As of now, you may have come across many articles on dropshipping. But may not get a clear idea about How to Start a Dropshipping Business with no Money. Really tired of searching, how to start a dropshipping business with no money or very little money? Then you arrive at the right place. Here we talk about every aspect of dropshipping in a very simple manner.
Dropshipping means that you are only responsible for marketing and selling the supplier’s products in your online shop.
After a product is sold, an order is generated which is sent directly to your supplier who takes over the responsibility for delivering the product to your customer. For each product sold, you keep some part of the profit.
The easiest and best way for those who want to try dropshipping is via a platform that gives you access to thousands of products you can sell directly in your online shop.
The idea of running an e-commerce business without a physical warehouse probably seemed like an impossible task. But today it is extremely common and is summed up in a single word, that is Dropshipping.
Dropshipping, which is the fastest growing business model in the USA right now.
Table of Content
- What is Dropshipping?
- How dropshipping works?
- Step By Step Guide on How to start a dropshipping business with no money?
- Step 1: Choose a product to sell.
- Step 2 – Do Product competition analysis
- Step 3 – Find a reliable dropshipping supplier.
- Signs of best Supplier
- Signs of bad Supplier
- Step 4 – Make your online store
- Step 5 – Promote your online dropshipping store
- Obtaining an EIN number for your company
- Advantages of Dropshipping business.
- Disadvantages of Dropshipping business
- Key points to succeed in Dropshipping sales
What is Dropshipping?
Dropshipping is an online business model that makes it possible for users to create a webshop without stock.
The seller buys the product from the supplier against the customer’s order. The supplier distributes the product straightway to the customer. The seller receives a capital gain from the sale of the product from the store.
This model is easy for the seller. Seller does not have to keep stock of the products. These means don’t have to invest in buying products.
The seller does not buy the product until the end customer has received the order. Dropshipping is very much used in online shopping.
How dropshipping works?
The customer orders and pays for the product from your online store. Your online store sends the order to the supplier or manufacturer and you pay the product cost to the supplier or manufacturer.
The supplier will pack and deliver the product directly to the customer.
You will get your profit margin as you set in your online shop.
Step By Step Guide on How to start a dropshipping business with no money?
Step 1: Choose a product to sell.
There are a huge number of products in the world and finding a suitable product can be time-consuming. However, finding good products that fit this model is the single most important thing for you to do a profitable business.
Dropshipping is not an easy choice in terms of product selection due to the huge selection and fierce competition.
Choosing the right products is huge for your success because even with great marketing and reliable suppliers, you can’t sell products if you can’t find the right demand!
Some key points for finding the best products for sale.
Expiry Time –
Whenever possible, choose products having a high expiry time. It will surely save money and resources for you.
Choose affordable products –
Always choose affordable products to sell, it will help to generate a higher sale. It will lead to consistent sell and you will get your recurring profit margin.
Choose only physical products –
Digital products, such as software, e-books, and online courses, are not at all suitable for dropshipping-style e-commerce.
Focus on specific areas –
To succeed with this model, you should initially focus on just a few sales directions for your range. These sales categories should have enough for you to choose products for sale. The competition should preferably be less, and there should be a large number of products in that category.
Choose recurring products –
Recuring products are good options for sale, they will give you a more stable income and you will be able to develop quality relationships with your customers over time.
Easy marketability –
Choose products that can market easily in your online store.
Lightweight and unbreakable products better –
Delivery of lightweight products is cheaper and hard-to-break products will increase your revenue through reduced returns.
Step 2 – Do Product competition analysis
How to do Product competition analysis for dropshipping?
A market study for eCommerce provides you with a wide variety of data for your e-business. It will enable you to know the trends, products, and services in which online buyers are willing to buy.
A market study allows you to know your target audience, improve the description of your products. It will help you to create a market strategy that is well directed to publish your brand.
Without it, you will not have a clear strategy and the chances of something going wrong in your business will be greater.
A market study helps you determine the focus on your products, but don’t just look at your customers, remember to analyze your competition as well. So, you can set appropriate prices and offer an attractive value that no one else offers.
A market study for dropshipping is carried out to define and meet the business objectives.
As the owner of your dropshipping business, you must have to work on the below things.
- You should know the supply and demand of your products online.
- You should know the most suitable digital media for the advertising of your products.
- Determine the target audience for your brand.
- Create a marketing strategy that is successful with your current and potential customers.
- Launch innovative products that meet customer needs and stand up to the competition.
- Know the growth of the industry and current trends in the digital market.
- Improve the customer experience.
- Promote and distribute the products, adjusting them at the right price.
- Know the competing companies, their weaknesses, and strengths.
Interesting points to analyze from your competitors to get the most profitable business ideas out of it.
- If your competitors have very high sales, then you must have to work on your profit margin to stay in the competition.
