Suppose you are willing to enter the ecommerce space but do not want to manage the manufacturing of products and hold the inventory.
Ecommerce dropshipping can be a good option for you.
You can start the dropshipping website very quickly, source the products, and can start selling them at the international level within two to three days.
In this guide, you can get through the necessary steps which you should take before starting the Ecommerce dropshipping.
And you can learn about the primary details of this business model.
- What is Ecommerce: Types of Ecommerce
- What is Ecommerce Dropshipping?
- Step By Step Guide To Setting Up An Ecommerce Dropshipping Business
- How To Find An Excellent Dropshipping Supplier?
- The Best Dropshipping Companies & Free Suppliers List for Ecommerce
- Costs Of Running An Ecommerce Dropshipping Business
- FAQ For Ecommerce Dropshipping
- How Leeline Sourcing Help you find best Ecommerce Dropshipping Products and Suppliers
- Final Thoughts about Ecommerce Dropshipping
What is Ecommerce: Types of Ecommerce
E-commerce is the buying and selling of goods on the internet. From mobile shopping to online payment encryption and beyond, e-commerce includes a wide range of data, systems, and lots of tools for both online buyers and sellers.
Most e-commerce businesses make use of an e-commerce platform or a store to make the marketing and sales activities possible to oversee logistics and fulfillment.
Generally, e-commerce is divided into six categories:
- Business-to-consumer or B2C transactions are made between a business and a consumer. It is the most widely used sales models in the e-commerce context. For instance: when you buy shoes from an online store, it is a business to business transaction.
- B2B related to the sales made between two businesses, like a manufacturer, a wholesaler. This type of business does not involve the consumers and happens only between business entities.B2B e-commerce sales focus on the raw materials or products which are repackaged or combined before being sold to the customers.
- In consumer to consumer business model, the sales of the services or products between the customers. It includes the customer to customer selling relationships such as seen on Amazon or eBay.
- Consumer to business is the reverse of the traditional business model, where the individual consumers make the products and sell them to the business buyers.For instance, in the business model of the iStockPhoto, the photos directly from different photographers are available online for purchase.
- Business to administration covers the transaction model between the online companies and administrations—for instance, the products and services related to the legal documents, or social security.
- Consumer to administration involves the selling of services or products from the consumers to the administration. C2A may include things like online consulting for education, online tax operation.
The business to administration and consumer to administration focused on the increased deficiency within the government through the support of information technology.
Suggested reading:Dropshipping B2B: Ultimate Guide
What is Ecommerce Dropshipping?
In this business model, the store sells the products online does not hold the inventory or stock. The seller arranges the item to be easily and directly shipped to the customer from the supplier.
In this business model, the seller does not have any warehouses and staff to manage the items. It is beneficial for the suppliers, where they get an additional channel to sell their goods.
Dropshipper is a middleman, who arranges the transaction between the customers and manufacturer or suppliers, like a factor or importer.
The popularity of dropshipping has been grown tremendously during the last few years.
According to research, 23% of online sales in 2016 was fulfilled by the dropshipping and amounted to $85.1 billion. More than 33% of the online stores use drop shipping for their fulfillment model.
Dropshipping comes in different forms like Etsy, notonthehighstreet.com, or Amazon. In the case of Etsy, the site offers a platform for the product creators to display and sell their products.
Therefore, customers can get interact with so many suppliers on the same platform to get the products.
Some of the dropshipping pros are given below:
- In Ecommerce dropshipping, sellers and manufactures can focus on their strengths. It is the main reason for the vast popularity and success of the dropshipping.
- A very small or no upfront is required to start the business. So, securing an inventory capital is not an issue when you are dropshipping.
- There is no need to store the inventory. So you are free of storing the products in the warehouses.
- This type of business model eliminates the logistical headaches for the sellers. Pricing, packaging, and shipping can take a lot of time and may require the services of the experts; they are no more a headache for the seller.
Just like the advantages, there are a few drawbacks of ecommerce dropshipping, which are given below.
- Sometimes, the supplier may want to sell the goods in bulk or ship the products in wholesale to the retailers. Rather than sending the products individually to the customers according to the orders. So, tricky supplier relationships can become a severe issue for the dropshipper in some situations.
- Being a dropshipper, you cannot guarantee that the customer will get the products on time. Reputation is the primary reason for success for your ecommerce dropshipping, and therefore placing your status into the hands of the supplier can quite risky for your business.
- The product quality may not be inconsistent, and it may harm your reputation, especially when you are dealing at the international level.
Being dropshipper, you have to make sure that the supplier is providing the goods of high quality. The consumers may leave negative reviews if you fail to deliver the products according to the given description.
Step By Step Guide To Setting Up An Ecommerce Dropshipping Business
Dropshipping is a popular business model for new entrepreneurs, as it has many advantages over the conventional way of business.
