space 

When looking for a space for your dropshipping business, you have two options: to have your digital asset, also known as your own website, or get listed on other online selling platforms.own website

Building your website or buying a pre-made one for your brand is usually the preferred way to beef up your business’s online presence. Having your website means better customization options and earning more compared to joining online selling platforms.  However, one should also remember that having your website will not guarantee sales. So you’ll still need to put in the effort to market your business and lead the traffic back to your website, where customers can purchase your items.

Another way to get into the e-commerce scene is to get listed on online selling platforms.  Selling with these platforms may mean less control over branding and less profit as they’ll be getting a certain percentage from your sales.  This option is worth considering since these online platforms already have an established online presence, subscribers, or traffic.  For newbies who would like to play it safe and minimize risks as much as possible, getting listed with an established online selling platform may work best for you. And this is How Does Dropshipping Work

Research Your Winning Items

Before working with a supplier, it’s best to have a list of items you wish to sell on your online store. In researching your winning products, you may want to use the following to increase the chance of getting profitable results:

Hashtags on social media

Using social media hashtags in item research is perhaps the easiest way to look for winning items. social media hashtags

Just use a hashtag related to a product you want to sell, say bags, and from there, you’ll see what’s trending in style, color, and other stuff.

Google trends

Another way to research is to use Google trends.  Google trends allow you to see how popular a particular keyword is when used as a query to look for products.  You will see a graph that measures the decrease or increase of search volume related to your keyword and hence help you decide on what products you can potentially profit from.

Remember that you have to get products customers like, not what you want.  Being in the e-commerce business means keeping your emotions in check to reap more benefits. If you have no idea what items you can sell, think about products that fit the following criteria:

  1. Have a broad market
  2. Items you can bundle
  3. Frequently needed
  4. Inexpensive but still solves problems
  5. Potential seasonal demands

Some examples of products that satisfy the criteria above are:

  1. Clothing
  2. DIY kits
  3. Cutlery
  4. Novelty merchandise
  5. Stationery
  6. Jewelry
  7. Beauty products

See Also: Top 7 Google CRMs for G-Suite in 2022

Look For A Dropshipping Supplier

Now that you’ve come up with a list of potential items you wish to sell, the next thing to do is to look for your supplier. Working with a reliable dropshipping supplier is critical to the success of your business. This clears How Does Dropshipping Work.Dropshipping Supplier

Before you land with the perfect supplier for your brand, keep in mind that you’ll need to talk to several potential suppliers to negotiate better pricing, delivery, and other particulars. To help you choose the best supplier, you may consider some criteria to filter out shady and unreliable ones.

Here’s a list of questions you may want to ask your potential suppliers:

  1. Do they have logistic partner tie-ups?
  2. What are their customer support policies?
  3. Are their products legitimate?
  4. What are their refund or replacement policies?
  5. How do they handle fraudulent cases?
  6. Do they include insurance for their services?
  7. How are they rate in their online reviews?

Asking these questions is critical in forming a good business relationship with your supplier.  Knowing the answers to these questions early on will save you from headaches that might surface in the future and also you know How Does Dropshipping Work  Remember that it’s better to prioritize assured and reliable service over profit.  Keeping your integrity means working with reliable suppliers.

Start Marketing Them

You now have your online store and a list of items from your trusted supplier, so what’s next?Marketing

Now’s the time to start marketing your products.  In order to do so, you can start with the following:

See Also: How To Find Your Target Audience For Video Marketing?

Create The Ideal Buyer Persona

Creating a marketing strategy means knowing your customer.  Creating a buyer persona means focusing on the individuals who would most likely buy your products. And also You craft your customer avatar by hanging out where they hang out online. Publishing content that addresses their pain points, and enticing them with deals and promotions related to their habits and interests.

You can also utilize the customer journey map to give you a better understanding of their purchase process. This way, you can determine the marketing points to boost brand awareness and recall and this is How Does Dropshipping Work

Do Competitor Analysis

As previously stated, dropshipping is not a new concept, and many players have been at it for years.  To find your leverage, you may want to conduct a competitor analysis.  Understanding where your competitors, no matter how big or small, failed and succeeded can help you with your entrepreneurial journey.

Automate Your Business Processes

Once your store goes live, and orders start coming in, tracking orders manually can become challenging. Especially if your store gets the traction you need.  To manage your listing, keep your prices updated, and have real-time inventory monitoring. You may want to automate your processes to avoid getting overwhelmed.

The last thing you want is to get products mixed up or turn off clients who don’t have the patience to wait for their order confirmation.  Automating these processes will help you run your business and satisfy your customers.

On top of that, see if you can work with simple software that would link your website to your supplier’s system so that you won’t have to do it manually. This way, order processing is done in real-time, avoiding delays and shortening the turn-around time for fulfillment. Remember that correct orders delivered on time positively affect the customer experience. Happy and satisfied customers spend more compared to unhappy ones and this is How Does Dropshipping Work

Is This Business For You?

Assuming you’ve read several other articles about dropshipping before you looked into How Does Dropshipping Work. You may have imagined how you can profit from this business model. Just remember that dropshipping will demand your time and effort once you get a larger volume of orders, so it’s best to evaluate your current lifestyle before you launch your online store.

Like any kind of investment or business, always do your due diligence and manage your expectations to avoid any regrets in the future. With that being said, don’t forget to enjoy the journey, and may the odds be ever in your favor.