Dropshipping allows you to start a business with minimal financial risk and low upfront costs, making it a popular choice for budding entrepreneurs and experienced business owners alike.
In the dropshipping business model, you partner with a third-party supplier who handles inventory and logistics on your behalf. As a dropshipping business owner, you are primarily responsible for marketing and selling products, while your dropshipping partner does the rest.
For example, if you decide to sell custom t-shirts, you don’t need to buy hundreds of shirts upfront. Instead, when a customer orders from your website, your supplier prints and ships the t-shirt directly to the customer. Unlike traditional retail business models, the dropshipping model allows you to avoid leftover stock and test new products with minimal financial risk.
At this point, I’m sure you can see the appeal. But even though dropshipping is a profitable business model, it still requires market research and careful planning to be successful. From brainstorming dropshipping business ideas to building your online store, there’s a lot to consider.
That’s why we’ve compiled a list of how to start a dropshipping business in 7 steps. Let’s get started.
Identifying what you want to sell and to whom is the first step of starting a dropshipping business. That means finding a balance between your personal interests and market demand. Choosing a dropshipping niche you genuinely care about will help you market your products and overcome any challenges that arise. It’ll also help you better understand your customers’ needs as you’re part of the same crowd.
To develop your dropshipping business idea, spend some time researching the market and exploring current trends. Aim for products that are in high demand and will keep trending in the future. After all, you can’t sell what no one wants to buy. Make sure there’s a solid customer base for your chosen niche market. Additionally, check that the products you plan to sell are available in your selling region.
Learn more: 21 Trending Products to Sell Online in 2024
Google Trends allows you to view trending keywords in specific locations. While it won’t give you the exact number of searches, it’ll give you a general idea of whether the term you’re searching for is trending.
Source: Google Trends
To zoom in on your search, use Google Ads Keyword Planner. This tool shows how many people are searching for specific keywords, how high the competition is, and how much it would cost to advertise on those keywords.
Source: Google Ads Keyword Planner
If you have the budget, you can also research with more advanced tools like Ahrefs, SEMrush, or AnswerThePublic. These tools allow you to do in-depth keyword research, see what your target audience is searching online, and explore your competitors’ keyword and ad strategies.
The next step is sizing up the market. Researching other dropshipping companies is a good way to understand what’s already out there and how to make your own dropshipping business stand out.
Start with a simple Google search and look at some of the top-ranking online stores in your niche. Explore their websites and note aspects like branding, product range, and pricing. Pay attention to their product images and descriptions—they are key in attracting customers.
Next, visit online marketplaces like Amazon, eBay, and Etsy. These platforms will help you discover popular products and how they are priced. Customer reviews and comments are especially useful. They often reveal what customers like and dislike about products, offering you a direct look into consumer needs.
Another effective strategy is joining Facebook groups and checking out online forums like Reddit. Online communities are where people interested in your niche express their needs, desires, and frustrations. Understanding those can help you choose the right products for your target audience and build a better marketing strategy for your ecommerce business.
Once you’ve researched the ecommerce industry and your competitors, use this information to develop your dropshipping business strategy. Take the time to think about how your online business can stand out from competitors and meet your customer’s needs.
Choosing the right dropshipping partner is one of the most critical decisions for your ecommerce business.
Your dropshipping supplier will be responsible for the inventory, quality, and fulfillment process. The supplier’s efficiency will directly impact your business reputation and customer satisfaction.
Consider the supplier’s reputation, product quality, and shipping speed. Research what products they offer and ensure they deliver goods to your intended selling region. If you want to customize and sell products under your brand, explore print-on-demand dropshipping options like Printful.
Your dropshipping supplier should be responsive and easy to communicate with. Whenever there’s a delivery delay, damaged goods, or any other customer complaint, your customers will hold you—the seller—responsible. Make sure your supplier’s customer support will address any issues quickly and efficiently. Also, check their return policies and how they handle defective or incorrect orders.
Cost is a significant consideration, too. Compare the product pricing, shipping costs, and any additional charges from various dropshipping suppliers. While lower costs can increase your profit margin, quality and reliability shouldn’t be compromised for lower prices.
A good supplier relationship will ultimately lead to smooth operations and customer satisfaction, affecting your brand’s long-term performance. Do your research and make sure you’re partnering with the right dropshipping provider for your business.
A common mistake new sellers make when creating their dropshipping business is offering various popular (yet random) products without thinking about how they fit together. Base this decision on the broader understanding of your brand. Your business identity should influence every aspect, from product selection to social media representation. Setting your business up right from the start improves your chances of sales and supports long-term growth.
Once you’ve considered your brand, done market research, and know what’s trending, it’s time to create your unique value proposition. Simply following trends isn’t enough. You’ll need to differentiate your products and make them relevant to your target audience.
For example, if you want to start a clothing brand that sells streetwear, consider custom hoodies and tees with designs that speak to your community.
Next, look at the products your supplier offers. Their catalog will determine the items you can sell. Ensure the products align with your brand vision and market demand. Make sure your supplier provides all legally required information about the products. This includes safety warnings, user instructions, and regulatory compliance labels, depending on the product type and the region you’re selling in.
How many products should you add to your store when you’ve figured out what products are available?
It’s a good idea to begin selling just a few products and see how they perform. You might need to test different designs to find the winning ones. Fewer products will also make it easier to manage your dropshipping store and provide better customer support, especially if you plan on working solo.
Before fully committing to selling a product, order samples for yourself. This ensures that what you’re selling meets your expectations and quality standards. It also helps you understand the overall customer experience.
Developing your product selection is an ongoing process. As you start making sales, listen to your customers. Their feedback and purchase patterns will help you add new items that customers want and discontinue products that aren’t selling.
