In this section, I will share with you the 8 processes to start a dropshipping business and get success in that.
If you follow these processes exactly, I bet you’ll get huge success in dropshipping. These processes will also show you why most of the newbies become unsuccessful in online business.
Well, without wasting any more time, let me explain these 8 processes to start dropshipping in USA.
The very first one is
1. Choose a niche
Niche or topic or field of operation whatever you say, it’s the most important ingredient to make a successful business.
If you choose the wrong niche, you will lose your money, time, and energy to water a tree that will not be going to give you the fruits you expected.
So, what do I mean by niche?
I have already written 2 comprehensive articles on choosing a niche for your business. You should read those articles to get the idea of how to choose a winning niche that will make you money online.
Here are the articles,
If you don’t want to read these comprehensive guides then I would explain in short choosing a winning niche here.
A niche is a field of operation under which a business is established. It could be anything from shoes to aeroplane.
A niche can be a broad niche like shoe under which all type of shoes comes, or it can be a micro niche like men’s shoe or men’s canvas shoe.
Choosing a good niche will make your business while a bad one will break?
So, how do you evaluate a niche if it’s good or bad?
There are 2 criteria you should see in a niche,
- Audience size (buyers)
- Competition
To understand these 2 criteria let me give you an example.
If you choose a broad niche like “Shoes” which is a big niche but there is already a huge competition in this niche then it will fulfill the first criteria but fails in the second one ie; Competition.
Now, if you choose “men’s shoes” then the competition is lower as compared to “Shoes” yet the audience size is huge as it covers half of the world.
Now, what about “Men’s Shoes in USA”?
This will trim down the other country audience yet has a very big audience size and low competition compared to the other two niches.
Now, let’s think about “Men’s canvas shoes in USA”. This niche has maybe very low competition but not a bigger audience size to generate sales. You have to be limited under “canvas shoes” by choosing this niche. So, this niche will limit your business to only canvas shoes.
So, for me “Men’s shoes in USA” is the best niche which has a good audience size as well as low competition.
That’s how you should think when deciding on a niche for your business. If you choose a broad niche with a big competition or a smaller one but a very low audience then you will fail in your business.
All these facts about niche are equally applicable for all types of business including dropshipping
2. Product research
It’s equally important for any business to research and choose the right products you want to sell.
If there are not enough products in your chosen niche, what would you sell to your customers? So, it’s important to choose a niche that has a good variety of products.
The other thing in product research is to consider the quality of the product. If your product quality sucks then you would never make a profitable dropshipping business.
You will be just draining your money on marketing but won’t get enough sales.
The success of any business depends on the quality of the product.
If you don’t choose a quality product, however, you can sell the first piece of the product but the customer will never buy from you in the future.
That’s why I always suggest choosing a quality product to sell.
In dropshipping, you don’t have the product in your hand. All you have to depend on your supplier. So, I suggest, first, use the product yourself then sell that to your customer.
That way, you will get to know the quality of the product. If the product satisfies you, there are more chances your customers will be satisfied too.
Also, the variety of products in your niche is important to target your customer in the future. If you don’t have products to cross-sell or upsell then you are leaving money on the table.
Dropshiping and other eCommerce businesses use strategies like upselling, down-sell, and cross-sell to get more revenue. Once you buy something from you, they start nurturing you through email or mobile number and offer more products in the category.
Maybe you’ve already get sponsored emails from Amazon, Walmart, ebay, Shopify, etc. they all use the above strategy to increase their revenue.
You can also do this, provided, you have a wide variety of products to sell to your customers. A “men’s shoe in USA” is a good example of a product-rich niche, in which you can offer hundreds of products to your customers.
Chosen a profitable niche and done your product research?
Now, come to the next step
3. Deciding the business capital
Well, after choosing your niche and doing your product research the third step in the process of building a great dropshipping business in USA is to decide the CAPITAL you are going to use in running your business.
