Dropshipping can be right for you if you plan to start a side hustle or even aim for financial freedom with passive income.
“Can” because all these YouTube videos tell you how to get rich – and of course quickly, do leave out important things to know before deciding to start with dropshipping. If it were easy and everyone could do it, everyone would be rich. Catch the drift?
Still, depending on your goals, chances are good that you can make a decent amount of extra money.
Five steps to prepare before starting dropshipping
You can jump on the first opportunity like FBA or any white-label shop. However, to be successful over a long time and have a sustainable side income, a better start is to understand it as the business it is.
The amount of money you need to invest to be successful with dropshipping will vary depending on a number of factors, such as the products you sell, the marketing you do, and the suppliers you use. However, you can generally get started with a relatively small investment.
1. Do your research on what you like to sell
This includes researching products, suppliers, and target markets.
You need to make sure that there is a demand for the products you want to sell and that you can find reliable suppliers who can provide good quality products at a competitive price.
2. Ideally, choose a niche to improve your market share
Don’t try to sell everything under the sun. Instead, focus on a specific niche market where you can become an expert.
This will make it easier to target your marketing efforts and build a loyal customer base.
Due to several questions from readers, we put up a specific example for such research regarding the adult entertainment affiliate niche.
3. Decide how and with which platform you want to sell products
You’ll need to choose an e-commerce platform, design your store, and add products.
There are many different platforms and services to choose from, so take some time to compare your options and find the one that’s right for you.
4. Identify marketing strategies and how to gain customers
You need to get people to your store if you want to make sales. There are many different ways to market your store, such as social media, search engine optimization (SEO), and paid advertising.
5. Be aware of the cost and plan for the actual cost of doing dropshipping
There are some upfront costs involved in setting up a dropshipping business, such as the cost of the e-commerce platform and the cost of marketing. It can be as simple as finding a good hoster for your website, which is not an easy task depending on what you want to sell.
However, the ongoing costs are relatively low, as you only need to pay for the products that you sell.
Five beginner mistakes that can cost you your business
Moving forward with the ten things to know before starting dropshipping, here are the remaining five.
These are tips for successfully running your business, increasing your profitability, organic traffic, long-term sustainability, and cash flow.
1. Don’t sell products that everyone else sells
If you want to be successful with dropshipping, you need to find a niche that isn’t too crowded.
This will give you a better chance of standing out from the competition.
2. Don’t overspend on advertising.
Promoting your dropshipping business is important, but you don’t want to overspend on advertising. Start with a small budget and track your results. Once you’ve found what works, you can increase your budget.
3. Don’t forget seasonal merchandise.
When not to save on advertising are changes of seasons, special celebrations, or national holidays. Some products are more popular during certain times of the year. If you want to maximize your sales, make sure to stock up on seasonal merchandise.
4. Don’t delay shipping.
One of the biggest complaints that customers have about dropshipping businesses is slow shipping. Make sure that you’re shipping products out as quickly as possible.
5. Don’t abandon feedback.
Customer feedback is essential for improving your dropshipping business.
Make sure that you’re responding to feedback promptly and taking steps to address any issues.
Two main reasons for failing at dropshipping
After knowing the top ten things to be aware of before trying to start a dropshipping business as a side hustle, let’s look at the main pitfalls.
As you now know, it is not going to be as easy as everyone tries to sell to you. When someone promises you easy money, they themselves dig for your money based on your enthusiasm whilst feeding you incomplete information. They are not interested in your actual success.
Here are the two main risks of dropshipping that no one tells you:
1. The easiness of dropshipping also is one of its biggest problems
There are some risks associated with dropshipping, in particular, because you are not the seller but act as a middle-man.
You have no influence on factors that are important for the success of your business, such as the risk of shipping delays, the risk of product returns, and the risk of dealing with unreliable suppliers.
These risks can be minimized by doing your research and choosing reputable suppliers. Not being aware of this is often skipped and results in a short-term income only ending with a bad reputation, no sales, and over-proportional cancellations and returns.
That means you pay for this with a lot of your time and money.
2. The person who has to create an excellent customer experience is you, not the seller
Excellent customer service is essential for any eCommerce business, but it’s especially important for dropshipping businesses.
Since you’re not the one handling the shipping and customer service, you need to ensure that your suppliers provide a good experience.
Moreover, your supplier will not provide customer service for your business. You will have to answer customer questions, handle complaints, returns, refunds, and everything else related. And all of these need to be done timely and professional.
This is okay in the beginning, but your goal is to grow and at least earn a considerable side income. Be aware and plan that you must also scale the customer touch point handling with your growing sales.
Summary
I hope you did learn about the most important things to consider about starting a dropshipping business.
They are not so different from any other business, and they should not scare you away – a great idea is the foundation of a great business. Knowing how to plan it and how to get there is the kind of knowledge you can get on the way with a bit of experimenting.
- Do not listen without questioning people telling you earning money is easy, and it just lays around waiting to get picked up. Otherwise, everyone would be rich or quit their nine-to-five jobs.
- Every successful business needs upfront planning, market research, and, most importantly, positioning within the market. Otherwise, you will compete against a plethora of other mini-startups that try to do exactly what you want to achieve.
- Earning income almost all the time requires investing money upfront. The more successful you want to be, the more money you need to invest into your business on the way and plan for it.
I wish you all the best with your side hustle or even going full-time with your idea!
Let me know in the comments how it went for you:)