Dropshipping Business Plan for Beginner

Dropshipping is an order fulfillment method that lets store owners sell directly to consumers without stocking any inventory. When a customer purchases a product from a dropshipping store, a third-party supplier ships it directly to them.

The customer pays the retail price you set, you pay the suppliers’ wholesale price, and the rest is profit. You never have to handle products or invest in inventory. 

STEP 1 Choose a niche

A good niche is one with products people are willing to pay for online. There should be some demand — dropshipping isn’t the place to roll out a bunch of untested products. 

The good news is, your niche can be almost anything. You can pick any sport or recreational activity and sell it to enthusiasts.

Or sell products related to food, fashion, home improvement, electronics, entertainment — the list can go on forever. 

Choosing a niche enables you to:

• Charge higher prices.
• Attract a devoted audience.
• Separate yourself from the competition.
• Become the go-to source for that line of products.

Step 2 Select Product and Find Vendor

When choosing a supplier, consider things like:

• The locations they ship to. Do they ship just within a certain country or to multiple countries? Can they get products to your target audience?
• Their pricing. Some drop shippers charge a monthly or annual fee, while others just charge for the products and shipping. Look closely at any and all fees.
• The reviews. How do existing customers feel?
• Their policies. How do they handle returns? Broken products?

Choose the products you want to sell, if you’re not starting with a specific idea. You won’t want (and don’t need) to sell everything a particular vendor produces.

Select the products that fit the niche you’re focused on and that you believe will produce good profit margins. 

Make sure to order some samples and test the products you’re going to sell online. This is key to maintaining a high-quality store and ensuring that the items look like their pictures and work as described.

The last thing you want is to sell something you can’t personally stand behind.

Step 3 Develop a marketing plan

Marketing begins with knowing your audience and your niche. Who are you marketing to, and why? To reach your audience, you have to figure out where they are. Are they best reached with online marketing, through the mail, in person, or somewhere else? 

There are a variety of ways you can reach those people, and the right strategy for you is probably a combination of:

• Paid, online advertising. Get your ads in front of potential customers on the websites they already visit. Set targeting options based on everything from age and income level to location and interests.
• Email marketing. Send emails to your list with new announcements, discounts, and tips. Plus, get your products back in front of people who added them to their cart but didn’t purchase.
• Content marketing. Write blog posts, guides, eBooks, and more to show your expertise and lead people to make a purchase.
• Search engine optimization. Reach people who are actively looking for your products or services on search engines like Google. 
• Social media marketing. Connect with followers or potential customers through posts, live videos, or paid advertising. 
• Influencer marketing. Use the power of influencers to reach a whole new audience that trusts that person’s recommendations.

Step 4 Analyse your Expenses

You can also use tools like Google Analytics and Search Console to measure search traffic over time and improve your search engine optimization (SEO) efforts.

Plus, if you’re using a third-party app for your social media or Messenger marketing, you check the reports monthly to make sure your overall strategy is working for your business. 

When creating a dropshipping eCommerce store, you want to create a data-informed analytics system. Remain consistent with what you analyze over time and measure your store’s performance against clear KPIs.

This will help you make smarter decisions for your store and take your small business to the next level over time.

Step 5 Create your website

With vendors, products, and a marketing and business plan in place, you’ll need to consider your website and technology. While there are a variety of tools available to sell online, building your dropshipping website on WordPress with WooCommerce offers two distinct advantages: 

1. You own all the web content and assets you create. Some other platforms charge you a monthly fee and can delete your store at any time, so it’s more like renting. 
2. WooCommerce offers hundreds of extensions that allow you to customize your store, speed up your administrative and business processes, and improve your marketing. 

Step 6: Deliver excellent customer service

A guide about how to start dropshipping wouldn’t be complete without discussing customer service. 

Customer service is essential to standing out from the competition. And since you won’t control shipping, you must have a plan and a team in place to keep customers informed and happy if anything goes wrong

even if the mistake is your vendor’s, customers will look to you to make it right. But how do you do that?

• Be upfront with product descriptions and photos. Include all the information people need to make a purchase, like dimensions, size charts, and ingredients. Have clear photos from a variety of angles that show scale if applicable.
• Offer support through multiple channels. People prefer reaching out in a variety of ways. Consider mediums like live chat, social media, phone, email, contact forms, and forums. 
• Create an FAQ page. Answer customers’ most common questions in one place that’s easily accessible. 
• Respond on social media. If your customers reach out with questions, comments, or complaints on your social platforms, respond quickly and professionally.
• Make documentation readily available. Help customers find things like instructions, tutorials, manuals, and tips. You can add this sort of information to the account page, confirmation emails, or blog posts. 

written by:

Hi there, My name is Bhavish based in Berlin, Germany. I am 24 years old and an intern at IIDM for the Master Marketing Program. Am doing my master’s in global MBA as a pathway in digital Marketing.