E-commerce is a profitable sector of the economy that offers various business opportunities to those who are interested. One such opportunity that has been gaining traction over the past few decades is dropshipping.
Dropshipping refers to a business model in which a seller purchases products that are manufactured by another company and sells them at a profit margin. Once they receive the order from a customer, they forward the details to the wholesaler or manufacturer who will take care of shipping the goods to the customer.
The idea behind dropshipping is that a particular business can specialize in a single activity. For example, manufacturing companies can focus on the production of goods without worrying about marketing them. And the dropshipping business can solely work on promoting the products they bought.
If this business idea is appealing to you, you might be interested in knowing what to do to get started. The first thing to know is that one of the most important tools available for dropshippers is a plugin.
A plugin is a software that is installed on a computer program to enhance its features. Hence, a dropshipping plugin is a software that can be installed on your business’ website to make the process more convenient.
There are many plugins that are available to dropshipping businesses, but only some of them are a good investment. One of the best plugins is AliDropship.
With that introduction, let’s understand how you can start a dropshipping business yourself using the AliDropship plugin. We’ll cover everything from the benefits of dropshipping to the preparations you should make before you set up the business.
How does dropshipping work?
Technically speaking, dropshipping is an order fulfillment method in which a retailer acts as a middleman for consumers and manufacturers. Rather than selling products by holding inventory, they purchase them from another company, who is responsible for shipping them to the customer.
There are 2 main ways you can operate a dropshipping business: through a brick-and-mortar store or through mail order. A brick-and-mortar store refers to a physical store where you keep all the products you’re selling.
A much better alternative to this is selling products by mail order. Customers will be able to order products through using your business email, phone number or a form on your website, and you can send them a sample of the product for review (if they ask for it) before forwarding the details, like the customer’s address, to the supplier.
On one hand, this may reduce your costs as you don’t have to pay the expenses associated with having a physical store, such as rent, electricity, insurance and so on. On the other hand, you do have to pay the shipping expenses and, if the supplier is located in a different country, import duties. You should make the right decision by calculating the costs for each option.
Why should you consider dropshipping?
If you are interested in dropshipping but are unsure about its benefits, this section is especially important for you. Yes, there are many downsides to using this business model. The profitability is uncertain as the margins can be really low- a majority of the earnings from the sale goes to the manufacturer and you only get a small percentage of it.
Moreover, you are still responsible for order fulfillment. If the customer doesn’t get their order on time, they are going to blame you for it.
Despite these drawbacks, dropshipping offers several advantages to budding entrepreneurs who want to dip their toes in and experiment with a low-risk business idea.
One of the most expensive aspects of a traditional business is the inventory. Not just the cost of production, but also other expenses such as inventory control/management, warehousing, insurance and damage control.
If you’re dropshipping, you don’t have to worry about any of these things. You don’t even have to purchase any inventory until you make a sale. You pay your supplier for a product only after a customer has already purchased it from you. Hence, you incur very low start-up costs, which makes your business less risky.
Flexibility of location
You are not tied to a particular location either. You can operate your dropshipping from any place that has a stable internet connection. This also makes it easier for you to scale your business across regions.
Range of products
You can list any product you like on your dropshipping website, as long as you obtain permission from the supplier of the product. Unlike traditional businesses, you are not restricted to selling only the products that you manufacture.
As long as you choose a reliable supplier and effectively promote the products, you can operate a successful dropshipping business.
What is AliExpress dropshipping?
You probably recognize AliExpress as the digital marketplace that sells pretty much everything you might want to buy, from consumer electronics like smartphones to clothing. The prices for products are relatively low and manufacturers from all across the world use AliExpress to sell their products.
The platform is also well-established for dropshipping. Much of the retailers on the website are actually resellers who are using the dropshipping business model. It’s quite easy for anybody to start dropshipping using AliExpress. There are no fees that you have to pay to get started, so it’s also low-risk.
All you have to do is add the products on the website to your own store and calculate and set the price based on your markups. Once you’ve made a sale, you purchase the product from AliExpress, which then ships it to the customer. The entire process is highly convenient.
It is made easier by the fact that you have access to a wide variety of goods from all across the world. You are not limited by a narrow range of products or your location. This makes it easy to scale your business not just across the number of products, but also across the type of products and location.
