HOW TO START A DROPSHIPPING BUSINESS IN 2021

Last updated on May 6th, 2022 at 05:00 pm

Starting a dropshipping business is a great first step into entrepreneurship. You’ll be able to sell products to customers, set your own product prices, and market your very own brand. You don’t even need to pay for inventory until it’s sold to an actual customer. If you’re willing to put in the work, you can build a successful brand.

And if you’re still on the fence about starting your online business, maybe it will help to know that ecommerce sales amounted to nearly 3.5 trillion dollars worldwide in 2019. So, if global stats on ecommerce are any indication, starting an online business is an increasingly lucrative option right now. There are some incredible aliexpress ebay dropshipping software tools that you can take a look at.

In this article, you’ll learn how to start a dropshipping business. We’ll explain what a dropshipping business is, how to find the right dropshipping business ideas and everything else you need to know to start dropshipping.

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What Is a Dropshipping Business?

Dropshipping is a business model which you can use to run your store without ever holding any inventory. Once you’ve made a sale, your supplier will ship your products from their warehouse straight to your customer’s doorstep. You’ll never need to worry about storing, packaging, or shipping your products.

dropshipping business model

How Does the Dropshipping Business Model Work?

There are three key players in the dropshipping business model: the manufacturer, the retailer (you), and the customer.

The manufacturer’s role in a dropshipping business model includes creating products, carrying inventory, shipping products to customers on behalf of the retailer, replacing defective products, and restocking them. They sell products to the retailer at wholesale prices, assuming the risk of unsold inventory.

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In the dropshipping business model, the retailer (you) sell the manufacturer’s products on your website under your own brand. You’ll be responsible for choosing and marketing those products. Plus, you’ll also be responsible for their shipping costs and setting prices that make you a profit.

Lastly, in the dropshipping business model, the customer buys the products directly from you, the retailer. If questions or issues arise, they contact the retailer they bought the product from.

dropshipping key players: supplier, consumer, and retailer

How Profitable is Dropshipping?

That’s a dropshipping FAQ we hear quite often. Dropshipping can be the most profitable business model of all, as you are not responsible for the costs of shipping and manufacturing. Because of this, profits can quickly be reaped once you have found the right suppliers with Oberlo. You can calculate your profit to ensure you are on the right track to success with our dedicated Profit Margin Tool.

Why Is Starting a Dropshipping Business a Good Idea?

dropshipping business is a low-risk business model. When it comes to startup costs, you only pay for products that you sell to paying customers. You don’t become overburdened with the cost of creating products, carrying inventory, costs of maintaining unsold inventory, and the cost of employees for packaging and shipping products. It’s a great entry into entrepreneurship as you can start your own dropshipping business by yourself during your evenings and weekends. It will require daily work when it comes to processing orders. However, most of the order processing steps are automated and require a click of a button. The dropshipping business opportunities are endless; you just need to take the first step.

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