- Find out on which platform your competitors doing online advertising campaigns, you may have to consider investing some budget in these media.
- Find out the keywords which your competitors use on their website to fetch the traffic and think about how to utilize them to improve your website.
Step 3 – Find a reliable dropshipping supplier.
You are doing dropshipping, which means you do not have a product in your warehouse. That means, you must have someone to supply the product to sell that does not belong to you.
The business from which you procure the product and physically store the product is our supplier. Your supplier can be one or more.
The commercial agreements between that business and you directly affect you.
Do not make deals with high turnover and targets at first Some things will emerge over time.
According to the product range, you want to sell, you have to agree with suppliers who will leave you the profit rate you want.
Doing good research on what price range the same product is sold in the market will help you find a supplier that will give you the right profit.
How to find reliable good wholesalers, Suppliers, for Drop Shipping?
Signs of best Supplier
It provides easy ordering.
It is convenient for you to handle long-lasting product selections via an easy application or web.
There should not be a limit on the order amount.
Imposing a minimum order amount can make your business difficult.
Provides professional support.
Working with a representative who will be assigned to you will help you overcome many problems easily and quickly.
It invests in technology.
Viewing online catalogs, digital order history records and real-time inventory records make it easy to work with.
Product range and continuity.
Product varieties are important, but continuity is another important factor.
It does not sell in retail.
It will be frustrating for your supplier to compete with you.
It should not demand a monthly fee.
Instead, it may be more appropriate to receive a commission from the product depending on the situation.
It has a convenient location.
The fact that the supplier is close to you and it provides an advantage in cargo delivery times.
Signs of bad Supplier
Since the customer receives the product directly from the supplier, delivery problems will be directly reflected on you. If the customer claims that they did not receive the correct product they requested, or that they received defective goods, it will be up to you to resolve the issue.
Having enough products from your supplier provides the advantage of fast delivery. Pay attention to the commercial capacity of your supplier. Stock records are not always accurate.
Choose a supplier to whom you can easily contact and communicate. A supplier that you can reach with a single phone when there is a problem gives you an advantage in solving the problems quickly. Otherwise, it will cause you to fall to the back pages in the search results of the system you are connected to due to negative store reviews by customers. This means meeting fewer customers.
Supplier selling retail
If you choose such a supplier, your supplier will compete with you. You will likely have trouble with product prices during the campaign periods.
- Worldwide Brands
- Wholesale Central
- Sunrise Wholesale
- Inventory Source
- National Dropshippers
Step 4 – Make your online store
If you want to sell things online, the first thing you need is to create an online store. A digital store opens new horizons for you.
In addition to global reach and the ability to sell services or products around the world around the clock without restrictions, you also get access to an advanced set of marketing and marketing tools.
Modern website building methods allow users to create e-commerce projects from scratch without any special skills.
On the other hand, the time and resources required to deploy the store depend on the technology you choose.
Below are some important steps to create your online shop.
Pick your shopping cart platform
Choosing the right platform to create your store makes everything easy. It is a very vital decision. There are a lot of shopping cart platforms and a lot of different options but there are only two that I would recommend Shopify and woo-commerce.
Shopify starts at around 30 dollars a month. It is very easy to use. You don’t require any technical knowledge to use it. Also, It has a great community around it.
One of the best features of Shopify is, there are a lot of apps that help you to do anything you can imagine.
The issue with WooCommerce is that it does break easier. There is no support to help you. where Shopify has dedicated support. So, I highly recommended if you’re looking to start a real business then you should go with Shopify only.
To start dropshipping with Shopify, the first thing you need to do is set up your Shopify store. Shopify has a very easy interface, you can create your e-commerce site within hours without any technical knowledge. Shopify has made it very easy to enter e-commerce. It is an excellent chance to begin your dropship business.
Click here to start your online store with Shopify. (LINK)
To establish a company for e-commerce, it is required to pay taxes on products sold on the internet.
Buy a domain name
After setting up your Shopify store, you must have to buy a domain name. You can get your domain name from Shopify or other domain name provider companies.
Integrating Payment Systems
To do e-commerce with the dropshipping model, you must add the virtual Point Of Sale (POS) method that allows you to receive payments by credit card to your online store.
There are 100s of payment channels that have completed their integration with Shopify.
Upload your products
Upload your selected products with help of applications in your online store.
Shopify’s app store has many apps where you can find products for dropshipping. The best-known apps are Oberlo and Spocket. After you become a member of Shopify, you can download these applications, choose the products according to your taste, and put them for sale in your store.
The common features of the types of applications, which I mentioned above are –
- Product import from suppliers
- Automatically fulfill orders
- Inventory and price automatic updates
- Product customization
These apps work the same way and allow you to easily categorize and easily add products from other dropshipping companies like Aliexpress or anyone else.
