Are you someone who is constantly inspired by young entrepreneurs and believes that age is a mere number?
Are you ambitious about being an entrepreneur but don’t know how to juggle between school and business?
Here, we present you with one of the best practices prevalent globally ‘Drop Shipping’!
So what exactly does one mean by Drop Shipping?
Drop-Shipping consists of three main players:
- Retailer (you)
Drop Shipping is like having a business partnership with your supplier. In this business, you are a mediator between your customer and supplier. Your customer will place an order on your e-commerce platform henceforth your supplier will package the product with your brand label and ship it directly to your customer. In this case, you don’t store the inventory; you facilitate indirect communication between your customer and supplier.
The fascinating part is that you could be selling products you have never seen or touched.
How can Drop Shipping be feasible for a student?
- Minimum capital required ( investment possible using pocket money)
- Exemption of worries related to inventory, setting up a warehouse
- Less investment = less risk zone
- You’re your own boss
- Dropshipping can be a side hustle, therefore easier to manage education and your entrepreneurial venture.
Found the description interesting? Scroll further to learn more!
A pocket guide to set up a ‘Drop Shipping’ biz
Here’s what you need to do:
- Select your niche:
First, it’s necessary to make an informed decision about the niche you wish to cater to as a business. Niche is important to intrigue a particular demographic. Select a product that you can obtain for a low wholesale rate. Prefer not to deal with a general store, since it’s better to do little but do it perfectly. You can niche down further to narrow it to a specific product.
· General niche: jewelry for women
· Niched down: oxidized silver jewelry for women
· Further niched down: oxidized silver earrings for women
You should know your products well because you will have to engage with the consumers in case of an inquiry.
One important thing to keep in mind: the consumers targeted are going to be one time consumers. Therefore, your product displayed should elicit a response to impulse buying.
- Create your e-commerce site:
For a Drop Shipping business, there are 2 ways to go about it. One method is designing and launching your website. One downside of this is the huge number of pre-existing websites. In this case, you have to create your recognition and attract users.
Other methods include launching your website through renowned e-commerce platforms e.g. Amazon, eBay, Shopify, WooCommerce, BigCommerce
- Select a supplier:
Choosing the right supplier is a very crucial decision. Your supplier will be a deciding factor for the economic growth of your business.
How can you find a supplier?
You can employ different techniques to find a supplier
- Supplier directories – This is an old technique but a worthy investment. You can contact different wholesalers. You can contact suppliers through this even before deciding a niche. It’s an effective way to get additional knowledge about various products and then you can come to a conclusion regarding the product you wish to market.
- Manufacturer – if you have already landed on a niche, you can contact the manufacturer or factory outlets. Manufacturers can provide you with a list of their wholesale dealers.
- Online directories – when starting out a venture, one fear that resides is whether your supplier is authorized and genuine. Various online platforms like Worldwide Brands, SaleHoo, Doba, Wholesale central, Oberlo prove to be a more legitimate search engine for suppliers. They tend to perform a background check of their suppliers. Some of these might charge you a particular fee to access the directory and contact suppliers.
Important questions to ask your suppliers
- Are they already in tune with other retailers? (this is necessary for inventory analysis, price analysis and competition analysis)
- Shipment and delivery time
- What tracking methods do they provide?
- QMS (Quality Management System) of the supplier
- Warranty or insurance of the products
- How will they deal with damaged products or return products by the consumer?
- Mode of payment:
In a Drop Shipping business, there is a constant payment transaction between you and your supplier / customer.
It’s preferable to set up a bank account. You can assist various modes of payments also like PayPal, Google Pay, Square, SecureNet, Money box. Providing so many payment options can be applied as a marketing scheme. This is because if you provide only one option and your customer is new to that method, they might change their mind to buy a product. Also, it looks more legitimized.
PCI Compliance – it’s one method of securing the checkout methods from any kind of online or data theft. Being PCI compliant can make your business more legitimate.
More options = more suppliers / customers
- Sales Tax identification number:
These licenses differ from one country to another. This could be a prerequisite when launching your website on different e-commerce platforms. Also before contacting the supplier, this could be a legal requirement.
- Market Analysis:
Although Drop Shipping is a very convenient way to launch your business, it’s a market with a lot of competition. There’s no need to freak out! This can be managed simply by doing thorough research about your competitors, expanding your knowledge by observing their errors or oversights & also by updating your research from time to time.
- Study the demographic: Since you are trying to appeal to only a specific set of populations. You need to carry out a study related to their income, buying trends this is a good way to set appropriate prices on your products.
E.g. If you are selling boating equipment, you should study what income group your average buyers come under and their average expenditure on this equipment. After analyzing this you can label an accurate price. You can also run psychographics to learn what makes them interested in this product.
- Market trends: with changing demands every day, the market trends also change in a jiffy. It’s easy to get outdated therefore remaining updated is important. You can do this by using different online platforms like:
- Market insight (Amazon)
- Google trends
- Market your niche:
In this tech-savvy world, promoting your e-commerce business on various platforms is of great importance.
How to market?
- Offering discounts or referral codes
- Offers like buy one get one free or cashbacks
- Low-cost marketing
- Free shipping for first-time users or free shipping over a particular amount.
- Post customer reviews on your website and for your products.
- Boost your SEO (e.g. create a blog and keep updating it with relevant information, use keywords, involve URL’s )
- Create a social media page for your brand. Publish ads through social media.
- Make video content to advertise your products.
- Join relevant forums and groups on different social media to advertise your products there.
- Employ influencers to market your product by providing the user with a specific referral code.
- Supply chain management:
In the first few months, you may face issues with shipment and delivery for products. To resolve this:
- Real-time inventory data: ask your supplier to update inventory data. This will aid you to forecast your product availability.
- Customer suggestions: once the product is delivered to your customers, you can generate a survey form to review the product delivery and provide a suggestion.
While there is much more to drop shipping than just these points, this should provide a head start into launching your own e-commerce business.
“Start small, nail it and then make it big”Ritesh Agarwal (Founder and CEO of OYO rooms)