How to Start a Dropshipping Business in 2022
Starting a dropshipping business is a popular way to become an entrepreneur and earn money these days. It offers many benefits like:
- An easy-to-learn business model
- Low startup and running costs
- The ability to scale globally with ease
However, like any other business, dropshipping requires careful research and planning to achieve a solid financial return. After all, you’re investing time and energy in managing a business.
A common mistake people make when creating their first dropshipping business is offering a variety of popular (yet random) products without putting thought into a cohesive collection. It’s better to start your online store with a thought-out product offering and proper setup to improve your chances for long-term growth and sales.
Since planning is key, we’ve put together the steps you should follow to successfully launch your own dropshipping business this year.
1. Find a dropshipping business idea
One of the first steps behind getting your business off the ground is having a great idea. To figure it out, think about:
- Researching which trends are popular and are projected to keep growing
- Finding out what products are in demand and available for dropshipping
Maybe you’re wondering, “why should I start with these steps?”
Well, no one can make good money trying to sell products that nobody wants to buy. Likewise, you shouldn’t focus your energy on products that aren’t available to dropship.
Before you decide on your dropshipping niche or store branding, spend some time looking into what your current options are and rely on real trends data to make informed decisions. This helps you invest your money wisely when it comes to your own store setup, product catalog, and custom designs later on.
Research global trends
Some examples of product trends that are going strong at the moment include:
- Embroidered and crocheted clothing
- Personalized pet beds and food trays
- Bright and colorful accessories (we’re looking at you, Y2K fashion!)
- Platform sandals, knee-high boots, and chunky heels
To learn more about current trends, you’ll want to use trusted resources to compile information like Ahrefs Keyword Explorer, Google Trends, and Google Ads Keyword Planner. Head over to YouTube and search for beginner how-to videos to get started.
Once you figure out what trends are popular, put together some notes on the ones that appeal to you most. After all, doing what you love helps motivate you to keep at it, and your business will stand a better chance of reaching success in the long run.
Learn more: Is Dropshipping Worth It
Choose your products
To find products to dropship, use reliable databases like:
Save links for on-trend products you come across that fit with your brand. After you’ve selected your first bunch of products, look into each one thoroughly and learn everything you can about your supplier. It’s also a good idea to order some samples to check the quality of the products.
Don’t be afraid to cut products from your lineup that are missing supplier information. This can include production location, materials, and real cost per product to you. All the information you need should be available on your suppliers’ website, or from their customer communications team.
Here’s a tip: it’s okay if some of your products have different suppliers. Just try to keep the quality and shipping times consistent. For example, don’t offer a product that takes 3 to 4 weeks to ship if the rest of your catalog ships within 5 days. Likewise, don’t include a product made unsustainably if the rest of your offering is all eco-friendly products.
You need to do right by your customers and offer popular products you’re actually proud of, so it’s worth making the extra effort!
2. Do your market research
Before launching your dropshipping business you’ll need to gather information about your audience, competitors, and the market.
Why? It helps you better gauge what’s out there before offering new products, get a feel for competitive pricing, and develop a more effective marketing strategy.
You’ll be able to find out vital information like:
- What benefits your product range has compared to competitors
- How others have approached their product descriptions and visuals
- If other businesses are taking advantage of the trends you’re interested in
- How much similar products cost on competitors’ websites
- The marketing strategies of other brands (on social media, with paid ads, newsletters, giveaways, or coupons)
To get started, it’s a good idea to follow these steps:
- Build a list of any competitors you know
- Take note of how they’ve designed their website
- List any trends showcased on their website
- Note what social media platforms they market on
After you’ve made your competitors list, it’s time to examine their products. For each retailer, consider:
- What products are offered
- What color options and designs are available
- The retail price of each product
- Shipping costs and any free shipping offers
- The tone of their product descriptions (straightforward, fun, quirky)
- What types of product images they use
- If they include product videos
Once you have all this information, use it as inspiration for your own store’s design, product options, descriptions, images, and pricing. It’s a great way to get your creative juices flowing and conceptualize how you want your business to be.
Think about the social media marketing channels your competitors use, and decide whether or not they’d also work for your audience. Check out our detailed post on the best way to market your products for additional ideas.
3. Pick a dropshipping supplier
Although you can work with more than one dropshipping supplier, it’s best to start with just one. That way, you can learn everything you need to know step-by-step and go from there.
To select your dropshipping business suppliers, here’s what you can do:
- Round up a list of suppliers from the products you’ve decided on
- Research dropshipping or print-on-demand providers
- See which products you like from which providers
- List any monthly costs for their services, plus relevant product and shipping fees
- See what designs or customization options are available
- Rank suppliers from most suitable to least suitable for your goals
- Select the best one to start with
Your suppliers are vital to the success of your business, so choose wisely. Product quality, design options, shipping reliability, and cost-per-product all affect your brand’s long-term performance and can impact customer satisfaction. Do your research and make sure you’re partnering with the right dropshipping provider for your needs.