Step 5 – Promote your online dropshipping store
The biggest problem facing new dropshipping entrepreneurs is Promoting their online dropshipping store. The main reason for this is very low traffic on their online store.
Focusing on Marketing and SEO is the key to success in getting traffic to your e-commerce site.
After the launch of your site, you should devote most of your time to marketing, SEO, and traffic generation. To generate good traffic the first 6 to 12 months are very vital.
When you are a beginner, then it can be difficult to allocate a budget for marketing. That’s why you will need to take personal initiative to improve your SEO and marketing skills.
Obtaining an EIN number for your company
Each business must have an employer identification number (EIN) as required by IRS, which functions as a business’s Social Security number. When it comes to filing taxes, opening a wholesale dropshipping account, and opening a bank account, you’ll need this number.
Getting an EIN number is a quick and painless process. To obtain an EIN number, apply for an EIN number online.
Advantages of Dropshipping business.
- Does not bind initial capital
Perhaps the biggest advantage is that there is no need to tie money to products in advance. This allows you to start your own business at a no-cost or very low cost and is therefore well suited for beginners as well.
- Easy to get started
Another major advantage of the model is that the operation is easy to run because you do not have to worry about e.g. storage, packaging, and shipping of products. You just need your online store where the products are displayed properly and advertising it correctly.
- Low risk
Business risk is low because no initial capital is required. If it turns out that the products are not trading, you can easily exchange products or stop online shopping without major financial losses.
- Time and place independent
All you need to start a dropshipping business is a computer and an internet connection. Apart from this, you need skills to get started and run your own online dropshipping business.
- Wide product range
Because there is no equity commitment to products, you can keep a wide selection in your online store, and easily test which products sell best and remove poorly selling products from the selection.
- Easy to scale
Even if sales volumes start to grow, it doesn’t burden you as a salesperson because most of the work is done by the supplier. In addition, Facebook advertising makes it easy to scale sales up when the desired profitability is achieved.
Disadvantages of Dropshipping business
- Margins can be quite small
The business margin percentages can remain quite small depending on e.g. niche, product, and supplier. Hence, you must have to choose the products having very cheap price as possible. The margin is typically between 10-30%.
- The seller is responsible even if the supplier faults
Because the product is purchased from the seller’s online store, the seller is always responsible for the success of the transaction, even if the supplier makes a mistake. Therefore, finding a reliable supplier is very important.
- Delivery times are relatively long
The products are usually sourced from China and the e-Packet delivery method is mainly used for deliveries. The delivery time for a US e-Packet, for example, typically takes 8-15 days. Some buyers might have this problem.
In the online store, you should tell about the delivery time openly to avoid negative feedback.
- Competition can be fierce
Depending on the product, the competition may prove to be fierce Thus, it is very important to find products with very little competition.
Key points to succeed in Dropshipping sales
Adding value –
You can add value, by providing quality customer service, good guides, in-depth product descriptions, etc.
Prices lower than competitors –
You gain market share by selling at the lowest prices, but your profitability is usually weak. This method of pricing requires extremely low costs to support your business and is usually best done when playing with higher capital.
Product customizability –
If a product can be tailored to one’s own needs, of course with a higher price. However, that can take much longer to ship such products, than for regular products.
Complex technical issues in the product-
Some products that often require guidance or installation are usually good alternatives to products for sale. You can add value to them with, high-quality instruction manuals, guide videos, or product descriptions. It will greatly increase his customer satisfaction.
The below video will make things clear on How to Start a Dropshipping Business with no Money.
Here I have tried all explain all concepts of Dropshipping and made it clear How to Start a Dropshipping Business with no Money.
Dropshipping is suitable for those taking their first steps into the online business. Because it can be started with very small initial investments, Hence the start-up investment is very low.
Dropshipping is also great for online retailers who want to quickly test product ideas without having to purchase products from their warehouse.
By setting up your dropshipping stores, you can get to know and test for yourself how to build an online store and how to make it a profitable business.
Although the cost is small compared to starting your very own business with all that demands, you need to be prepared to invest a few bucks and a lot of time to get started.
Dropshipping is not for everyone, but those who have patience and business insight have a great chance to get success.
I hope this guide has helped you one step on the path to your next challenge. I would be happy if you get a clear idea about “How to start a dropshipping business with no money” in a simple way.
All the best!
Frequently Asked question
1. Do you require a business license to dropship on Shopify?
No. Shopify does not require any business license to use their platform.
2. How profitable is dropshipping business?
Dropshipping is a lucrative business if you do it by proper planning and execution. So many peoples are making $8000 to $10000 per month.
3. Can I dropship on Amazon?
Yes, Amazon allows you to use their marketplace for dropshipping if you comply with their policies.
4. Which is the best dropship company?
There are many dropshipping companies. But I preferred Oberlo for a dropshipping business.