One of the easiest ways to get started with your first eCommerce store is to use a business model called dropshipping. You might have heard about it before, a huge craze associated with it a few years ago, and maybe you are wondering if it is the right model for your new online store.
But what is dropshipping and how does it work?
Let’s find out…
What Will I Learn?
What is Dropshipping?
The Dropshipping model is merely the process of finding a supplier for products that you want to sell. Once you have done this, you actually make sales of those products on your own online shop platform (like Shopify) which you can check out our reviews over here ecommerceasean.com and then have them delivered to your customers without you ever even touching them.
So basically, you don’t ever buy the products to sell, you just buy them after they are sold, and they are delivered to the customer by the supplier.
Sounds great, right?
The Dropshipping Process
So, here is the dropshipping process that you can use here in Singapore.
The main website that most people use for their dropshipping business is called Aliexpress, you know the B2C arm of AliBaba.
- You find a product that you want to sell,
- You locate manufacturers or suppliers on Aliexpress and check out their products, you are happy with what you see, good price, fast delivery, good star rating,
- You import the products to your store using an app like Oberlo for Shopify (if using SHopify as your ecommerce software),
- You edit the listing from the supplier adding a good write up of the product, shipping details, your new price point,
- Then you go out and try to sell that product using marketing like Facebook Ads, SEO, YouTube, TikTok etc,
- You make a sale and the customer pays you money into your account,
- You get notified of the sale inside your Shopify Dashboard,
- You click the link of the sale inside Shopify and get redirected to the supplier page where you pay for the product, shipping costs etc,
- The product is packed at the supplier warehouse and delivered to your customer without you ever touching the product at all.
This is the dropshipping process when using a service like AliExpress and Oberlo for Shopify and the great thing is, it works extremely well in Singapore too.
One of the main advantages is you don’t have to deal with any wholesalers, you don’t have to make a purchase of stock or inventory, and you get the manufacturer or supplier to deliver your product to the consumers.
Simply put, you are the retailer, who’s products are delivered to the consumer, without the hassle of dealing with a wholesaler, shipping issues, or manufacturers… pretty neat!
The Truth About Dropshipping: The Good, The Bad and The Ugly
The facts about Dropshipping: The Good, The Bad, and The Ugly. Dropshipping has been around for many years now, and more and more retailers use the model to pack their online businesses with products.
And this ease of access has come with a great burden also because so many things that are being sold in these online shops are identical.
There is no differentiation among the products that are being sold in one dropshipping store to another.
Because of this lack of differentiation, the drop-shipping model has gotten a lot of bad business press over the last few years, with some saying it is dead, and that it had its time, now it’s over.
Despite its weaknesses (or seller weakness in finding unique original products), dropshipping is still a powerful tool for your new eCommerce business.
But you have to be smart with it, and do:
The Right Approach To Dropshipping
- Do great research on trends and look for products around these,
- Find a real quality dropshipper to work with (this can make all the difference),
- Make things like your customer service brilliant,
- Don’t try to market products that are oversold or saturated.
You can definitely still use this selling method to build your business… but maybe not as quickly as you expected.
Research Tools For Dropshipping
There are a few tools that should immediately become your go-to tools for research into your future drop shipping products.
- Google Trends – this shows you trending products globally on Google – it’s good, but take a lot of research,
- Google Alerts – great for keeping up with the latest news in your chosen niche area – you get emails delivered to you with the latest news articles related to your niche,
- Exploding Topics – This shows you topics that are exploding online, the searches that are being made – and if you catch it at the right time, potentially it could be a product that makes you very wealthy,
- AliTools – This is a suite of tools for AliExpress that allows you to find great products and their competition – really useful,
- AliDropship Center – this is an AliExpress own tool that shows you how well the type of product you are thinking of selling is selling and how good the suppliers are also – really important.
There are just a few tools that I recommend getting started with when looking into dropshipping. Make sure you get yourself familiar with them.
How Do I Choose The Best Supplier For My Drop Shipping Business?
This is a great question and one that I wish more people would ask when it comes to knowing which is the right supplier, with the right prices that deliver your products when buyers purchase from you.
There are a few quick things that you can look at to see you are choosing the best supplier for your store.
- Check their positive feedback out of 100,
- See how long they have been operating for,
- View their star rating,
- Look at their number of orders for the products,
- Then look at their number of reviews,
- If you do this you will be able to get a good idea about how good your supplier will be.
Positive feedback is obviously so important as you are aware, and having low feedback scores from other customers means it might happen to you also.
It is much better to go with a company that has been in business for over 2 years, it just means that it has had more time to legitimately set up its business and also more time to gather positive reviews.
Their star rating is out of 5, based on how positive their customer reviews are.
If you look at orders of products it will tell you if they have a good number of products sold, meaning that if they are to get good reviews they have to be doing some things well, like delivery, sales, etc.
And finally review to orders ratio – if they have a 50% review to order ratio this is a good sign, which means people are happy with the products they are purchasing.
What Is The Best Platform For Dropshipping?
For ease of use, the best platform to use for dropshipping is Shopify. It is so easy to use, and you can get started for $29 per month with a free 14-day trial (no credit card needed at all).
Why is it the best?
Well, basically they built the drop-shipping model that exploded when Shopify came to the market because they (and developers who created apps for the Shopify app store) made everything so easy and AUTOMATIC!
Shopify and Dropshipping Example
(14 Simple Steps & You Are Not Involved In Most)
- Set up your Shopify store,
- Go to the Shopify App Store and add Oberlo to your store,
- Go to the Oberlo dashboard via your Shopify Dashboard,
- Search for products that you like,
- When you find a product click Import and that product will be added to your own store,
- This now connects you with the product supplier,
- Update the product on your store, text, price, etc.,
- Make sales using Shopify,
- Their payment gateways look after everything (you will need to sign up to them though),
- Once the sale is made you get a notification of sale,
- Go and click the notification and be automatically directed to the supplier to pay,
- Pay using part of the funds from your customer,
- Enter your customers delivery address,
- Your supplier will pack and deliver the product and show you delivery time etc.
And that is it…
That is why Shopify is the absolute best for dropshipping, it just simplifies the supply chain and automates a huge part of the selling process for you.
There is no other platform that does it as well as Shopify.
So I hope we have answered what is dropshipping and how does it work for you because it is definitely a business model that is worth consideration. While not as easy as it once was, it is one that if looked at professionally, as a business and not a hobby, some real cash can be made with it.
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