If you are looking for a What is dropshipping for beginners guide, interested in drop shipment meaning and what drop ship model is, then you’ve come to the right place! This e-commerce dropshipping article is a comprehensive guide about what is dropshipping, its definition, benefits, and drawbacks. Whether a beginner or an experienced online seller, you’ll find valuable insights and strategies to help you succeed in eCommerce.
You might have heard about such benefits of dropshipping business, like low startup costs, minimal inventory management, and the ability to sell a wide range of products without managing product inventory and warehousing. However, dropshipping for beginners also has drawbacks you should be aware of, such as lower profit margins and less control over shipping and fulfillment.
Despite its drawbacks, drop shipping is a popular and profitable business model practiced by millions of online sellers across multiple eCommerce platforms, marketplaces, and social media. By understanding the pros and cons of dropshipping model and following best practices, you can successfully build and grow your own eCommerce business.
Here is what we will speak about in this dropshipping for beginners guide:
- Drop Shipment Meaning. How Drop Ship Model Work?
- How Drop Ship Model Became Popular?
- Retail Arbitrage In Dropshipping.
- An Example Of E-Commerce Dropshipping For Beginners.
- The Pros And Cons Of Dropshipping Model.
- Is Dropshipping Legal?
- Is Dropshipping Worth It In 2023?
- The Correct Approach To E-Commerce Dropshipping.
- E-commerce Dropshipping Supply Chain.
- Best E-commerce Dropshipping Marketplaces.
- E-commerce Dropshipping Suppliers.
- E-commerce Dropshipping Categories & Products.
Let’s start with the drop shipment meaning and how the drop ship model work. So, what is dropshipping?
Drop Shipment Meaning. How Drop Ship Model Work?
Alright, let’s define what is dropshipping: This business approach is a type of order fulfillment where sellers don’t manage their own inventory. Instead, dropshippers buy the items from a third-party supplier who fulfills customers’ orders for them.
So, in other words, with the dropshipping model you don’t hold physical inventory – you’re simply the middleman between your client and the supplier you choose to source from. The buyer purchases from you, and you then place the order directly to your supplier with your client’s information (name & mailing address), and they will ship out the order to your consumer’s doorstep.
For example, you want to start an online store selling phone cases. Instead of buying a large inventory of cases, you could partner with a dropshipping supplier who carries a wide range of phone cases. When a customer purchases on your website, you forward the order to the supplier with the customer’s shipping information. The supplier then ships the phone case directly to your customer.
Another example is a clothing retailer that uses drop shipping to offer a wider selection of products without the need to hold inventory. The dropshipper partners with a supplier who carries various clothing items and accessories. When a dropshipper makes a sale, they send the details to the supplier, who then ships the product directly to the buyer.
The e-commerce dropshipping model can be a great option for entrepreneurs who want to start an online business without the upfront costs of inventory. However, it’s important to carefully research and select a reputable supplier to ensure timely delivery and quality products. We will cover that later in this dropshipping for beginners guide.
How Drop Ship Model Became Popular?
Let’s head back to 20 years ago. In the 2000s, eBay and Amazon made it possible for people like you to sell online and changed the world of eCommerce to what we know today. Moreover, both platforms allowed for a drop ship model, where sellers could partner with suppliers to fulfill orders on their behalf without holding physical inventory. However, these platforms used to charge dropshipping fees, which could impact reselling profits.
Let’s fast-forward 10 more years when AliExpress has become one of the biggest platforms for dropshippers. The platform enabled anyone in the world to buy products directly from Chinese manufacturers, making it easier and cheaper to source products for their businesses. The launch of AliExpress massively influenced drop shipping. The ability to have an online business where there’s no need to hold physical inventory, reducing product costs, warehouse costs, and all the shipping logistics became appealing for most sellers – sounds awesome, right?
In conclusion, eBay, Amazon, and AliExpress have all played significant roles in shaping the eCommerce world and the drop shipping industry. Today, the drop ship model is a popular business approach for entrepreneurs looking to start their eCommerce business with little upfront investment.
