6 Steps to Start And Run A Dropshipping Store Without Ever Leaving Your Home
With solutions like Shopify, you can own and run a dropshipping ecommerce store without investing in inventory or a dedicated logistics chain
By Monika Ghosh
The global pandemic has accelerated digitization and boosted ecommerce, as consumers move online to make purchases in the interest of maintaining social distancing.
According to a survey conducted by YouGov, 82% of people in Hong Kong reported avoiding crowded places in March. In Hong Kong, a brick-and-mortar paradise with easy access to physical stores, this phenomenon was a blow to the retail sector, but a boon to ecommerce.
According to the Nielsen Media Index, data from January and February shows that Internet usage grew to a historical high of 99% in Hong Kong, while the penetration of online shopping increased by 8%. Additionally, average spending on online shopping increased by US$114 over a three-month period.
Even with economies slowly reopening, health and safety concerns remain paramount, and industry analysts predict that the online shopping trend is here to stay.
It is, therefore, an opportune moment to start your own ecommerce dropshipping business, which requires minimal investments and no inventory or logistics, and you can manage it without ever leaving the comfort and safety of your home.
Dropshipping refers to a business model where the store does not stock the products it sells, but instead, purchases the items from a third party when it receives an order, and has it shipped directly to the customer. The third party can be a manufacturer, wholesaler, or retailer.
An ecommerce store with a dropshipping model will allow you to start your business without spending a fortune on inventory, and eradicate the risks associated with large inventories, thereby giving you the freedom to test out different products and ideas in your target market.
Since you are not involved in the supply chain, dropshipping will allow you to allocate more attention toward marketing your products and store, and growing your business.
Most importantly, dropshipping will allow you to source products globally and sell to customers around the world, allowing for a rapid and intensive scale-up of your business. As an added incentive, a dropshipping business doesn’t even have to be a full-time commitment – it can be your side hustle while you continue at your day job.
Here’s how you can start and run a dropshipping ecommerce store with Shopify in 6 easy steps:
1. Figure out the basic and legal requirements for running a business in your country
If you are serious about launching a venture, even as a side hustle, you will need to research the legal requirements for operating a business in your country. While dropshipping may seem like something that doesn’t need permits or papers, it’s a profitable venture like any other, with all the accompanying tax requirements and liabilities.
Figuring out the tax requirements in your country of incorporation is an important step, not only for profits tax purposes, but also to determine any additional sales tax that you may have to charge for your products. This will help you establish the mark-up you want to charge.
Along with the legal requirements, you will also need some basic facilities for the financial aspects of your ecommerce store, including a business current account to receive and process business transactions, and a business credit card for payments to your suppliers and any other business expenses.
2. Determine your target market and product rang
According to Eric Rise, the author of The Lean Startup, the failure to understand the wants and needs of customers leads to business failure.
Therefore, before launching your ecommerce store, determine your target market – who you want to sell to, and what they want. Are they localized to your city or country? Could there be regional or global appeal for these products? Your ecommerce store can be set up to cater to any of these scenarios.
When selecting the products you want to sell, perform keyword searches and research product trends in your target market by using tools like Google Trends to understand which products are in demand, and how likely it is that they will sell in your selected market.
3. Name your online store and design your logo
A store’s name helps form the first impression of your business in a customer’s mind Therefore, it is crucial to choose the right name for your business.
As an ecommerce store, branding is a key factor in the success of your venture. You will need a customized logo that will reflect the right values on your online platform, and will be used for all branding and marketing purposes.
You can design it yourself using softwares like Photoshop or Canva, or hire a graphic designer if you have more budget to spare.
It’s also important to make sure your suppliers put your logo on packaging materials, so as to offer a more customized feel for your buyers.
4. Create and optimize your Shopify account
Once you sign up on Shopify with your business email address, you can optimize your account by adding products, payment information to receive payments, tax information, store policies, shipping charges, etc.
You can add products from Shopify’s default dropshipping app Oberlo, or select other dropshipping platforms on Shopify’s marketplace, such as Modalyst, Spocket, or Aliexpress Dropshipping.
You can add the retail price for your products when selecting them, after considering your supply and shipping costs. You can also edit the product information and employ some creative copywriting skills for a more customized store.
This is where you will need to determine your profit margin. You can keep a low margin to price your products lower to attract customers, but earnings from small orders will then be small. Pricing higher, with a comfortable profit margin, is another option, although if the markup is too much, it may prevent people from ‘converting’ or buying your products.
Retail pricing depends on your business strategy and should be a carefully thought-out decision. Crunch some numbers to find out what level of earnings you are comfortable with.
Once you have added all this information, your online store will be ready to launch.
5. Design your ecommerce store
Shopify’s Theme Store has a wide range of free and paid themes for users to choose from. Make sure you choose a theme that best complements your product range – for example, if you want to sell apparel, look for themes that facilitate bigger images for your products, and include relevant product categories.
Don’t forget to add essential pages like ‘About Us’ and ‘Contact.’ The ‘About Us’ section helps your store look more authentic, and is a useful opportunity to create a brand story that may help potential buyers connect with your message. The ‘Contact’ page, on the other hand, is a simple and efficient way of getting in touch with your customers without installing a separate feedback system.
At this stage, you will also have to add a domain for your online store. If you already own a domain, you can transfer it to Shopify, or purchase a new domain through Shopify.
When you are satisfied with all the changes, you can start selling by selecting a paid plan that best suits your needs and budget.
6. Determine your marketing plan and handle customer service
It is useless to have an online store up-and-running if no one visits your store, which is why you need to determine a marketing strategy within your budget to drive your target consumers to the ecommerce platform.
Shopify offers marketing and SEO tools like email marketing, Facebook Ads, and Google Smart Shopping. However, you can also launch marketing campaigns on your own, on social media platforms like Instagram or Twitter.
You can also leverage your network connections to drive traffic and to create awareness for your ecommerce store. Keep testing different campaigns and platforms to find out which platforms and campaigns work best for your business.
Something that’s often overlooked amid the hustle and grind of entrepreneurship is a reliable and friendly customer service offering. Offering memorable and quick service is key to having customers return to your site. If your customers are unhappy, or you fail to address their issues, they will not return to your store. More importantly, with the use of social media, dissatisfied customers can easily spread negative publicity, and you could end up losing potential customers.
While dropshipping is easy and less cost intensive than other models, keep in mind that it offers lower margins than other business models, and may involve shipping complexities and supplier errors. If orders are missed, poorly packaged, or go missing, you will have to accept responsibility for those mistakes.
Lastly, your options for customization and branding are limited with the dropshipping model. You do not have any control over the product itself, and any changes to the product will require a minimum order quantity from the manufacturer’s side, which many early-stage brands don’t have the resources to sell.
In spite of these drawbacks, dropshipping is the easiest and most cost-effective way for you to own and operate an ecommerce store. Whether you are a homemaker or a serious ecommerce entrepreneur, you can sell globally and earn income easily without having to ever leave your house, hire anyone, or invest in inventory or logistics.
This article was written with support from Findr.