Want to start a dropshipping business with high-quality customizable products?
4. Create an online store
Your online store is where customers will be able to peruse and buy your products. As a dropshipper, your store is at the heart of your business. Be sure to prioritize making it easy for customers to find product information and complete the purchase when building your online store.
What your store should contain
Here are the essentials you’ll need on your online store:
- An About us page describing your business
- A Products page
- A Contact page for questions and inquiries
- A page for your returns policy
These are the basics. You can also include a page for customer reviews, a FAQs page, or anything else you think is important. We also recommend reading this post to learn how to optimize your store design for better sales conversions.
When a customer clicks on one of your products, the following information should be included:
- An informative product description
- High-quality product photographs
- Some product videos, if possible
- Shipping information available upfront
- An easy-to-spot add-to-cart button
- A link to your returns policy
Now that you know what your store should contain, it’s time to start building. Check out this helpful list to figure out the different ecommerce platforms you can use to create your store.
If you’re unsure how to design your website on your platform of choice, it’s easy to use YouTube to learn from other people or hire a professional to build it for you.
Choose a domain name
Now that you know what your ecommerce website needs, you’ll want to go live. To do that, you need a domain.
A domain name is the name of your website URL address. Most companies use the name of their business as their domain name. Some website platforms let you register your domain through them, but not all offer this feature.
If your chosen platform doesn’t provide it, use one of the following services to buy and register your domain:
Once you’ve bought your domain, you need to connect it to your website platform. To do this, follow the instructions on your specific platform as they may vary. If you’re unsure how to do it, contact your website platform’s customer support team for assistance.
So your store is all set up… but something is missing, right? Time to add all those products you researched!
Head over to your dropshipping supplier and look for articles or FAQs detailing how to:
- Connect the supplier’s plugin to your store
- Import products to your Products page
This changes depending on the dropshipping supplier you chose. If you’re working with Printful, check out these simple steps from our FAQ.
Set up payments
With your store basically ready to go, you’ll need to set up a way to receive the money you get from customer purchases. Most dropshipping businesses usually rely on the built-in payment processors on their website platforms to handle finances.
For example, Shopify and Wix have you set up payments as part of their website creation process. Other ecommerce platforms might not have the same options though.
To start, check out the resources available on the website platform you chose. Look for articles or FAQs that explain how to set up payments. Make sure to follow the steps they provide, and contact their customer support team if you have any trouble along the way.
TIP—some platforms allow you to set up 3rd party payment processors or cryptocurrency. Setting up these processes isn’t usually beginner-friendly, but if you’re confident in your skills and interested in doing it then you can try those out too.
5. Register your business
Now that you’ve gotten your dropshipping business off the ground, you’ll have to comply with country or state laws before marketing and selling products. This means it’s time to register your business and set up accounting procedures.
Select your business structure
We’re not lawyers and can’t offer any specific legal advice. However, we can shed some light on different types of business structures you can choose from:
- Sole proprietorship—This is the easiest type of business structure to create. It’s great because you’ll be on the receiving end of all incoming profit. However, you’re solely responsible for all losses and won’t have any personal liability protection if your business gets sued.
- Partnership—This is very similar to a sole proprietorship, but you’re creating the business with one or more other people. It’s a collaborative effort, which can be great for new brands. However, this business structure doesn’t offer any personal liability protection either, so be careful in your operations and try to maintain open lines of communication to avoid any issues with partners.
- Limited liability company (LLC)—To start, this is not as easy as the other business structures. It usually requires either the help of an agency or a lawyer to set up. However, your business is established as a separate legal entity, which provides more protection to your personal assets. What this type of business is called and the extent of protection depends on the specific laws for the country you’re operating in.
Whichever you choose, make sure you learn everything you need to know before registering your business.
Get the help of a lawyer if you need. And if you choose a sole proprietorship or a partnership, be sure you protect yourself and your personal assets.
Learn More: Beginner’s Guide to Dropshipping Sales Tax
Open a business bank account
This is probably the most important part for managing your dropshipping business. Before making any sales, your income needs to go into a bank account.
Set up a separate business bank account with the financial institution of your choice. Some people prefer working with banks they already have personal accounts with. Regardless, what you choose should comply with your local state or country laws.
To learn more about business accounting, we have a detailed guide explaining how to manage personal and business finances. If you’re based in the US, we also have an in-depth post outlining steps you can take to start your business and set it up.
6. Market your store to drive sales
Now that your store’s ready to go, it’s time to get those sales!
