After creating several successful stores, we’ve developed an eight-step guide to help set up your dropshipping store and start generating sales.
Some of the steps are necessary, while others are just recommendations that we’ve learned along the way.
Let's take a look.
- You can start dropshipping on a budget.
- Look for a product that is in demand and has low competition.
- Track your competitor's products using our Sales Tracker tool.
- Find a reliable supplier to provide the product and request samples to check the quality.
- Set up your business and build an online store using Shopify, WooCommerce, Wix, or any other eCommerce platform.
- Promote your product using Google or Facebook ads, email marketing, and social media.
- After you’ve started selling, analyze and optimize your store to increase sales.
How Does Dropshipping Work?
Dropshipping is a way to have an online store without holding or owning stock.
In simple terms, it works as follows:
- Find a product to sell and a supplier to supply and ship the product directly to customers.
- Create an online store and list the products.
- Once a product is ordered, you forward the order and shipping details to your supplier.
- The supplier packs and ships the order.
- You keep the profits (as well as the tax collectors).
You make a profit by marking up the cost of the product.
In simple terms, you buy a product from a supplier for $6, the shipping costs $2, and you sell it for $10. You get a $2 profit for every product you sell.
However, before starting, there are many considerations, including product quality, discovering a profitable product, finding a repeatable supplier, legalities, and additional costs.
Additional costs include advertising and marketing, branding, samples, creating a website, using a custom domain, automation tools, etc.
All these costs and considerations can make starting a dropshipping store challenging for beginners.
We’ve created a simple-to-follow step-by-step guide with everything you need to know.
Can I Start Dropshipping with $0?
No. It’s cheap, but not free, unfortunately.
As we learned, you don’t hold stock. This makes it more affordable to start than selling on Amazon FBA or running a traditional store.
But you will need some money to start.
How Much Money Is Required to Start Dropshipping?
Technically you could open your store for under $50.
This would cover buying a custom domain ($15) and the first month of your Shopify store subscription ($29/month).
Although currently, Shopify is offering three months for $1 when you sign up for a free trial. This means you could start selling for under $20 with this discount.
You can start with a free tool like DSers. They are an AliExpress dropshipping partner and will help place orders for your online store.
But, even though you could start this cheaply, we don’t recommend it.
- Product Testing - Always *ALWAYS* test your products. Order samples from various suppliers to check the quality of the products. Samples are usually free, but you typically have to cover the postage cost
- Website Design - Don’t spend huge amounts on your first website. But making your website more appealing and developing a brand identity can improve sales.
- Custom Packaging - Although custom packaging isn’t vital, we like to add our branding to the product to develop our brand identity further. This is usually a small label, card insert, or logo on a box. It’s generally not expensive, but it is a cost to consider.
- Marketing - Without running ads and promoting your products, how will people know your store exists? You need to consider the cost of marketing.
Try Dropship.io for Free and Get Access to Our Dropshipping Course!
We have created a step-by-step video course with everything you need to know about dropshipping.
We currently have a free trial, meaning you can watch and use the course without paying a penny!
To do so, follow these steps:
1. Open Dropship.io.
2. Click Start Free Trial.
3. Create an account, or sign up using Facebook, Google, or Apple.
4. Follow the steps to set up your free trial.
5. Open your Dashboard.
6. Click Dropship University from the sidebar.
7. Click Watch Course.
8. Use our free trial to access the course and start a profitable dropshipping store today.
How To Start Dropshipping
1. Find a Product
There are various ways to find products and considerations before deciding on them.
Top Tips for Choosing Products:
Demand - Find a product that people actively search for and want to buy. You want the product to have high demand.
Competition - See how much competition there is and what the competition is doing.
Ideally, you need a product with little to no competition, and if there is competition, think of ways to beat them.
You can beat them with lower prices, better photos, more informative descriptions, quicker shipping, or building an established brand identity - people will spend $500 on a Gucci t-shirt for the branding alone.
Size and Weight - Look for small and light products. They will keep your shipping costs low and allow more space for profit.
Legalities and Restrictions - Tobacco, plants, food, cosmetics, medication, and many other products require a license and certification to sell. Make sure to check before you land yourself in legal trouble.
Advertising Issues - Some products can’t legally be advertised in certain countries. If you can’t advertise the products, you will struggle to sell them.