Moreover, a significant burden is taken off your shoulders as product images, descriptions and reviews are already available on AliExpress. You can use a plugin to copy this straight to your site. If you want, you can use them as the basis for finding new images and writing new descriptions based on the needs of your business.
The reviews are another advantage. As I’ve mentioned before, order fulfillment is still your responsibility even if you’re not producing or shipping the products. For this reason, it is important to select the right suppliers.
If your suppliers are not punctual, provide incorrect information about their products and are just generally uncooperative, your business will take a hit. By looking at customer reviews, you can choose the right wholesalers for your business.
Moreover, the prices of the products are really low, so you have the opportunity to set a reasonable profit margin for yourself, as long as you provide valuable service to justify the higher price.
What is AliDropship?
AliDropship is a company that provides WordPress plugins for your dropshipping business, allowing you to automate a large part of the process. Their plugins perform a variety of tasks, including:
- Search and import: Find the right products on AliExpress using filters and import them to your own website.
- Numerous built-in themes: You can customize the look of your website using the variety of themes that the plugin provides.
- Pricing: This feature allows you to automate the calculation of the prices for your products. You can also apply different rules for different products.
- Updating: The products available on AliExpress are automatically updated, making it easier for you to decide which new products to add.
- Automatic ordering: Customers can easily place orders simply by clicking the ‘Order’ button.
How to get started with dropshipping with AliDropship
Given all the tools that are available at your disposal, building a dropshipping business has become relatively easy. The following is a step-by-step guide for getting started.
Step 1: Tools for starting out
The very first, and obvious, step for setting up your business is having a gadget that you can use to operate the business. You will have to set up a website, engage in marketing on social media sites, reach out to customers and generate leads. To perform all of these activities, you will need a functional gadget- usually a laptop or personal computer.
Moreover, your business will also rely on an internet connection, so make sure that you have that as well. If you haven’t already, you should also invest in a high-speed Wifi. Faster the internet speed, more expensive the set-up, but it’s worth investing in as it will save you a lot of time and make the entire experience more convenient.
The third basic tool to think about is digital security software. Because you’ll be handling payments from customers and to suppliers, your business is a target for hackers. Make sure to install an effective antivirus software on your computer as well as take other steps to protect the security of your personal information:
- Install a firewall
- Use a strong password for all your accounts (like your WordPress account)
- Ensure that nobody else has access to the gadget that you use to run your business (or at least, ensure that only people you trust have access to it)
- Continually update the antivirus software
Step 2: Finding your niche
A niche is a specialized area of the market. For some dropshipping businesses, consumer technology is the niche. For others, it may be watches.
There are many advantages to having a niche. It gives you the ability to focus on a specific area and be the best at it. This allows you to distinguish yourself from competitors, build a unique brand for your business and secure customer loyalty.
You should develop your niche such that customers think of your business when they think of the product.
Your ideal niche has 3 important features:
- It is something you know a lot about and are passionate about. For example, if you are interested in selling wireless headphones and know a lot about the market, you can make that your dropshipping niche.
- The market for this product is not already saturated, so the level of competition is relatively low. Mainly, you need to ensure that big corporations don’t already have a monopoly in selling this product (an example is Apple- people would much rather buy Apple products directly from the company). This usually means that the product is new.
- Selling this product is profitable. You can have a good profit margin (30-40%) by selling it. To ensure this, your niche shouldn’t be so specific that only a small number of consumers are interested in buying it. You also must look at the future trends for the profitability of this product. Is the demand for it going to fall in the next few months?
Alternatively, you can also choose to sell a wide variety of commodities so that you can cater to a larger customer base. This is not a great idea when you’re just starting out, as selecting the right products and the right suppliers for different products is really cumbersome. Moreover, your business will be all over the place. It’s much better to pick a small area, establish your reputation in it, then diversify your product range.
Step 3: Branding
Now it’s time to focus on branding. Branding is important as it gives your business an identity, allowing it to stand out from others. Effective branding also allows you to build customer loyalty.
There are different aspects of branding that you should think about, the two main ones being:
- Name: What is your business called? You can also consider your niche when you’re choosing a name. You should also choose a name for which a domain name is available.
- Logo: A simple and attractive logo will make your business easy-to-recognize.
Step 4: Building the website
There are various automatic website builders that you can use to create one for your online business. WordPress is the best one mainly because it supports a variety of useful plugins, like AliDropship.
