The Ultimate Guide: How to Start a Dropshipping Business in 2021

Today, the internet dominates many aspects of businesses and online shopping is a very popular online activity globally. So, it is unsurprising that many people nowadays are finding themselves attracted to the idea of setting up an online business. 

There is no better time than now for you to start an online eCommerce business.

So, let’s first make a strong line between these two concepts: Dropshipping or Dropsurfing?

Wondering how to start a dropshipping business?

There is a good reason for the bold statement above.

Let’s take a look at the global stats on e-commerce:

All these numbers suggest that money is flooding into the industry. But you still need to learn how to start dropshipping and how to dropship successfully. 

That’s why we have created this article. This article is the ultimate guide on how to start a dropshipping business in 2021. 

Here, we will discuss fundamentals specific to how to start a dropshipping business, including:

  • What is a dropshipping business?
  • How does the dropshipping business model work?
  • Is dropshipping profitable in 2021?
  • Do I need to register a business entity or obtain some business permits and licenses to start dropshipping?
  • How to start dropshipping: A step-by-step guide to starting a dropshipping business in 2021

how to start dropshipping

What is a dropshipping business?

In essence, dropshipping is a very popular business model. It enables store owners to sell products online directly to consumers without holding any inventory.

Moreover, it is a fast-growing way of running an online business because of its low start-up costs, simplicity to get started, and location flexibility. 

How does the dropshipping business model work?

One of the many benefits of dropshipping is not having to keep any inventory. As a dropshipping store owner, you do not have to hold or handle the goods you are selling. 

Because of this, you can start a dropshipping business with limited funds. For a new dropshipping entrepreneur, it is a great advantage to start a business with limited funds.

And it is relatively easy to start a dropshipping business. 

But this does not mean that dropshipping is a get-rich-quick scheme. So, let’s dig a little deeper to help you understand how the dropshipping business model works. 

In the dropshipping business model, there are actually three key players. These key players include the dropshipping supplier, the dropshipper (you), and the customer.

To start dropshipping, you must get familiar with the roles and responsibilities of each key player in the dropshipping business model. 

Namely, to get started, you need to find and partner with reliable dropshipping suppliers that store and offer the products you want to sell online.

Try working with multiple supplier which you can find on our Premium Dropshipping Supplier Directory, or to begin with you can check our CJ Dropshipping Review.

You need to select the best dropshipping products from one or more dropshipping suppliers. Then, you need to add these products to your dropshipping website and market them to your customers.

Once a customer places an order in your online store, you must inform the supplier about the order. And then, the supplier fulfills the order and ships the product directly to your customer. 

For more information on this topic, you can check our article about how the dropshipping business model works. Here, you can also learn more about the advantages and disadvantages of dropshipping.

Is the dropshipping business profitable in 2021?

Fewer expenses make dropshipping a lucrative business opportunity for new e-commerce entrepreneurs. It is a steady source of income for many online merchants. 

Taking into account the data and stats mentioned above, dropshipping can be a business idea that’s worth pursuing in 2021.

Dropshipping is a low-risk business model that is still going strong. Plus, it enables you to make money from the comfort of your own home. 

However, there are a few things to remember before diving into the world of dropshipping.

The first thing you need to remember is that if you are patient and willing to invest time, effort, and money into your dropshipping business, you will definitely become a successful dropshipping store owner. You’d better do that, otherwise dropshipping isn’t worth it.

Another thing worth mentioning here is the fact that the profitability of your dropshipping business will depend on several factors.

These factors include the type of products you sell, the number of items you sell, and the wholesale prices set by the suppliers you work with. 

There are also other costs related to setting up and managing a dropshipping business, such as the costs of website development, web hosting, and maintenance, dropshipping platforms, advertising and marketing, taxes, etc. 

Do I need to register a business entity or obtain some business permits and licenses to start dropshipping?

If you are serious about your online business, you need to set up a legitimate business entity.

In other words, to collect a good amount of profit from your dropshipping business, it is recommended to set up your business as a legal entity.

By doing so, you will make sure that both your personal and business assets are legally secure.

It is important to seek legal advice and sort out all the legal stuff before registering your dropshipping business. 

When it comes to permits and licenses for dropshipping, the number of official pieces of paper you will need to run your business is minimal.

But you still need to consult somebody in the legal field. This will save you much expense and heartache.

how to start dropshipping

How to start dropshipping: A step-by-step guide to starting a dropshipping business in 2021

Want to start a dropshipping business, but have no idea where to begin? If you do not know how to dropship, just follow these steps.

1. Commit to opening a dropshipping business

Creating a new business venture takes an entrepreneurial spirit and the desire to turn your business idea into reality. Achieving entrepreneurial success requires lots of commitment. 

Keep in mind that although you have access to a wealth of knowledge, obstacles may still exist. Things like market fluctuations, competition, and financial challenges, may present obstacles for your dropshipping business.

But you can overcome any obstacle if you stay committed to your business. And remember that hard work will surely generate profit.

2. Find a profitable dropshipping niche and in-demand dropshipping products

One of the greatest challenges new dropshippers face is finding profitable, in-demand dropshipping products that will sell, whether it is a single product or a complete line of products occupying a niche in a market.

Without demand, even the best business idea in the world may be useless. If no one is searching for your product, you will have difficulty making any money.