Retail Arbitrage In Dropshipping Model
Retail arbitrage is the process that consists of buying a product at a low price and reselling it at a higher price in order to get profits. The process starts by finding trending products with high demand on a Marketplace such as eBay or Amazon. Then source the same item on a different website at a lower cost, and lastly, list it in your store at a competitive price.
So, in the drop ship model, you sell items online without holding a physical inventory or being on top of anything involving shipping logistics, making your business journey easier to start. Not to mention that it is cheaper since you don’t need to buy inventory ahead.
Let me give you an example of retail arbitrage:
I found this military cord rope on eBay, with three sales made at the time of writing. It is being sold for $31.44 by a seller who sources the item from China.
I found the same item on AliExpress with the exact characteristics for a lower price. It is sold for $13.29, and the shipping fee to the US is $4.22 through AliExpress Standard Shipping, which is an air cargo carrier.
In total, if we calculate the price we would need to cover if we dropship from AliExpress this product, we will get a total of $17.29 (product cost + shipping fee).
If we dropship it on eBay, we need to take into consideration the selling fees the platform charges, which is around 12.55% for the majority of categories. We have an excellent Profit Calculator that you can use to easily calculate your profits.
We’re talking about a difference of $9.98 that could be your potential profit from each successful sale!
Get the picture?
Don’t wait for the profits, make them!
Start a profitable dropshipping business with DSM Tool. Get a free course and a free trial of the software.
Lastly, if you decide to source the product and add it to your listings, simply offer a better deal or a lower price for the item than your competitors (like the seller you sourced the item from at the beginning).
An Example Of E-commerce Dropshipping For Beginners
Alright, do this example of e-commerce dropshipping for beginners with me, so you understand how it works. Here’s a short walkthrough of how to find a good product and quickly source it. I will be using eBay and AliExpress for this example.
1. Finding a product with high demand on eBay:
We need to find a good drop shipping product. It’s important to detect what buyers are looking for. Look for products with at least four sales made in the past month.
Some of the richest categories to find winning dropshipping products to sell are:
- Home Decorations.
- Home & Garden.
- Home Improvement & Tools.
Take a look at this example:
As you can see, this item has been sold 33 times by this seller. If you take a closer look at where the product is being shipped from, we can see that the item location is based in Hong Kong, China. This means that even though the shipping timeframe will be longer, users are still willing to purchase the product.
If you click on the number of sales highlighted in red, you will be taken to the Transaction History. Here you can see the number of times the product has been purchased, the date of sale, the variation of the product sold, etc.
This product has been bought six times throughout the same date. So we see a clear trend here — buyers really like this item!
Check out the image below:
2. Sourcing the product from AliExpress:
We have found a product we can try to dropship with a decent amount of traffic. Now, it’s time to source it from AliExpress, our dropshipping supplier for this example.
You can easily scan any image from a given product, and AliTools will automatically give you different sellers who offer the same item on AliExpress.
When you find a winning product on eBay or any other eCommerce marketplace, you can quickly scan and find other suppliers on AliExpress who offer the same product in order to source the item and list it in your dropshipping store.
Based on the calculator, if we offer this item at the same price as our competitor, we gain $18.13 profit per sale! We want to be competitive, so we include in the calculator sheet a recommended selling price.
You can modify it as you want for as long as you offer the product for a lower price. Then you will have a somewhat competitive standpoint over the rest of the dropshippers.
Just make sure you are constantly checking on your competitors, what they offer, and the prices they set.
— Further, along with this dropshipping for beginners article, I will show you the best categories & products you can find.
To sum this part up:
So when somebody purchases from your drop shipping store, you simply place the order with your supplier directly, and they will take care of all of the logistics when it comes to shipping & handling.
All you need to do as a seller is to get customers to your online store, add profitable products to your listings, and provide good customer service.
The best thing is that you can dropship from anywhere, as long as you have a laptop and internet connection! If you don’t believe me, check out the Stories Of A Digital Nomad.
