Dropshipping is currently one of the most popular ways to make money online MMO. Any object can participate and do business in this form. However, to succeed and earn high profits with the Dropshipping model, many seller factors are required. The following guide will help you, especially those who are new, to simplify how to make money with Dropshipping.
What do you need to prepare before Dropshipping?
Dropshipping seems pretty straightforward. However, you may not want to dropship and get started right away. Before you start, you need to prepare certain things for Dropshipping to be effective and profitable.
capital and time
As always, to start a business you always have to prepare a certain amount of capital. Depending on the Dropshipping model and form you choose, the amount of capital you need to prepare will differ. The better the size of your business, the more capital it will be. For starters, the minimum capital to do Dropship ranges from 100 to 200 USD.
Dropshipping doesn't require you to spend all your time working. Depending on your financial goals, the time you spend on the Dropshipping business model will also vary. You need to spend at least 1-2 hours a day regularly if you want to learn and make money from Dropshipping.
As mentioned above, the profit target will help you determine the amount of capital and time to spend. Setting profit goals is important to increase your motivation and sales potential. The goals you set need to match your capital and time capabilities, professional skills, and relationships. At the same time, you need to determine what time frame the goal is in, short term, medium term or short term.
Once you've set your goals, what you need to do is make a detailed plan for the time and work to be done.
A bank account, Visa/MasterCard for payment
Of course, you need to prepare a bank account or Visa/MasterCard to be able to support customer payments. Please pay attention to use official bank account to limit problems when making payments.
knowledge and will
Knowledge is an indispensable thing if you want to invest or do business in any area. Do your research and market research to help build your strategy. At the same time, you need to identify Dropshipping as a career that can bring you income. Therefore, you need to invest time, effort and have a serious attitude towards the profession, so what you achieve will be proportionate to what you spend.
Step-by-Step Instructions for Effective Dropshipping
The Dropshipping process usually includes the following steps.
Idea generation and product selection
A business idea is an indispensable thing before starting. Pre-determine the ideas for the products you want to sell. You can also look at other reputable selling sites like AliExpress Most Popular Products, Amazon Best Sellers, Ebay Daily Deals… to see what product categories are selling to determine which trends you follow. Create an account and follow e-commerce sites to stay up to date on topics that interest you and get product ideas from there.
Once you've listed your product ideas, you can narrow the scope with these suggestions:
- Choose products that have a high volume of potential customers and still don't have many salespeople.
- Choose products by newly developed categories like: Fashion, accessories, electronics, toys…
- The best product should have a price range of 40 to 60 USD. The cheaper the product, the more customers it attracts.
- Check popularity by looking at the Google search volume for that product.
- Check product trends at trends.google.com.
Choosing a supplier to work with is very important. You can find suppliers through platforms like Aliexpress, Alibaba, Taobao… You will not know the customer experience because the product is shipped directly from the supplier to the customer. Remember, low prices are not always better. Price will go hand in hand with quality. You need to find a supplier with a high positive rating rate of over 90%. Also pay attention to how quickly your suppliers respond to your requests.
In addition, you can also check the supplier's reputation by pre-ordering the product to check and assess the quality. This is how you experience customer psychology in the most authentic way. When you have tested and compared directly, you will have your own choice.
There are two options on the market to do Dropshipping for you: Vietnamese market and international market. Prestige free international Dropshipping channels like Amazon, Ebay, Bonanza… will be the best choices for newcomers.
Create your brand website
A site well invested in terms of content and form will help to build customer trust. Create a website and give your brand a domain name. Configure the information and choose a theme that is attractive and easy to see. If you don't have much experience with this, you can pay website builders to create a quality website.
Marketing to Attract Customers
Set aside a small capital to promote your brand. You can pay advertisers to run ads on popular media like Google, Facebook, Tik Tok… Or target potential customers who want to use your product. Or you can also post and advertise products on the accounts available on these media. This form does not charge a fee and is also convenient because you already have relationships in these vehicles.
Customers can find you through your website. Somehow they will contact you to buy the product. You can receive orders and request information such as your name, address, contact telephone number… Then you must ask them to pay by the means that you think are more reasonable for both parties. You will use this money and customer information to purchase products from suppliers.
Summarize and receive supplier discounts
You are responsible for tracking shipment and customer service and resolving issues, if any. The amount you receive from the customer will be partially paid to the supplier, the remaining discount is the profit you earn on an order.
Selecting the Dropshipping model
The Dropshipping model is divided into two basic types, namely the traditional Dropshipping model and the modern Dropshipping model. Understanding and choosing a suitable Dropship model will help you move in the right direction.
Traditional Dropshipping Model
The Dropshipping model was born around 2006 when the Aliexpress shipping service became popular globally.
The implementation process of this model is quite simple, including the following steps:
- The seller publishes the supplier's product on the sales site.
- Customers buy products through the website and pay.
- The seller places an order with the supplier and the supplier ships the product to the customer.
Thus, the seller will earn a profit from the difference between the purchase price of the product from the supplier and the sale price of the product to the customer, after deducting the advertising fee.
The traditional Dropshipping model has the following advantages:
- No need to worry about inventory issues.
- Diversified product portfolio.
- The order is limited to a minimum of 1 product.
Some limitations of this model are:
- Difficulty in controlling product quality.
- Shipping time is quite long, it takes about 12-20 days because the supplier is usually in China.
- The order cancellation rate is high.
The Dropshipping model is pretty standard and simple. It is suitable for individual sellers with little capital. Ignoring some weaknesses of this model, if you are a newbie and want to make money from Dropshipping, you can completely start with the traditional model.
Modern dropshipping template
In the traditional model, it takes 14-20 days to ship an order to a customer, which disrupts the customer experience and also hinders your scale. Based on this, the modern model of Dropshipping with an inventory form was born.
The best advantage of this model is that the shipping time is reduced to 3-5 days. In addition, this model also has some other advantages:
- Good customer experience due to fast shipping times.
- Due to ordering in large quantities, Deal gets a good price from the supplier.
- As the goods are already in stock, the ability to improvise is good if market demand increases.
The implementation process of this model will be conducted as follows:
- The seller orders bulk goods and products from suppliers and ships them through leased warehouses in the US.
- Customers place an order on the seller's website to make payment.
- The warehouse will ship the order to your customer within 3-5 days.
However, this model still has limitations that you need to consider. The modern Dropshipping model has a pretty high inventory risk and this can be a financial burden for you. So to get started with this model, you need to have a certain amount of capital, at least 1000 USD, used for things like product quality testing, bulk ordering, PR branding, equipment. Website design…
Please consider your capital, time and business capacity to choose the most reasonable model for you.
Above are instructions on how to make money with the Dropshipping model that you can refer to. Remember, before starting any business, you should also equip yourself with complete prior knowledge to avoid surprises and limit incidents in some cases. If you're interested and ready for a Dropshipping business, let's get started right away. The attractive profit that this model brings will certainly not let you down.