I have wanted to share my experience with dropshipping in recent years on the blog.
First of all, I want to make it clear that I do not consider myself an expert in dropshipping, but I have tried this ecommerce model in my own project and analyzed many others in all this time.
I would like you to have a much more complete and realistic vision of everything behind dropshipping when you finish reading this post so that you can decide for yourself if it is really the ecommerce model you are looking for.
I will try to be totally transparent and honest with you. I’m going to tell you the good and the not so good of dropshipping.
But above all I am going to explain to you how I would do it if I started an online store with this business model today.
How to do ecommerce with little investment thanks to dropshipping
If there is something that makes dropshipping especially attractive compared to other online business models, it is, without a doubt, its little or no barrier to entry.
That is, for
do GETTING STARTED with dropshipping does not need a large economic investment, or very advanced technical knowledge. What you will need the most is time.
But since you probably still don’t know what dropshipping is all about, I’m going to explain it to you quickly before delving further into the subject. Quiet! Believe me if I tell you that pronouncing it is more difficult than understanding it hehe …
What is dropshipping?
Dropshipping is an ecommerce technique in which the owner of the online store (also called dropshipper ) acts as an intermediary between the customer and the actual seller .
The actual seller is usually a large product supplier working with multiple dropshippers at the same time.
And what benefit does the owner of the online store get? You may be wondering …
Well, here the dropshipper has the freedom to put the price he wants to the products and thus define the profit margin with which he wants to work. In other words, the supplier does not impose a minimum PVP (Retail Price) to work with him.
The great advantage of dropshipping is that you do not have to invest anything in buying stock of products , so you do not need to physically have a warehouse to store them, or even take care of shipping the orders. All this is done by the provider.
All the dropshipper has to do is collect the orders and notify the supplier.
Where to find product suppliers?
Finding good product suppliers is vital for a dropshipping online store to become profitable.
These are, from my point of view, the minimum requirements that a dropshipping provider should meet in order of priority:
- That the products are of quality . We do not look for top brand products, but they do have a minimum quality that guarantees that we will not have many returns.
- Have experience selling online . I usually discard those that have been selling for less than 5 years.
- Good prices . For a dropshipping store to work, we need to offer attractive prices, but that in turn give us a minimum profit margin (at least 50% for products with a medium-low ticket; € 20-50). Conclusion; we need to buy cheap.
- Fluent communication . That is, if we contact the provider, it does not take a week to respond.
This is very important to take into account in case we have to manage a return.
Taking these requirements into account, it is usual to look directly for suppliers in China. And the web par excellence for this is AliExpress.com
Apart from AliExpress there are other marketplaces from which to look for suppliers, such as: eBay or DealExtreme.
However, the biggest drawback of these two is that they are not compatible with the main dropshipping tools, the product catalog is usually smaller and the prices somewhat higher. Hence, AliExpress is still the most used option today.
Start with the most important thing: the niche.
The market niche you are going to focus on will make the difference between the success or failure of your dropshipping online store , even before you start selling.
A very common mistake that is repeated over and over again among people who start dropshipping is that they spend 10% of the time (at most) looking for the market niche and 90% to set up the store.
If you really want to have a chance of dropshipping success, don’t skimp on finding your niche. If you need 4-5 days to do it, go ahead! It will be your time best spent.
Seriously, be patient at this stage of the process and carefully analyze the pros and cons of each niche you study. Because this will be one of the few things that you will not be able to change once you launch the store.
To make it a little easier for you, I am going to share with you below a checklist of requirements that a good niche for dropshipping should fulfill.
- Focus on a very specific niche, the more specific the better. This will greatly reduce your competition, help you stand out more easily from the rest, and make your store a benchmark for your target audience.
An example of a specific niche would be training material for yoga lovers.
- If there is already someone selling, all the better . I’m not saying to look for niches saturated with a lot of competition, but rather to look for a balance between specialization and market size.
That is if you find a very specific niche that you find interesting and you do not detect any competition. Hmm … that niche is probably too small or not profitable and that’s why no one has stayed with it.
- Avoid complex products. The easier the product is to understand, the easier it is to sell and the less likely it is to receive returns. For this reason, if you are starting in this, I would not recommend entering the technology or electronics niches.
- Focus on mid-ticket products. That is, products that you can sell from € 20 to € 100, and that allows you to apply a good profit margin.
Selling “non-brand” products above that price consistently overtime is going to be tricky. I’m not saying it can’t be done, but it will certainly be much more complicated.
- Make it timeless. This means that it does not depend on specific dates/seasons of the calendar for sales. So I would recommend that you try to avoid niches related to; Halloween, Christmas, summer, etc
- That allows you to create attractive content for social networks (Facebook and Instagram especially). This, which may seem silly at first, will give you a beastly advantage over other niches that don’t have it. Mainly because it will allow you to quickly get a qualified audience at a very low cost.
- That it has a stable consumption trend and if it is increasing, the better . Forget about fads and niches “hit”. You can use Google Trends to get a rough idea.
Do you remember the spinners? Well, that’s a good example of a niche “hit” that you should avoid.
Look at the Google search trend for that product since it appeared on the market.
And please burn this to yourself; “More products in the store, does NOT mean more sales.” I know dropshipping ecommerce with 4, 5 or even a single product, which have managed to invoice several thousand euros per month.
A good example of a niche that would meet all of the above requirements could be gel manicure.
It is a very specific micro-niche within the giant beauty sector, but it is also large enough to generate a good volume of sales. The products are not complex, the price is average ticket and their search trend has been quite stable in recent years and most likely will continue to be.