Top Ways to Find Products:
Use Our Tools - Warning: For the next 10 seconds, I’m going to push our own products, but trust me, it’s worth it.
We have a Product Database tool to help you sort through and discover profitable products. You can filter your search by price, revenue, and sales. Try it out with the 7-day free trial.
We can help save hours of research using our Portfolio tool. We will send 40 product ideas every week directly to you.
Search Social Media - Use TikTok and Instagram to find trending products. Consider the longevity of a product. Will it only trend for a week, and then everyone will move on?
Use Online Selling Platforms - Search through the best-selling products on Amazon, eBay, Etsy, Alibaba, etc.
Find a Product within a Niche - Think of a niche that interests you and search for products within it. If you’re a dancer, think of products or accessories in that niche that you could sell.
Check out our article for more information on how to find the best niches.
Gaps in the Market - Identify a gap in the market.
- Think about experiences you’ve had when a product hasn’t met your expectations. Work out how to improve it.
- Look at the feedback from other customers, their issues, and how to fix them.
- The products might be available, but not in a specific location. See if you can bring it to that market.
- Consider offering better shipping, return, refund, or warranty policies.
2. Track Sales and Check Competitor Prices
Once you have found a product you think is a winner, check how your competition sells and at what cost.
How to Check Competitor's Prices:
Find your competitors using our Competitor Research tool. Simply type in the product you want to sell and see who else is selling it and how much it costs.
How to Track Competitor’s Sales:
Online Tools - The best is, of course, ours (haha). Our Sales Tracker tool allows you to add competing products and track the sales and their performance over time. It will show the price of the product, monthly sales, and revenue.
Amazon 999 Method - This is where you create a spreadsheet and track how Amazon products sell over weeks or months.
To do this, add a product to your Amazon basket and enter 999 as the quantity. This will show the number of items in stock. Enter this every day and see how the stock levels change. If the numbers go something like 801, 786, 760, 741, 722, 703, and 688, you can guess the seller is averaging 16 pieces a day.
This will give you an idea of how many you are likely to sell if you decide to sell this product.
Look at Google Trends - Type the product name into Google Trends and see the interest. If the searches increase, you can assume that sales are rising too.
Once you have all this information, you can confirm that the product is likely to sell.
It will also tell you what price you can sell for. Then, you can work out how much to spend on the product and shipping to create a profit.
Run your numbers through our free Numbers Breakdown tool.
3. Contact Suppliers and Source the Product
Once you have decided on a product, you need to source the product.
To do this, start reaching out to suppliers.
There are several places to find suppliers. Here are some of our top choices:
We look for specific qualities in a supplier. Including the following:
- Clear Communication
- Excellent Customer Support
- Ability to Integrate with Software
- Variation of Products
You also need to make sure that the following are suitable for your store:
- Return, Warranty, and Refund Policies
- Product Cost
- Shipping Cost
- Packaging and Shipping Time and Costs
It is essential to find a reliable supplier.
They will be responsible for the quality of the product, as well as packaging and shipping your product directly to your customers.
Your supplier could make or break your store. Check out our article for more information on finding a dropshipping supplier.
Try to find several suppliers you think you could work well with and fit the criteria. Make sure to check that the product price and shipping cost will leave you with a profit.
4. Request Samples and Choose One
Request samples from your selected suppliers. We recommend requesting samples from 3-10 suppliers.
Check the following from your samples:
Of your samples, there could be a clear winner - this makes it easy. You’ve found your supplier.
Or you might like them all equally. If this is the case, compare the terms, policies, price, shipping location, and communications you have had with the supplier.
5. Set Up Your Business
The country or state you sell in and where you live will determine the business type, license, insurance, and tax you need to pay.
In some areas, these are legal requirements, so make sure to check.
You may require the following:
- S Corporation
- Business Licence
- Financial Business Account
Even if these aren’t legal requirements for you, it might be a good idea to look into using them as they can help to protect you and your business.
6. Build Your Shop
You can build your store on a variety of platforms. Some of the most popular include:
Shopify - Arguably the most popular (and our favorite) option for building a dropshipping store.
Shopify is an all-in-one platform. You can create and scale your business with Shopify.