Ecommerce platforms let you build your own website. You control how it looks and works, handle your branding, and manage your sales. They’re great if you want full control over your online store but require more effort to set up.
Online marketplaces are platforms where many sellers list their products. These sites are well-known and attract lots of customers. Marketplaces are easier to use because they handle things like payments and sometimes customer service. However, you have less control over how your online store looks, and you usually pay a commission on your sales.
We’ve compiled a list of ecommerce platforms and marketplaces popular among dropshipping sellers so you can explore and compare them in depth. There, you will also find detailed instructions on how to set up your online store.
Source: Printful Integrations
If you choose to build your own website, you’ll need to pick a domain name. Aim for a short, memorable name that reflects your brand. It’s good to check if the name is also available as a username on key social networks. Having a unified name across your website and social media strengthens your online presence and makes it easier for customers to find you.
If you’re unsure how to design your online store, follow a tutorial on YouTube or hire a professional to build your site for you.
Once you’ve set up your site, it’s time to add products to your store. The process will differ depending on your dropshipping partner. If you’re working with Printful, follow our guide.
When creating your product pages, include detailed and engaging product descriptions, high-quality product images, and shipping information.
Before you can start selling, you must comply with country or state laws. That means it’s time to register your business. Besides the bureaucratic part, registering your online business has several advantages, such as separating your personal and company finances and legal protection.
While we can’t offer you legal advice, we can shed some light on different types of business structures for small business owners:
A sole proprietorship is the simplest business structure where one person owns and runs the business. It’s easy to set up and offers complete control, but it also means personal liability in case of company debts or legal issues.
A partnership is similar to a sole proprietorship, but you create the business with one or more other people. This structure shares control, profits, and liabilities between partners. However, it doesn’t protect from personal liability either, so be careful in your operations and avoid any issues with your business partners.
A limited liability company (LLC) is easy to run—like a sole proprietorship or partnership—but gives you the legal protection of a corporation. If your business owes money, your personal assets are usually safe. Setting up an LLC is a bit more complex and usually requires the help of an agency or a lawyer. But it offers more safety and options for managing and taxing your business.
Learn More: Beginner’s Guide to Dropshipping Sales Tax
Before making any sales, your income needs to go into a bank account. You’ll also use this account for all your business expenses, such as web hosting and paying your dropshipping supplier.
Set up a separate business bank account for your business and make sure you comply with your local state or country laws. Avoid mixing personal and business finances, as it’ll make accounting difficult and can get you in legal trouble.
If you don’t feel comfortable managing finances yourself, working with an accountant is a good idea.
To learn more about business accounting, we have a detailed guide on managing personal and business finances. If you’re based in the US, we also have an in-depth post about taxes and legal requirements.
Now that you’ve set up your store, It’s time to get the word out and draw customers in. There are a few ways to do it:
Social media: Create accounts on platforms like Instagram, Facebook, and Pinterest. Build your social media presence by posting regularly. Show off your products and reply to customers’ comments. This is an essential first step toward organic growth for your dropshipping business store.
Search Engine Optimization (SEO): Good SEO helps your site get noticed in search results, making it easier for potential customers to find you. Include relevant keywords on your website, in product descriptions, and alt tags. Make your site easy to navigate and optimize for mobile devices.
Paid advertising: Besides organic marketing, consider investing in paid ads to reach a larger audience and drive more sales. You can also use retargeting ads for visitors who’ve already visited your site. It’s easier to sell to someone who’s already interested than to attract new customers.
Email marketing: Collect email addresses from your website visitors (maybe offer them a discount to sign up) and send out regular updates about new products, deals, or exciting news related to what you’re selling.
Content marketing: Consider starting a blog on your site. Write posts that answer common questions or offer advice related to your products. This helps with SEO and also shows that you know your stuff.
Influencer partnerships: Look for someone relevant to your target audience and collaborate with them to promote your products. As a new dropshipping business owner, you might not have a big budget, so consider offering influencers an affiliate fee. This way, you won’t have to spend a lot of money, and they’ll get a commission from every sale you make.
Online communities: This is a powerful strategy for building customer relationships without directly selling to them. Use communities to give value and assistance to customers. Remember, your most valuable asset is the place in your customers’ minds.
Promotions and discounts: Everyone loves a good deal. Special discounts or waived shipping costs are a fantastic way to bring new customers to your store.
Lastly, always chat with your customers. While this isn’t a marketing technique per se, it affects your reputation. Replying to customer messages and comments or thanking them for reviews shows that you care, and can turn a first-time buyer into a loyal customer.
To make sure your marketing efforts are paying off, analyze the results. Use tools like Google Analytics or Google Search Console to look over your website’s traffic and customer purchases. This’ll help you understand which marketing channels work best for your dropshipping store.
Likewise, look at your ad statistics to determine the best-performing ones. Test different ad variations by switching up images and descriptions. Don’t get discouraged if an ad doesn’t work right away. Sometimes, it takes time to find out what clicks with your customers. Just make sure to start with a smaller ad budget and scale up only when the ad is performing well.
Finally, analyze your marketing performance and sales results often. Optimize your product selection, pricing, and marketing strategy to reach customers and drive sales.
So there you have it—a rundown on how to start a dropshipping business.
This business model offers flexibility and low start-up costs. Whether you’re looking to turn a passion into a business or simply want to try something new, it’s a low-risk way to try your ideas. Plus, with dropshipping, ecommerce businesses can reach a global market more easily than ever—often by working out of a living room.
As you go along, keep adapting to trends and customer needs. With time and dedication, you can turn your ideas into a successful dropshipping business.
Ronja is a Content Writer at Printful. With a degree in performing arts, she’s passionate about all things creative. Currently, she’s expanding her expertise in marketing while pursuing an MA in creative industries.