How To Start Dropshipping Business

What Is Dropshipping?

Dropshipping is a business model where an online retailer sells products without keeping them in stock. Instead, when a customer places an order, the retailer purchases the item from a third-party supplier, who then ships it directly to the customer. In this model, the retailer acts as a middleman between the supplier and the buyer.

How Dropshipping Works

1. Set up an online store – Create a storefront on an e-commerce platform to showcase and sell products.

2. Choose suppliers – Partner with wholesalers or manufacturers who are willing to dropship their products.

3. Select products – Add chosen products from the supplier’s catalog to your store without pre-purchasing inventory.

4. Customer places an order – You receive payment and order details from the customer.

5. Notify the supplier – Forward order and shipping details to the supplier.

6. Supplier fulfills the order – The supplier ships directly to the customer, and you keep the profit (retail price minus wholesale cost).

Advantages of Dropshipping

• Low startup costs – No need to invest in large quantities of stock.

• Wide product selection – Offer a broad range without storage concerns.

• Reduced operational tasks – No inventory management, packaging, or shipping duties.

Challenges of Dropshipping

• Finding reliable suppliers.

• Limited control over shipping times and product quality.

• Maintaining customer service without handling products directly.

How to Start a Dropshipping Business

1. Commit to the Business

Dropshipping requires time, patience, and realistic expectations. Expect to invest heavily in either time or money—and don’t anticipate quick, massive profits.

2. Choose a Business Idea

Perform market research just as you would for a physical retail store. Look for niches with:

• High demand but manageable competition.

• Passionate, targeted audiences (e.g., pet accessories, phone cases, fitness gear).

Research Tools:

• Google Trends – Identify product popularity and seasonal demand.

• Keywords Everywhere – Find search volumes and competition levels.

• DSers order volume – Check how well products sell online.

3. Do Competitive Research

Identify around five competitors, including big players like Amazon or Walmart.
Research their:

• Product offerings.

• Marketing strategies.

• Pricing models.

Useful Tools:

• Google Search – Find top-ranking competitors.

• Similarweb, Alexa – Track traffic, referrals, and competitors.

• Social media – Study engagement, ads, and branding.

4. Choose a Supplier

Reliable suppliers are critical to success.
Platforms like DSers (integrated with Shopify) make it easy to:

• Find products from AliExpress.

• Automatically forward orders to suppliers.

• Offer faster ePacket shipping from China to countries like the US, UK, and Canada.

5. Build Your E-Commerce Store

Use platforms like Shopify to:

• Choose a domain name.

• Customize store themes.

• Sell in multiple currencies and channels.

6. Decide on a Business Structure

Options:

• Sole Proprietorship – Simple but no liability protection.

• LLC – Limited liability and more credibility.

• C Corporation – Strong protection but more complex.

Apply for an EIN (Employer Identification Number) for tax, banking, and supplier purposes.

7. Organize Your Finances

• Separate business and personal accounts.

• Use a business credit card for purchases.

• Understand sales tax rules in your state.

• Obtain local business licenses if required.

8. Market Your Dropshipping Store

Strategies:

• Paid ads – Facebook Ads, Google Shopping Ads.

• Influencer marketing – Affordable, trusted endorsements.

• Content marketing – Blogs, videos, podcasts to attract organic traffic.

• Communities – Engage in niche forums, Facebook Groups, and Reddit.

• Mobile marketing – Text clubs, live chat support.

• Email marketing – Build relationships and encourage repeat sales.

9. Analyze and Improve

Track metrics like:

• Best-selling products.

• Traffic sources.

• Conversion rates by device.

• Profit margins per SKU.

Tools like Shopify Analytics, Google Analytics, and SEO reports will help refine your strategy.

How the Dropshipping Model Makes Money

You set a retail price, pay the supplier’s wholesale price, and keep the difference as profit.
You never physically handle products—just manage orders, marketing, and customer relationships.