- Easy to use
- Lots of integration options
- Build a branded website
- Accepts multiple payments
- Mobile friendly
- Good customer service
- Available globally (175 countries)
- Ability to scale
- More expensive than other options
- Limited theme options
- Transaction fees on the Starter plan are 5%
- Some training materials provided are difficult to comprehend
WooCommerce - If you already have a WordPress site, add the WooCommerce plug-in to create an e-commerce store.
WooCommerce is not a stand-alone eCommerce service and requires a WordPress website.
- Affordable and free plans
- Cheap to open a WordPress account
- Easy to use
- Plug-in and extension options
- Lots of theme options
- Not a one-site solution
- Limited customer support
Wix - Wix is a platform that allows you to create a website. It is a versatile and affordable platform.
You can create a dropshipping business on Wix. But it was not created for eCommerce originally. Its original purpose was to share information.
- Easy to use
- Able to create a store with content
- No charges for using a third-party payment gateway
- Free custom domain name with an annual plan for the first year
- Not many apps or integration options
- Not initially designed for eCommerce
eBay - Selling on eBay is simple to set up. You don’t need to create your own website.
Simply list your products and run promotions.
- Use eBay promoted listings
- Add offers and discounts
- Imidate access to a large audience
- Extra fees
- Must source products from genuine trade-only or wholesale suppliers, as per eBays T+C’s. You can’t buy from a retailer or marketplace.
- Must follow eBays delivery and shipping policies
Amazon - You can dropship using Amazon, but there are policies you must follow.
Amazon also heavily promotes its FBA program and in-house brands, making competition fierce.
- No need to create a website
- Amazon already has the trust of consumers
- Collect reviews
- A large, readily available audience of shoppers
- Strict policies
- Difficult to build a brand identity
- Competition with FBA sellers and Amazon's own brands
Select your platform and join.
Top Tip: Lots of platforms have a free trial, so you can try them out before paying a penny.
Design your website and add relevant pages, like refunds, warranties, cookie consent, terms and conditions, and privacy policies.
List your products and set your price and detail your shipping information.
7. Market the Product
You have created your website and found a great supplier and high-quality products.
It’s time to get the word out there.
Develop your Website - Before marketing your products, ensure that your website is ready for potential customers. Consider the look of your website, the message it sends to visitors, your branding, and why people should buy from you.
After your website is ready, start to generate traffic. There are a few ways to do this, including the following:
Run Ads - Use Facebook, Google, and Instagram ads to drive traffic to your website.
Social Media Marketing - Reach out to social media influencers in the niche you’re selling to see if they would be interested in promoting your product.
Email Marketing - Use email marketing to update and promote new products directly to customers.
Create Social Media Content - Create YouTube videos or Instagram posts to build customer trust. It shows potential buyers what your products do and how to use them.
Post in Online Community Groups - If you sell dog toys, look for a community group that discusses the best dog toys. Find people who are your target audience and take the products to them. Get involved, offer valuable information, and promote your products. Just make sure to stick to the rules of the group.
8. Analyze and Optimize
You’ve opened your store and started making sales.
Now, it’s time to analyze the information you have and optimize your store to grow it further.
The way you do this will depend on the feedback you have. It could include:
- Altering ads
- Updating your website
- Changing your email marketing sequences
- Upselling other helpful products
- Changing the cost
- Updating shipping methods
Continue using feedback to improve your store and build a thriving eCommerce business.
Here are some common questions about starting dropshipping.
Can a Beginner Start Dropshipping?
Yes! Dropshipping is relatively low-risk and cheap to start, so it can be a good option for those new to eCommerce.
Can You Start Dropshipping by Yourself?
Yes. You can create a successful dropshipping business alone with the right integrations, tools, and platform.
Is Dropshipping Hard?
The premise of dropshipping is simple. Find a product and sell it.
Some more challenging aspects are finding the product and a reliable supplier.
It can also be challenging to manage and ensure the orders are correctly fulfilled. Plenty of tools can make this more seamless.
You are also responsible for the products sent and any customer queries.
Is Dropshipping Profitable?
Absolutely! eCommerce is growing rapidly , making it a great time to start looking for profitable dropshipping products.
Is Dropshipping Worth it?
It's worth trying. You don’t need to spend thousands to start, and it can become very lucrative. You can learn more about this in our article on is dropshipping worth it?
If you want to begin dropshipping, why not give our eight steps a go.
It can be challenging to begin dropshipping, but it is a relatively low-risk eCommerce business option. There’s little to lose and potentially an empire to gain.