Online trading via DropShipping is associated with far-reaching advantages. One of these is the greatly reduced complexity of the required corporate structures and processes. But it is the simplicity of managing a drop-shipping company that tempts many founders to underestimate the start-up effort.
The advantages of DropShipping are more than convincing
If you are interested in starting a trading company on the basis of DropShipping, then you are definitely not on the wrong track. More and more founders are deciding to start a drop shipping company. This is mainly due to the overall good market potential, the low barriers to entry and the specific drop-shipping advantages. All these advantages together result in an overall concept which is very convincing and which you should definitely take a closer look at. Let’s take a look at these potentials together in short form.
We operate in the market environment of online trading. We are thus opting for an industry that is characterized by high growth rates and excellent prospects for the future. Some critics complain that growth figures have declined in recent years. This is also true. However, one has to consider that they have only been reduced from oversized areas back to a still fantastic potential. We can therefore assume that e-commerce will continue to play an important economic role for a very long time to come.
Those who opt for DropShipping choose a professional field in which there are hardly any obstacles in their way. You do not need a specific professional qualification, you can run your business ideally from home and even in terms of start-up capital, this does not present a drop shipping company with an insoluble task. All in all, you will hardly encounter any insurmountable obstacles and will be able to realize your dream of independence quite unhindered.
Minimize your risk with DropShipping
Finally, let us look at the main advantages of DropShipping. The very good relationship between opportunities and risks is particularly important here. DropShippers do not have to pay any special costs before the start of your business and can therefore not lose much money. You benefit from low running costs and the complexity of your operations is also very limited. All in all, DropShipping thus represents a particularly risk-free entry into the world of e-commerce.
Anyone who wants to benefit from these advantages and benefit from them will be interested in our contribution, which explains how you can start a DropShipping company in 10 steps. But before we get into our step-by-step instructions, we would like to briefly explain why a structured and well-planned start is so important.
With a structured start to successful DropShipping
The way people start their businesses differs greatly from one another. Sometimes the decision for self-employment and foundation is made within a very short time. You come across an interesting business idea and are so enthusiastic about it right from the start that the realization somehow comes about of its own accord. However, such an easy and simple start into entrepreneurship is the exception. As a rule, the foundation is rather the result of a long and detailed planning and preparation phase.
During such a phase, you as the founder and prospective entrepreneur set the course for your later success. Your current decisions already determine how your business will develop in the long term. In this context, it goes without saying that the greatest possible effort should be put into preparation. In most cases there is no second possibility. So we don’t start with the dress rehearsal for independence, but go straight to the premiere.
This performance doesn’t have to scare you. You will have ample opportunity to plan and prepare your entry into self-employment. In our experience, it is best if you work with a structured plan, which you can complete in a series of individual and clear steps.
Problematic in this context: The creation of such a plan is of course much easier for people who have already founded a company. If, on the other hand, you are dealing with such a topic for the first time, it is difficult to select the appropriate steps, put them in the right order and implement them.
This manual is already half the battle
For this reason we provide you with our elaboration “Starting your own DropShipping company in 10 steps”. Here we have written down and detailed the most important milestones on the way to becoming a successful DropShipping entrepreneur. But that’s not all: For each individual step you also receive a well thought-out practical tip. This will help you to put what you have learned into practice immediately. This works even if you have no previous experience of setting up a business.
So take a few hours and work through the following 10 steps and their tips one by one. The goal should be for you to create an individual plan that divides your own start-up project into meaningful steps. So you always know what to do next and don’t lose the overview.
With these 10 steps you create your own DropShipping company
Even though DropShipping is the much simpler alternative to traditional online trading, this form of self-employment is also not available effortlessly and without thorough preparation and planning. Remember this when you are thinking about starting a business and use the following 10 steps to a successful DropShipping company to get off to a successful and safe start.
Step one: Your individual business idea
On the previous pages we have presented many interesting business ideas and concepts that can be based on DropShipping. Now it is up to you to develop your own strategy with which you want to take markets and consumers by storm. When choosing your future business segment, do not only orient yourself on the expected market opportunities, but also consider your personal interests, abilities and inclinations.
The better you can identify with your DropShipping business idea, the more pronounced your prospects for business success will be. In addition, you will deal with the subject chosen now over years or decades. I’m sure a little personal identification won’t do any harm.
Our tip: Find yourself a good conversation partner
Mutual exchange is particularly valuable when it comes to setting up a company. Therefore, make sure that there is a person in your immediate vicinity with whom you can talk about the progress of the foundation, but also about your worries, concerns and questions.
Whether or not this person is a specialist only plays a subordinate role. Much more important is that you know each other well and understand each other well. In this way you will discuss your own points of view again and again in a controversial way and critically deal with your situation.
Step two: Stay critical
No matter how enthusiastic you may be about the business ideas for your future company: Stay critical at least until you have put the concept through its paces. Some founders and entrepreneurs tend to look at their own ideas through pink glasses. You’d better beware of that.
Instead, check the concept with the critical eyes of an uninvolved person and try to detect weak points and errors. Use the Internet to research the market situation and consumer interest and form a truly objective picture of your business opportunities before taking the next steps.