Remember, nobody is an overnight success. A dropshipping business is a long-term endeavor, and you’ll have to keep working at it to get loyal customers and sales.
Choose your marketing strategy
It’s a good idea to research the different steps and watch free online tutorials to learn how to optimize your marketing tactics depending on the strategy you choose.
Some of the most common ways to get the word out about your store are:
- Social media marketing—Think FaceBook, TikTok, Instagram, and LinkedIn. Build your social media presence by creating a business page or account and posting content to reach potential customers. Posting regularly will help you connect with followers and generate buzz around your products.
- Paid ads—Instead of growing your audience organically, you can opt to pay for advertising space on Google, FaceBook, Instagram, and other social media platforms. It’s a fast way to get exposure.
- Influencer marketing—This involves partnering with someone who has a solid social media following to promote your dropshipping products across their accounts. Pick an influencer with the kind of following that’d be into your products. That way, they’ll help you grow interest and ultimately get sales.
- Content marketing and Search Engine Optimization—This is more of a long-term strategy that involves writing blog posts and using tools like Ahrefs, SEMRush, or similar to improve your content’s likelihood of appearing in search results or on social media pages. The best part about this tactic is that it lasts a long time and can always be updated.
Analyze and optimize
Once you’ve gotten your marketing strategy off the ground, you’ll have to use data to see how it’s doing. Check out:
- Free videos on YouTube
- Courses on Udemy
- Guides from your social media platforms
- Google Analytics and their free analytics tools
Mainly, you want to reuse and build off of what works. Don’t be scared to cut out whatever is wasting your time. In the end, keep working at your marketing strategy and you’ll see results over time!
Ready to get under way?
Starting a dropshipping business and finding the right suppliers is not an easy feat, but if you follow the steps in this guide you’ll have a better chance at succeeding. You’ll need to spend time researching suppliers, building your store, developing your product offering, and perfecting your marketing efforts, but it’ll all be worth it once you start getting sales.
Remember it’s a continuous learning process, but over time you’ll get better at managing your store and your sales will increase. Good luck and let us know how it goes in the comments!
What is dropshipping?
Dropshipping is a business model that allows a store owner to sell online without keeping physical stock. A third party manufactures the products which they ship to customers who’ve bought from the dropshipper’s ecommerce business.
How does the dropshipping business model work?
A dropshipping business model consists of a store owner who markets and sells products that an external manufacturer produces. Whenever a customer makes an order, the dropshipping provider creates the product and ships it to the customer’s address. A dropshipping store owner doesn’t need to keep any stock, so financial investment is low enough that most people can try dropshipping out and test their business ideas.
What are the pros and cons of running a dropshipping business?
A dropshipping business model is not suited for everyone. Even though it’s one of the easiest business methods to try out, people still need to research suppliers, test products, manage customer relationships and returns, file taxes, and keep track of inventory and shipping price changes with their suppliers. On the other hand, dropshipping offers plenty of opportunities to scale your business globally, access a wider range of products, increase profit margins, and remove the need of renting warehouse space and manually shipping orders to customers.
Can you start dropshipping by yourself?
Yes, you can dropship by yourself. You don’t need a business partner to start your own dropshipping store online, and the internet provides many opportunities to find good quality, international suppliers from all over the world. As long as you take the time to learn how to sell and market online, you’ll be able to run your own dropshipping business.
Can you make money dropshipping?
Yes, you can definitely make money dropshipping! Dropshipping is a profitable, low-risk business model that requires little money upfront, and provides plenty of opportunities to scale your ecommerce store globally. If you take the necessary time to research and plan out your business, you could find yourself earning a lot in the future!
Can you dropship with no money?
Yes, you can start a dropshipping business with zero investment. Major dropshipping platforms like Amazon, eBay, and Shopify cost no money to try out and you don’t pay until an order is placed. However, we recommend spending some money on samples so you know the quality of the products you’re selling.
How much do beginner dropshippers make?
Not all dropshippers make huge amounts of money in their first year of business. Beginners need to learn the best ways to market their products, manage their online store, and build their own brand before they can earn a lot. However, it’s possible to make money in your first year if you’re dedicated and have experience with design, running a website, and marketing. Dropshipping is a long-term endeavor, so store owners will eventually earn more with time as they build their ecommerce management skills.
How can you start an online business using dropshipping?
Dropshipping allows you to sell products from suppliers without storing any inventory yourself. To start, you’ll need to choose products and a dropshipping provider, and create an online store. Use Shopify, Wix, or something else to create your dropshipping business. After, connect to a dropshipping provider like Printful to add the products you’ve chosen to sell to your store. Next, market to customers and manage orders as they come in. These are the main steps for starting an online business using dropshipping, but go back through this article for more in-depth information.