Dropshipping Business Model
Share on facebook
Share on twitter
Share on linkedin

What is Dropshipping and Should you Start this Business in 2024?

A very easy concept of doing business. It is not a new term for any industry and many people have adopted the dropshipping business concept. Although coming into 2024, is the dropshipping model still worth it?  In 2024, is it feasible to start a dropshipping business? That is what we are here to discuss.

What is the Dropshipping Business?

The dropshipping business is a straightforward e-commerce business. You simply create a new online store and sell items from particular or multiple niches. You will be free to set prices for these items. Although, you won’t have the items in inventory.

Instead, you will forward the customer’s order to a supplier and pay only the wholesale price and the difference between the two would be your profit. Many different types of products can be sold using a dropshipping business, such as blank Popsokets, cables, chargers, and many more things.

How Does it Work?

If you are looking to start a dropshipping business, you must know, how it works?. So first the customer will place an order on your online store, according to the price you set, let us say $200 for item A.

Now you will place the same order with a supplier and pay the wholesale price of $150 for item A. The difference of $50 would be your profit. Now, the supplier will directly send item A to the customer and not to you.

Join Our Small Business Community

Get the latest news, resources and tips to help you and your small business succeed.

7 Easy Steps to Start Dropshipping?

To start your dropshipping business, you must take a few steps in the following order for a better understanding of this business concept and to also make the best decision for your business. You will need these steps to kickstart a dropshipping business. The whole process could be a lot easier if you use dropshipping software.

1. Understand and Find a Suitable Niche

To start with, you must understand what opportunities you have. You could sell many different kinds of products. Therefore, to make a firm decision, you must start by understanding the different niche possibilities and then come to a conclusion about which niche would be the most profitable for you.

2. Analyse your Competitors

Once you have made your decision about which niche product, you will serve. You must start by analyzing your competitors.

It will give you an understanding of how your competition is working in the industry and other details like their USPs, their market share, their policies, etc. This will help you build your business in a way that can compete with the existing brands.

3. Figure out your Business Structure & Other Details

Figure your Business Structure

Now, your focus must shift to your business. You should now think of your business name and structure (Sole proprietor, partnership, LLC, etc). You will set up your online business and also get the EIN for tax purposes and hiring employees.

Creating a strong business foundation can help you give a clear sight of where to move on now. You need to finalize what type of products can be sold. For example, you can also sell customized products such as custom Popsockets, koozies, bottles, and many more.

4. Do Research for a Supplier

Find the right supplier for you in your niche. You may find many suppliers who will give you the product you want to sell. Although at the time of selecting your supplier, you must take a look at their wholesale cost and other benefits to make the final choice.

5. Apply for License & Permits

Once your supplier is confirmed, you can now go and apply for the permit and license to do business in that state and country. You will need a business license and also a particular permit to sell a particular product.

6. Build your Online Site

Now that you have your business structure and business licenses and also the supplier. Consider launching an online store to reach your target audience.

This store should be engaging, highlighting your USPs, and relevant to your audience. You must also focus on making it responsive for all devices like computers, laptops, tabs, and smartphones.

7. Optimize your Dropshipping Store

Once your store is ready, you should then target your audience and work on optimizing your website so to increase the reach and make it reach the correct audience. This would need you to work on SEO optimizing your site.

It will help you bring traffic, which will turn into leads and finally become your customers. You can also focus on increasing your impression and conversion rate and use paid ads to market your store.

Would You Be Starting Your Dropshipping Business Now?

Now that you are clear about what is dropshipping and how it works. You can think about it and make a decision about whether you would like to start such a business or not.

The steps shown above would be a great boost for your business and will give you a solid foundation. In the beginning, being patient is important. Optimize your website and you will see results within a few months.

Join Our Small Business Community

Get the latest news, resources and tips to help you and your small business succeed.