07/08/2021
Why Starting An Online Business Is The Solution?
it’s no surprise you’re considering joining the 7.9 million online businesses that sell products via the web. Research published by Statista in March 2021 showed revenue from eCommerce in the United States reached $431.6 billion in 2020 and is expected to reach $563.4 billion by 2025 It may seem popular, even easy to start a dropshipping business, but don’t be fooled by the amount of work involved to make it a success.
With the emergence of Amazon (Amazon FBA), Alibaba, and Shopify over recent years, and the relative ease with which you can start an online business, markets have been swamped with new retailers.
Business basics still apply. In order to succeed, your business must meet an unmet need, solve a problem, or provide a product so amazing that people can’t help but talk about it. Don’t think you can simply start selling anything online and become successful with your business. You can’t, and you won’t. There’s much more to it than that. Before getting started, ask yourself this — will my business do the following?
• Solve a problem better than anyone else.
• Meet an unmet need or demand.
• Have a unique value proposition.
If the answer is yes, you’re ready to follow the advice in this guide and start your new dropshipping business.
How to start a dropshipping business in 5 steps?
Now that you’re aware of the pros and cons of starting a dropshipping business, and what it takes to be successful, here’s how to get started in five simple steps.
1. Identify your product niche
We now know that selecting the wrong niche can be devastating to a new business, and is one of the common causes of failure.
It’s vital that you choose the right niche for your business. When deciding this, go back to business basics. What’s the gap in the market you want to fill? What problem does your business or product solve? What’s the unique value proposition?
Furthermore, you as the founder and business manager are going to need a huge amount of enthusiasm for the product. Operating and growing a business is exhausting and incredibly demanding. You’re going to need to select a niche you understand and won’t be bored by.
You’ll also want to make sure you consider the following when choosing your niche:
• Viable profit margins. Ideally, aim for over fifty percent as an absolute minimum.
• Shipping costs. Larger heavier products will cost more to deliver, which may affect your margins or the price the customer pays.
• Is there demand? Using tools such as Google trends will help you figure out if people are searching for what you want to sell.
• Competitors. Is your market already oversaturated? Check what’s available on Amazon, Etsy, Wish, eBay, and other websites by checking search engines. Look at prices and the quality of the products on offer, as well as shipping services.
2. Find your supplier
Working with the right supplier is crucial to the success of your business. You don’t want your customers to receive products that are damaged or arrive late, as this will reflect negatively on your business and damage your brand.
Blaming the supplier is not going to be acceptable to your customers, you will be held accountable.
When choosing your supplier, make sure you perform due diligence. This can take the form of asking questions and checking certification before you place an order.
Make sure you check:
• Quality assurance and product safety certifications required for the country and market you will be selling to.
• Lead times to manufacture and deliver the product to the customer.
• Refund policy for damaged, incorrect or late orders.
• Samples. Make sure you order a sample of the product for quality testing before you start selling. You need to make sure the items are as described.
• Production capabilities for when your business scales.
Some of the most common dropship suppliers and websites for connecting with manufacturers include Alibaba, AliExpress, and Oberlo.
3. Create your website
Your website will be the most important part of your dropshipping business. It will be your online store where customers browse, consider, and hopefully order products, as well as making payments.
As we discussed earlier, poor website design is a factor that causes business failure.
Choosing the best website builder for your new dropshipping business can be confusing as there are so many and the differences may seem subtle.
When choosing a website builder, make sure you consider:
• Ease of use for designing, updating, and processing orders.
• Marketing features including customer service features to automate the process, such as email order confirmations.
• Choice of website templates: You want your website to be clear and effective at showcasing products and making them easy to buy.
• Try before you buy: Start a free trial to see how you get on with the website builder before you build your entire site.
Popular choices include Shopify, BigCommerce, WordPress, Magento, and Weebly. Monthly costs and sales commissions vary, as do the transaction fees. Make sure you compare before choosing which to use, as an expensive platform will eat into your profit margins!
4. Market your business
Once your suppliers are in place and your website established, all your effort should go into attracting customers and making sales. The best way to do this effectively is to create a customer acquisition plan that takes into account your budget for marketing spends.
You should take a two-pronged approach to market your business; short-term and long-term.
Short-term marketing
• Pay-per-click adverts on search engines, such as Google and Bing.
• Social media adverts, Facebook and Instagram for example.
• Remarketing adverts.
• Digital marketing adverts, such as banner placements on digital publications.
Long-term marketing
• Website search engine optimization (SEO).
• Consistent email marketing to keep in touch with your customers, gain repeat business and grow your brand recognition.
• Engaging social media content to grow your brand and connect with customers.
5. Track everything and optimize
In order to optimize your website for sales conversions, understand consumer behavior, and market effectively, it’s important to track and analyze customer metrics.
The five most important metrics you should track on your website are:
1. Cost per acquisition: How much it costs to gain one new customer.
2. Conversion rate: The percentage of website visitors that make a purchase.
3. Average order value: The average sale (or basket) amount.
4. Customer lifetime value: The average amount a customer spends during the lifetime of their relationship with your business.
5. Cart abandonment rate: The percentage of visitors that add items to their cart, but don’t complete the purchase.
In order to track your metrics, you can use data from your website shopping cart, web hosting provider, and platforms such as Google analytics.
With this knowledge in hand, you can edit your website design, marketing content and update product listings or pricing to streamline your sales funnel and increase your conversion rate (sales).