Luckily, many online tools can help you find out if there is enough demand for your product. The most popular tools for this purpose include: 

Keywords Everywhere

Google Trends

FindNiche

Niche Scraper

Sell The Trend

Ecomhunt

Finding a profitable dropshipping niche and in-demand dropshipping products is a great starting point for your business concept. So, do not overlook this step!

3. Analyze your competition

Now that you have decided on your dropshipping products or niche, you should carry out a competitive analysis. This means that you need to measure competition in your dropshipping niche. 

On the one hand, too little competition may be an indicator of a small market that will significantly limit how big you will be able to grow.

On the other hand, too much competition may indicate that you will compete with well-established players and have a hard time building traffic. 

Also, analyzing your competition can help you evaluate potential barriers and advantages within a market around a product. In short, it can help you create great offerings and a unique marketing strategy for your business. 

This is the reason why it is a good idea to identify who your competitors are and monitor what they are bringing to the market.

To conduct thorough, in-depth research, you should be objective and use one of the following competitor spy tools:

Alexa

SimilarWeb

You can also search on Google by entering the name of the product you are planning to sell online. Then see who shows up on top.

Do not forget to browse and analyze every detail of their online stores! You may also want to check out their social media accounts. 

4. Find reliable dropshipping suppliers 

Did you know that working with unreliable dropshipping suppliers can ruin your online business?

The success of your dropshipping business greatly depends on your dropshipping supplier. Therefore, it is advisable to find a good supplier. 

Finding a reliable dropshipping supplier plays a key role in your entrepreneurial success. Additionally, you can work with one or more dropshipping suppliers. 

However, you must take into consideration some factors when choosing the right dropshipping suppliers.

You must take into consideration their location and shipping options, fees, products, return policies, etc.

You should also find out whether they are suitable for beginners or experienced dropshippers.

Even if you already know that the demand for what you are going to sell is high, you must ensure that you choose and work with dropshipping suppliers that can provide the service your dropshipping business needs.

If you want to learn more about this, you can read our article about how to choose the right dropshipping suppliers.

5. Build an online store

Once you have got your niche and product, and you have chosen your dropshipping suppliers, you are ready for the development of your dropshipping store.

Now, you need to build the actual website where you will sell your dropshipping products.

You can do so in two ways. You can either build a store on a popular e-commerce marketplace such as eBay or Amazon FBA, or use one of the major  e-commerce platforms such as BigCommerce, Shopify, WooCommerce, or Magento to create a website. 

But what is the difference between the two options?

  • Build a store on a popular e-commerce marketplace

An e-commerce marketplace is a third-party site, which includes product listings from numerous sellers across different product categories.

It is super-easy to set up an account on an e-commerce marketplace and engage in dropshipping. These marketplaces are quite popular among buyers and online merchants.

Learn How to Dropship on the Facebook Marketplace.

But the downside of selling on an e-commerce marketplace is that it can limit your independence as a dropshipper. In short, you won’t have total control over the design, branding, and marketing of your store.

  • Use one of the major dropshipping platforms to create a website 

If you want to take the route of creating your first dropshipping store, you should use one of the major dropshipping platforms mentioned above.

Though it requires more investment upfront, it is definitely the best option for creating a dropshipping store.

Through these dropshipping platforms, you can build and launch your dropshipping website with ease. Also, using one of these dropshipping platforms gives you greater control and independence. 

6. Market your dropshipping business

Now that you have created your online store, added winning products, and solidified every single detail of your new venture, it is time for people to see it.

Just sitting in front of your computer and waiting in anticipation for that first sale will not bring anything good. 

So roll up your sleeves and take action! Market your dropshipping business!

Market your dropshipping store is one of the crucial aspects of climbing the ladder of success. Just make sure that your marketing strategy suits your marketing goal and budget. 

And here is how to do that properly:

Though this is not a quick way to attract new customers, it may be an excellent long-term investment. It should get your website found in Google’s search results with time. 

You should start a blog on your website and start producting content for your audience. It is a good idea to use keywords and link to other pages on your website. 

Also, ensure that your website is user-friendly (it should not scare off your customers) and mobile-friendly (it should perform well on a mobile device such as a cell phone).

This does wonders for SEO and your buletproof marketing strategy, of course. 

  • Use social media 

You can also promote your dropshipping business on social media. Facebook, in particular, is one of the most popular social networks in the world. According to Statista, there are about 2.8 billion monthly active Facebook users worldwide

As a new dropshipping store owner, you can take advantage of the diversity and richness of data this type of social network collects. Thanks to Facebook, you can target the right audience.

  • Reach potential customers via e-mail

E-mail marketing for dropshipping stores is a powerful technique to communicate and achieve engagement with both new and existing customers. 

Whether you are selling clothing or consumer electronics, you should reach potential customers via e-mail.

To be more specific, with your e-mail marketing strategy, you will notify your customers of your latest offers or remind them of the items they liked. 

 

Final thoughts

Choosing to start a dropshipping business is a big decision. We know that as a new dropshipping entrepreneur, you probably do not know how to dropship.

So, in this article, we have covered everything you need to know to get your dropshipping business up and running.

Do not be afraid to chase your dreams and choose the path of entrepreneurship. Follow our 6 steps, and you will be on the path to launching your own online business. 

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