If you are a beginner and know nothing about the dropshipping business, you need to read this. If you are searching on the internet for how to make money online, a dropshipping business can be a perfect fit for you. Well, out of all the options, drop shipping seemed the most profitable. Here in this article, you will learn how to start a Dropshipping business in India.
But sadly, most beginners know little about dropshipping business. From scratch to a few thousand dollars, running a drop shipping business is easy and manageable.
Table of Contents
What is Dropshipping Business?
Dropshipping is basically a business where you are the middleman. You don’t do anything, you contact the supplier, select the products you want to sell, pitch them to your audience and they do it all for you. You will be like an Amazon where people come to buy your products and they are directly shipped by your chosen supplier.
What are the Advantages of Dropshipping Business?
If you break it into parts, the benefits of the drop shipping business are:
- Lower costs
- No inventory
- No stocking
- No shipping
- No maintenance
- Run your business from anywhere
- Sell whatever you want to
- Change products as you like
- Chances of losses are very low
What are the Disadvantages of Dropshipping Business?
There are a few disadvantages in spite of its risk-free business model.
Discounts will differ compared to wholesale buying
Bulk orders only come with extra discounts
No control over product quality
Choosing a good supplier is very important. The buyer is expecting the orders from you, not your supplier.
So ensuring good service is important, and that can only happen when you choose a good supplier.
12 Steps to Start a Drop Shipping Business in India
Here’s a complete guide on how to start a successful dropshipping business in India without any major investment.
To start with, you need a business plan. A simple plan on what you wish to sell, who is target market and where you will ship.
1. Choosing What To Sell
First, you need to pick your category. It’s really important. You select your suppliers and list their products on your dropshipping site. So, first, choose what you wish to sell. Don’t go for something common, like a mobile cover.
Instead go for something like Marvel Avengers Endgame mobile cover, or PUBG mobile cover. Choose a niche over a common category.
There are plenty of tools you can take help from. As an example, Jungle Scout is a popular tool for finding the best-selling products on Amazon.
2. Understanding the Competition
You need to study the market and your competitors properly. If you will follow the crowd, hardly you will have an impact unless your products are very cheap. For instance, take the example of selling backpacks. There was already a market for backpacks, but special editioned Deadpool backpacks had only a couple of sellers.
This helped me cater to an audience who is actually interested and I am reaching the right traffic.
3. Finding The Supplier
Once you choose a product category, now you need to find the seller. You just can’t randomly wish to sell something that may not even have been produced. So be practical, see what’s in demand, and choose the products. Go through possible suppliers. It’s always better to go with sellers who stock a wide range of products.
You can visit sites like IndiaMart.com and TradeIndia.com to find the right suppliers. They have a huge database of suppliers and manufacturers to choose from.
See if the supplier has any drop shipping experience or not. It’s important for the seller to understand the process and why he needs to ship them in time.
4. Selecting The Supplier
Before you choose a supplier, go through all the details. Check for how long he has been in the dropshipping business, how will he ship the product, how long will it take to deliver it, shipping methods, payments, and more. Also, wholesalers charge to offer drop shipping services, they generally add a fee to cover the costs like international shipping and packing.
The costs vary from product to product and countries from where you want to dropship.
5. Choosing A Platform
The easiest way to start a dropshipping business for a beginner is to try dropship marketplaces. There are plenty of such marketplaces available online nowadays. Oberlo which integrates with Shopify is the most popular one worldwide.
In fact, you can create a full-fledged dropshipping site with Shopify. If you are looking to create an online website for dropshipping business, Shopify is the best available. No one comes even close to Shopify.
You have to list your products. Enlist all the details and photos of your products after you take them from the supplier.
6. Working On The Keywords
To make your dropshipping site SEO-friendly, you need to work on the keywords. As I said before, you need to target a few niche products. A niche will offer you better search results and higher are your chances to be successful in the e-commerce market.
It’s not easy to rank the keyword backpacks on Google or any other search engine, but Liverpool backpacks will have one-tenth of the same competition.
7. Managing Your Product Listings
Now you need to list your items accordingly. Listing a product properly is very important. You must disclose all the product details in your listing. This will help you to sell your product to all potential buyers. And most importantly show from where you are shipping your product. Like if your supplier is in China, you should list that the product may take longer than expected to reach.
Dropshipping is different than other e-commerce orders or other regular wholesale orders.
8. Payment Integration
You need to choose a payment gateway. There are different options available via which you can accept the payments. Again understand that you are the middleman, so you have to accept the payment on behalf of your supplier and then pay the charges to the supplier.
