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Dropshipping guide 2020: How to Start Dropshipping?

I have made a collection of tricks and recommendations to make a store based on Dropshipping. It is a very interesting concept in which you can sell products from a third party without having to store or send them. We will discover everything about online fashion sales.



Many entrepreneurs find a big problem when creating their online store since they do not have the capital to make an initial investment that allows them to have stock. In addition, they need the necessary product storage spaces. With the Dropshipping system, these inconveniences are largely solved.

What is Dropshipping and why are you interested?

Using the Dropshipping technique you can set up an online store without the need for a stock of products. On the one hand, you avoid having to have a physical space to store the material and, on the other, make an initial outlay to acquire those products that you do not know when you are going to sell.

The operation is very simple. The customer enters your online store and buys a product. Your order arrives at your Dropshipper (supplier), you pay for the product and he directly sends it to the customer. In short, the figure of your online store is an intermediary between the end customer and the Dropshipper, having the management and control of your own business but delegating a series of services to third parties.

Seen in this way, the chances of creating an online sales business can be accessible to any entrepreneur who wants to work without the need to make a large initial investment. But be careful, do not believe that everything will be easy, you have to keep in mind a series of ideas and tricks that I will give you throughout this article.

How to Start Dropshipping

Before starting your online store you must be clear about a series of points and obligations that you assume as an entrepreneur:

  1. Choose a good CMS manager for your online store

The creation, design, and management of the online store are your job. Remember that it is where the customer lands to make the purchase and you will have to control the registration of products, payment gateways, etc. You have different content managers that can help you when setting up your online store, for example, Prestashop and Magento. I really like Woocommerce which is a WordPress plugin with which you can have a professional store in no time.

  1. Get a good SEO positioning for your website

Getting customer traffic for your business will be another of the tasks you will have to do. At first, it is very likely that nobody knows you and you find it difficult to appear in the top positions of the search engines. You need continuous and precise work in this regard to improve your positioning and that your target audience finds you. In case you want to learn how to improve the SEO of your website, I recommend this post: 75 steps to do SEO.

  1. Know the margins on benefits in Dropshipping

Normally, the margins in Dropshipping are not very high. If we add to this the probability of facing “fierce” competition, you will have to be very clear about the profit margins you have to determine how far you can lower prices in order to be competitive. Depending on the sector, there may be Dropshippers that mark a minimum retail price of their products to avoid “battles” among their retailers.

  1. Do not forget to meet your tax obligations

Before starting your professional activity you have to make a series of steps before different official bodies that allow you to act as retailers and sell within the law. It is important that you proceed to process your fiscal discharge (model 036) before the Tax Agency and the discharge as an autonomous before the General Treasury of the Social Security. In the same way and periodically, it is normal that it is every quarter, you will have to present your tax settlements (VAT and IRPF).

11 tricks to get started successfully in Dropshipping

  1. Make a market study of your sector

It is very important that you know the sector in which you want to start your online store, as well as having real data on the demand for the products. In a sector with great demand, you will have a lot of competition and a greater difficulty to open a hole in it. In a sector with low demand, you will have to fine-tune to locate potential customers.

There are several tools that can give you guidance on whether the products you are going to sell have demand and competition, for example, you can use Google Trends to find out the search trends on certain products and the Adwords Word Planner to find out how many searches It has a term and, in addition, what competition it presents.

It would also be very interesting to analyze what competition you face and find out, among other details:

a) If they are very powerful stores with a very high sales volume, you will have to adjust your profit margin a lot to be able to get closer to their retail prices.

b) Find out if they do online advertising campaigns on different platforms, you may have to value investing some budget in these media.

c) Detect what keywords your competition uses on your website to attract traffic and decide if you can use them for content development.

  1. Create a good customer service

Something that will differentiate you from your competition is the personalized attention and attention with the client. Remember that it is you who they buy and any problem you must solve directly. Make it easier for your client to contact you for questions or queries, for example, through a web chat or with the social networks that best suit your business. Offering a pleasant and close customer service ensures you improve your online reputation and generate good references within the sector.

