In just 5 simple steps to your own DropShipping company

Anyone who has ever looked more closely at drop shipping will quickly realise how superior this form of e-commerce actually is to other types of online trading. And yet the question arises as to how the start of an own company in this area actually takes place. We will introduce you to five steps that will lead you directly into self-employment as a DropShipper and explain to you exactly what you should pay attention to.

In just 5 simple steps to your own DropShipping company

DropShipping: You can immediately benefit from these advantages

There are many good reasons for taking the path towards self-employment. Those who become their own boss will in future be happy about many freedoms, a high degree of self-determination, independence from superiors and, last but not least, a good income and a high social status.

If you want to achieve this goal as quickly and easily as possible, then an independent career in online trading is the right choice. Here the barriers to entry are particularly low and the chances of success are extremely high. What many people unfortunately don’t realize, however, is that if you decide to start your own business in drop shipping, there are a whole range of advantages that are invaluable. Let’s take a brief look together at this unique potential.

What is DropShipping – Definition: In drop shipping, the online retailer does not buy his goods in advance, instead they remain with the wholesaler until a customer orders a product. The wholesaler then dispatches the goods directly to the customer.

The DropShipping dealer hardly needs any capital to start his own business. After all, no goods have to be purchased and paid for in advance, as these simply remain with the respective supplier until the individual orders are placed. And that’s not all. Since no goods are bought, one does not have to store these also. This saves rent for storage space and above all the costs for logistics personnel.

The so-called goods risk does not affect the DropShipper either. This refers to the danger associated with buying certain goods for one’s own account without knowing exactly whether these products can actually be sold at a profit or whether they may turn out to be annoying shopkeepers.

DropShipping dealers can also sit back and relax when it comes to purchasing packaging material. This is just as dispensable as storage equipment, storage tools or transport equipment. In addition, DropShipper does not have to deal with small-step order processing, which saves a lot of time. If this time is invested in meaningful activities such as customer care, marketing or advertising, then DropShipping dealers can gain a clear advantage over their conventional colleagues and profit from it permanently.


Comparison DropShipping with classic online trading

DropShipping merchants can sell any product on the Internet without investing in purchasing, packaging or shipping.
The goods are not purchased in advance, but remain with the wholesaler. This means that the online retailer does not have to maintain its own warehouse for drop shipping.
With a customer order the commodity is dispatched directly from the wholesaler to the customer, who has the expenditure for packing and dispatch.
The online retailer only has to concentrate on product presentation and marketing activities.

How to start your own DropShipping company

In the following, we will show you how to start a drop shipping company in just five simple steps. Follow our instructions meticulously and within a short time you will have your own successful company. We wish you every success.

Step one:
The business idea for your new company

Maybe you’re looking a little irritated and wondering what we mean by the business idea when you’ve long since decided to do business online and want to do it via drop shipping. In this context, we must tell you that choosing e-commerce is not much more than defining your future distribution channel.

A real business idea requires some additional aspects and definitions, with which we will now briefly familiarize you. The business idea defines which types of products or services you want to sell to which target groups via which sales channels and what distinguishes your offers from those of your competitors at first glance.

So if you would define that you want to sell high quality espresso machines and accessories from Italy via drop shipping and that your offers will serve well-earning and discerning customers in your own shop, who will receive particularly comprehensive advice and a lot of background information from you, then this is a real business idea.

Our tip for you: Choose a business idea that is as related as possible to your own interests and knowledge. This makes it much easier for you to become self-employed.

Step two:
Overview of the various formation formalities

DropShipping offers a very easy entry into the world of self-employment. However, even this form of company foundation cannot do without one or the other formality. Before you can really get going, you should first consider whether you would rather start your new business as a full-time or part-time employee.

Sideline workers have the advantage that their financial and social security through their ancestral job is maintained for the time being. For this, however, they have to take care of two strenuous tasks at the same time.

In order to actually start your own business, all you need to do is register your business online using DropShipping, which you can obtain from the relevant municipal authority for a small fee. This registration automatically leads to a control report to the local tax office, so that you do not have to contact the tax authorities yourself.

