Among the many options, you have to make money online, selling products is undoubtedly the most lucrative. However, it is also true that not everyone has the capital to set up an online shop with their own merchandise. Fortunately, there are alternatives; read on to find out about Dropshipping, what it is and how it works.
Below, I’ll give you a detailed guide on how Dropshipping is done, from finding suppliers to setting up your shop. In addition, we will see how profitable it is as a business model.
Dropshipping: what is it and how does it work?
This model consists of selling products online, but with a supplier who takes care of the storage and logistics of the order. You are in charge of creating the shop and attracting customers, the customer places the order and your supplier takes care of shipping it; it’s as simple as that!
The main advantage is that you don’t have to make a large investment or purchase the product in advance, and most of the process is automatic. Currently, one third of e-commerce consists of Dropshipping; in fact, one of the best Dropshipping examples is Amazon itself, who have hundreds of suppliers.
Although it is difficult to know how much you earn with Dropshipping, it is a profitable business, as you do not have to deal with production and shipping costs. Usually, the supplier has a fixed price to which you can add what you want to earn. All this without investment risks, so you could earn a lot.
How to do Dropshipping on Amazon?
Now that you know about Dropshipping, what it is and how it works, you are probably wondering how to do Dropshipping on Amazon. The main advantage of using this platform is that you will be exposed to a wider audience and you will also benefit from its reputation. You have two options:
Dropshipping via FBA: your supplier sends the goods to Amazon’s logistics centre, so that they take care of shipping and customer service.
Conventional Dropshipping: Amazon will work as your online shop, but the supplier will be in charge of shipping.
However, Amazon has many restrictions when it comes to Dropshipping. One of them is that your supplier’s details cannot appear on the package that the end customer receives, so you can only do Dropshipping via FBA. This is why Amazon is not a practical option when it comes to using Dropshipping to make money.
How to use Dropshipping to make money?
However, your possibilities do not end at Amazon and you always have the option to create your own shop for Dropshipping. Let me explain how Dropshipping works in Latin America without Amazon.
1. Choose a niche
Like basically any business, it’s all about deciding what you want to sell. You can choose a classic niche, which is always in demand; or go for more innovative niches, where the target is very specific and competition is low.
To evaluate a niche you can use tools such as Google’s keyword planner, which will allow you to see the search volume for certain products. In Dropshipping suppliers you can also see the volume of product orders, so you can get an idea about your profitability.
2. Analyse the competition
Once you have chosen a niche, it is time to check out popular e-commerces within your niche. A Google search can be useful for this; just enter the name of your product and refer to the first page of results. And don’t limit yourself to the website, be sure to analyse their social media as well.
On the one hand, seeing how many followers they have and how well they interact with them can help you identify their interest in your products. On the other hand, you can also look at what the most successful brands have in common, copy what works and figure out where you can differentiate yourself.
3. Choosing a supplier
This is probably the most important step, as the whole process depends on the suppliers. Although you can search for them on Google, it is best to do it through a special platform for this, such as Oberlo. Don’t forget to check reviews and ratings, and make sure you do everything legally.
Make a list of five or so options, and ask them about shipping times and if they have a minimum order quantity. My recommendation is to place a test order to compare delivery times, packaging and product quality.
Another point to consider is the location of the supplier. Although it doesn’t really matter where the product is located, it might be convenient if it is in the same region as your target audience; for example, if the product is shipped from China, shipments to Latin America might take a while, so it is important to test.
How to use Oberlo for Dropshipping?
One of the advantages of Oberlo is that not only does it make it easy for you to find suppliers, but it also allows you to create the shop in Shopify and add the products directly. All you have to do is use Oberlo’s search engine, and the products will be displayed along with their rating and number of reviews, number of orders, imports and more.
4. Create the shop
Of course, you can’t do Dropshipping if you don’t have a digital space to offer your products; that’s why the next step is to create the shop. For this you can hire a web developer; or create it yourself and reduce the investment a bit, in case you know programming.
You can use Shopify, an e-commerce platform that comes with all the tools and functions you might need. In addition, you will find many applications on the internet to connect suppliers to your Shopify shop; in the case of Oberlo, it has a free plan for you to upload up to 500 products to your shop.
5. Promote the business
No business is complete without some advertising, which is responsible for attracting customers. In this step you may need to make a small investment, as you will need to place ads on social networks; create several so you can see which products sell best.
Also, don’t forget about content marketing, which is a very organic way to increase traffic. It can even help you gain visibility and position you as an authority in your niche.
6. Analyse and improve
Once you’re all set up, the revenue will start coming in almost passively, but now it’s time to analyse the results. See which products are selling and which are not, so you can update your catalogue accordingly; listen to customer feedback about the product they receive.
Of course, don’t forget to also study the marketing campaigns and make the necessary changes.
Dropshipping: start selling without inventory
If you want to start a business with little money, Dropshipping is an excellent option. And, although it serves as a final business model, there are those who use it as an experiment before setting up a shop with their own products. Whatever the reason, Dropshipping, what it is and how it works, can be a great way to start making money online without risking anything.