Our tip: Use the Web for in-depth research
In the digital age, we have fantastic possibilities at our disposal to obtain qualified information quickly and, above all, very conveniently. Use the Internet to take a critical look at your business idea. For example, you can search for trends and current developments related to your business area.
In this way, you will quickly gain an impression of whether your business concept is worthwhile or whether it still needs to be improved. The network offers you access to all relevant information and data at any time.
Step three: Searching for suppliers
Since you have opted for a DropShipping business model, the next step is to find potential suppliers who support your concept and help you implement it. So you need to find manufacturers, wholesalers or importers who are willing to ship goods on your behalf directly to your end customers.
The search for such DropShipping suppliers is sometimes difficult because individual companies often avoid advertising their DropShipping services publicly. They don’t want to alienate their classic customers and it is therefore up to you to use special databases like DropShipping.com to discover suitable suppliers.
Our tip: Define your criteria before searching for a supplier
Ideally, you will work successfully with the suppliers you now choose over many years. In order to improve the chances of a good and long-term cooperation right from the start, we advise you to formulate as concrete and exact criteria as possible, which are relevant for you within a professional cooperation.
What personal qualities do you attach particular importance to? Are reliability and punctuality important to you? Do you expect your suppliers to actively participate in the design of your product range? These and similar questions bring you directly to the individual criteria catalogue.
Step four: Trust is good, control is better
With any DropShipping model, the quality of the company’s work depends to a large extent on the performance and reliability of the connected suppliers. Since the partners deliver ordered goods directly to the end customer without you having to see the shipments again before, you must be able to rely on maximum punctuality, the highest quality of the goods and the perfect condition of the packaging.
Poor performance in these areas generally falls back on you and your company and must be avoided at all costs. Therefore, check each supplier thoroughly before you shortlist them. For example, you can use trial orders under a different name to directly experience how orders are handled.
Our tip: Test orders provide information about reliability
Paper is patient and this also applies today to promises made on the net or by e-mail. You are unlikely to meet a supplier who openly admits his weaknesses as early as the initiation stage. Instead, it is more common to show oneself from the chocolate side.
In order to gain knowledge about the real characteristics of a potential supplier, we recommend that you carry out several test orders. Have them carried out by people from your environment to whom you have no personal reference and record your experiences in detail.
Step five: Negotiate for your benefit
After you have selected and qualified a certain number of suppliers through steps 3 and 4, the first direct contact is now due, which at the same time is connected with the negotiation of the best possible conditions. Make sure you use this initial contact to complete your personal impression of the respective partner.
Then enter directly into the active negotiation of conditions and prices and also consider additional services in the areas of service, technical connection or returns management. Use suitable occasions for price negotiations again and again within the framework of a long-term cooperation and demand significant discounts, especially in the case of increasing sales.
Our tip: Go into every negotiation with fixed ideas
Negotiating prices and conditions is part of the daily and recurring tasks for every online retailer. This area is particularly important for the DropShipping entrepreneur. Since you only ever purchase individual products, you may get worse conditions than your classic competitors right away.
This makes it all the more important for you to have clear ideas and guidelines at every negotiation meeting and to consistently try to assert your points of view successfully. The more clearly you have visualized and memorized your intention in advance, the better you will succeed.
Step six: The right sales concept
Success in online trading depends on a number of different factors. However, the question of where on the World Wide Web you offer your products is particularly important. Your own online shop will be the focus of your activities. In addition, however, you should include many other sales platforms, especially in the start-up phase, in order to reach a sufficient number of consumers with your offers.
For this the well-known market places like Amazon or eBay offer themselves on the one hand. In addition, you should also include price search engines, web catalogues and other shopping directories in your individual sales concept. Make sure that potential customers come across your products in many places on the network.
Our tip: Get to grips with the Amazon marketplace
As part of your work on the sales concept, you should think very carefully about the integration of external marketplaces. The best example in this context is the Amazon marketplace. This has already opened years ago for dealers and offers you very convenient possibilities for marketing your products.
One of the most important advantages in this context is that millions of Amazon customers are already waiting for interesting and attractive offers. Use this reach to generate good and motivating sales from day one and also take advantage of the many advertising and marketing opportunities Amazon has to offer.
Step seven: Don’t forget important formalities
In the heat of the moment, budding entrepreneurs often forget essential formalities and legislation during the start-up phase. It is essential that you register your young company with the relevant trade and tax offices in good time so that you do not commit any inadvertent breaches of the rules, which may lead to adverse consequences. In the first step you need a trade licence, which you can apply for at your local trade office for a small fee of 15,00 to 30,00 Euro.
In addition, you should apply to the relevant tax office for a sales tax identification number, which entitles you to show the sales tax on your invoices. It is important to remember that you are obliged to pay the VAT collected to the tax office at short notice.
Our tip: Find a tax advisor early on
Many online traders, who assume a rather small business volume in advance, do not cooperate with a tax consultant. Either the thought of dealing with the tax office is completely ignored or one assumes to be able to control this topic with a tax app or a tax program on one’s own initiative. This may, in principle, be true under certain circumstances.
