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How to Start a Dropshipping Business in 14 Steps (In-Depth Guide)

August 16, 2020

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Why would you want to start a dropshipping business?


Ah, the laptop lifestyle… 

You work when you want, where you want.


That kind of freedom seems like the life, doesn't it?


Dropshipping can enable you to live a life of freedom, to work when and where you want.


That's why it's such a popular business model.


Reality check!


Dropshipping has a 90% failure rate.


90%!

But why do so many dropshippers fail?


The answer is simple: they start a dropshipping business blindly, knowing nothing about it. 


Is dropshipping still a viable business option in 2020?


Of course it is! You just need to know how to go about starting your dropshipping business.


So. Want to know how to start a dropshipping business the right way?


You're in the right place! In this step-by-step guide I will show you how to get started with dropshipping in the most successful way possible.


I wrote this guide for beginners who are looking to start a new online business as quickly as possible. But done the right way, without taking shortcuts that will hurt your business.


This easy-to-follow Dropshipping Guide includes effective steps, methods and tips to increase your chances of success.


TOP TIP: Don't skimp through this content! Read this entire post, from start to finish.


I spent well over a 140 hours compiling this dropshipping guide for you. Open the separate post pages of each of the 14 Steps.


Step pages contain Top Tips, Advanced Tips, Links to more resources and even FREE downloadable content to help you start your dropshipping dream. 


If you're serious about starting dropshipping, then you have to meticulously work through this guide. 


It will help you.



Will this dropshipping guide change your life?

Yes.


Just like that answer, this guide is simple, straightforward and to the point. And it answers all your questions about dropshipping. 


You need little more than that, right? 


In this guide, I answer all the burning questions you might have about dropshipping, such as:

  • What is dropshipping and why is it so popular?
  • How does dropshipping work?
  • What are the advantages and disadvantages of dropshipping?
  • Is it still possible to make money with dropshipping?
  • How do I start a dropshipping business?
  • Where do I find dropshipping suppliers?
  • How do I choose dropshipping products?
  • What is AliExpress dropshipping?

I answer these key questions and much more!


The most important question you probably have is: Can I be successful with dropshipping?


If you follow my 14 steps, YES! I make $10k per month with ease, so it is still possible. 


It's very important that you know exactly what dropshipping is, especially the pros and cons, before you embark on a new business adventure. If you're not sure what dropshipping is, (or why it is so popular, or how it works), then go here.


Itching to make money? But how do you get started with dropshipping?

  • In this section I highlight the 14 steps you should follow when starting out.
  • I will regularly update these as time goes by, so check in from time to time.
  • Each Step has a link to a separate page with more detailed info.
  • Read them all, and apply what is taught.
Build your dropshipping dream with these steps

You cannot build anything without a plan.


Over the years, I learned that there are certain steps to follow that will help increase your chances of success. 


It doesn't guarantee dropshipping success (there are no guarantees in business), but if you're willing to put in the effort and follow advice, then you have a better chance than most.  


How to start with dropshipping? 14 Steps to start a successful dropshipping business.

Step 1 Are you ready?

Before you even start, you need to have the right mindset.

business building mindset by amazon fba pro Tim Sanders founder of Private Label Masters dropshipping course

You need to be up for the challenge and willing to persevere and work hard at your online business. If not, then there's really no point in even looking at the Dropshipping Steps...


Remember the famous Vince Lombardi quote: “The only place success comes before work is in the dictionary.”


You need to put in the hours and push on during the hard times.


To get this done, you need to have the right mindset. 


You need to know your strengths, weaknesses and be able to stay positive when the going gets tough. 


And you have to do a lot of reading, which may seem daunting to you.


BUT...


Knowledge is power. The more you know about dropshipping and business in general, the better your chances at success. There's now way around it, sorry...

Advanced Tip: Reading through the steps on this page will not suffice. You need to visit each Step's separate Page to get more detailed insights. These pages contain pro tips, free downloadable content, and links to additional resources. 


Click the buttons to get full access!

Step 2 Do your due diligence

You can't expect to be successful at a business if you know nothing about it. If you're not sure what dropshipping is or why it such a popular business model, then go here.


Educate yourself about the dropshipping business model before you even think of starting out.

Don't start with a course right away, but go through some free resources out there and familiarize yourself with dropshipping.