You do not need to store the inventor, low startup cost and online marketing make it the best way to earn a massive amount of money.
The ecommerce website, which operated the dropshipping model, purchases the products from the third party suppliers and sell them to the consumers without storing the products.
You can cut down the operational costs. Still, it will also free up your time to focus all of your efforts on customer acquisition.
If you want to start your business and want to compete with other companies, begin with a limited budget, and follow the under given steps.
It is a fact that the dropshipping business does not require a lot of startup funds, but it will require extensive hard work.
· Select Your Niche
The niche that you select should be laser-focused and something you are interested in. The product range, which is challenging to focus, will be difficult to market if you are not passionate about the niche that you have selected.
You will be more apt to become discouraged, as it takes a lot of work to make the dropshipping a successful business.
The following are the points, and you need to consider while selecting the niche:
- When you are running a dropshipping business, you need to focus on marketing and customer acquisition. The hard work required to sell 20 items or 200 items is the same.
- Shipping costs are high. Your supplier will control the shipping, but if the shipping charges will high, they may repel the customers. Try to find suppliers who can offer inexpensive shipping. So, you can provide free shipping to customers and attract more buyers.
- You need to make sure that people are searching for your products actively. For this purpose, you can use Google’s keywords Planner and trends to check the typical search terms related to your potential niche.
· Making Your Business Official
It is very crucial to make your business official and for that purpose, follow the given steps:
- Make sure that you can legally use your business name
- You need to register the business
- Try to get the required licenses, permits or any requested document
- Get a tax ID number
- Open a business account in the bank
· Choose a Sales Platform
An e-commerce website can give you control over your product’s commercialization. Still, it may not give you much exposure as a global marketplace.
Building your store from scratch can give you flexibility, access to the custom tools and analytics. But try to put more effort into you’re your marketing to build your audience.
The following are the best places to sell online:
· Setup Your Branding
Your dropshipping business will be of more value if you can rebrand whatever you are selling. And launch it as your own business.
You need to search for the products which you can sell with your label with custom packaging and branding.
· Build Your Ecommerce Site
The quick way to launch a website that can support the dropshipping business model is to use a simple e0commerce marketplace like Shopify. The platform offers plenty of apps to help you to increase sales.
Even though you have a sizable budget that will allow you to hire a web design, it is much better to move to use the plug and play options.
Once you have established the business and have started to get the revenue, you can explore the additional website customization.
· Find Your Products And Suppliers
Make sure that you are going to compete in the market with other dropshippers, like Amazon or Walmart. It is the point where most of the dropshippers go wrong and lost all of their money.
There can be many reasons for a product to not having a lot of competition, including the high shipping costs, supplier and manufacturing issues, or reduced profit margins.
You must select those products which have a game, as it shows the high demand for these products. These products can make your business model entirely sustainable.
Supplier is significant and can play an important role to make your business a success. So, you do not need to rush while choosing a dropshipping supplier. A wrong supplier can ruin your business.
You need to conduct proper research and try to select the most reliable and legitimate supplier. Communication is an excellent way to learn about the suppliers, so be confident and try to learn about them.
Alibaba.com is a great platform to identify and communicate with potential manufacturers and suppliers. You should ask a lot of questions so that you can learn about their production capabilities. Ensure that they can scale up with you.
You can learn from the experiences of the other dropshippers who have walked the same path in the past.
Suggested reading:How to Find the Best manufacturers on Alibaba
If you have a big website and excellent products, it will not ensure success without the customers. The best and the easiest way to attract potential customers is the marketing of your business. And for that purpose, you can use different platforms. Social media is one of them.
You can use Facebook or Instagram for the marketing of your business. In this way, you can generate sales and revenue right from the start, which can contribute to quick scaling.
Through Facebook, you can place your offers directly in front of the highly targeted audience. In this way, you a chance to compete with the largest brands and retailers immediately.
For the long term success of your business, you can make use of search optimization and email marketing. You should try to collect the emails from the customers; it will help you to generate a lead for your business. And later on, you can also set up an automated email sequence and can inform the customers about discounts.
It is not easy to get a massive customer base and revenue without additional advertisements and marketing strategies.
Suggested reading:Dropshipping Marketing: The Ultimate Guide
· Growing Your Dropshipping Business
You should track all the data and metrics for the growth of your business. It includes Google Analytical traffic and Facebook conversion pixel data. You can review the comments of the customers; it will help you to build a success story.
You need to keep in touch with all of these. So, you can test new opportunities and which can help you to flourish or expand your business.
How To Find An Excellent Dropshipping Supplier?
If you know what type of product you are going to sell, the next step is to find the ecommerce supplier. There are multipe platforms that you can use to get a reliable supplier like trade shows, websites, and Google.
