Dropshipping for beginners: what is it, how does it work and how do you get started today?

What is drop shipping?

Dropshipping is an order fulfillment method where the store does not keep the products it sells in stock. Instead, the seller purchases inventory as needed from a third party, usually a wholesaler or manufacturer, to fulfill orders.

The biggest difference between dropshipping and the standard retail model is that the seller's merchant does not store or maintain inventory, but rather acts as a middleman.

Do you want a job? Here's everything you need to know about dropshipping for e-commerce stores and how you can get started today.

Dropshipping for Beginners: Your Questions Answered

Let's answer some common questions about what dropshipping is and how it works.

How much do I need to invest to start dropshipping?

Although it is difficult to predict the exact costs of any individual business, there are a few items that every dropshipping business will need to spend money on to get started. Here's a quick rundown of the main costs.

Online store

Estimated cost: $29/month

You will need to find an eCommerce platform or website builder to create and host your online store. Obviously, we recommend starting a Shopify store. You'll be able to easily sync with DSers Marketplace for dropshipping products and you'll have access to our full set of free themes and branding tools so you can get your business up and running fast.

Domain name

Estimated cost: $5 - $20 per year

It's hard to build trust with customers without your own domain name. While there are several top-level domains available (eg store, example.co), we recommend looking for a .com that matches your brand, if one is available. Use our domain name generator to get started or learn more about creating a compelling business name.

test commands

Estimated Cost: Varies

Although dropshipping allows you a minimal involvement in managing your total product catalog, you should set aside money as well as a little time to test the products you plan to sell. If you don't, you risk listing a product with too many shortcomings or defects, leading to dissatisfied customers and spending a lot of time dealing with returns.

internet ads

Estimated cost: proportional to your business; We recommend budgeting at least $500 to start

Every eCommerce business should look for ways to lower the average cost of acquiring a customer through organic channels like content marketing, search engine optimization, and word of mouth. But to begin with, advertising is usually a primary channel for most product-based businesses. The most popular channels include search engine marketing (SEM), display ads, social media ads, and mobile ads.

How do dropshippers make money?

Dropshipping companies act as product coordinators, selecting the right mix of products to market to customers. Remember that marketing is a cost you incur, in terms of time and money, to help potential customers find, evaluate, and buy the right product.

You will also need to include the cost of providing customer service when there is a problem with the product or shipping. Last but not least, the original price at which the supplier sells the product.

With all these costs in mind, dropshipping companies mark individual products against distribution. This is why vendors are fine after dropshipping their products to them: dropshipping stores bring in extra sales that the vendor might otherwise lose.

To make a profit with your dropshipping business, it's a good idea to know the cost of "acquiring" a customer and price your products accordingly.