You also need to know if dropshipping will be a good fit for you. In the accompanying Step 01 Post on Due Diligence (click on the button below), I included a "Dropshipper Profile", which will highlight the character traits and skills needed to succeed at dropshipping.

Step 3 Spy on the competition

It's important to research your competition before you enter your niche.

It's good to know who else will vie for the same customers and what they do to attract those customers.


Just don't copy everything they do!


Note what works for them and use your own unique twist to your web design &/ content &/ marketing.


That is what will differentiate you from the competition. 

Step 4 Be unique

Don't jump on the bandwagon and try to sell the latest craze. Stand apart from the crowd!

Trending products don't have a very long life cycle - you're only able to cash in at the very beginning. Being only a few days late to the party can be detrimental to your success.


It's better to have a unique approach to marketing/web design/or the products you sell.


This will distinguish your dropshipping store from others.


Unique stores stand out and are much more memorable than the hundreds of cookie cutter dropshipping sites out there.

Step 5 Choose a niche

It helps if you have a niche you are passionate about - it makes things easier when the going gets tough.


Find a niche you love and only then think of products.

Become an expert! If you're an expert in your niche, that will drive sales in the long-term, making it a much more viable option than the endless chase after trending products.

Step 6 Choose the right products

It's not as simple as it looks on the dropshipping videos.


A lot of thought and research need to go into your product choices.

Try for a combination of trending and evergreen products as opposed to focusing on only one product.  


Most important: your products must either solve a problem, or appeal to a passionate audience.

Step 7 Sourcing the right suppliers

There are thousands of suppliers out there and the wrong supplier can easily sink your business.

Make sure you vet any potential suppliers carefully. If your dropshipping business is successful, you will walk a long road with them. 


If you go to the Step 7 page, you'll find much more detailed information. It also contains a FREE downloadable PDF Supplier's Guide. It includes tips, Supplier Contact Script Template and a Supplier Checklist.

Step 8 Building a brand

Building an online store is child's play these days. What's more important is creating brand identity.

It's easy to change a store, but not so much a brand.


Choose your store / business name carefully. It will link to the lifelong brand that you will be promoting. 


There are other elements to consider, such as a logo and/or a slogan, the use of specific colors, font type and size, content. 


These elements all work together to create a lasting and memorable brand. 

Step 9 V&V (Values and Value)

Just like any other business, you still need to conduct yourself in professionally (Values). This includes being ethical and honoring your commitments and operating within the legal framework of a registered business.


To stand out from the competition, offer your customers Value. I'm not talking about merely offering a great deal on cheap products.


You should add value by offering your customers the best shopping experience. 

Think of how you can make it worth their while to buy from you and then to continue buying from you for years to come. 


In addition, it's a good idea to start your business on the right foot - as a legal entity. There are many benefits to registering a business as opposed to running things as a sole proprietor.


Local laws and applicable taxes will differ from country to country (and even state to state), so it's always a good idea to find out what the legal implications are of starting a business in the area where you live.

Step 10 Have a game plan and exit strategy

Have a game plan in place with realistic goals and reward yourself when you reach these goals. Start small and build up to more lofty objectives.

Remember why most dropshippers fail. Even the successful ones didn't get it right the first time.


Writing a business plan forces you to think ahead and set your goals, and how you're planning to reach them.


To make it easier for you, I have included a Dropshipping Business Plan Template that you can use to get started. Just follow the link to the separate Step 09 post.

Step 11 Build your store

Many courses suggest that your first step of dropshipping should be to build your online store.


There are some, however, (including myself) that strongly suggest you only build a store AFTER you've done all your homework. 

This approach makes more sense to me. 


You'll save a lot of time and heartache if you do proper niche, product and competition research before you haphazardly dive into the deep end. 

Step 12 Marketing

Facebook Ads are pretty complicated. It's the go-to method for most dropshippers, but what happens if your FB Ad Campaigns are not converting?


You need to have several advertising campaigns, on different media platforms in place. Don't put all your marketing eggs in one basket...

Oh, and you need a bit of money to throw at it. 


You might have heard of the dropshipping favorite: $5 per day Facebook Ad Campaign.


If you have, don't believe the hype. It only costs $5 on the first day. After that, you need to scale and that gets expensive...

Step 13 Be realistic

Don't get fooled by the gurus and their sports cars.


Success doesn't come overnight.


