How to start dropshipping: The ultimate guide to selling with no inventory

The feeling of receiving a package with a product that you’ve been wanting to buy for a long time is amazing.

Even though the world is switching to digital, people will still want and need to buy physical products.

That’s why starting an online dropshipping business is a great idea.

Where there is a demand it’s good to be the supplier.

That’s where a dropshipping store comes in.

You can fulfill that need for physical goods with none of the complexities of a typical eCommerce store.

That’s the topic of this post.

We’re going to walk you through the entire process of setting up a dropshipping website. We’ll even share some tips on selecting a dropshipper and running your store.

By the end of this post, you’ll be the proud owner of your very own dropshipping store ready to deliver!

Understanding the dropshipping model

The dropshipping model is simple to explain but more difficult in practice.

Does making a profit for doing very little work sound good?

Dropshipping can be very lucrative because:

• You need a low upfront investment to get started.
• You can stop promoting a product without incurring losses if sales don’t meet your expectations.
• You have freedom. There is no need to be tied to a warehouse.

This doesn’t mean that the dropshipping model is fail-safe and has no disadvantages.

• It’s complex to control the quality of the product, packaging and the delivery experience.
• Profit margins are lower since you’re not buying products in bulk.
• You’re still in charge of customer support, which can become costly in terms of time and energy.

On balance, there are many more benefits to dropshipping than downsides. That’s why it’s such a popular way to run a store.

eCommerce without breaking the bank: How to sell with no inventory, the magic of #dropshipping

How much money can you make with a dropshipping business?

As you’re sharing some of the workload with the dropshipper you might be thinking that your profits won’t be that high.

Dropshipping can be profitable, but can you earn enough from it to make it more than a side hustle?

According to Bluecart, the average dropshipping profit margin is between 15% to 20%.

That means that if you sell a product for $100, on average you’ll be making $15/$20 of profit.

That’s pretty good considering the average profit for Amazon is 7.26%.

To make about $3,000 a month you should sell:

• You could have a higher profit margin by getting a better deal with your supplier or by increasing the retail price.
• You could have a lower margin if you have to handle a lot of returns.
• You could earn more if you are able to sell more units per month.

It all depends on the market, average prices and demand for your products.

You can only ever charge what the market will sustain.

To know how much you can earn with dropshipping you just have to be honest in estimating how many sales you can drive during a month.

Dropshipping calculator

Aliexpress has a calculator that helps you to estimate your potential earnings from dropshipping.

With a supplier product price of $80 and a margin of 20% (which means you would sell the product at around $100), you’ll need 150 sales per month to be at the $3,000 per month mark.

We’ve set the selectors on the lower side. This means you’ll have a lot of room to grow if you get more sales or improve your margins.

We consider them to be realistic estimates, especially if you’re just starting out.

Here are some quick calculations you can use as a reference for selling a retail product of $100 and a 20% profit margin.

Remember to be realistic. Saying you’re going to sell 500 products a month consistently is much easier said than done!

How to start a dropshipping business in 2023

Now you have a better understanding of what dropshipping is and what your potential earnings could be, it’s time to take action.

Creating a successful dropshipping business comes down to 3 big steps:

1. Research and planning.
2. Creating the dropshipping store.
3. Managing it efficiently.

Research and planning

Using the dropshipping business model you don’t have to invest in buying a batch of products. You will have to invest time and money in promoting them though.

Identifying your niche and products

There are two ways of launching your dropshipping store:

• Sell a single product or type of product. Like Miraclesofa does selling sofa covers.

• Sell products within a niche. Like Marigolds Shadows does in the fashion niche with jewelry, clothing and other accessories.

The easiest is to start by selling just one product or type of product. You’ll find it much easier to focus your marketing efforts this way.

You can always expand your product line later once you’re up and running.

What should you look for when choosing a winning product?

• Choose something you like. It’s not mandatory, but you’ll work more comfortably if you’re selling products related to something you are passionate about.
• Medium/high price. It will be much easier for you to monetize products that you can sell for $100 or more. Avoid ~$20 products unless you can cope with volume sales.
• Low return expectations. Returns are one of the biggest drawbacks of dropshipping and retail in general. Avoid products that have high potential for returns such as clothing or breakables .
• Relatively small and light. For the same reason as above.
• Not a passing fad. If in 2016 you had come up with the idea of creating a dropshipping store for fidget spinners, would it still be operating today?

As a rule of thumb avoid products that could generate legal problems at customs in certain countries. That could include products that could be considered weapons, those related to health or be potentially illegal in your target region.

These types of products can also be more difficult or even impossible to advertise.

Some typical ideas of good dropshipping products are:

• Jewelry.
• Home decor.
• Pet products.
• Home office equipment.
• Travel accessories.
• Party decorations.
• Hobby accessories (like knitting).

These ideas don’t go out of fashion, the potential risk of legal problems is lower and they’re not as susceptible to returns as other products.

Even if your cat likes the box more than the toy!

Did you know…?

You can also sell customized products like customized cushion covers through dropshipping thanks to print on demand companies.

Need more ideas?

Simply visit the bestseller section of your favorite store and start analyzing products from a dropshipper perspective.

