So you’re thinking of trying dropshipping? You’ve seen a few gurus on YouTube tell you how you can make money easily for zero investment? You’ve had a poke around AliExpress and Oberlo and seen a ton of eye-catching products available for great prices that you think could sell for a great profit?
Read on for our article, things to consider before dropshipping in 2022 and see if dropshopping is right for you. You might also be interested in our article Does Dropshipping Work?
Below is a list put together from one of the Job Asylum contributors based on their own personal experiences.
- 1 Are you able to trade as a sole trader or a limited business?
- 2 Are you able to either create or outsource the creation of a website?
- 3 Can you afford associated web-hosting fees?
- 4 Are you confident in managing social media channels?
- 5 Can you produce professional content for social media, website and email marketing?
- 6 Can you offer proper customer service?
- 7 Do you know proper SEO strategies to help get your website ranked?
- 8 Can you afford advertising fees for social media ads or pay-per-click campaigns?
- 9 If selling on eBay/Amazon are there people already selling the same products?
- 10 High ticket or low ticket?
- 11 Do you have the time around your other commitments?
Are you able to trade as a sole trader or a limited business?
If you are dropshipping using a platform such as AliExpress or Oberlo you won’t need to be a registered Ltd business in the UK and can act as a sole trader. If you are going to use UK based wholesalers and manufacturers for dropshipping in the UK, then there’s a very good chance they’ll only trade with you and let you open an account with them if you are a limited business. See here the differences between what it means to be a sole trader or a private limited business.
Are you able to either create or outsource the creation of a website?
If you have the technical know-how and the graphic design skills required then you just need to commit time. However, if you don’t, you will need to go away and learn how to do it or pay someone to do it for you. You might want to consider websites like upwork or fiverr.
If you consider yourself creative and want to do graphics yourselves, check out Canva, a great free tool for graphic design. Using Canva combined with royalty-free photo websites such as pixabay or pexels can make your life a lot easier.
Can you afford associated web-hosting fees?
There are multiple options for which platform to use for your website. One option is to purchase a web hosting package with someone reliable like Bluehost and then use WordPress with either a free or premium template alongside installing payment methods such as Stripe or PayPal.
The other option would be to use a specialist e-commerce platform provider such as Shopify which is more of an all-in-one platform for creating an e-commerce business. Whichever way you go, make sure to pay attention to what percentage cut is taken from you after each order you receive. You should calculate this beforehand and build it into your pricing structure when deciding on how much to sell a product for.
Social media is a great way of engaging with your audience if done correctly. Running a social media account for a business isn’t the same as running your own personal account. Decide upon which social media platforms your target audience are more likely to use. You don’t need to be on every platform, it’s better to be really good at one or two social media platforms than rubbish at several of them. Content creation and managing social media is time-consuming. Tools like Canva can speed up creating graphics and scheduling tools like Buffer can make it easier for you to bulk schedule all of your posts for the upcoming weeks.
You need to be able to either produce or outsource professional marketing content, whether that be text, images or video. Your branding and content need to look as professional as the big brands if people are to trust you, especially as a new brand. When creating your content, think, is this a shop you would order from yourself. Poor graphics, bad layouts and spelling errors will stop you from getting orders.
Can you offer proper customer service?
I know dropshipping sounds like an easy system where the customer clicks to buy and then you order the product from your supplier and the difference in cost price vs sale price is your profit. When you have a reliable supplier this is often a smooth process. But what about when things don’t go right?
Let’s say a customer isn’t satisfied with the product quality, or before purchasing they have some questions. Are you able to handle these in a professional manner? Often your supplier will have a return or refund procedure in place but you will be the first point of contact for your customer.
Do you know proper SEO strategies to help get your website ranked?
So you’ve made your new website, it looks great, it even has a catchy name. But it’s not on the first page of google. In fact, it’s not even in the top ten pages. Make sure you learn about SEO, on-page and off-page strategies to get yourself up the rankings and gain organic traffic. There are tons of free resources available online or if you are happy to pay, check out courses on udemy.
Social media advertisements and search engine pay-per-click ads aren’t essential but put to good effect they can start to bring visitors to your website immediately, but at a cost.
Getting instant traffic sounds great but your adverts need to convert into sales. Not only that they need to convert at a rate that still keeps you profitable. Sure you might be happy to just break even or even make a loss to guarantee sales if it gets you testimonials from customers that help build confidence for future customers. But it needs to be within your budget.
Like with SEO, there are plenty of free or affordable resources out there to learn social media ads and search engine PPC. Check out Google Skillshop or simply search YouTube!
If selling on eBay/Amazon are there people already selling the same products?
All this talk of websites and SEO. Why not just scrap the lot and sell on eBay and Amazon instead? Well, you might find dozens of highly-rated established sellers already attempting to sell the exact same products and if there are a dozen sellers there’s a strong chance you could be entering a price war to see who can sell for the lowest price.
The benefit to eBay and Amazon are the number of people who visit the websites every day and will see your products, but they also take a percentage of your sales. If people are already selling the products you’re interested in for a low-profit margin, the profits you could potentially make minus eBay or Amazon’s cut could massively dent how much you make.
If you are selling branded products from established brands, you might need to seek permission to sell on these channels and failure to comply could result in the removal of your selling account and even legal prosecution.
High ticket or low ticket?
You need to decide if the products you want to sell offer a significant enough profit margin to make it worth your time and the kind of volume you would need to sell to hit your own targets.
If you are selling low ticket items with a small amount of profit attached to each sale, you need to sell more of them to make your business profitable. Seeing your inbox explode with order confirmation emails is fun but you need to make a certain amount of profit to make it all worth your while and cover your overhead costs.
Do you have the time around your other commitments?
This is probably the biggest question and one you need to be honest with yourself about. Launching any business is a big commitment, one that will need plenty of hours investing into it every week on top of learning any areas you aren’t already experienced in. If you have other large commitments such as employment, a marriage, children, sports and social clubs, consider if this new venture can fit into your schedule where you can commit enough time to do it justice.