It requires a lot of blood, sweat and tears to make a success from dropshipping. 


The laptop lifestyle only comes after a lot of trials and tribulations.


Google the following statistic and you'll see it pop up a lot. Success only comes to those who know the risks and are prepared for them. There are "...12-24 million online stores in the world, but only 650,000 make more than $1,000 of annual sales."


When you worked through Step 9: Have a Plan, you should have come up with your business goals. 


It is important to have your goals and equally important to be realistic about them.


Set short-term goals and work at attaining them. The short-term small victories will lead to attaining your bigger goals.


Don't set out to "Getting $1 million in sales."

Break it down into smaller pieces. "I need $100k sales in the first year. $200k in the second" etc. Break each of those smaller. To get "$100k sales, I need to..."


Remember that your first 3 - 6 months will most likely be difficult. That's why you need a plan and need to be realistic. Go back to Step 9 if you need to review. 

Step 14 Decide whether dropshipping is for you.

Hopefully, you've gone through all the steps, before deciding. I hope you also read about my dropshipping experience that I presented to you as a case study. 


So, yes. Dropshipping looks very attractive on paper. It has a lot of positives going for it. But you also need to weigh the positives against the negatives.

I urge you to make your own list of the two and see which one, outweighs the other. 


Remember to add things like your available capital and the time and effort you're willing to put into your new business venture.


Are you going all-in, doing dropshipping full time, or will it be a side hustle?


What will your goals and aspirations be for this business?


And finally, decide how long you'd be willing to carry the business financially, before you show a profit. You need to know how long you can survive before throwing in the towel. 


I know that last bit sounds terrible. But you need to remember that only 10% of dropshipping businesses succeed. You need to know when to call it quits, if things don't go according to plan...   

Before you start going through the steps in detail, here's more advice. 


It's important to know what you want out of your dropshipping business. Here's what one of the most successful dropshippers of 2018 had to say:

I was happy if I could make my yearly salary and just be able to wake up when I want. To not have someone say I’d have to come in at a certain time or to have to ask, ‘Can I have 20 days off of work?’ That’s what I generally wanted to get out of it...


- Harry Coleman

"The Beast of Ecom" made over $5 million in dropshipping sales in 2018

See? You don't need lofty dreams of where your dropshipping business will take you.

Think of why you need to start an online store and focus on short-term goals first.

Tips for new dropshippers

1.

1. Use this guide to start out.

I’ve used the knowledge gained through experience and taken the best from what I’ve learned from dropshipping courses to compile this guide.


Trust me, it will save you countless hours and many dollars.


I've spent the time and money so you don't have to make the same mistakes I did. 

2.

2. Learn as much as you can.


Although I tried to make this guide as comprehensive as possible, no guide or course will ever be able to teach you everything there is to learn about a subject. 


Gain as much knowledge about dropshipping as possible. There are a lot of free resources available on the internet, but stick to the well-known dropshippers who have been in the game for a while.

 

Good choices are Oberlo and Franklin Hatchett's YouTube channels. Adrian Morrison's Profit Power Hour is also a good option. All of them post new videos on a weekly basis.


Oberlo.com offers a host of free resources, including e-books, a dropshipping hub, podcasts, videos, dropshipping related stats and an FAQ section.   

  

3.

3. You need not spend thousands on a dropshipping course!


This guide gets you started without having to spend additional money and time.


I've compiled this guide so you don't have to pay exorbitantly for advanced tips and methods.


Most of the gurus will offer free tips on their YouTube channels or websites, but not the finer details. They keep these "trade secrets" exclusively for their students, forcing you to pay for that information. 


I won't be doing that. I'll be offering all the secrets I've picked up over the years, for free.


Just a side-note: If you're dead broke though, you shouldn't try dropshipping. You will need between $2,000 and $4,000 minimum to get going...

4.

Test the waters!


You need not go all in. The great thing about dropshipping is that you can start your dropshipping journey as a side hustle.


Because it's such an easy business to start, you can try it out without committing all your time and effort (and money).


It's a good idea to start with a general store, selling several products. You can then test these products to find a winner, rather than starting off with a single niche product.


No matter how great you think a product is, it's not advisable to start with a single product store. You can consider this option at a later stage when you've gained some dropshipping experience. 

5.

Be wary...


I can't stress this enough. Dropshipping has a high business failure rate.


