To start almost any business anywhere in the world, you need capital or money, no matter how small? But what if I told you there is a type of business you can start without any capital?
Have you ever heard the name Justin Wong? This is the guy who earned $12,000 in a month from his e-commerce store, So Aesthetic. For a period, he worked full-time to pay for his studies. Unfortunately, that wasn't enough to cover his expenses. He tried a lot of income-generating options before hitting the jackpot with e-commerce.
Guess what? Justin Wong launched his e-commerce store with no upfront investment. This might seem like a one-off instance. But what if I told you that you can also start an ecommerce business without capital? Yes, you can start a dropshipping business with zero capital and this is how. But first of all, introduction.
What is dropshipping?
In case you are not too familiar with the term dropshipping, here is a quick definition. Dropshipping is one of the smartest business innovations of the internet era. Shopify defines Dropshipping as a fulfillment method where a store does not have to keep the items it sells in stock in order to fulfill the order. Instead, stores purchase items from third-party suppliers and have them shipped directly to customers. In this way, the seller does not need to see or handle the product directly.
Dropshipping differs from the standard retail model in that the merchant selling the items does not stock or own the goods. Sellers typically buy inventory as necessary from third parties - usually a manufacturer or wholesaler - to fulfill orders.
What are the benefits of dropshipping?
1. Setting up a dropshipping business is relatively easy
Getting started with dropshipping doesn't require any prior business experience. Learning the basics will help you launch a business quickly and learn the rest along the way.
The start-up cost of dropshipping is low compared to other retail business models, and this makes it easy to get started. For example, you don't need a warehouse or a team to operate your business. Stocking and shipping are also not a concern. As soon as you get going, it becomes quite hands-off.
Thus, you can begin your business today. In fact, you can set up and begin operation within few hours.
2. The dropshipping model is scalable
You don't need to change anything about your business model as you grow. Growing your business will require more work in sales and marketing, but aside from processing more orders, your day-to-day operations will remain the same.
Dropshipping has the advantage of keeping infrastructure costs low even as it scales. Due to this, you are left with more resources to devote to your marketing efforts. Your business will be better served if you put your focus on promoting it and delivering great customer service.
3. Dropshipping doesn't require a physical location
An entire business can be run directly from your laptop, so there is no need to make significant investments. Advertising is likely to be your most considerable expense, and you can scale the budget as your store grows. Despite growing your business, your costs will remain reasonably low, especially when compared to conventional business expenses.
4. Dropshipping offers a lot of flexibility
This is one of its most significant advantages. You have the freedom to make your own rules and regulations. Anybody can pursue it successfully, and it's by far the most flexible career out there.
With a laptop and a few other things, you can work from home at the most convenient times for you. This is perfect for people who want a business that works around their schedules.
As a business model, dropshipping is also flexible in the sense that you can make decisions that work for your business. Your strategies can be adjusted on the fly, and new products can be easily listed when you want. It is possible to generate passive income while you are on vacation if you automate everything. There is no end to the possibilities.
5. Dropshipping is easier to manage
Since it does not require you to hire employees or rent warehouse space, dropshipping is easy to manage. For the most part, once you've located suppliers and got everything organized, you're only responsible for running your online storefront.
Start your own dropshipping business in three simple steps
Step 1: Identify a product you want to sell
Selling is only the first step, it isn't the end goal. A reliable product is essential to retaining customers, gaining positive reviews, getting referrals and growing your audience. Some of the most important guidelines for choosing the right product include:
- Your product should be within the price range of N10,000 - N40,000 so that you can make a decent profit without selling thousands of products to get by. Selling low-cost items of about N3,000 is a bad idea as their margins will be too low.
Another way to play around with this is to sell the product as a collection. If you have a product that is N4,000, for instance, you can sell three of it per order (N4,000 * 3 = N12,000).
- Weight - Shipping costs can have a significant impact on heavy product sales, especially if you allow express shipping. Try to tilt more towards lightweight products.
- Easy to use - Your product should be easy to use to avoid customers returning them. Customers return products they cannot use when they receive them, and you have to cover the return shipping cost. Over time, these costs can add up and reduce your profit margins significantly.
Step 2: Look for a reliable supplier
Dropshipping businesses rely on the delivery of their products on time, without fault, and as described.
As a result, your suppliers must:
- Be available whenever you need them.
- Ideally, process orders the same day or within 24 hours.
- Ship using fast shipping methods with complete online tracking
- Take responsibility when things go wrong and realize the importance of quality items.
- Be sure to let you know when products run out or if there are other delays - This is crucial since you rely on them entirely.
Step 3: Upload your product to a ready-to-use platform
There are two ways you can set up an online store for your dropshipping business. The first method involves self-hosting. This won’t be a good option if you're starting your dropshipping business with zero capital. However, the other highly recommended option is to host your store on a ready-to-use e-commerce platform.
You can create an online store on platforms like Jumia, Konga, Shopify, eBay, Amazon, all of which have templates and designs included. As a result, you don't need to buy a domain and hire a designer to build an eye-catching store.
It’s important to note that dropshipping does not start bringing in money overnight. Don’t expect to start making all the money from dropshipping in the space of days. You have to put in the work by marketing your product using everything at your disposal, starting with your mouth down to your social media (Whatsapp, Twitter, Instagram, Facebook etc.). Be consistent, and before you know it, the orders will start trickling in.
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