Not Ready For The Ecommerce Deep End? Try Dropshipping
Can You Say Zero Start Up Costs? Starting a Dropshipping Ecommerce Business for FREE Has a Pretty Good Ring to It.
- Selling On Amazon
While researching a different post, I took a look at Google Trends and noticed that searches for “dropshipping” had spiked over the previous six months.
Can you say zero start up costs? When it comes right down to it, starting an ecommerce business for FREE has a pretty good ring to it. In fact, in my time producing podcasts for several high profile SaaS companies I listened to what seems like hundreds of Amazon sellers say that they got their start (very inexpensively) with dropshipping.
But first, what is dropshipping?
What is Dropshipping?
Dropshipping is a business model and order fulfillment method in which a seller purchases inventory (on an as-needed basis) from a third party to fulfill orders.. That usually means a wholesaler or manufacturer. The dropshipper doesn’t keep ANY of the inventory they sell.
I was curious about that so I typed “can you start dropshipping with no money” into the search bar and a half a second later, received this result:
It appears that the answer is for the most part, yes.
Why Start Dropshipping?
I’m going to list a few more reasons, but really, do I have to? At free (or close to it) to get started, why not give it a shot?
Working with a third party, dropshippers can quickly set up an online store to connect with an incredible selection of high-quality products from suppliers around the world.
If free isn’t enough to get your interest, here are a few more reasons why a lot of Amazon sellers get started with dropshipping:
All the traditional Amazon sellers’ worries of sourcing stock, and hiring employees to help fulfill those orders are no more. In addition, if you’re dropshipping you don’t have to worry about:
- Paying for an expensive warehouse (or Amazon’s FBA storage fees)
- Packing and shipping orders
- Handling returns and inbound shipments
You can run your dropshipping empire from anywhere with an internet connection. All you need to do is make sure to align with your suppliers and follow up with customers.
An Almost Unlimited Selection of Products to Sell
All the time that a traditional Amazon seller spends sourcing component parts for their finished product, dropshippers can use to build their business. Without the obligation to pre-purchase the items you sell, dropshippers can quickly pivot and follow the trends of the moment!
Test Test Test
How many times have you been right the very first time about anything? A traditional Amazon seller would love to be able to run a variety of A/B and other tests to determine the viability of prospective products were it not for one big thing, money.
Dropshippers can run an almost unlimited number of tests using inventory that’s already on the shelves of third-parties. That’s why one of the biggest benefits of drop shipping is the ability to test products without committing to a large amount of inventory.
Seems Too Good to Be True – How Does Dropshipping Work?
Your dropshipping journey begins with research. (I said that it would be inexpensive, not effortless). Start by finding a supplier ( located in North America or anywhere) by using supplier databases, or implement one of the many dropshipping-specific tools available for that purpose. (More on that in a section below).
While there are a number of slight variations with dropshipping, the basic model goes something like this:
- The customer places an order with you
- That triggers you to alert your dropshipping partner (The manufacturer or wholesaler)
- They package and ship the product to your customer
- Once the product has been shipped, your partner bills you for the service, and you turn around and bill the customer
It’s important to remember that the shorter the supply chain, the more money a dropshipper will make.
Dropshipping Isn’t Perfect
As you might imagine, something this seemingly simple doesn’t come without a few potentially negative aspects. Here are a few:
It goes without saying that these are NOT your own products. Dropshipping reduces your involvement and severely impacts your ability to monitor and guarantee product quality
You’re probably not the only one dropshipping this product. And, of course there’s the manufacturer itself. Because the products you sell are not unique you might have trouble differentiating yourself in the marketplace
With the lack of differentiation, price remains one of the few ways to compete with your competitors. Selling at low prices can create problems for your profit margins
When your fulfillment timeline is dictated by a dropshipping service, you have zero control over the entire process from order selection and packaging, to shipment fulfillment
You’re not going to be dropshipping alone. With the low cost to get started, dropshipping is a very competitive field.