The necessary formalities have now been completed. However, we strongly advise you to hire a tax consultant from the outset who will accompany you into self-employment.

Step three:
Suppliers and products as a prerequisite for good business

Of course, your new DropShipping shop needs one thing above all else: many attractive and interesting products that you can offer your customers for sale. The access to articles for your virtual assortment presupposes thereby the contact to suitable suppliers. And in your case, they must be ready to supply you on the basis of DropShipping.

Now, of course, you can go on your own search for such trading partners and make use of the search options offered by the Internet. You should note, however, that in many cases it is not immediately obvious whether a manufacturer or wholesaler is willing to offer drop shipping functions to its customers.

The search is simpler if you use special databases, such as the directory of DropShipping.com. Here you will find a very large selection of suppliers who are clearly committed to DropShipping and who you can reliably supply with countless products and offers.

Use the assortments of these suppliers to put together a beautiful and attractive product range with which you can win over and inspire your customers and visitors.

Step four:
The appropriate software and the optimal work processes

The focus of every self-employment in the field of online trading is, of course, always on the most powerful shop software possible. For DropShipper, this not only has the task of representing the actual shop and helping visitors and customers to achieve the most pleasant shopping experience possible.

Ideally, you will also support the entrepreneur in controlling the internal work processes and in this way relieve him of a lot of work and effort. Here one has to distinguish between two different areas. On the one hand, this involves the presentation of products in the shop and on the other hand order-related communication with the connected suppliers.

For the DropShipper, it is first of all a great relief if the shop software has access to the stock of the various suppliers and is thus able to recognize for itself whether a product is currently still available or not.

In addition, the system’s ability to automatically forward incoming customer orders to the respective suppliers, so that the retailer no longer has to deal with this task himself, significantly eases the workload.

Step five:
Success with customer care, advertising and marketing

We’ve already seen that the DropShipping retailer can save a lot of time by optimizing its operations. However, he should not waste this potential carelessly, but instead invest consistently in his personal success.

In e-commerce, this is best achieved when he is intensively involved with customer care, advertising and marketing and thus actively works on optimal sales and profits. Customer care not only includes advising visitors before the actual purchase, but also after the order has been placed.

This is the only way to achieve the highest possible proportion of regular customers. In addition, drop shipping entrepreneurs in particular should extensively deal with the question of how they can further boost their business through the targeted use of instruments and tools from the fields of advertising and marketing.

As a DropShipping retailer you often have to make do with slightly lower profit margins due to the individual purchase of products and can therefore use additional sales to achieve optimal business results.


DropShipping: The experiences of entrepreneur Alex Horn

From the very beginning, Alex Horn’s requirements in terms of warehousing and dispatch logistics were a particular burden. As there was not enough storage space available, the individual products were usually only ordered from the respective suppliers after the end customer had placed the order. This led to long delivery times, which modern consumers are no longer willing to accept today. Incoming shipments were also packed and prepared for dispatch by the company itself, which led to some night shifts and weekends.

In order to create the prerequisites for further healthy growth and at the same time reduce the burden of manual logistics, the entrepreneur decided to introduce a drop shipping concept. Alex Horn talks about his beginnings in online trading and his experiences with drop shipping.

1. How did you come up with the idea of opening a crockery and cutlery shop?

Horn: I have always been interested in stylish websites, how to present products visually. As a hobby web designer and programmer, I have already set up and maintained one or the other shop “by the way”. Some of them became quite successful over time – so why not do it yourself?

However, I knew one thing: I never wanted to sell articles with a net cord – already in 2005 there was a total price war on the Internet. There was actually a shop to the topic house and living exactly the right thing. The prices were still relatively o.k. and difficult to compare and one could create a nice, appealing shop with suitable pictures. In my search for decoration articles I ended up at the wholesaler Ritzenhoff&Breker. In the end, tableware became the main category, probably because it was the absolute niche at the time.

2. Did DropShipping play a role from the beginning and how did you decide to sell your goods via DropShipping?

Horn: At first we packed ourselves. That was very elaborate. We needed a lot of packaging material, fillers, a ramp for pallets, shelves, lift trucks and so on and so forth. We usually only ordered the goods after they had been ordered by customers; we had no room for proper storage at all. One problem with this process was a delivery time of at least one week. I think that would no longer be acceptable to most of our customers today.