  1. Create and manage your own online store

My advice is that you do not depend directly on third parties to create and manage your online store. You can make updates at any time and save on your budget by not having to hire a professional for it. Many entrepreneurs delegate the creation and maintenance of their store to others and, sometimes, they are limited to be able to have immediate changes or improvements that they want to implement. I advise you to learn to create your online store. You can see the information on our Course WordPress Online or face to create a website from scratch.

  1. Choose your Dropshipper (suppliers) very well

This will be one of the important points to keep in mind since «everything that glitters is not gold».

Flee from suppliers that ask you for a monthly fee to sell their products, they will be looking for a profit with quotas and not with sales of their stock. This for you can be a drag that prevents you from starting the business.

Choose a Dropshipper that has an infrastructure that allows you to synchronize your stock with your product catalog, you will save a lot of time and avoid offering a product that is out of stock. Stock control can be done by importing a CSV file, or by using an API key that connects to the Dropshipper store. Also, make sure that you work with a Dropshipper that meets the deadlines and be clear on how to proceed in cases of return of orders by customers.

A good option is not to have a single provider but to maintain a relationship with two or three so as not to see you “tied” to any incident that may occur. So you will see which of them response best in the service.

  1. Implement a good Content Marketing strategy

Although your intention is to sell, for that you will create an online store, you have to design a Content Marketing strategy offering valuable content to help, advise and build customer loyalty. An initial step is to create a blog on the website of the online store. Start writing articles that can provide very interesting content for users of the sector. You will get to know yourself, attract traffic to your online store and improve the SEO positioning of it. So you know, to write super interesting articles for your target audience!

  1. Inform the customer of your retail status

As I said, the responsibility for the sale lies with the retailer (in this case your online store), so it is advisable to inform the customer when the product is not in our possession. You can record on the web or in the purchase process about this condition.

  1. Make sure the Dropshipper does not include your advertising in the shipment

Some suppliers, when sending the order, include their advertising and even the delivery note with the amounts that you paid them, something that will not be very well seen by your customer when you open the shipment. Luckily, many Dropshippers are improving this problem and make the shipment of the merchandise as if it were really your company that sends it, in this way the customer has no record that you act as an intermediary.

  1. Check if your Dropshipper is abroad

In this case, you will have to take into account possible requirements on the part of the customs that can retain the merchandise until the appropriate tariffs and taxes are settled. You must also have controlled delivery times. If your Dropshipper is abroad, make sure delivery times are not too high. This could cause dissatisfaction to your customers.

  1. Start from less to more Dropshipping

Since you don’t know how Dropshippers work, we advise you to start offering your customers a part of the product catalog. As you see results you can increase them. This way you avoid receiving several orders initially without being clear about how the professionalism of the supplier works: delivery times, product status, return policy, etc.

  1. Take advantage of online advertising platforms

In one of the previous points, I commented that at the beginning it costs to have a good position in search engines and to publicize your brand and products. But you have the possibility to do paid marketing on different platforms such as Google Adwords, Facebook Ads, and Twitter Ads. Through a certain investment in advertising, you can make campaigns that allow you to appear in the first results of Google when someone searches for your products. You can also create other types of campaigns that greatly improve your brand visibility and make yourself known. The good thing is that at all times you have control over the budget you want to allocate and real data on the results obtained.

I hope I helped you to be clear about how to take your first steps in Dropshipping. Now let’s see what software you have in the market to help you manage your orders with the Dropshipper.

  1. Manage your stock

If your Dropshipping business is growing, you can consider having several suppliers, and thus avoid inventory problems by having more than one supplier with the same items. In addition, having more than one supplier you can make faster shipments by having a greater geographical diversity. It is very important that you contact the sales manager of your Dropshipper to indicate the availability of the items you sell.

Disadvantages of Dropshipping

  1. The person responsible to the final customer is you. If an unforeseen event occurs, you must answer yourself to your clients to solve it in the best possible way.
  2. You must have many sales to obtain profitable benefits since the profit margin is not very high. In addition, you must pay the autonomous fee.
  3. Communication with the Dropshippers can be a problem if you don’t have a good relationship with the wholesaler. If an emergency arises, it is necessary that you have staff that manages your account effectively.
  4. As I said before, the lack of inventory can become a very delicate point, which will cause problems if you do not manage it correctly.

How to make your Dropshipping business profitable

  1. Get the maximum profit margin

The greater or lesser profit margin you get will depend on each product and on whether the product is in high demand. If the margins offered by your products are too low you should focus on compensating it with a high number of sales.

