Dropshipping is a form of ecommerce order fulfillment that allows merchants to sell products on their website that they are not themselves responsible for warehousing or shipping.
Instead, merchants purchase products wholesale from manufacturers or dropshipping suppliers, which oversee fulfillment for them.
The process looks something like this:
- A customer buys a product on a merchant’s ecommerce website.
- The merchant sends the order information to their dropship supplier.
- The supplier picks, packs, and ships the product directly to the customer.
Today 33% of ecommerce stores use drop shipping as a fulfillment method, and with the e-commerce industry growing at a 17% clip annually, dropshipping’s popularity is only expected to increase.
Peter Stone Group of Companies has been around for 30+ years and we would like to share our success with You by inviting You to become a Peter Stone Dropshipper.
In this guide we are going to talk about how to start a dropshipping business. But before we do, we want to introduce our Company and the niche brands you can choose from when adding us to your Dropshipping Business
PETER STONE GROUP OF COMPANIES
CHOOSE YOUR NICHE
FOR THE BEACH, DIVE, NAUTICAL, SEA LIFE, WATER SPORTS ENTHUSIASTS
CELTIC, SPIRITUAL, ANCIENT SYMBOLS, FASHION, NEW AGE
WICCA, PAGAN AND MAGICALLY INCLINED AND THE SPIRITUAL -NOT RELIGIOUS
BREE ZEE STONE
HOT SEXY AND TRENDY - FINE STERLING SILVER AND GOLD FASHION LINES CREATED BY WOMEN FOR WOMEN WHO DARE TO BE DIFFERENT
Dropshipping has become a popular business model because it makes starting an ecommerce business simple and less costly. Shipping is taken care of from the get-go, and adding new products to your catalogue is as simple as a few clicks. Your risk is minimized because you don’t have to pay for inventory or warehousing, and if the products you sell ever lose popularity you can simply change them out.
In addition, the upfront costs are minimal. You only pay a small start up admin fee of $200 when joining Peter Stone and you receive so much with that $200. Plus, dropshippers offer cheaper and more efficient shipping for their vendors than they would otherwise get. All you have to pay for is your ecommerce website and internet connection.
Finally, most dropshipping services will allow you to provide your own labels, so your customers don’t even need to know you’re a dropshipper for a small fee.
How to Start With Logistics
If you understand the minimal risk and great reward of dropshipping and are interested in proceeding, the first step is to leap a few bureaucratic hurdles. These include:
- Select and register your business name and DBA (if applicable).
- Decide on a business structure that best suits your needs (sole proprietorship, LLC).
- Acquire an employer identification number (EIN) for tax purposes.
- Depending on where you do business and what you are selling, you will need to acquire business licenses and permits from your federal, state, county, and local government.
Once you sort through the red tape of starting a business, you are ready to start the work of creating your dropshipping business.
How to Identify a Market
In dropshipping, you and your competitors all have access to the same products and work with suppliers that offer similar levels of service. Therefore, the great differentiator between your business and your competition will be your marketing efforts. This is why partnering with a established and thriving 30+ year old company who is willing to help you with marketing, is a plus. To market successfully, you need to identify a target demographic and sell a product that speaks to them in some way.
Here are some things to keep in mind as you refine your business concept:
- What interests you: It’s easier to sell what you know. Consider your own interests when looking for a product to sell. Chances are if you like it, other people are into it too.
- Identify a niche: When you first start, you want to focus on a smaller subset of people because you can tailor your business to meet their specific needs. An example of a niche would be people who scuba dive and love the Ocean, DiveSilver would be their niche
- Keyword research: To help you identify a niche, you should perform keyword research via Google Adwords and Trends to see if there is any search volume around the products you wish to sell. The higher the search volume, the higher the demand for that product.
- Social media engagement: Check to see what people in your niche are engaging with on major social media platforms, like Reddit, Facebook, and YouTube.
- Competition research: Once you’ve found a niche, research the competition in that space. If high demand is already being met with high supply, you’ll want to steer clear of that market.
- Evaluate profitability: Finally, once you have identified a market and a product, you’re going to want to evaluate the profitability of your concept. With dropshipping margins being so low, you want to ensure you can actually make money in your niche. Our jewelry offers you up to a 300% Markup.
How to Find a Supplier
Once you settle on a niche you want to target with a specific product, it is time to find a supplier that sells that product. This shouldn’t be hard as we are a mere click away. www.peterstonewholesale.com
If you wish to have more then one keep in mind Your dropship supplier is a key partner in your business. To help you find the right one, we recommend prioritizing the following criteria:
- Experience: You want to make sure your supplier has a proven track record in the dropshipping business and also provides good customer service. Before reaching out, look up their Net Promoter Score and see what’s being said about them on review websites like TrustPilot and Better Business Bureau.