Based on this alone, I would be very careful going into this business model if I were you.


You can still make money with dropshipping, though. No doubt!


Just know of the difficulties you might face and know that it will not be a walk in the park.

Is dropshipping still worth it? What about market or product saturation?


First off, let's bring in some stats. 


Ecommerce is a global phenomenon. It only seems to grow bigger and bigger with each passing year. 

According to the experts there can never be market or product saturation of any kind in dropshipping. There are just too many products and too many potential customers for that to happen.


Fair point, so you don’t have to worry about product or market saturation.

But, dropshipping does have its challenges. Its not as easy as it once was, FB ads for instance, have become more expensive.


In this guide though, I hammer home things to watch out for that can make you successful in 2020.

Remember the 90% failure rate... 

Unless you have unlimited time and money, you should be doing your homework first. Using this guide should be the start of your dropshipping journey and should help you in the right direction.

Starting a successful dropshipping business is not as easy as it was a few years ago.


The Golden Years are sadly over...


Dropshipping has made several millionaires since it rose to popularity in 2014. The height of the dropshipping craze seemed to have been between 2015 and 2016. 


It created many dropshipping millionaires in this time and rose to prominence because of it. Some of them started their own dropshipping courses.


Since the beginning of 2018 though, the amount of new dropship millionaires have dwindled.


In 2019, you're considered a success if your store makes 6 figures in a year. 


Guys like Harry Coleman are in short supply.


Most of the so-called dropshipping gurus all make their money from their courses - NOT from dropshipping...


They made a ton of money from dropshipping, but now make their money selling courses.

But why are there less and less new dropship millionaires every year?


This is because of two major factors:

  • the increase in competition, and
  • rising advertising costs of Facebook and other social media platforms.
  • (Yip, it's not saturation ;-))

Why am I telling you this?


I want you to be realistic about your expectations going into this business model. Very few people make it to dropshipping guru status. You can be successful, though!

The Solution going forward:

It is still possible to attain dropshipping success in 2020. 


However, new dropshippers need to go into this business model with their eyes wide open. They need to do their homework and put in a lot of effort.


Dropshipping only offers success to those willing to burn the midnight oil and make informed business decisions.

So, is dropshipping still viable in 2020?

It depends on what your goal is.


If you're in it to make a quick buck, it's a gamble. 


If you're in it for the long-term, then it's still very possible, but don't expect to be a millionaire soon.


Dropshipping is not as simple as seeing a product on AliExpress and selling it for double the cost price. There's a lot more to it...


Yes, there are dropshippers who have made millions online.


But they never tell you how much of it was profit.


Marketing also takes a HUGE bite out of your income.


And everyone seems to neglect mentioning taxes. Yes! You have to pay those too.


So your slice of pie might not be as big as you think it is. 


BUT, you can still have your pie and eat it! 😉


Just follow my tips and steps to building your dropshipping business and you'll be fine.

Luckily I have you covered with my easy to follow steps. They will definitely help!


Franklin Hatch​ett

"I'm not going to tell you exactly how much I earned, but it's over a million. But that's over five years..."


Dropshipping legend Franklin Hatchett, stressing the fact that you won't be a millionaire overnight. It takes hard work and you need to be in it for the long haul.

Conclusion about dropshipping

Although starting a dropshipping business costs much less than most other new businesses, it doesn't mean that you should throw all your chips in, right from the start. 


Remember the goal of any business is to be sustainable over the long-term and this counts for dropshipping as well. 


Think before you dive head-long into any business and weigh up all the pros and cons. 


I would even suggest comparing dropshipping to other business models before making a choice.


It is increasingly becoming more and more difficult to make money in dropshipping.


Sure, with the right product and a bit of luck (and some marketing money to burn), you can still make good short-term money off of dropshipping. But it's the long-term dropshipping prospects you should aim for.

Dropshipping as a viable long-term business prospect, however, is gradually becoming more complex as more and more dropshippers join the fray and advertising costs continue to rise. 


It's only the savvy dropshippers that will survive!


Which is why you absolutely have to know what you're doing...


A good place to start, is Step 01: Due diligence. Click here to start your dropshipping journey.

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Ippei Kanehara
Founder/CEO Ippei Leads

$52K per month providing lead generation services to small businesses

Ippei.com is for digital hustlers, industry leaders and online business owners.

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