  1. Choose your products correctly

In Dropshipping businesses, it is preferable to opt for products with little competition. You will get greater benefits and it will be easier for you to position yourself. If you sell well-known brand products or products, you run the risk of competing in prices with other online stores that may have the same products, but much cheaper, and monopolize the entire clientele. It may be a mistake to choose to sell these types of products due to the great competition that exists.

  1. Price policy

As a retailer, you will have the option to choose the prices you put on your products. However, you will be conditioned both by the minimum price established by your supplier and by the price of your competition.

  1. Provide added value to your products

A competitive strategy may be to provide extra value to your products. So you can raise prices. You can provide greater value by offering good customer service, good after-sales service or personalized advice.

  1. Avoid packs that include the creation of the online store

You must run away from all those offers that promise to give you everything done in exchange for a monthly payment. As I said before, it is preferable to choose a CMS and create your own (or through a designer) your own online store page and make a single payment. Many companies offer packs that include the creation of your online store and also assign you a catalog of products in exchange for a monthly payment. It can be attractive since at first glance it seems that they leave us all ready to start selling. With these packs, you would be paying a monthly fee without even knowing if you are going to have a good sales volume.

On the other hand, it is recommended that you create your online store to suit you to ensure that it is optimized for positioning. When you are clear about the product you want to sell, you can also consider the alternatives that I tell you below.

Options for Dropshipping

  1. Dropshipping on eBay

Advantages

  1. Getting started is very simple, simply by creating an account on Ebay, you can start creating a list of products and start selling them.
  2. The advantage that Ebay has is that it is known worldwide and visited daily by thousands of buyers.
  3. You can forget about promoting your products with Marketing techniques. In addition, you will save having to work your SEO since Ebay has all that road traveled.

Disadvantages

  1. You must pay fees that can reach up to 10% of the sale price of your products.
  2. The Ebay design does not offer much customization, so you will have to settle for the present design.
  3. Being an auction platform, you should be aware of the status of your products to republish them when necessary.
  4. You will not be able to create an asset capable of increasing value. By not creating your own business, with your own client portfolio, you don’t have the option to sell that asset in the future.
  1. Dropshipping on Amazon

Advantages

  1. As on Ebay, starting is very simple, and has the same advantages in terms of positioning, traffic, and marketing.
  2. Amazon has a fulfillment service (complete your orders) so you don’t have inventory problems.

Disadvantages

  1. Having access to a wide network of buyers comes at a price. As on Ebay, you will have to pay rates that vary depending on each product.
  2. On the other hand, Amazon will have access to all data about your sales, so you will not have the full protection of your information.
  3. As on Ebay, the design of your sales platform is totally limited.
  1. Dropshipping with your own online store

Advantages

  1. You will have total control over aspects such as the distribution or design of your online store.
  2. You will not have to pay a percentage for each sale to any third party, so your profit margin will not be as diminished as if you work with Ebay or Amazon.
  3. You can create a brand associated with an image and increase your client portfolio.

Disadvantages

  1. You should focus a large part of your efforts on SEO strategies and online marketing since you will start from scratch, in addition to dealing with the technical configuration.

Differences and similarities between Affiliation and Dropshipping

– With Affiliate Marketing the way to earn money is different than with Dropshipping. Membership consists of earning commissions for each sale of a third-party product that you promote. The promotion can be very diverse. The common thing is to reach your audience through your blog, writing reviews of the product you are trying to sell, through banners, through email marketing, etc.

– In affiliate marketing, as in Dropshipping, the role of online marketing and search engine optimization will be very important in order to generate traffic to the pages where you promote your affiliate products.

– As for prices, in Dropshipping you can adjust the sales prices and set your own retail prices. But in the affiliation, the sale price is determined by the seller.

– With Dropshipping you have more options to create a solid and entrenched clientele since the product page is yours. With affiliate marketing, it will be more difficult, since the affiliate link redirects to the seller’s page, which will be totally different from yours.

Did you know Dropshipping?

Finally, I invite you to tell me what you think about this Dropshipping, if you knew this technique or if you practice it. Maybe you can add some advice or recommendations that I missed. I await your comments! Thank you very much for reading my article and for your interest?

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