One of the newest methods in retailing is the art of dropshipping. Shopify defines dropshipping as a method of retail fulfillment where the company doesn’t keep the items in stock but instead uses a third-party supplier (such as a wholesaler or a producer) to fulfill its orders. Dropshipping offers retailers a completely new method of dealing with the background operation of a business such as supply chain logistics and inventory management. For people who are interested in running a business, but have low capital and limited time (like college students), dropshipping provides a handy method for opening and running a successful retail business.
The Benefits of Dropshipping to a Student Entrepreneur
Dropshipping offers several advantages to a young entrepreneur that a standard retail business doesn’t. Among the most obvious of the advantages it provides are:
- Low Startup Cost: Building a business on a shoestring budget is par for the course for a student entrepreneur. Forbes mentions that the startup cost for a dropshipping business is negligible.
- No inventory Management: One of the most substantial challenges retail business face in their day to day operation is to ensure that they can fulfill their clients’ orders. Order fulfillment requires having an inventory in stock and proper supply chain management so that customers don’t get turned away. Because dropshipping happens from the source provider, there is no need for the dropshipping company to keep an inventory on hand, which simplifies the business in terms of space and time.
- Premises Not Needed: Because the system operates based on an online store, there is no need to rent a location. Dropshipping is based almost entirely on advertising, whether on social media or through other means like google ads.
A Multi-Million Dollar Business
According to AmeriCommerce, the total e-commerce market in the US comes up to roughly $220 million. Dropshipping is a significant part of that revenue, but it doesn’t make up a majority. Dropshipping’s appeal comes from the promises that it makes that entrepreneurs can earn money after setting up a store and just letting the sales roll in.
Just like any business, such as Wellington’s Fine Leather Furniture, building it and letting buyers come probably won’t be an overall successful business strategy. On the contrary, it is a better idea to follow the advice of actual e-commerce advisors. Understanding basic marketing techniques and how to apply them, as well as offering high-quality products and superior customer support, is an excellent way for a small entrepreneur to get business.
A Few Important Ideas to Remember
For all types of business, but most especially online retail stores, the aim should not be to make just one sale. Instead, the objective should be to build a brand and customer recognition from the purchase. Inc. mentions that an outstanding and stellar purchasing experience is likely to retain customers after they’ve already bought a product from the business. Return business and customer loyalty is essential. Even if a student intends to use dropshipping to build a business, there’s no reason why he or she should treat the customers as expendable.
Additionally, testing multiple methods of getting customer attention is a crucial step in streamlining an online store. Big Commerce informs us that AB testing or split testing (as it’s called within the industry) enables e-commerce websites to present 50% of visitors to the site with a different landing page from the other 50%. Through the number of conversions, an e-commerce store can streamline its marketing to convert more customers through the preferred landing page.
The Steps to Developing a Dropshipping Store
Dropshipping businesses can be done in a student’s spare time. It doesn’t need complicated negotiations or logistics to figure out what goes where and how it gets to the customer. To set up a dropshipping store in its most basic form, a student can follow this checklist:
Step 1: Find a Niche
A niche could be anything that suits your interests or the kind of customers you want to focus on. it’s a good idea to choose a niche that you are a little bit knowledgeable in (or are interested in learning more about)
Step 2: Research the Competition
Competition is stiff in the world of dropshipping. A student entrepreneur who wants to be successful should look at what other competitor dropshipping stores offer and decide how they can stand out against the background noise.
Step 3: Get a Supplier
The largest dropshipping intermediary in the world is Shopify, but a lot of other dropshippers prefer AliExpress or even Amazon as their fulfillment company.
Step 4: Develop an eCommerce Website
The heart of a dropshipping company is its branding and website design. This step is likely to take the longest since it’s the customer-facing portion of the business. It’s worth investing time and some money into putting this together if that’s an option.
Step 5: Build the Ideal Customer
The idea of the ideal customer is a standard marketing technique. Entrepreneur notes that creating a perfect customer allows a company to focus its marketing tactics and sales methodology towards a particular profile.
Step 6: Analyze Sales and Optimize Marketing
Ecommerce requires heavy marketing. It’s not a fully automated system that improves itself. However, tools exist to help an entrepreneur discover new and exciting ways to increase revenue. From content marketing to metric evaluation, depending on how technical a business owner wants to be, the analysis should help the company’s sales and visibility.
Dropshipping is Mostly About Marketing
Entrepreneurs and business-minded individuals stand to benefit the most from doing dropshipping. Even if a student isn’t the type of person who would go door-to-door to sell a product, dropshipping can work, because it’s not that kind of retail. The underlying driving factor for dropshipping is getting products in front of consumers and having them buy the product. It’s about converting the ideal customer into YOUR customer. It doesn’t take a huge chain store or a corner shop to do that. Most students can easily create websites that can sell from the comfort of their dorm rooms.