Check out:

• Amazon bestsellers.
• eBay best selling products.
• Aliexpress best selling and hot products.
• Extra tip: Search “TikTok made me buy it” in TikTok.

Analyzing the competition

In the previous section we recommended choosing several product ideas to consider selling.

This is because you need to make a second qualifying round.

You now need to identify how much competition is out there and what they are charging.

The first and big red flag of high competition is the presence of a dominant brand that people love.

Can you think of a great brand of a portable juice blender that people are passionate about?

Could you compete effectively with them?

What other things should you take into account when analyzing the competition for the product you want to sell?

• Who are the main players in the different social networks (YouTube, TikTok, Instagram, Pinterest)
• Which websites are ranking in Google? Could you beat them with better content and better SEO?

PRO TIP

Not all of your competitors will be stores. They may be content creators that might help you promote your products. Take note of those as well.

• What is the cost per click and difficulty in Google paid advertising if you wanted to promote products? You can use a tool like Ubersuggest to find it out.

It’s quite likely that you’ll find competition in all the products and niches you analyze. This is partly a good sign, as that means that there is demand.

If you find 10 or more stores selling an identical, or very similar product, to the one you would like to sell, it’s a sign that you should choose another product.

At least at first.

Once you have more experience and know how to compete with established retailers, you can take on more competitive niches.

Finding a good supplier

Now to the final and most challenging round.

• You have researched niches and potential products to sell through dropshipping.
• You have analyzed the competition.
• You have identified a range of products you would like to sell

What’s the final step?

Find a good supplier.

Choosing a good supplier is vital to the success of any business.

It will make the difference between doing well or much better.

What should you look for in a good dropshipping supplier?

• Quality products. The best way for you to check quality is to order some test units.
• Wide range of products. It will be much easier to expand using the same supplier.
• White label or customized packaging. So that you can build your own brand rather than use someone else’s.
• Fast shipping times. According to statistics, fast shipping is one of the most relevant factors in conversion.
• Great tracking. So that customers can easily follow up on the progress of their delivery.
• Affordable pricing. This is pivotal for having a profitable dropshipping business.
• Easy order fulfillment process. You want the purchase made in your online store to be easily sent to the supplier.

Overall you’ll want your supplier to be logistically reliable, both for current and future demand.

It’s also important that you can communicate easily and clearly with them.

Now you know what features a good dropshipping supplier should have, how and where do you find them?

There are many well-established dropshippers and directories that you could easily get started with:

They include:

• Alibaba
• SaleHoo
• Doba
• CJDropshipping
• Spocket
• CROV
• Modalyst

To name a few.

Many of these platforms have thousands of registered suppliers, so it’s hard not to find the one you need.

If you already know the products you want to sell, you can also try doing specific searches on Google:

Best [name of product] dropshipping suppliers

For example, looking for dropshipping suppliers of pet products we’ve found TopDawg. Despite the name, it offers many more types of products than just for pets.

It’s also worth investing time looking outside the traditional suppliers.

In fact, an advanced tip is to propose a dropshipping model to suppliers who don’t offer it.

If you know a small company whose products you like, you can try to make a deal with them for a dropshipping collaboration.

You’ll get more exclusive products and much more personal attention.

Building your online store

The research and planning part is the most laborious but important. Now let’s get to the fun part, actually building your store.

Choosing an eCommerce platform

Your online store is the cornerstone of your business. It seamlessly connects customers with your supplier with you in the middle.

There are 3 straightforward options to create a store:

• Create your own website with WordPress and an eCommerce plugin.
• Use a cloud-based eCommerce platform like Shopify.
• Dropshipusing a marketplace like Amazon.

We recommend the first option as it provides more control for less money. It does require more effort on your part though.

Cloud-based platforms are easy to set up but charge a commision for every sale.

Marketplaces have fierce competition. You’ll also have to work with smaller margins, as the marketplace will take its cut for each transaction.

Create an online store using WordPress

To dropship using WordPress, you’ll first have to create a website.

Fortunately you can do it in less than 1 hour if you follow this guide to building a WordPress website.

• Pros of using WordPress for dropshipping:
  • Cost-effective. WordPress and WooCommerce are free and so are some great WordPress themes.
  • Highly customizable. You can design the site you want without using code using free tools like Spectra.
  • SEO-friendly. Pretty handy if you want to attract potential buyers organically.
• Cons of using WordPress for dropshipping:
  • Learning curve. You’ll need some extra knowledge and time to get the whole system up and running.
  • Limited support. You’ll be working with a couple of free tools, so it might be difficult to get direct support from them if you need it.
  • More responsibility. You’ll be in charge of tasks like security, speed, maintenance and backups. Although hosting providers like Hostinger take care of these tasks.

You’ll need store features on your site so you’ll also need to install an eCommerce plugin.

We recommend choosing between

• SureCart
• WooCommerce

SureCart is the platform we’ve developed to make your eCommerce life easier.

You can create your SureCart store in less than 5 steps, and thanks to its free plan you wouldn’t have to spend a dime to start up.

We know beginnings are difficult so we did everything we could to make it as painless as possible!

