The drop shipping e-commerce business model is booming, and successful store owners are being created on a regular basis. The biggest draw towards this type of model is that there are no upfront production and manufacturing costs, warehouse storage fees or the risk of being stuck with unused inventory.
If you have been thinking about starting an online business using the drop shipping model, you could be up and running in a month. Here is a simple six step formula to follow, which can have you up and selling in just 30 days.
- Find a popular product with high margins.
While finding something that you can resell for large margins is key, you also need to find something that has the potential to be a big seller. If there isn’t a lot of searches for what you are selling it will be very hard to turn it into a profitable e-commerce business.
A little common sense goes a long way, combined with research performed on Amazon to identify popular products, and Google keyword tools, to help you determine search volumes of potential keywords.
Social media is also a place where you can search for new trends in certain markets you are thinking about entering. Take your time to find an opportunity with a long shelf life and not just a fad that will disappear in a couple months, like fidget spinners did.
- Identify a manufacturer that can also fulfill orders.
Once you have a product picked out you will need to find a manufacturer. There are plenty of them to be found on sites like Alibaba, but you will really need to spend some time on due diligence. There are a lot of bad apples on there, so make sure you put their communication response time to the test and always get samples prior to engaging in any orders.
Ensure that they can handle both the production and fulfillment, as you don’t want to touch the inventory at all. If they don’t have a plug-and-play fulfillment solution that you can tie your website to keep looking. The experienced drop shipping manufacturers have this all set up and ready.
- Create a brand name online.
Rather than just selling an unbranded product, you should really strive to create a brand, as it turns your drop shipping website into a real business. You will want to think of a brand name that is catchy, easy to remember, and one where you can lock down the domain name and social media handles. Spend some time on this, because the wrong branding approach can quickly kill a great idea that once had tremendous potential.
- Build your website.
You can hire a web designer to create a custom solution, but this is going to cost a lot of money and you will have to optimize it for conversions. The easiest solution to start is using Shopify and starting with a template that best suits your brand, then customizing it to match the look and feel of the brand you have created.
With so many apps available to help you run your store more efficiently, an e-commerce platform like Shopify makes the most sense. Some of the biggest online brands in the world are running off the Shopify platform.
- Create a marketing plan.
Ok, so now you have a product, a brand, and a website. Now you need to get people on your website. You need to map out a solid marketing plan according to what type of budget you are working with.
If you are operating lean, you can focus on organic social media with some paid promotion mixed in to get the ball rolling. If you have a healthy budget, you can jump right into paid Facebook ads and Google AdWords to generate sales right away.
Every product is going to have different ideal traffic sources, so make sure to test as many different options as possible. Think long-term and do little things like collecting email addresses from day one, so you can then leverage that list down the line as the brand grows.
- Launch your new online store.
The sooner you can launch your website, the better. This allows you to test the concept and prove that the business has potential to scale. Since the drop shipping model allows you to start with a low financial investment, if a particular product or brand doesn’t take off or show promise, scrap it and start again. You don’t want to throw money at an idea that has no traction. Launching as soon as possible lets you know whether or not you have a winner.