However, one should not do without the cooperation of such a consultant, especially at the beginning of self-employment. He informs you about tax obligations, keeps an eye on the relevant appointments for you, is your contact person in many financial matters and keeps your back free.
Step eight: Your personal shop on the Internet
Business idea, supplier search and formalities are now checked off and actually it could start now with your DropShipping business. What you are missing, however, is your virtual shop on the Internet: A suitable shop software must be available. There is a choice of chargeable solutions on a purchase or rental basis and free open source models. In the first step, get a good overview of the various offers on the market and check the performance of the individual shop systems, especially with regard to your individual wishes and requirements.
It is ideal if the selected software actively supports certain DropShipping functions. If, for example, the program is able to automatically exchange article data, stock levels and orders with your suppliers, you will save a lot of time and effort in your daily work.
Our tip: Define your specific requirements for the shop
Today, there are a vast number of different shop solutions available to prospective online merchants on a free basis, for rent or purchase. After all, you are often spoilt for choice and cannot really decide on the optimal software.
This is made easier if you compile a list of all the important requirements that you yourself place on a shop system in advance. Don’t forget the specific functions that play a role in DropShipping, as they can make your life as an online entrepreneur much easier in the long run.
Step 9: Safety first: Legal security in the shop
So that your young independence in on-line trade does not take a premature and sad end, you should absolutely pay attention to a pronounced legal security in your own on-line Shop. The legislator obliges you as an Internet trader to comply with a whole series of rules, regulations and provisions.
Violations can have legal consequences as well as warnings with costs and should therefore be avoided at all costs. Pay particular attention to compliance with formal requirements for the legal and consumer texts in the shop and, if in doubt, contact an experienced and experienced lawyer.
Our tip: Use legal platforms on the Internet
As an online retailer, you have to deal with legal matters all the time. Most entrepreneurs in this field do not like this at all. Unfortunately, nothing can be changed here. Ideally, you will cooperate with an experienced lawyer who will assist you in all legal matters.
However, this is quite a costly solution. If this is out of the question for you, then you should at least use one of the reputable legal platforms on the Internet, which can provide you with legally secure shop and consumer texts.
Step 10: Marketing to the next level
Your DropShipping business model is now on solid footing and has all the technical and content elements and structures that are required. An essential advantage of DropShipping is that you as an entrepreneur have enough time to deal with the optimal marketing of your offers. However, you should also make the most of this potential if you want to be successful.
It is therefore highly recommended that you develop and implement an individual marketing concept in order to help your company achieve more new customers, better sales quotas, higher turnover and substantial profits. This is where your creativity is most in demand. There are countless strategies, tools and instruments in modern online marketing that can be used to put together the right measure for every entrepreneurial goal.
Our tip: Always check marketing instruments for their potential first
As a DropShipping entrepreneur, you ultimately decide for yourself how successful your business model will be. You use targeted advertising and marketing to draw the attention of as many consumers as possible to your offers and to increase your sales quota and your shopping basket value.
Before using such instruments, which in most cases are time-consuming and costly, you should thoroughly examine the potential of the individual measures. Focus on strategies that deliver maximum value for you and your business.
Start your DropShipping Business in 10 Steps
The 10 steps that we have presented here offer you a good and solid framework on the basis of which you can establish your independence quickly and easily. Of course, these are only the most important cornerstones of the foundation. There are several things you should include in your planning that ultimately give your business the individuality it deserves.
Very important in this context is your decision for the right products. Basically it is possible today to buy and resell many different merchandise on the basis of DropShipping. So in a way they can draw from the full and do not have to restrict themselves very much.
We recommend that you specialise early on in a clearly delimited and descriptive product area. On the one hand, this makes it easier for you to fully specialize in a particular topic and at the same time enables your customers to identify you and your shop with specific products and offers.
Most of the founders in the drop shipping sector have good experience with initially establishing themselves in a market niche. Such niches offer the advantage that there is little competition here. So you are not exposed to a bitter price war and do not have to assert yourself against financially better positioned large suppliers.
Use the advantages of DropShipping for your product selection
You can always recognize a niche in the market by the fact that, despite a certain demand, only a few dealers offer a manageable number of products. It is important, however, that consumer demand is not too low. Otherwise, you would quickly realize that no significant sales figures can be achieved.
Think about whether there are products that are particularly advantageous to sell in conjunction with DropShipping. This applies, for example, to bulky and heavy items. The fact that the goods only have to be transported once has a particularly strong effect here. The shipping costs for such products are so high that a classic dealer is clearly at a disadvantage compared to you.
Ideally, you choose a market niche and search for products that are particularly advantageous in combination with DropShipping. If you adhere to this directive and additionally consider our 10 steps to your own DropShipping company, then there is not much that can go wrong when it comes to self-employment.
With these 10 steps you are guaranteed to enter the world of DropShipping. But did you already know that this business model is particularly suitable for you when you start your own business for the first time? Find out now why DropShipping uses the optimal choice for your first own company is.
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