You can contact the ecommerce supplier to provide a comprehensive list of products they can offer you. It helps to make sure that you are going to have a reliable product at the economical prices. So, you can get a considerable profit margin.
You should contact all the suppliers and try to select the one who will give you high-quality goods at the lowest possible price. All these will help you to attract a massive number of buyers towards your store.
Sometimes the suppliers can ask if you have the experience of selling the goods online or if you have a website. So, be confident and professionally represent yourself and your business.
Remember this, you are going to sell their products and profit for both of you will be equally important.
· Check Major B2B Marketplaces
If you are searching for a wholesaler or supplier, the best way is to use the online marketplaces. If the volume of your products is smaller, then the business to business marketplaces can give you the fastest service with a marginal discount on top of that.
Alibaba is among top business to business marketplaces for the importers, manufacturers and wholesale distributors. There are many other businesses to business marketplaces that you can use to search the suppliers.
For example, B2B marketplaces include Global Sources (United States), Buyer Zone (United States), Busy trade (Hong Kong), and EC Plaza (Korea).
· Try Searching For Dropshipping Wholesalers On Google
You can start your research with Google. But, as you continue and go to a more profound analysis, you will have to be more specific. You will have to focus on the particular product that you are looking for.
To search like an expert, you can try Google searches for essential words like distributors or wholesalers. You can also add specific terms or keywords, which are related to your product or niche.
Furthermore, you can also use the brand names, product names, and model numbers. They will help you a lot in searching for the best supplier.
Then, you will have to get through every result so that you can get a link for the wholesale account. So, you can get the contact details and other related pieces of information.
· Subscribe to All of Your Industry’s Trade Publications
You can attend the trade shows as it is the best way to grow your business and to build your business with time.
Most of the time, these events are specifically tailored for retailers like yourself. Similarly, you can also follow the trade publications.
Through the trade shows, you can have a face to face conversation with other wholesale distributors and manufacturers. As a result, you can establish ties and build a relationship with them, as they are vital to your business.
To attend the trade shows you will have to pay money and time as well. As long as you do work hard, you are a successful dropshipper.
· Join Industry Groups, Forums, and Other Professional Networks
You will have to consider the fact that not all retailers are willing to share the supplier’s information, especially with fellow competitors. To keep the game on, you can join the forums, industry groups, and many other professional networks.
You can also use the social media to get the best suppliers online. So, you need to develop a social media strategy. In this way, you can find the products and locations of the suppliers.
Networking is an excellent way of getting or finding the best wholesale suppliers for your business. Once you have successfully tied the strong ties with the industry’s insiders, you will turn into one of them. So, do not feel shy to create a LinkedIn profile.
You can also participate in the online forums, can build vital connections, and also subscribe to the industry newsletters. If you keep on working the same way, it will enhance your professional network.
Suggested reading:How To Find The Best China Dropshipping Suppliers?
The Best Dropshipping Companies & Free Suppliers List for Ecommerce
The following are the best dropshipping websites or companies, which can ensure the constant supply of products for your Ecommerce dropshipping business.
Amazon is the world’s largest online retailer and a prominent cloud services provider. The company started its working as a bookseller but later on expanded its business, and now they offer you a wide range of quality products.
The headquarters of the Amazon is in Seattle, Washington. The site has individual websites, customer service centers, software development centers, and fulfillment centers in many locations around the globe.
Suggested reading:Amazon Dropshipping: Ultimate Guide
The company is an online shopping site, which is well known around the globe for its auctions and C2C business. The site is top-rated for the online wholesalers to use as a sales channel.
The company offers its best services in worldwide. However, you need to search for the availability of products in your local area.
Alibaba is one of the most significant drops shipping websites, and you get easy access to Chinese goods through this site.
The directory of Alibaba contains the wholesalers and suppliers from China, with an immense catalog of every single product that you could ever think of.
They mostly deal with wholesalers. Therefore, you can get the products only if you are going to order the MOQ of their products. Beside it, you may found a few suppliers there who offer the products for the dropshipping.
Alibaba usually takes from 2 to 3 weeks to dropship the products to your customers. It can kill your potential sales. And under these circumstances, they may search for some alternatives.
The company is an online marketplace where people can sell handmade products. It allows the customers to search and buy antique items and crafts, which are difficult to find somewhere else.
Everything that you will find here will be made by the people who are running their small businesses.
Suggested reading:Etsy Dropshipping: Ultimate Guide
Walmart is a multinational retail corporation located in America that operates a chain of hypermarkets, discount department stores, and grocery stores. It is the world’s largest company by revenue.
The company aims to save people’s money so that they can live a better life, and it is the idea of the company’s founder. The company offers services and products at the lowest possible prices.
Jet is an American company with headquarters in Hoboken, New Jersey. The company aims to provide an exceptional marketplace where the traders can sell or buy the product at the lowest prices.