As it’s a physical product selling business, you need a good amount of money to start.
However, it depends on the niche, your marketing needs, and some other factors.
Well, the most beneficial thing in dropshipping is you pay your supplier only when the customer pays.
In dropshipping, when someone buys a product on your website, she pays directly to your business bank account, from there you can transfer the product costing to your supplier and instruct them to ship the product to your customer.
SO, ideally, there is no upfront costing in product purchasing like a traditional eCommerce business. Even you need some extra money in your bank account to manage returns, and replacements.
The above costing is not a big amount and can be managed by anyone.
BUT, in an eCommerce/dropshipping business the big chunk of the capital goes into marketing. Well, we all know that marketing is an important thing in any business. If your marketing is good then you can “sell your pen to anyone”.
So, if you are going to start a dropshipping business then be ready to spend a big money on marketing.
Experts say eCommerce businesses should spend 7-10% of their total revenue on marketing. However, it depends on your goals. If you want more reach then you have to spend more at least in the 1st year of the business.
This costing covers all the marketing tactics including, PPC, social media marketing, chatbots, etc.
Now let’s jump into the next step to start dropshipping in USA
4. Find a reputable drop shipping supplier
Business all depends on supply and demand.
And in dropshipping, you are dependable on your supplier. If they do not have a good product then your return percentage will increase that eventually, you will face a loss.
On the other hand, if your supplier has a good product but cannot fulfill the demand then you will have to cancel that increases your cost and decrease your goodwill.
That way, a supplier is the lifeline of any dropshipping business. SO, where do you find good suppliers for dropshipping?
There are 2 ways you can approach the suppliers.
- Local suppliers
- International suppliers
How to Find Local Suppliers
You can find the local suppliers in your city’s local markets or you can find out the famous products of other city’s online and approach the suppliers/manufacturers directly. But, before agreeing with them, always do market research if they are reliable or not.
For that, you can ask their neighborhood if they are genuine or not.
How to find International Suppliers
Finding international suppliers is easier than local suppliers. many websites provide a big database of suppliers and manufacturers from all over the world.
Websites like USAmart.com, Alibaba.com, etc are the big player in this business.
You can search and talk with the suppliers or manufacturers through these websites if they provide dropshipping facility?
You can also ask them to provide sample products as well as about their reliability. The one thing I like about these mediator websites is you can easily recognize good suppliers by looking at customer’s reviews about them.
Whatever method you go to search suppliers always remember few things.
- Try to sign an agreement with them about the supply.
- Ask them not to do self-promotion in the product.
- Ask them for demo products before starting a business with them.
- Ask the minimum processing and shipping time and cost.
- Compare their product cost with other suppliers.
5. Paperwork
Before starting any business we need to do some paperwork otherwise it will be illegal in the eyes of your government. So, here is the list of documents you need to start an online or offline business.
For Proprietorship business
- Your Tax Id/EAN id
- Company Trade name
- Current Bank Account/SavingBank Account
- IEC code or import-export code (It’s needed if you sell or purchase abroad)
- Trade license from the State Govt.
- Credit card
- Your Identity Card
- Your email
- Your phone number
- Your business address proof/Utility bill
For Private Limited/LLC or any other form of business
- Company Registration Certificate
- Company Current Bank Accountstatement
- Company EAN Id/IRS Registration
- Company’s IEC code or import-export code (It’s needed if you sell or purchase abroad)
- Trade license from the local State Govt.
- Credit card
- Your Identity Card
- Your email
- Your phone number
- Your business address proof/Utility bill
I know you are thinking arranging these papers is hard and costly. Well, any tax professional can arrange these papers for you at minimum costing.
However, you can start dropshipping without any papers but I always suggest becoming professional. Professional businesses run over the documents so you should obtain these papers before starting your dropshipping business.
In this way, you will avoid unwanted circumstances from your government.