Paypal and Stripe remain one of the most used and easy-to-integrate payment options. Paypal is now available in India while Stripe is available on request.
9. Deciding The Prices
You will be adding your commission to the supplier’s pricing and decide the final pricing. Study the market properly, see the competition available and pricing of other similar products. Also, do keep in mind that international shipping does add up to a lot of charges, so decide the pricing accordingly.
It’s better to go through other websites and see how they are charging their products. It will help you choose a better price for your product.
10. Register Your Dropshipping Business
It is compulsory to register your business if you want to carry out a dropshipping business in India. Read our guide on how to register a business in India. Another mandatory requirement is to have a GST Number. It is not going to be possible to run a business in India without having GST registration.
11. Open a Current Bank Account
While opening a current bank account for dropshipping, it is advised to check whether the bank offers instant money transfer facilities or not. Since foreign banks have a wider network of branches worldwide, most drop shippers prefer foreign banks for their bank accounts.
12. Making Money
Once an item is sold on your site or platform, you will collect the money from the buyer. Then you pay your supplier and keep the profit. Now you order the item to your supplier you have just sold from their website and provide the shipping details. The supplier will now ship the item you have sold via your platform directly to the buyer.
Within a few days, you can start to work out your best-selling products. You can start to list products in the future based on the sell-through rate and delete the products which don’t sell.
Dropshipping offers you the advantage to sell products without going into production or manufacturing, making it a profitable business.
Frequently Asked Questions
What are the Startup Costs Involved in Dropshipping Business?
To start drop shipping, you will need some sort of investment. It’s minimal, but not nil. The startup costs primarily involve what you need to establish an online business.
If you choose to sell via eBay or Amazon, you’ll need to pay for the listing and then the commission for sales.
In case you choose to run your own online store, you need to host a website and pay your suppliers for their drop shipping services.
What are Marketing Costs?
The marketing costs will depend on the scale you want to carry your business. For small businesses, social media is an easy and free-to-reach option.
You can even add a blog to your site to promote your products via blogging and use email marketing to market your products.
What Profits Can I Expect From Dropshipping Business?
Dropshipping can be hugely profitable as you make it. Do remember the competition is high, and there are big players everywhere.
If you can pick a good niche, you can easily make good money out of the dropshipping business.
How To Price Products In Dropshipping Business?
You need to keep the profit margins depending on the product’s availability and competition. There’s already plenty of competition out there, so you need to keep your prices low to grow your sales.
It’s better to follow a low-profit-margin and higher volume sale model for general products.
While for the niche you can follow a lower sales volume and higher profit per sale model.
How To Choose A Dropshipping Supplier?
Once you finalize a product category, go through all the suppliers who offer products in that niche. Read reviews and check their costs, compare and if possible see how many years they are in the business.
It’s better to keep a few suppliers handy rather than just one or two suppliers.
How To Order From Suppliers?
Once you partner with your supplier, you just need to forward the order you have received. Small orders can be submitted directly by forwarding a confirmation email.
For higher volume, you may have to generate a daily sales sheet with all the necessary data.
You need to provide the item, shipping address, and payment details.
What Are The Shipping Charges Involved in Drop Shipping Business?
You need to pay your supplier for the shipping. If you have large orders, the supplier will charge a flat fee per item or a cumulative amount. You can list your product with the ‘Free Shipping’ tag and can add up the charges to the product.
Free shipping results in higher sales. It attracts more customers, especially during sales.
Who Will Pay The Shipping on Orders?
Your supplier will arrange everything to ship the product, and you will pay the charges decided beforehand. You can choose to show the shipping charges separately in the invoice or hide them in the listing price.
Can Packaging Material Be Customised?
You can make your orders appear like they have been directly shipped by your company. Dropshipping suppliers offer customized packaging but will charge extra for it.
You can pay the additional charges to have your own packaging, shipping labels, and item tags with your company’s name and logo on the dropshipped items.
This also brings in a sense of confidence among customers that they are actually ordering from a good e-commerce store.
What If My Customer Wants To Return The Drop shipped Product?
The return will depend on the supplier. While many dropshipping suppliers accept returns for certain items, most of them don’t accept returns for certain items. You should make it clear with the supplier, and list the return details on your site accordingly.
Once a product is returned, the supplier will identify the item and process a credit to your bank account once verified.
Who Will Pay For The Return Shipping?
This depends on why it is being returned. If a product is damaged or defective, the supplier will reship the product at his own expense. But if a customer wishes to return a product, either the customer or you will have to pay the return shipping charges.
Establishing a profitable drop shipping business takes time. You need to research the products you choose and pricing them smartly is important in such a competitive market.