How To Start A Dropshipping Business

Dropshipping is a popular business model because of its inexpensive start-up costs, zero overhead, and simple structure. Starting a dropshipping business can cost as low as $100 CAD, making it an attractive alternative for people looking to kickstart a new endeavor. Best of all, dropshippers can sell a wide variety of products without ever having to buy or store any inventory.

In this course, you’ll learn how to establish a dropshipping business from beginning. We’ll go over the fundamental procedures, useful tools for starting your business, and important concerns.

What Is Dropshipping?

Dropshipping lets companies sell things without stocking them. The customer orders, and the corporation contacts the manufacturer or distributor to drop it into a package for the customer. The producer or distributor ships the product straight to the consumer for the dropshipping company.

Simple order: consumer pays dropshipper. Dropshippers pay manufacturers and distributors. The producer or distributor ships the merchandise. Essentially, dropshippers market.

Dropshipping allows new business owners to sell products without inventory, saving money. It also avoids holding onto unsold products.

Here’s how to start a dropshipping business in six steps:

• Choose a Business Concept

Your business concept outlines what and to whom you sell. Because dropshipping has so many alternatives, start with a few products you think will sell to a specific market.

Your company idea could be to sell graphic T-shirts to skateboarders. This audience will like the T-shirts’ designs and quality, which skateboarders wear.

Spend time on the concept because it underpins your products, website, and marketing. Due of the low cost of dropshipping, you can alter things up if you make a mistake or change your product passion.

• Source Products

A company concept does not guarantee that you will be able to obtain the products necessary to satisfy your target market. Before creating a website, spend some time researching different products. Look for multiple distributors who sell the same product to get the greatest wholesale pricing.

Some of the most popular marketplaces are:

• AliExpress
• SaleHoo
• Worldwide Brands
• Doba
• Megagoods
• Wholesale Central

You might also look for print-on-demand clothing, household items, or books. Print-on-demand garment firms apply a bespoke graphic to numerous brands and kinds of clothes, such as T-shirts, socks, and jackets.

Choose a product that excites you, has a good profit margin, and looks great in the photographs on the website. Many of these suppliers also provide statistics on popular items, allowing you to select items that are more likely to sell because there is an existing market for them.

• Select Suppliers

Once you’ve determined whatever products you want to provide, it’s important to select the supplier who will actually distribute the products to your clients. There are several factors to consider while selecting a supplier:

• Quality: Select a provider who provides the quality you want your firm to represent. One business approach is to charge more for high-quality products. This contrasts with being a discount provider of goods that may not be of the highest quality. How would you like to position yourself?
• Profitability: The product should yield a respectable profit. Include shipping and transaction expenses in your calculations. Most dropshippers aim to earn 15% to 20% profit margins. Of course, increasing profit margins is a good thing.
• Reliability: You want to work with a provider who ships products on time and at a reasonable cost. Many suppliers are located overseas, and you must decide whether you want your clients to wait for their products. You also need a supplier who keeps a product in stock, as it is inconvenient for both you and your customer to have an order that cannot be fulfilled. The best way to test reliability is to order a few things from the source and document the procedure.
• Return policy: When possible, choose a provider who provides a return policy. Many don’t, so verify before making any final selections. You must consider how you will state your own return policy based on what the supplier gives.

Most dropshippers use online marketplaces because they have a larger assortment of products from reputable vendors. If you’re looking for a certain product, you can find a direct source supplier. This necessitates more work to determine who is distributing the product for the producer, and sometimes requires a minimum quantity of monthly sales to be qualified.

• Build an Online Store

To sell your products, you will need to set up an e-commerce store. An e-commerce store is a website that is meant to assist you present the products for sale in an appealing manner while also providing the shopping carts required to complete the purchase transactions. Building the store can be difficult for a beginner. The reason is that there are several moving pieces.

To build a website you will need:

• A content management system (CMS), such as WordPress, Shopify or Squarespace
• A domain name
• Web hosting (if using WordPress)
• Integrations with your chosen dropshippers
• A built-in payment gateway to accept online payments

E-commerce sites that automate product sales and supplier orders are preferable. Without automation, you’ll manually enter orders every day, which is tedious and error-prone. Shopify is popular for dropshipping businesses. However, there are other options, so read about the best e-commerce platforms.

Also consider selling your things on Etsy, Amazon, or social media (Facebook or Instagram). Multi-channel selling increases exposure and sales, hence it’s recommended. Providing you have the bandwidth to manage various selling channels.

• Register Your Business

Set up the corporation as a business to separate it from your personal assets. Create a name (typically your domain name) and register a corporation with Corporations Canada.

Your CRA business number (BN) will arrive once you submit your online application. Open a payment gateway-linked bank account with this BN. This bank account will receive deposits and cover corporate expenses like site hosting and upkeep. The account will also pay the provider for ordered products.

You need GST/HST registration. Sales tax is required in most jurisdictions. The provinces where you sell your products may require taxes.

• Market Your Business

You can’t expect thousands of people to find your website. Market your new business. Due to its internet nature, you may go beyond word-of-mouth marketing with local businesses.

Join business-related social media communities and start contributing. Help customers with queries, not simply sell. Become a community expert to be a resource. People will find your business. Use Facebook, Instagram, TikTok, and others for business pages. Promote new items, sales, and industry tips constantly.

You may wish to supplement your social media efforts with marketing and sales. Small budget Facebook Ads can target particular demographics. Consider a $10 CAD per day marketing campaign to attract visitors to your e-commerce store. You can also write an SEO-friendly blog to attract customers. Many new e-commerce companies need a mix of these marketing methods to attract enough customers to buy.

• Test Products To Gauge Interest In Them

Dropshipping lets you test new products to discover if the market wants them. This is simple and costs less than updating your store and announcing a new product.

Check with your suppliers for new products that meet your demographic. Launch one product at a time. If you believe in the product, budget for marketing. Run an online ad campaign for the new product and compare it to your other offerings.

Dropshippers should always try new things. This helps sell more to brand-loyal customers. It’s simple and cost-effective and should be part of your business development.

Bottom Line

Almost anyone can start a dropshipping business using marketplace suppliers and templated websites. It doesn’t require much overhead to get started, and you can rapidly transform a side hustle into a full-time job with the appropriate range of items that appeal to a specific market. You can become a business owner for as little as $100 CAD and expand from there.

FAQs

• How much do beginner dropshippers make?

Every store is unique, and earnings are determined by the profit margin and volume of sales generated. A dropshipper might earn up to $100,000 CAD in their first year of operation with the correct marketing strategy.

• What do I legally need to start a dropshipping business?

Most provinces require you to get a GST/HST registration. You may need to charge, collect and pay the applicable tax on any product you sell.

• Does Walmart allow dropshipping?

You can sign up as a Walmart dropshipper and sell dropshipped items straight to Walmart shoppers. You cannot ship Walmart merchandise to customers.

• Is dropshipping legal?

Dropshipping is a completely legal order fulfillment model utilized by wholesalers and manufacturers worldwide. However, you must take care to conduct business with genuine suppliers who are trustworthy and will fulfill your clients’ orders quickly.

Source: Forbes ADVISOR