3 Ways to Grow a Multi-Million Dollar Drop Shipping Business
Begin with these drop shipping basics and everything will soon fall into place.
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Thanks to the advent of the Internet, entrepreneurship is now something within everyone's reach. There's still very much a place for brick-and-mortar businesses, but with upwards of 3.2 billion people taking to the World Wide Web on a regular basis, it's no wonder money-minded thinkers prefer building websites to physical storefronts -- and warehouses, for that matter.
It's in this kind of digital environment that a new way to make a healthy living has steadily taken shape -- drop shipping. Odds are high you've heard the term before, but in case you haven't, drop shipping is a product fulfillment model in which inventory is purchased from a wholesaler and then subsequently sent directly to a customer once an order has been placed.
This means there's no storefront, warehouse or inventory to manage. As such, instead of devoting precious time and energy to trivial matters, entrepreneurs can focus on growing their companies. Even better, there's big money to be had in drop shipping businesses. That said, how exactly should someone go about getting into the up-and-coming, multi-million dollar arena?
Yes, free e-commerce courses offered by drop shipping leaders like Oberlo help new drop shipping entrepreneurs en route to their first million out on the Internet, but for the time being, it's important to see the bigger picture.
Though by no means an exhaustive list, if the idea of launching, maintaining and growing a drop shipping business has at least peaked your interest, the below three points will provide you with the information you need to get headed in the right direction:
Begin with a broad product spectrum.
From mouse pads and glow-in-the-dark trinkets to handheld electronics and fashionable clothing, just about any kind of product can become part of the drop shipping model. With this in mind, however, when first getting started, it's best to opt for a product niche that's more broad and easily identifiable. Once that's been taken care of, work your way down the scope of uniqueness.
For example, kitchenware occupies a respectable slice of the e-commerce pie. But instead of bouncing around from product to product, continue brainstorming and testing to discover the idea that will stick. Continuing with our example, you might find that coffee mugs with snarky comments on the side is the way to go. Whatever it is, find your niche, own it and stick with it.
Build your digital store.
Every new drop shipping entrepreneur hopes that his or her site will soon become the second installment of Amazon, but the more likely outcome is that things will remain relatively small in the beginning. Basically, at this stage in your ecommerce business, the more simple and straightforward you can make things, the more profitable you're likely to be.
Related: 3 Types of Ecommerce Business Models
Armed with this mentality and a specific product niche to occupy, take to Shopify or another like-minded ecommerce platform to start testing the waters of your new business. Naturally, you'll feel a need to spruce up the place with a custom logo, profile and branding materials, but be patient and wait for sales to first start trickling in before doing anything else.
The knee-jerk reaction is to take a peek at what others are doing, and then imitate them. While enticing, if you've yet to have proven your product line through a series of initial sales, you could very well find yourself doing little more waste an entrepreneur's two most precious commodities -- time and money.
Use effective, low-cost marketing methods.
Has your product line solidified its worth? If so, you're on the right path, and are ready to take the next step -- marketing. But don't make this any harder than it needs to be -- as previously mentioned with your store, keep things light, effective and low-cost.
Google Ads and search engine optimization (SEO) are great for building rapport with an audience that's already interested in your business' products, but to find new customers, use visually-driven social media channels like Instagram and Pinterest to create leads. Also, Facebook's Custom Audiences offers highly targeted ads and excellent conversion rates.
Making a multi-million dollar drop shipping business is a process, and a booming bank balance isn't something that happens overnight. As demonstrated by others, rapid success isn't entirely out of the realm of possibility, though. Whatever your current situation or entrepreneurial outlook, begin with the basics, and the rest will soon fall into place.