The company reviews the prices on the other websites and then gives a discount from the usual retail prices.
You can purchase the items in bulk by using the discounts and then resell them to get the profit. The company used to make the profit via customer membership, at $50 per year.
It is an America based company with headquarters in Midvale, near Salt Lake City. It was founded in 1997 by Robert Brazell.
It is a great marketplace where you can get the home décor items, furniture, bedding, and many other items. In 2007, the company achieved a profit of $7.7 million.
It is an online and app-based service. It can provide you cashback if you purchase through the Rakuten link. The company aims to help the people in getting low priced products, so they can save money and live a better life.
It is an online retail company. You can get a wide range of products here, and they will send you an email to make you sure that your parcel has been shipped.
And they will also give a tracking number to the customers, so you can check where your product is at this time. It is a reputable and trusted platform to shop from.
Costs Of Running An Ecommerce Dropshipping Business
Dropshipping is considered to be the easiest way of earning a considerable profit margin. And this business has gain popularity over time as a minimal amount is needed to start the business. There is no need to store the inventory.
· Ecommerce Platform Costs
Depending on how simple or complex the e-commerce platform is and what the licensing costs can be, the price may vary dramatically for similar functionality.
There are industry-specific solutions, integrated solutions based on the ERP systems. The software as a service offering designed to be comfortable for the business owners to set up and configure themselves.
· Dropshipping Platform Costs
You may have to pay $up to $72.90 to get a store or website for your dropshipping business. Beside it, you will have to install the apps o get all of the functionality which you want.
For instance, Shopify and Oberlo do not have any default way to offer you discounts for bulk purchases. You can sell the products in bulk. It will ultimately lower the per-unit price.
You can also build a store that is easy to navigate by the shoppers and easy to operate for you. You can also install the Shopify apps.
· Advertising And Marketing Costs
It is really not easy to say how much money you will need to spend on marketing. However, there are many assumptions that you can use to get an estimation.
The average global conversion rate in ecommerce is somewhere between 2 to 3 percent. Well, it may vary with the niche and country.
Let’s suppose the conversion rate is 2.5%, and it means that if you got 200 people to your store, five of them would buy or purchase something from your store. At this time, the best channel for the marketing of your dropshipping business is Facebook.
To get 200 customers, you will need your ad to reach 20,000 people. The price for 20,000 impressions will vary depending on who you are targeting. For instance, reaching American Facebook users will cost more than reaching Singaporeans Facebook users.
FAQ For Ecommerce Dropshipping
The most frequently asked questions related to Ecommerce dropshipping with best possible answers are given below.
· Is ecommerce necessary?
Yes, as e-commerce seems to be everywhere these days. It is a significant profit driver for the business. Most of the things in online stores are automatic. Costs of the products, customer details, payment details, availability of stock, and many more can be obtained at just one click.
Therefore, most of the consumers feel more comfortable while shopping from online stores as compared to the physical stores.
· What is the Dropshipping supply chain?
The supply chain demonstrates the path that a product takes to go from the manufacturing unit to the end consumers. The supply chain has three many components, i.e., manufacturer, wholesaler, and retailer.
The dropshippers receives the orders from the customers and direct them to the supplier. The manufacturer or supplier not only prepares the products but also ships them directly to the consumer.
· What is a hosted ecommerce platform?
The hosted ecommerce platform is a type of software used as a service and which hosts online stores.
A good hosted ecommerce platform will have ecommerce specific features like online payment integration and inventory management, powerful a reliable server technology resources and experts, and many more.
Mostly the hosted ecommerce platforms are ideal for the individuals or small and medium-sized businesses, which have a little or no ecommerce development experience.
· How much does it cost to launch an ecommerce platform?
The cost of starting the ecommerce platform depends on two factors, i.e., required custom features and traffic goals.
Depending on these two factors, you may have to pay $1K to $5K, and the professional custom site will cost you much more.
· How quickly is ecommerce growing?
E-commerce is growing tremendously. Much of the growth in ecommerce has been triggered by the massive internet and smartphone usages.
According to estimation, there will be more than 17% growth in this business within the coming years.
How Leeline Sourcing Help you find best Ecommerce Dropshipping Products and Suppliers
Leeline sourcing is another platform that is making its way in the domain.
It gives a wide range of services, for instance, from finding the suppliers to inspecting the products; it provides complete dropshipping services.
The company holds a comprehensive list of products from numerous suppliers. You can contact the suppliers very quickly and get the required goods.
The company used to keep the list of products updated, according to the market demand.
Final Thoughts about Ecommerce Dropshipping
Starting the Ecommerce dropshipping is quite easy and requires a minimal upfront cost. The business model has shown an exponential growth within the last few years, which depicts it’s potential to earn a massive profit margin.
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