How to Start a Dropshipping Business

by contentwriter

Author: Geoffrey Musk

Have you been thinking about expanding your current income streams? Or did you recently hear about dropshipping and are interested in knowing more?

Well, you’re in luck because we’ll be looking at how you can successfully create a dropshipping business in this article.

Let’s get into it.

How Does Dropshipping Work

Dropshipping is an order-fulfillment business where store owners directly sell products to customers without having to stock products. With drop shipping, you only handle the marketing aspect while the manufacturer or supplier ships the order to the consumer.

Is Dropshipping Profitable?

Like all business ventures, you run a risk with dropshipping. But it can be a profitable business as you never have to handle the affair of shipping and manufacturing.

Furthermore, dropshipping doesn’t incur heavy costs, and you make a good profit when you are working with good suppliers. 

Many people make $100,000 yearly from dropshipping. If your success metric is to make that much, you might have to consider branding your items and working with a reliable supplier.


How hard is it to start a Dropshipping business?

A dropshipping business can be very competitive. The fact that it’s free to get started makes the competition higher. 

How to start a dropshipping business

Dropshipping is a worthwhile investment, but only with a solid business plan and market readiness.

Here are nine steps we prepared to guide you in starting your dropshipping business:

1. Commit to starting 

Like every business, dropshipping requires significant commitment and long-term planning. Being realistic will also help you stay committed as you may be disappointed if you want to make a six-figure income in a few days/weeks.

2. Choose your business Idea

When learning how to create a successful dropshipping business, you should conduct adequate market research.

Look into different competitors, trends, locations, and niches of interest. Then use the information you gather to make the right judgments about your potential profit.

Focus more on niche products that can gain the attention of specific shoppers and increase traction without competing with established businesses.

3. Conduct Competitive research

Now that you’ve decided on what to sell, the next is to find out who your competitors are and understand how they work.


If your market has a lot of competitors, limit your research to about the best five or ten dropshipping businesses in your category, including some top names such as Amazon or Walmart. This can help you to plan your next moves and build a stronger brand.

Some ways to go about these are:

  • Subscribe to their email lists.
  • Research via Google
  • Follow them on social media

4. Choose your Dropshipping Supplier

This step is critical in creating a successful dropshipping business. By now, you have chosen what to sell and considered its profitability – now you need a supplier that provides the high-quality products you wish to sell.

5. Build your eCommerce store

The next step is to develop a website where you can list your product. You may consider Shopify or Bigcommerce.

3. Sole Proprietorship

A sole proprietorship doesn’t offer personal liability protection, meaning you may lose your possessions if your business gets sued. Filing reports are minimal, and you’d have to report your earnings from personal taxes.

4. Company Registration  – Limited Liability Company (LLC)

LLCs offer more protection for personal assets because your business is established as a separate legal entity. You may have to comply with extra filing requirements and pay for incorporation and ongoing fees.

5. Put your Finances in Order

A common entrepreneurial error is mixing your business and personal finances, which can lead to confusion, make accounting difficult, and cause you to be flagged by the IRS.


Keep your personal and business finances separate from each other as much as possible, and the easiest way to accomplish this is by opening accounts in your business name.

6. Marketing Channels

Now that you are knowledgeable enough to open your dropshipping store, it’s time to start marketing. You can market your store through paid ads, influencer marketing, content marketing, communities, mobile marketing, and more.

To stand out, you may need to put more effort into your advertising and marketing. As your business grows, you should review and adjust your strategies to help reduce costs, increase revenue, and grow your dropshipping business.

7. Analyze and Improve

As you market and advertise, look out and analyze the results you’re getting so far. Answer essential questions such as:

  • Sales. Where should I invest more ad money? Which are my best-performing channels? Who are my best customers? What are my bestsellers?
  • Customer behavior. Where do customers buy more? From desktop or mobile? What’s each device’s conversion rate?
  • Profit margins. What do my sales and profits look like month after month? What product and variants bring the most profit.

Remain consistent with your analytics over time and measure performance against strong KPIs. 

This will aid you in making well-informed decisions and take your business to the next level over time.

Final word

Dropshipping is a worthwhile business venture to consider starting. But like all good business models, it requires a clear business mindset to function. For better results, approach it with realistic expectations, a strong business idea, and dedication.


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