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5 Steps to Build an Online Drop Shipping Business

Do you want to make easy money, but you don’t have any idea how? One of the best ideas is setting up an online drop shipping business. Are you wondering what it is and how it works? You probably know Amazon, eBay and similar platforms. It’s something like that, a supply chain management method in which the retailer doesn’t keep products in stock, and it transfers them to the manufacturer, another retailer, or the wholesaler who then sends the goods directly to the customer. Being a kind of an agent between a customer and a supplier can make you filthy rich in a short period of time. To start such a business, you need the mind full of creative ideas, a little money in the pocket, and that’s it. Here is a more detailed instruction book in case you are more interested.

build an online drop shipping business

 Find Your Niche

The first step you need to take is finding your niche. You can’t sell everything. Your choice should be limited to products you have some knowledge about but at the same time those being in demand. It’s always good to start with your passion and interests, and then research the competitive market. So, for example, if you’re interested in travelling, go for travel accessories. The more unique your niche is the higher the chances of success you have. That’s why offer something that will solve the customers’ problem and avoid branches that are already covered by major sellers and brands. Then, you’ll be subjected to inevitable failure.

Find a Dropship Supplier

Once you have established your niche, it’s high time for you to find a reliable dropship supplier. A drop shipper will be your most important business partner, responsible for keeping your product in stock, upholding its quality, and then delivering it to customers. To find a trustworthy supplier usually takes a lot of time. But choosing them, you should take into consideration a few aspects. First of all, check its eligibility, whether they have dropshipping rights since some of the product suppliers are only wholesalers or manufacturers. Then, verify them in terms of their experience, efficiency and quality. Finally, make sure whether you can afford to pay their fees.

online drop shipping business explained

Get a Sales Tax ID

Establishing your business in the US or Canada, you also have to receive a tax ID, which usually equals to 6-9% of the sale price. Most states require this kind of tax, but there are some exceptions, such as Alaska, Delaware, Montana, New Hampshire, and Oregon. To obtain this tax ID, you’ll need to have a Federal TAX ID number. But don’t panic, you won’t go bankrupt since you’ll include this expense into the retail price which will be paid by customers.

online drop shipping business explained

Choose a Selling Platform

Meeting all these requirements, you can finally move to a more interesting part of your job, namely- choosing a selling platform. Now, you are at a crossroads- either you’ll use an already established platform, or you’ll start your independent online store. It’s always good to weigh up the pros and cons of both ideas.

If you decide on the existing online marketplace, you have already guaranteed a huge traffic and trust of millions of consumers. But, on the other hand you’ll have to be charged with fees for every sale and struggle with other competitors operating on the same platform.

However, if you set up your website, you can take advantage of a shopify case study, which will help you build amazing content on your Internet platform. In this case, it’s only you who takes control over the content, branding, design, layout, etc. You are more independent, but at the same time, you must invest some money and time to strike out on your own.

Promote Your Store

The final stage concerns marketing. To boost your traffic, you must reach as many potential clients as possible. You can achieve it in many ways, from promoting your products or services on social media sites, like Facebook and Instagram to using SEO and professional marketing, which will incredibly increase your search rankings.

Are you ready for your new online drop shipping business? With all these tips in the back of your mind, you should become a master in the field. So, don’t waste your time and try your luck!

Daria Skutecka


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