Creating and customizing your website on WordPress is also really easy. Choose the theme that suits your business the best and finish creating all the web content (such as the product page and about page).
Next, you need to install the AliDropship plugin. You can do this by going to the ‘Plug-Ins’ page on your WordPress website editor then installing and activating this plugin. Note that you have to pay a one-time fee of $89 to obtain the license (but you won’t incur any further charges).
Step 5: Finding suppliers
Next, you have to hunt for businesses that sell the products you feature and resell on your website. Finding a legitimate and reliable supplier is key and because you’ve installed your AliDropship plugin, this step is easy.
You still have to research and filter through reviews and find the right suppliers though. The following are some criteria for evaluating them:
- Experience: The supplier has been in the business for a long time (and they can prove it). This makes them more reliable and makes the process more convenient for you as the supplier would be familiar with all the rules and formalities.
- Cost of ordering from them: Make sure that the supplier you choose doesn’t impose a huge order fee as this will reduce your profit margins.
- Shipping speed: To ensure that your customers get the fastest shipping experience, you must pick a supplier who wouldn’t delay shipping. This is something you can judge by looking at customer reviews.
Other aspects, such as having high-quality products and product images, are taken care of by your plugin. Since businesses that sell on AliExpress are vetted for legitimacy and are required to provide high-quality product information, you can simply sit back and search.
Step 6: Setting up a payment gateway
A payment gateway is a piece of software that allows your customers to pay for the products they purchase on your website and transfers the money to your bank account. It is one of the most important aspects of setting up your e-commerce store. Select the right payment gateway based on the following important factors:
- The cost of using the application (for example, the cost of creating an account, annual maintenance charges, etc.)
- The ease-of-use of the app and its graphical user interface (GUI)
- The versatility of payment options (it should support a variety of payment methods- debit/credit cards, netbanking, and wallets like Google Pay and PayPal)
- Processing time- how long it takes for the payment to appear in your bank account
Keeping these features in mind, the following are the best payment gateways that you can use for your business:
Choose the gateway that is the best one for your business. You should also be able to integrate it into your WordPress website.
Step 7: Advertising and marketing
Advertising and marketing products are at the core of your dropshipping business. The effectiveness of your promotions is the most important factor that will determine whether or not your business will succeed. So make sure to invest time and effort into this.
Digital marketing is one of the most popular ways in which businesses promote themselves. It is popular because it is effective, convenient and far less expensive than traditional advertising methods. So how can you incorporate it into your own customer acquisition strategy?
Luckily, numerous social media platforms have advertising functionality built into them. Instagram and Facebook are just two examples that offer ads services. Google Ads is another example.
There are many benefits to using these advertising tools. The first one is outreach: you can reach millions of users by buying ads on these platforms. Facebook, for example, has 1.66 billion daily users which is why so many businesses use Facebook Ads.
These ads also offer a variety of other features that allow you to build a consumer base. Some examples are below:
- Adding a link to your website in the ad, so that customers can click on it and directly go to your website
- Directing customers to your business’ Facebook page
- Adding a Google form that customers can fill out- this would also allow you to gather other information like their email address, which you can then use to send more high-quality promotional materials
Another benefit is narrowing down your target audience. Your products may be suitable only for a particular group of people. For example, the younger generation is likely to be more interested in wireless headphones than the older one. Your advertisements will be more effective if they are only targeted at the people who are interested in your product.
There are various filters that you can apply to narrow down your target audience:
- Past behavior (e.g. people who’ve purchased similar products before)
- Connections (only include people who don’t know about your business to get new customers)
However, there is a downside to using these ads: you have to pay for them. The cost is based on factors like how many people you want to target and the purpose of your ads (e.g. brand awareness). The more effective you want them to be, the more you have to pay.
This is why it is a good idea to have an existing source of income that you can use to fund these activities.
There you have it: a complete guide to starting a dropshipping with AliDropship! Starting a dropshipping business can be a great idea because of the various benefits it offers, such as low start-up costs, location flexibility and choice of products to sell. All you have to worry about is getting customers and contacting suppliers!
The process is made even more convenient by the AliDropship plugin, which allows you to automate different parts of your business- from creating a store to setting the price.
Moreover, the entire process of setting up your business can be completed in just seven easy steps. Follow them correctly and you may end up making a six-figure profit!