• Pros of using SureCart for dropshipping:
  • Outstanding checkout that will help you increase conversions.
  • Free plan with automatic sales tax and EU VAT calculations.
  • Advanced sales features like cart abandonment recovery are available.
• Cons of using SureCart for dropshipping:
  • You won’t find integrations with dropshipping platforms for automatic product imports.
  • Some physical products selling options are still under development.

You can also choose WooCommerce which is widely used in the dropshipping industry.

It’s free and can be also installed and set up in just a few steps if you already have a WordPress website.

• Pros of using WooCommerce for dropshipping:
  • You can start using it for free.
  • Some dropshipping platforms integrate very well with it. You can easily import products in bulk.
  • You’ll find a lot of information about dropshipping with WooCommerce.
• Cons of using WooCommerce for dropshipping:
  • The default checkout is not very attractive.
  • Difficult to get customer support from them.

Create an online store using Shopify

Shopify is an eCommerce platform that allows you to create online stores in a very simple way.

We could say it saves you the steps of buying a hosting, installing WordPress on it and setting up an eCommerce plugin like WooCommerce.

But you have a lot less control over your store, your data and how everything works.

• Pros of using Shopify for dropshipping:
  • Ease of use. Creating an online store is easier as everything is ready to use.
  • Customer support. As this is a paid solution you’ll get better support if you face any issues.
  • Less demanding. You don’t have to care about technical aspects like hosting, security or backups.
• Cons of using Shopify for dropshipping:
  • Costly. Plans start at $39/mo.
  • Limited control. You can’t freely modify the design or other aspects of your website as you would like.
  • You’re locked-in to its rules.

Adding the products to your store

At this point you should have a functional online store and at least a couple of suppliers in mind to work with.

What you need to do now is to connect these two pieces of the puzzle.

Depending on the tool you’ve chosen in the previous step you’ll have to do it in a different way.

• In WordPress you can install a dropshipping plugin to add the products to your store.
• In Shopify you’ll do the same by installing a dropshipping app.

Adding the products to WooCommerce using a dropshipping plugin

To add your suppliers’ products to WooCommerce efficiently you need an extra plugin.

These plugins are usually paid, but they are cheaper than a yearly subscription to Shopify.

The good news is that there are plenty of WooCommerce dropshipping plugins available.

• DSers
• AliDropship
• WooDropship
• WooCommerce dropshipping
• Dropified
• AutoDS

The bad news, besides the fact that we can’t explain all of them in detail, is that not all plugins work with all providers.

Let’s see a quick example with DSers.

• You can sign up for their free plan and connect your Aliexpress and your WordPress account.

Then you can search for products from the platform and import them into your WooCommerce with just a couple of clicks.

DSers even allow you to automatically modify the price during the import using rules. e.g. increase the price 30%.

• The product will show up in WooCommerce where you can easily modify anything before starting to sell it.

You’ll be able to track and manage all sales from the DSers platform.

This is an example of just how easy dropshipping can be when you use the right tools.

Depending on the tool you decide to use, you’ll find different interfaces and features.

But the working approach will be similar in all of them.

Dropshipping store management

Once your store is ready with the products added the rest should be as easy as 1-2-3:

1. You receive a new order and payment from a customer.
2. You send the order details to the dropshipper and pay for the product.
3. The dropshipper fulfills the order.

Some plugins and apps make step 2 easier so that you don’t have to manually copy-paste the order details. Instead, you can just just forward them with one click.

Managing inventory and change prices

It may seem strange to mention inventory when we talk about dropshipping, because the whole point of dropshipping is that you don’t have one!

But your supplier does, and you depend on it.

• You don’t want to sell a product in your store and realize that it’s out of stock when you resend the order to your supplier.
• Nor do you want to find out that the product’s price has gone up, leaving you with hardly any margin.

If the dropshipping plugin you choose to work with syncs availability and price,it can save you a lot of time and hassle.

If not, at least make sure the plugin notifies you of changes so that you can modify the values manually.

Handling returns and refunds

The dropshipper is in charge of order fulfillment and shipping.

You should also clarify what will happen when problems arise:

• What happens if a product never arrives?
• Or if it arrives damaged?
• Or if the customer wants to return it?

All these questions should be discussed in advance with your supplier to avoid surprises.

Legally you’re the seller of the product as the customers are paying you.

You’ll always be accountable to them for shipping, warranty, and any kind of issues that may arise with an order.

It’s up to you and the dropshipper to decide, preferably in writing, who is responsible for what.

Final thoughts on building your dropshipping business

The steps to set up a dropshipping business are quite straightforward.

• Find a good product that fits this business model and doesn’t have strong competition.
• Agree on pricing and terms of collaboration with a supplier.
• Create an online store with WooCommerce to promote the products. Install a dropshipping plugin to make everything work.

But these steps are just the beginning.

In addition to managing your inventory, your products, prices and sales, you’re left with the most complicated part: Attracting customers.

There is a whole world of possibilities to do this, from developing a blog content strategy to paid advertising or content sponsorship.

Since you don’t have to deal with warehouse management and shipping, it’s precisely this part that you’ll have to focus on once you have your store up and running.

So, what are you waiting for?