Have you ever thought of starting an e-commerce store but don’t have the means to produce or store the products you want to sell? Don’t get discouraged. Dropshipping offers you a unique alternative to more traditional business models. Read our ultimate guide to dropshipping to learn everything you need to know to get started.
What Is Dropshipping?
At its core, dropshipping is a type of online retail business model. Using this model, the seller doesn’t manufacture or stock the products you sell. Instead, you purchase items as needed from third-party suppliers. These suppliers are the ones who take care of packing and shipping customer orders.
Let’s take a quick look at how dropshipping works:
- You list items from your dropshipping partner(s) on your dropshipping store website.
- A customer places an order and receives a confirmation from your business.
- The order gets forwarded to the supplier.
- The supplier packs and ships the order.
- The customer receives the order.
Is Dropshipping Legal?
Yes, dropshipping is legal, so long as you go about it correctly. You may not be in charge of stocking inventory and shipping items yourself like many online stores, but you’re still running a business. And like any other business, you’ll need to adhere to local, state, and national laws when you sell online.
Awareness of copyright or trademark infringement is a must. Copyright violations often occur when a supplier is selling counterfeit products. As the business owner, you could still be liable and face legal issues, even if you were unaware of what the supplier was doing. Choosing reputable suppliers with high-quality products can help reduce this risk for your dropshipping business.
Other laws you’ll want to keep in mind include:
- Consumer protection laws: You’re responsible for product quality and safety
- Tax laws: You have to collect and pay any applicable sales tax as well as pay income tax
- Truth in advertising laws: When marketing products, you must represent them accurately
Depending on your location, you may also need a business license or seller’s permit (sales tax permit) to run your own online store. Even if your state doesn’t require a business license, you might consider applying for one anyway. You may also want to think about product liability insurance.
Please note that this information doesn’t constitute legal advice. Consult with a legal or tax professional for guidance specific to your business and location.
Benefits of Starting a Successful Dropshipping Business
Not sure if dropshipping is a good idea? Here are a few benefits to consider:
Low Startup Costs
There’s no need to rent a warehouse or even an office as a dropshipper. Nor do you have to worry about the costs associated with packaging materials. Instead, most of your initial — and ongoing — costs are your website, product costs, and marketing efforts.
Wide Product Selection
As you aren’t the one maintaining inventory, you can partner with multiple suppliers and offer a broader array of products than businesses that stock items themselves. You can also rotate or change your products quickly, allowing you to stay on top of the latest trends and customer demands.
Flexibility
Dropshipping offers a great deal of flexibility. Running your own business means being your own boss, and setting your hours. You can work from pretty much anywhere with an internet connection.
Reduced Risk & Inventory Management
You only order products when your customers purchase them. That means you don’t run the financial risk of over-ordering items and potentially sitting on unsold inventory.
Scalability & Growth Potential
Scaling any business comes with extra work. However, with dropshipping, your suppliers handle the additional orders from your increasing customer base. This leaves you free to focus on other aspects of growing your business.
How to Grow a Dropshipping Business
The following tips in our ultimate guide to dropshipping can help you launch and grow your dropshipping business:
Market Research
First, you’ll need to decide on your business idea and find your niche. Narrowing your focus makes it easier to identify your target market or the people most likely to purchase the types of products you plan to sell. Take some time to get to know them. That way, you can reach them more effectively and generate sales.
Find Quality Suppliers
The suppliers you work with can make or break your business. To increase your likelihood of success, you’ll want to assess your options and partner with reliable, reputable companies that stock high-quality products your customers will want to buy.
Create Your Brand Identity & Website
Developing a brand identity helps you distinguish yourself from your competitors. It also allows you to connect with your target market, helping you build trust and relationships. Along with a recognizable name and logo, you want to consider design aspects such as colors, fonts, and other imagery. You want to establish a unique voice and personality, too.
You also need a place to sell your products. Shopify is a great e-commerce platform that offers the tools you need to build your digital storefront and showcase your unique brand.
Market Your Business
Marketing is essential for building awareness of your brand. It allows you to reach your target market and attract customers to your online store.
There are many ways you can market your business:
- Search engine optimization (SEO): Using tactics that optimize your website to increase your rankings in search engine results (incorporating keywords, link building, fast loading speeds, seamless user experience)
- Content marketing: Creating and sharing relevant content such as blog articles, videos, podcasts, and other media to attract and engage your target audience on Google search
- Email marketing: Sending emails (newsletters, promotional offers, recent updates) to build relationships and drive sales
- Social media marketing: Establishing a presence on social media platforms to build brand awareness and connect with your target audience
- Word of mouth: Encouraging satisfied customers to promote your brand
Ultimate Guide to Dropshipping: How to Pick the Best Dropshipping Suppliers
Not all suppliers are the same. The following tips can help you find the best dropshipping partners for your business:
- Look for unique and trendy store inventory: Unique, stylish, in-demand products can help you stand out and attract more customers in your target market.
- Assess product quality: Your supplier’s products should be made from high-quality fabric and be well-sewn.
- Ensure product reliability: With dropshipping, you will need to ensure that your product quality is consistent and that the on-shelf availability for hot-selling products is accurate.
- Check shipping costs and logistics: While you aren’t in charge of shipping, you’re still responsible for ensuring customer satisfaction. How quickly does the supplier ship? What’s their return policy?
- Look for positive reviews and reputation: Reviews offer insight into the experiences of other dropshippers.
- Evaluate profit margins: What is the dropshipping supplier charging you versus what you would sell the product for? Be on the lookout for monthly fees, too.
- Check for high-quality product descriptions and images: This will help you decide which products to use for your store’s inventory.
Trendsi: Your Trusted Dropshipping Supplier
With Trendsi as your dropshipping partner, you’ll gain instant access to over 100,000 high-quality, on-trend products sourced from trusted suppliers. After connecting your Shopify store, you can easily add and change products with just a few clicks. While you focus on customer service and growing your business, we’ll handle all of your shipping and logistics needs. There are no monthly fees or minimum order quantities.
Trendi has strict supplier sourcing rules and quality checks to guarantee our products are of the highest quality. We guarantee 2-7 business day shipping from our US warehouse and ensure high on-shelf availability for hot-selling products.
Has our ultimate guide to dropshipping motivated you to get started? Visit Trendsi to learn more and start selling today!