6 Steps to Build a Profitable Dropshipping Business
Dropshipping business is a great e-commerce fulfillment model and suitable for online newbie to start with. The reason behind it ? No upfront cost.
Thanks to the maturity of the internet and online marketing, to lower down the entry barrier of e-commerce business and dropshipping is definitely the best solution for online business. Since you do not have to stock or fulfill the order by packing , shipping …. That means you are possible to start your dropshipping business with only a laptop.
The concept of dropshipping business model is easy. Once you have received an order, you place the order from your supplier and let them ship the order directly to the customer. This can cuts your operational cost (no warehouse, no shipping materials are needed), and also free your time to focus on online marketing.
Want to start your dropshipping business ? Let’s move forward to our 6 Steps tutorial to build a profitable dropshipping business.
1. Conduct Market Research
Market research is simple but powerful, that allows you to understand your target market without offering unnecessary products or services to your market.
Getting information from online world is relatively easy as there are lots of free online marketing tools and information for you to access. Google Trend is one of the great offer from Google for you to understand the hot topics and popular keywords
For example, Korean Cosmetics Dropshipping is a increasing trend in United States and United Kingdom , as the K-Pop wave by BTS, Blackpink… are booming the western market.
To know about a trend will help you to select your market and product niche easier. However, as the Google trend is driven by big data, it reflects to the general market (for example the market of United States) and you might need to take a deep analysis on the data for some specific topic.
2. Pick your product to dropship
Yes, picking your niche is important, but it should be done right after you have the general market data from the market research. This step is crucial and reflect your further steps on how to target your prospect.
If you are new to dropshipping or e-commerce, you can start with a General shop rather than a niche stores. Once you have enough data base or customer, then you can move forward to a specific store. For example to start a Beauty store to cater mass prospect’s need and you might start a Men’s care dropshipping store afterward, as you found male customers are willing to pay more to purchase skincare products.
3. Find your quality supplier
You can get in touch with international suppliers with a click by internet, however, getting a quality supplier gives you a plus to your business.
Partner with the wrong supplier would kill your business, indeed you need to partner with a 3rd party organization to offer service guarantee for you. If you dropshipping suppliers are located in oversea, then you have to concern the shipping time as delivery time is one of the key of dropshipping.
As you are competing with local competitors and international competitors as well, it would be great if you can offer reasonable price and speedy delivery.
4. Structure your marketing plan
Alright, in step 4 , you have find your supplier, product to sell and done your market research.
You are one step away from making money, but a structured marketing plan will help you to achieve your goal easier.
A plan is help you to trace and measure your current milestone and better flow to communicate with your customer. A simple example would be a social media e-commerce model, you are using your social media account, for example instagram , facebook to drive traffic to your website and convert your visitor to be your customer.
To set up your social media accounts or e-commerce website is very easy, but coordinating the channels are relatively difficult. The tone on your social media or websites should be the same and bringing the integrated marketing message to your prospect.
You should consider the marketing channels are effective or not, for example the user demographic data of Facebook and Snapchat are totally different and using Facebook might not be able to capture millennial.
5. Set up your e-commerce website
You should be able to make profit from this step, with a e-commerce website you can make money 24/7 without border.
However, some of the countries like China they are highly stick to some marketplace (taobao ,tmall, Wechat), if you are targeting some specific countries with unique online user behavior, then you should follow the culture, but not building a e-commerce website.
Generally, target market like United States, United Kingdom, Australia online buyers are happy to buy in independent e-commerce website. You can build your online shop with any operator like Shopify, WooCommerce, Prestashop, the website building process is easy, but you should spend time on user interface (the homepage design) to increase the conversation rate.
6. Optimize your performance
Getting sales is a good sign of your dropshipping business, however, optimize is the next target.
Do you know your Customer acquisition cost ? Cost per action ? With enough data you can spend wisely on your online marketing budget :
You need to track all of your data and metrics by a tool, Google Analytics, Facebook Pixel are very useful for your analysis as they are free and able to give you big data to move forward and revise your strategy.
Once you have tracked your website data and get sales. Then you can analyse the customer journey and optimize the roadmap for them. Facebook Pixel can allow you to create Lookalike audience , to attract similar audience to your customer profile and increase the conversion rate.
You will need to test and optimize your online marketing plan time to time based on the performance, to shut down the unsuccessful camping and boost the effective campaign.
Build a dropshipipng website is easy, but making your dropshipping business profitable needs tricks and tips. Most of the dropshipper missed the 6 simple steps to do so. Make sure you are ready and be prepared before starting your dropshipping business.
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