- Fees: With margins being so low, you want a dropshipper that won’t hit you with unreasonable fees. SalesHoo says you shouldn’t pay more than $15 per item for stocking, packaging, and shipping. Some dropshippers will also charge you a small monthly fee for working with them. Peter Stone does not.
- Fast shipping: With dropshipping, the expectation is that the product will arrive within one to two weeks (most dropshippers are located in China). Any longer and you will likely face backlash from your customers.we offer this shipping method based on your customers shipping choices.
- Referrals: A good supplier will provide you with referrals to other businesses they work with upon request. If they refuse, consider it a red flag.
How To Build Your Website
We’ve identified a market and we’ve aligned with a supplier. Now it’s time to build the actual website where we will sell our products. There are two ways to go about this. You can either create a store on a major ecommerce marketplace like Amazon or eBay, or build your website from scratch using an ecommerce platform provider like Shopify or WooCommerce.
If you’re going to be a dropshipper, we recommend building your own ecommerce website. As we said earlier, your marketing is what will set you apart from your competitors, and ecommerce websites offer you a lot more functionality in that regard.
There are many good ecommerce platform providers out there. Choosing which platform to use for your business will partially depend on who your dropshipping for. In general, consider what kind of store you want when deciding on your platform. More product-focused stores will benefit from being on platforms like Shopify or BigCommerce, because they offer a lot of product functionality. If you want your store to be more content-focused (which could be a boon to your marketing and SEO efforts), consider using WooCommerce, which integrates with the content management system WordPress.
How to Market Your Site
Regardless of which platform you choose, you are going to need to market aggressively. This is typically done through a combination of email marketing, paid ads, and social media. Each approach has its own merits. We recommend settling on a few that work best for you.
- Email marketing: Most ecommerce platforms have a plugin for an email marketing tool like MailChimp. Collect your customers’ emails and reach out to them each week highlighting new products, sales, and content on your site.
- Facebook and Google ads: You can post ads for your website that will appear for terms related to your business on Facebook and Google. Both give you the ability to tap into a huge audience and target your specific niche. You can also pay extra to ensure your ads reach your target market.
- Social media: Posting content related to your business on Facebook, Instagram, Twitter, and other major social media platforms is a cost-effective way to organically market your business. Read our guide on small business social media marketing strategies.
- Search engine optimization (SEO): SEO should be the backbone of all your marketing efforts. It is a set of strategies that improve your website’s ranking on search engines. Steps you can take to improve your SEO include working with a website builder that prioritizes SEO (WooCommerce), engaging in keyword research-based content marketing, and building up the number of backlinks to your website.
How to Get Financing
Although the cost of starting a dropshipping business is fairly minimal, it is not nonexistent. At a minimum you will be paying for your ecommerce website, inventory, and some shipping and marketing costs.
There are a few different avenues you can take to finance a dropshipping business. They are as follows:
- Business line of credit: You can think of a business line of credit as a mixture of a loan and a credit card, allowing you to draw against a pre-approved amount of financing, and only pay interest on what you borrow. This makes sense for dropshippers who only need to pay for expenses as they arise, like marketing campaigns.
- Inventory financing: If you can’t afford the wholesale prices offered by dropshipping suppliers, inventory financing may make sense for you. With inventory financing, a lender provides the funds for a large portion of inventory, and the products purchased with those funds serve as collateral for the financing itself. As long as you make your scheduled payments on time and in full, the inventory is yours to do with as you see fit. Be careful though; if you fail to make a payment, your lender could repossess your inventory as repayment for the debt.
- Business credit card: If you’re having a hard time securing a loan, try using a business credit card. If you can qualify for a 0% intro APR business credit card, you can spend for a predetermined period without paying interest. Once your introductory period ends, your APR will set in at a rate that will vary with the market Prime Rate, so be sure to see the issuer’s terms and conditions for the latest APR information.
- Ecommerce grant: Grants are free money. However, to acquire a grant, you typically have to fill out a lengthy application and wait a significant period of time. If you’re looking for grant opportunities, two places we recommend checking are the U.S. Department of Commerce, and the U.S. Small Business Innovation Research program.
Note that if you are seeking a loan, online lenders are going to be your best bet. Dropshipping is a highly competitive industry, and banks tend to be risk-averse. Online lenders also offer faster funding, and offer more money.
How to Put It All Together
The information we have provided should be enough to get you off the starting line and into the race. Just remember that competition is fierce. The best way to break away from the pack is to create a highly focused concept, partner with a good supplier, that is willing to help, like Peter Stone Group of Companies and a solid ecommerce platform, and market like crazy. This is just the basics though. For more information on how You can get started with your very own online Jewelry Dropshipping Business Today, give us a call at 800 397 8787 or email email@example.com
Let us help you succeed!