Start Dropshipping in 2020
Interested in starting a dropshipping business in 2020? You’re in the right place – this guide has everything you need to start an online dropshipping store today, for pretty much free.
Dropshipping seems to be all the rage in 2020. But is it still possible to earn money online this way when it seems like everyone is doing it? Is this a viable online business? The answer is yes. It’s going to require you to work hard to achieve success in this competitive environment, but dropshipping can still be the way to earn thousands on the side, or even replace your job!
You’re already a step ahead of everybody else by reading this guide. Bookmark it now for later reference. You’ve chosen the best time to start a dropshipping business because it’s never been easier. It’s possible to launch a dropshipping business in just a few hours.
Start your online store right now with this dropshipping guide, and start earning passive income. What’s more, with a free trial of Shopify, you can start earning with extremely minimal investment and make your subscription pay for itself before your trial ends, making the setup cost virtually zero.
This guide will walk you through creating a simple and profitable online dropshipping store using Shopify and Oberlo. Setup can be completed in under a day, although it might take you a bit longer depending on how much experience you have. You have 14 days to start making money to make sure Shopify pays for itself once your free trial ends. You can technically set up a store completely free, although I recommend having some money to invest in advertising.
Useful Links in this guide:
Shopify Free Trial
Step One – Understanding Dropshipping
The first step is to understand the business model that you’re going to be following in this guide. Dropshipping has been around for almost as long as the internet but has recently seen a huge uptake due to new tools making it easier to start a dropshipping store. Put simply, dropshipping is where you find a supplier for certain products, sell them at a higher price on your own website, and use the money from the sale to purchase the product and get it shipped directly to your customer’s address. You are acting as the middle-man, and the difference between your buying and selling price is where you generate a profit.
What is so enticing about dropshipping is that you do not have to purchase an inventory before you begin selling. There is very little risk involved in starting a dropshipping store. This means it’s the perfect online business to start if you don’t have much to invest.
Step Two – Planning Your Dropshipping Store
Ideally, you want everything planned out in your head and on paper before you begin. This will help make sure you take advantage of all 14 days of the trial and make sure you can make enough sales to pay for the subscription at the end of the trial ($29).
The first decision to make is to choose your niche. This is the area that your shop will focus on. It’s no good creating an online general store, it is simply too difficult to market a store that doesn’t have a focus. A niche can be a hobby or anything in which people have an interest. If you have an interest in it too, that’s great.
For the sake of this guide, I will be using the example of an online store that sells phone accessories, such as cases and chargers.
Struggling to Think of a Niche?
Write down a list of hobbies, then search on Facebook for related groups. Do they have huge followings? This is important to ensure you have a customer base to sell to. Are there products related to this niche? Check on AliExpress.
Do a quick search and find products that fulfill the following criteria:
- Cheap – start with products that are no more than $5 or $10, including shipping. Remember that you are going to be pricing them up.
- Simple – Something the consumer doesn’t have to learn how to use, something which they might impulse-buy.
- In-demand – Something which achieves something for the consumer, something they want or need to have.
Step Three – Creating Your Dropshipping Store
Shopify makes this simple. You need to choose a name for your store! Brainstorm some name ideas that are relevant to your niche. This next bit is optional. By default, Shopify stores have the domain names “.myshopify.com”, so when a customer is on your site, it will display as “yourstorename.myshopify.com”. While this isn’t terrible, it does make your store look a little unprofessional and cheap. You can get a .com domain for $10, so it’s up to you whether you want to make that investment.
If you want your own domain, use domain.com to check if your name is available and purchase it for $10 (You can’t find them cheaper than that). Integrating your domain into Shopify is easily done, so the next stage is to sign up for your 14-day trial. Once you’ve signed up, the race is on to earn $29 in 14 days! That works out to just $2.07 per trial day though, so don’t stress over it.
Now you want to familiarise yourself with Shopify and begin building your store. Choose a theme that suits your website and start messing around until you feel comfortable with using it.
