There are many ways to make money online. To achieve this goal, you might think about dropshipping. For many people, dropshipping allows them to run a business and enjoy a nice life. In this article, you’ll learn what dropshipping is, if it’s right for you, and how to start a dropshipping business.
What is Dropshipping?
Dropshipping is a type of retail model. Most retailers stock goods and sell them directly. When a store’s inventory is getting low, someone orders what needs replenishing. After this happens, some type of delivery brings inventory to a store for employees to re-stock.
With dropshipping, you act as the retailer for a customer. As the dropshipper, you don’t have to worry about having or replenishing inventory. Instead, when someone is ready to buy, you send this order to the business and it ships this item to your customer.
Is Dropshipping Worth It in 2020?
Considering the simplicity of dropshipping, it’s understandable to wonder if this will help you make profits. It’s true that many people are able to make full-time incomes from dropshipping. But, as with any type of business, you’ll get farther by learning tips and strategies.
Is dropshipping worth it in 2020? Absolutely, provided that you’re ready to put time and effort into this venture. There are plenty of electronics distributors who are ready to sell their items. If you start dropshipping but don’t take it seriously, dropshipping might not be worth it. Before you decide to jump into dropshipping or not, you’ll also want to learn about its advantages and disadvantages.
Why Should I Start Dropshipping Electronics?
As you can imagine, there’s a lot of popular items to start dropshipping online. With that said, you might want to know why so many people dropship electronics. Selling electronics online is beneficial for several reasons.
Beneficial Reasons to Consider Dropshipping
Before learning dropshipping tips, you might still be on the fence about doing this. With that in mind, it could be helpful to learn about what makes dropshipping beneficial.
Not Calculating Inventory Forecasts
Most new companies need to have inventory unless they dropship. With dropshipping, you don’t need to spend hours and hours coming up with inventory forecasts. This also eliminates the stress of not knowing whether you’re buying too much or not enough of a product. These are all worries dropshippers don’t have to deal with.
Not Having to Store Inventory
In addition to buying inventory, you’ll need a place to store it. Depending on the size of where you live, this might not always be possible. If this is the case, you might have to rent storage space. Unfortunately, renting a storage unit will only incur more costs. If you dropship, all of the inventory is stored at another company’s facilities.
Quick Start-Up Times
Another important factor when starting a business is how fast you can set it up. If you’re trying to start a traditional business, it could weeks or months before you’re ready to get started. With dropshipping, you don’t have as many requirements to worry about. You’ll just need a website and a few retail partners to start dropshipping.
A 100% Online Business
With things the way they are, most people aren’t spending lots of time in offices and meeting with sellers in-person. For this reason, many people are exploring what working from home has to offer. If you’re looking for a way to start making money from home, dropshipping is an option to consider.
Disadvantages of Dropshipping
We also want to look at the reasons why dropshipping might not be for you. There are few dropshipping disadvantages you’ll want to learn about. With that in mind, let’s take a look at some of the disadvantages of dropshipping.
Shortage Issues
Something almost every dropshipper has to deal with are shortage issues. Sometimes, the company that provides you with products runs out of items. This might leave you dealing with orders that need to be sent out from a company that has no product to send.
Feeling “Out of the Loop” With Customer’s Problems
Unfortunately, there’s no guarantee that everything you ship out will get to your customers. Unless you have an inside connection with your dropshipping partner, you won’t know key information like tracking numbers and arrival times. This might leave concerned customers contacting you for information that isn’t available.
How to Start a Dropshipping Business
If you want to start a business by dropshipping electronics, it’s good to do a bit of research on this subject. We’re taking the guesswork out for you by listing step-by-step instructions on how to start a dropshipping business.
1. Buy a Domain and Hosting
Before you can start a dropshipping business, you’ll need a domain. Think of a domain as a virtual building for your business. While it sounds technical, registering a domain is easy. You have many options when it comes to where to buy a domain. A few popular options include GoDaddy, Hostgator, or Namecheap.
The first thing you’ll need to do is decide what you want your domain name to be. When choosing a domain name, it’s best to choose something short and memorable. If possible, try to keep your domain under 6 to 14 characters. While costs vary, it should only be about $10-$20 to register a domain name per year.
After you buy a domain name, there’s still one more critical step to take care of. Now, you’ll need to purchase hosting for your domain name. Without hosting, a domain is not much other than a blank page.