If it’s Ecommerce, There’s a Tool For It
The growth of ecommerce and online business has helped fuel the explosion of software tools. Need to find an influencer for your niche, there’s a tool for that. How about an artificial intelligence program that anticipates shipping delays? Yep, that too!
Of course there are dropshipping-specific tools out there for the many entrepreneurs looking to get into ecommerce on the cheap.
Here are eight, distributed amongst three different categories.
Shopify is one of the biggest ecommerce platforms out there and very popular with dropshippers. Although it’s not specifically a “tool,” as a starting point for your dropshipping business, it’s a good choice.
WooCommerce offers high-performance hosting, as well as proprietary caching and allows you to create ecommerce landing pages and shopping experiences that work with WordPress sites.
WordPress powers approximately 35% of the web, so it’s a solid platform to begin with.
More of a do-it-all solution, AutoDS is a product research tool, an automatic order and tracking tool, a product importer, and an inventory management tool. It also works with both Shopify and eBay. With AutoDS, you can automate processes like stock monitoring, optimizing pricing, and updating tracking numbers.
Dropified says that it “automates dozens of the daily tasks required to run a successful dropshipping business, allowing you to focus on marketing and growing your ecommerce stores.” It also offers integrations for ecommerce platforms such as Shopify, BigCommerce, WooCommerce, GrooveKart, and CommerceHQ. Supplier and Order Processing Tools
AliDropship offers effective automated solutions for profitable dropshipping business with AliExpress. AliDropship’s specialists have experience in software development, marketing, management – and dropshipping.
They tout their powerful WordPress based plugins as a tool that allows entrepreneurs to quickly launch their own webstore.
Sprocket says that it, “allows you to choose the best products to sell from thousands of dropshipping suppliers all over the world.” Sprocket easily integrates with Shopify, WooCommerce, Wix, BigCommerce, and AliScraper.
Google Trends takes advantage of the 5.6 billion searches that the industry-leading search engine processes each day. Not only will Google Trends help you with market research. It’ll give you a clear picture of the keywords and search terms searchers are using. You can turn around and use them with your advertising and listing optimization.
It also will show you related topics and search queries. You can often use these “suggestions” to broaden your research.
Sell The Trend
Sell the Trend says that it “uses predictive A.I. technology that gives detailed information on which products are selling now, and which are predicted to grow in demand.” It also offers one-click fulfillment. Want to locate your ideal customers? Their Facebook Interest Targeting tool might be just what you need.
Shopify Versus Amazon
Any time we discuss online selling platforms, we’re going to run into the Amazon versus Shopify debate. To simplify this choice, let’s look at what the two VERY DIFFERENT platforms offer to ecommerce sellers.
To begin with, Shopify is a tool that lets you build your own online store, Amazon IS the biggest online store.
On Shopify’s platform, they’re assisting you in building a new website. You then add products to your store. All you really need to get started is an email address and basic contact details.
Amazon never lets you forget that it’s their platform. When selling on Amazon, the way that you can position your business has definite limits. Although customizations are possible (and increasing in number constantly), for the most part your storefront is going to look like every other Amazon seller.
Because Amazon users are accustomed to a certain “look’ and experience, Amazon is careful about the amount of differentiation they allow. With Shopify, you have much more control over your brand’s image and the overall user experience.
As I mentioned at the beginning of this post, many very successful Amazon Fulfillment by Amazon (FBA) sellers got their start with dropshipping. Who knows? You might be the next.
CANOPY Management is Here to Help
CANOPY Management is a “full service” marketing agency for Amazon sellers, and our team consists of former Amazonians, multi-million dollar sellers, and award-winning experts. When you consider the ways in which CANOPY Management is able to help you grow your Amazon business, you’ll know why.
- Strategic Growth Planning
- Listing Copywriting Optimization
- Listing Photography
- Product Videography
- Advertising Management
- Customer Service
- Demand Side Platform (Amazon DSP)
- Amazon Posts
- Full Service Management
- Amazon Review Aggregation
Are you looking to expand your income stream, or transition away from your primary career? It’s a new year and with the growth of eCommerce, now is a great time to reap some benefits yourself!