Quick tips when designing your dropshipping store:
- Clean Looking
- Easy to Navigate
- Strong Fonts
- Clear, Rounded Pricing
- Call to Action
- Advertise Discounts
Use large, high-quality photos for your non-product photos. Shopify has an excellent image bank you can use. Photos of your products will be imported automatically later on. You can also create a logo using Shopify’s logo editor. Make it clean and simple, or don’t make one at all if you can’t think of a design. A logo isn’t massively important until you are trying to establish yourself as a brand, which will come after you start making a serious volume of sales, although a logo is helpful for when you create your Facebook page later.
Step Four – Finding & Importing Products For Dropshipping
Visit the Shopify app store and install Oberlo. Oberlo’s free tier offers everything you need to get started, and now allows unlimited orders per month, even on their free tier. Oberlo also has great integration with AliExpress. AliExpress is a large marketplace based in China. Goods are very cheap and most listings will have free shipping. install the Oberlo plug-in on your web browser (I use Google Chrome and so should you) and head to AliExpress. You can use the plug-in to filter goods by your specifications, and with a click of a button import them into your Shopify store. Find products that have good reviews so you know it is of high quality.
Find 20-30 products in your niche, ensuring they have free or very cheap shipping that doesn’t take months. Nobody wants to wait 60 days for their order. Now head back to Shopify and visit your import list within the Oberlo page. Your products should be listed here.
This is where the hard work comes in. Change the title of your products to make them simpler, write good product descriptions and select high-quality photos (Oberlo should import a load of photos to choose from). You will also need to categorize your goods.
Now is the time to set your prices. Oberlo has a multiplier built-in which you should use to set consistent markups. Make sure your prices are rounded to the nearest .49 or .99. The products you’ve imported from AliExpress should be very cheap and so you shouldn’t be charging more than $5-10 after you’ve priced them up for your customers. “Compared At Price” allows you to give the impression of a discount, e.g
You also need to accommodate for transaction fees. Shopify will charge you a set amount and a small percentage of each transaction depending on what plan you’re on. This means you need to price your products about 50c higher (for low ticket items) than you might otherwise have thought. Consider your profit margin. If you can make $2-3 per item, that is a good return. It is difficult to justify selling a $5 item for $20, but easier to sell a $1-2 item for $5.
Next, you need to think about shipping. Free shipping will always draw customers in, so if you go down this route make sure you advertise it all over your store. If not, charge a realistic figure based on the size of your products. Nobody is going to pay $4.99 shipping for a small item.
Once your products have good titles and descriptions, good quality images and fair pricing, hit the “import all” button and watch as your online store is filled with your products!
Step Five – Finishing Up Your Dropshipping Store
Oberlo isn’t the only app you can use to make your store run better. For example, use in-cart upsell to recommend more products when your customer is about to checkout. There are thousands of apps for Shopify, many of them are free. Shopify will suggest more on the app page. Browse the store and install any that you think will improve your site.
You also need to add about and return policy pages to the store. Your about page should explain what you are trying to achieve with your store and about why you created it. (Hint: don’t say “to make money”) Your return policy can be generated by Shopify if you want to follow a standard one, although when dealing with returns to China it is often easier to take the hit and offer a refund without a return. If you are selling clothing, you will need to have a size chart on your store.
Build collections on your site and make sure there aren’t any default text or images anywhere. When building an online business by yourself, it is easy to pat yourself on the back and view your hard work as amazing or exceptional. You need to make sure you see-through this and look at your store objectively. Would you buy something from it? If the answer is no, fix it. Don’t take any shortcuts, it may save you time but it’ll cost you sales.
Step Six – Begin Marketing Your Dropshipping Store
Once you have a fully-functioning and fantastic looking store, it is time to spread the word! A good place to start is Facebook. Facebook advertising is an important tool for the aspiring entrepreneur, so you should start here. Create a Facebook page for your store, using imagery from your store for profile and cover photos. If you want to try and minimize your investment, promoting your store in relevant Facebook groups might be good enough to start with. Eventually, you will need to start paid advertising. This might seem daunting, but once you have mastered Facebook ads, they should return more than you invest and make your store a source of self-generating passive income!