6. Building an online store for dropshipping
Every business needs a place where you showcase your products to your customers. In traditional offline business, it’s a brick and mortar shop, but it’s a website in online business.
In the eCommerce business, the website is the backbone. Without a website, we can’t even think of any online business. Some people are making money however by selling on social media platforms but that’s not the right way to build a successful dropshipping or eCommerce business.
Social media accounts and pages are not your property so you can’t rely on them for a long-term prospect. You must have a website to run your dropshipping business smoothly.
SO, how can you start your dropshipping website?
Well, there are several options out there.
Let’s look into some of them.
Web hosting and WordPress way
You can purchase web hosting and install WordPress and Woocommerce to build your eCommerce platform.
This way is the cheapest one and also the most flexible as you have total control over your website.
BUT, you should be a bit technical to implement things on your WordPress website. However, there are tons of tutorials available online that you can learn to create your awesome WordPress website.
BUT, choosing a web hosting for eCommerce websites is not so easy. But the good news is, I have already written an article on choosing the best web hosting that you must read before choosing your web host.
Also check out my review on Bluehost,
eCommerce Template Platform
There are some eCommerce platforms available that you can use to create your dropshipping website.
Websites such as Shopify and Bigcommerce are the best service providers in this category. Especially, if you are new to websites then with them you can create your eCommerce platform with just a few clicks.
BUT, they are much more costly than their WordPress website.
However, you will get all the features like inventory management, payment gateways, hosting, etc ready-made. SO you can think about them as an option.
White page Dropshipping Website
That’s the one in which you and your dropshipper work together. They provide you white page website that you can promote online and collect payments. When a customer places an order it is automatically processed and shipped by the dropshipper.
This is a great way for dropshipping business however, you cannot promote products from other dropshippers. For products, you have to rely solely on your dropshipper who provides you the white page website.
If you want to start your dropshipping business this way then you must read my article on 12 Best Dropshipping Sites in USA.
Now let’s come to the most important step for building a successful dropshipping business.
7. Online Marketing
Every business needs marketing to introduce your products to people.
There are several ways of marketing a business but for dropshipping the most prominent way is online marketing. It’s affordable and the best-converting marketing option tested by many companies and online marketing agencies.
Online marketing itself is a vast field. However, we can divide it into 3 main subcategories ie;
- PPC ads
- Social media marketing
- Influencer marketing
All the online marketing options have their pros and cons. Let us discuss them one by one in short.
First,
PPC ads
PPC ads or pay-per-click ads are the advertisements for which you have to pay whenever someone clicks on your ad. However, there is another variant of this ie; Pay per impression in that the advertiser has to pay per 1000 impressions.
There are many ad networks available on the internet that acts as a mediator between advertiser and publisher. But, the most famous is Google ads.
Google ads give you the option to display your website in their search engine like the below image.
This is a PPC ad that comes above the Google search results when you search for something.
Google ads also provide you the facility to advertise on the same niche individual websites, Youtube channels, and other properties.
According to research, the conversion rate of Google search ads is 4.40% and 0.57% on the display network on other properties.
Social media marketing
Among dropshippers, social media marketing a very popular online marketing option. Believe me, if you do it well and in an organized way, you can generate a good amount of sales from this marketing tactic.
For a detailed guide on social media marketing, you can read my article,
Influencer marketing
In this marketing option, you approach influencers to promote your products on their platforms such as Youtube, social media account, etc. It’s just like hiring a celebrity to promote the product.
If done well you can do it at a very low cost than the above marketing options.
You can use Ninja Outreach to find and approach influencers on different platforms.
8. Analyzing the sales and tweak the process
The last step is to analyze your sales and tweak where needed.
Let me explain this to you.
Suppose, you start social media marketing and start getting the sales but you want to increase the sales so you have to tweak the audience demographics, size, etc.
Maybe, you have to increase your product quality, decrease shipping time, etc.
The main thing is to see your results and tweak the process where it’s needed.
That’s it.