3. please describe your career so far.

Horn: In the first 1-2 years that we were packing ourselves, we built up a better and better relationship with the wholesale trade. He saw that we grew continuously and were reliable partners. At some point we were invited to a conversation, and we were offered drop shipping. At that time we had about 1000 articles in our assortment and developed really fast. I still think back full of horror to the pre-Christmas time 2007. At this point we were at the end of our capacity. On 23.12. we packed until midnight and filled another truck in the morning on Christmas Eve. This should be our last self-packing season.

At the beginning of 2008, a 4-month development period began at the interface. From May 2008 we ship exclusively by DropShipping. Our growth is not quite as rapid as in the first two years (we have doubled in each of these), but we still manage 20-30% annually. Currently we have approx. 4000 articles in our assortment.

4. What do you see as the advantages of DropShipping?

Horn: There are several advantages. On the one hand, the lack of warehousing avoids a capital commitment that should not be underestimated. We also save resources such as storage space, packaging materials, packaging technology and, of course, personnel. Since our wholesale is well staffed, orders can be processed well even at peak times (such as Christmas business). Since the wholesale trade often already has good contracts with logisticians, it is usually possible to ship quite cheaply via this rail – the handling costs are thus partly amortized.

5. do you see any disadvantages in drop shipping?

Horn: Definitely. An immense technical effort is required to map all logistical steps automatically in the respective merchandise management system. Order processing should be as transparent as possible for the customer. In order to make correct statements to the customer hotline, you constantly need a current processing status. What about arrears, what’s the package number? Is the merchandise out yet? One or two packages? Is the return back yet? The difficulty with the connection to the existing enterprise resource planning system is often the partly outdated or proprietary software in the classical wholesale trade or lack of interfaces.

A further disadvantage is the dependence on the DropShipping supplier. It is said that after a while he opened his own (manufacturer’s) shop and thus competed with the DropShipper from his own house. Here a certain amount of trust or contractual coordination is necessary. If several DropShipping suppliers are used, there may be overlaps within one order. This results in multiple handling and postage costs per order. This is not always economical.

6. do you purchase your products from one or more DropShipping suppliers?

Horn: Meanwhile by several.

7. what are your experiences regarding delivery capability and delivery time in the DropShipping trade?

Horn: We are really satisfied with that, we often have a 24h shipment, which we could not guarantee ourselves.

8. how do you handle customer revocations? Will the goods be taken back by your supplier?

Horn: Yes. Each parcel contains a return sticker with our c/o address recipient at the wholesaler. There the goods are stored again and we receive a credit note minus a return handling fee. The feedback will then be sent by fax and we will issue the customer credit note. This process is very cumbersome, but fortunately our returns are limited.

9. what goals have you set yourself for the future and what tips can you give from your experience in drop shipping?

Horn: Last autumn we switched to a new merchandise management system in order to better automate the normal standard processes. To a large extent, we have already succeeded in this – now it is time to put the finishing touches to it. The next goal is to expand the product range, and initial discussions have already taken place here.

From my experience the introduction of a DropShipping system at the wholesale trade is a not to be underestimated expenditure. The underlying processes often differ greatly. Therefore, I can only advise new shop operators to be patient and, in case of doubt, to carry out the shipping themselves. You also get a feeling for the goods you are sending and can answer customer questions more competently. If the sales figures increase, the shipping system can still be switched to DropShipping.


We support you with the start of your DropShipping company.

Do you want to take your professional destiny into your own hands or build up a lucrative additional income in addition to your job? Then DropShipping is just the thing for you!

With this business model you can enjoy many advantages:

  • Foundation almost without capital
  • Gentle start to your own company
  • Low running costs
  • Great profit opportunities and scalability
  • Comfortable work from home

How this works exactly and how you can set up your own online business step by step is explained in our large guide, which we now make available to you completely free of charge and without obligation.

Find out today about your excellent future opportunities with a unique business model.