Set your conversion event as a purchase when designing your ad and follow the instructions to install your Facebook Pixel on your store. Facebook allows you to target ads at customers based on their demographics and likes. This is the reason I suggested checking if there were Facebook groups with large followings for your niche. Target customers relevant to your niche via their age and likes. Shopify has a great blog post to help you get your head around Facebook advertising here.
Facebook ads are a complex beast and they are best used with an analytical trial and error approach. You should run several separate ads with different demographics and design for around $5-10 each and compare the results. Facebook makes it easy to see exactly where your ads were effective. Use the data to refine your ads continually and with each iteration, you should get slightly improved results. Learning how to produce effective Facebook ads is an excellent skill that will serve you in any other online business you may start so it is definitely worth jumping in.
One strategy for Facebook marketing is the “free+shipping” method. This is where you offer products for free, then charge a shipping amount that covers both the cost of the product and shipping. It is difficult to strike the right balance here and to achieve this, you need a product that is extremely low price with free shipping so you can offer a realistic shipping cost for the item. This method can be a useful way to get customers on your store and email list. You can also play around with discount codes on the discount section of the Shopify dashboard, which you can include in your advertisements for better results. When a customer places an order, Obelo will automatically fill in their address and order it for you through your AliExpress account with your payment details.
Step Seven – Integrating Email and Future Growth
Thanks to Shopify, every sale you make requires an email address. Even if a customer cancels before making the final purchase, if they have entered their email address, you can market to them. Email marketing is effective because you are contacting people who have previously shown interest in your store, therefore they are more likely to purchase from you than someone who has not. As you make sales, your email list will grow. MailChimp is excellent for managing an email list and allows you to send out email en-masse. It is completely free up to a list size of 2000. In your emails, advertise things such as sales and discount codes, or new products. Writing effective marketing emails is another skill you will need to learn. Adding a blog to your store can also be effective for promoting your products and gives you something to email your customers about.
It is important that you reinvest and scale up after you begin to make sales. It can be satisfying to make sales and pocket the profit you make, but remember to cover your costs. At the start, it is better to reinvest everything you make to scale up your store. You should carefully plan out how much you are going to invest in marketing and how much you can expect to make in return. Once you’ve mastered all of this, you’ll be an expert in e-commerce and will have a profitable dropshipping store of your own!
Step Eight – General Advice for Dropshipping in 2020
If you’ve followed this guide, you now have a successful dropshipping store, congratulations! Here are some general tips about running a dropshipping store in this competitive environment. Avoid making these mistakes to ensure your store has a greater chance of success.
Problem: Customer receives faulty or damaged goods
Apologize and offer them a refund. Contact your supplier. They may offer to ship another free of charge. Never argue with your customer, especially over low-ticket goods. This is the strategy Amazon use and it has helped build them into the biggest e-commerce store on earth.
Problem: Item out of stock
Make sure you track the stock levels on your products. AliExpress can be prone to items suddenly being taken off the site. If one goes out of stock, make sure you quickly swap in a new, equivalent item. If a customer orders an out-of-stock item, you will have to cancel the order and explain to them you just ran out of stock and you are very sorry.
Problem: Adverts not performing well
Advertising is difficult and there is certainly a tough learning curve. Adverts should include a call to action. This is means a phrase that encourages customers to click onto your store, for example: “Buy today for 50% off!” Advertising should emphasize discounts or anything that will make people want to visit your store. An offer for first-time customers can also be a winner.
Problem: Lack of sales
This is probably the most concerning thing you may encounter. If you are struggling to make sales, take a step back and try to think it through logically. Is your store of high quality? Is your pricing fair? Are you doing enough to promote your store? These questions usually hold the key to solving this problem.
Now you know everything you need to know to start dropshipping in 2020. Once your store is successful, you can replicate the method in a different niche and begin to grow your e-commerce empire! I hope you’ve found this guide informative.
Remember, the most important step is starting. You may not succeed with your store, but not starting in the first place guarantees you won’t! Signing up to our mailing list is a great way to stay informed on our excellent entrepreneurial content.
Good luck with your entrepreneurial journey!