When it comes to hosting, you can either pay per month or year. Most hosting companies offer you a lower overall cost if you pay annually. Before committing to anything, it’s a good idea to do a quick Google search for a hosting company you’re wanting to partner with. If everything looks good, choose your hosting package and you’re all set.
2. Design Your Website or Hire a Web Designer
After buying a domain and hosting, you’re ready to design your website. 10 years ago, this might have been a semi-complex task for certain people. Now, there are several companies that offer ways to make designing websites simple and fast. Several website building services are Squarespace and Wix.
However, if designing a website isn’t something you want to learn how to do, there are other options. You can choose to partner with a web design company or a freelance web designer to solve this problem.
We recommend checking out a few templates and seeing if setting up your website is for you. If it becomes too time-consuming or frustrating, there are web designers all over the world to start reaching out to.
3. Determine Your Profit Margins
An essential dropship tip for beginners is knowing your profit margins. To put it another way, your company’s profit margins involve how much money your business makes per sale.
First, you’ll need to calculate how much the product you want to sell will cost you. Next, take a look at how much this item sells for online. After subtracting your shipping costs, you should have a good idea of profit margins for each item you want to dropship.
Let’s say you find smartphones available for $80 each. You’re confident you can sell these items on your website for $160. It will cost you $6 to ship this product.
After selling your electronics for $160 each, subtract $80 to cover your cost of goods and take away $6 more to cover shipping costs. This leaves you with a total of $74 in profit.
($160 - $80 - $6 = $74)
4. Choose Electronics You Know About
Warren Buffet, one of the most successful investors of all time, used the principle of only investing in industries and topics he knew about. As you start your online dropshipping business, you’re going to have lots of choices. When starting an electronics business, it’s better to choose profitable items that you have some type of interest in.
While setting up an online store is somewhat easy, making content about topics you don’t care about isn’t. One of the keys to having success with anything is doing something you enjoy. By selecting electronics that you have an interest in, setting up content around these topics will become second-nature. You’re also saving yourself the time it takes to research new products you don’t know much about.
5. Start With a Small Number of Products
Another way to keep things simple is by keeping a small number of products in your store. You might think this might set you back compared to larger online businesses. However, most of these companies spend years honing down what sells well and what doesn’t.
As you get started, it’s easy to start clicking away and adding products to your store. Before you realize it, you might have hundreds of products in your store. However, unless you hire someone else to do it, you’ll need to write content for each of these pages. Even if you only write 150 words about 100 topics, that’s over 15,000 words!
With so many products in your store, you might also run the risk of overwhelming customers. By sticking with items all closely related to each other, it makes it easier for customers to know what your store is about.
Starting out with a handful of products is easier to manage. If things go well with a smaller selection, you can start adding more products.
6. If Possible, Make a Sample Order
One of the drawbacks of dropshipping is never being able to hold the products you’re selling. With that said, there is a way around this. To do this, you’ll only need to purchase a few items you’re selling in small quantities.
Having the item or items you want to sell in your hands is great for many reasons. The first reason is that it’s easier to write content about something you have versus something you don’t. By having an item in your hand, it’s much easier to experience it for yourself.
Another great reason to think about making a few sample orders is to get pictures for your websites. Yes, it’s possible to find stock images or something similar. If you want high-quality photos that only your business has the rights to, it’s best to take them yourself.
Also, make sure to include the name of your website somewhere in this image. This will help ensure anyone who uses your image without permission also promotes your website in the process.
7. Set Aside a Marketing Budget
One of the great things we’ve mentioned about dropshipping is that it’s easy to automate. To make sure your dropshipping business stands out, use the time you have to create a marketing budget. Since almost every dropshipping business is based online, it’s best to go with a digital marketing strategy.
Before you start spending money on this, decide how you want to market your business. You can choose organic marketing, paid marketing, or a combination of both. Generally, organic marketing costs less but takes more time. On the other hand, paid marketing costs a little more but gets you faster results.
To wrap things up, it’s possible to start a successful dropshipping business by selling electronics. If you have a little time to get things started, dropshipping might be perfect for you. But, we also understand if this isn’t quite what you’re looking for. Don’t worry, there are plenty of ways to make money with electronics. To find out how to do this, consider visiting the Trade-In Tech blog. Here, you’ll find lots of tips and strategies for those in the electronics industry.