The Pros And Cons Of Dropshipping Model
Okay, let me be clear about something here. When it comes to dropshipping for beginners, aspiring sellers have a pretty easy way to enter the e-commerce world. To enter this eCommerce this way, you do not need a fancy degree from a business school or large sums of money.
It’s all about common sense and a little dropshipping research from your end.
However, this doesn’t mean the drop ship model is flawless. There are a few shortcomings to this approach. Let’s review the pros and cons of dropshipping. This way, you know exactly what you’re getting into.
Let’s begin with the pros of drop shipping business approach:
Pros Of E-commerce Dropshipping Model
- Easy to get started. Dropshipping for beginners is all about finding trending or profitable products you can sell in your online store. Once you’ve found quality products, you can launch your first drop shipping store in a couple of hours. It’s only a matter of opening a seller account on a marketplace you choose to sell, looking for a supplier where you can source your items, and then uploading them to your shop.
- No big investments are needed. One of the best things about dropshipping for beginners is that you don’t require a lot of investments to start your store. You do not need to buy inventory upfront or manage shipping logistics since your provider will do that for you. All you have to do is search for quality products, optimize your listings, place orders, and provide good customer service. You may need to invest in a monthly subscription on the marketplace you decide to sell and a dropshipping platform to automate your workflow & execute product research if you want to take your business seriously.
- No headaches when it comes to shipping logistics. As previously mentioned, you don’t need to rent a space or warehouse to hold inventory, nor do you have to ship out the packages. The moment your customer buys a product from you, your third-party supplier takes care of the order. With the drop ship model, you don’t need to:
- Pack and ship your products.
- Rent a storage space.
- Manage your inventory.
- Easy-to-scale business model. Since you don’t need to focus on packaging and logistics, you can focus on growing your drop shipping model business through marketing efforts. The more you profit, the more money you’ll have to invest in advertising through the marketplace, Google Ads, creating a solid website in Shopify, etc.
- You work remotely. You can work from anywhere around the world. Just make sure the shipping costs are worth it (depending on the item location and where you want to sell). However, with the drop ship model, all you need is access to the internet, and you’re golden.
- Delegate your workflow to apps or software. There’s no need to hire a workforce to help you grow your business. You have apps and software that help you automate dropshipping and your marketing processes.
You can use dropshipping software such as DSM Tool to automate your business policies, customer support predetermined messages, set up beautiful templates for your store, schedule the publishing of your listings, etc.
Another example is that you can run Facebook ads on autopilot instead of spending weeks figuring out the best practices of dynamic Facebook advertising.
- Be your own boss. No, this is not your typical pyramid scheme that many scammers sell where they say you can be your own boss and achieve financial freedom in a matter of weeks. The drop ship model actually allows you to be your own boss. Instead of working in the typical hierarchical structure, you make the rules. Usually, dropshipping for beginners is a side hustle, where you put it for 2-3 hours a day. It could be over the weekend or during free time. But anyway, you control everything. Of course, the idea is to achieve financial freedom, but it won’t be as fast and will take time and patience.
So far, you’ve read pretty things about the e-commerce dropshipping model, and it’s a great business model to start your eCommerce journey – easy, low-cost, and efficient.
However, just like any other business approach, there are some setbacks dropshipping for beginners have to overcome.
Cons Of E-commerce Dropshipping Model
- Shipping complications. When it comes to shipping, even though you don’t have to worry about logistics, not having control is hard, especially when there is a delay. You merely depend on dropshipping suppliers. Furthermore, most dropshippers tend to have more than one provider for different products. It can get a little bit tricky to calculate the fee for each supplier. The shipping costs and timeframe will vary. It becomes even more complicated when doing blind dropshipping.
When starting dropshipping for beginners, work with one supplier and then build up as you grow.
- Little to no control over branding & packaging. When you dropship products, you can’t do much about their customization. One thing is that you can have a nicely laid-out website with quality product descriptions. If you’re more serious with your business, you can do extra and arrange a high-quality photoshoot of your products. However, you won’t be able to do much about the packaging or the instructions that come with the products unless you work with dropshipping suppliers like CJDropshipping, Spocket, or Modalyst.
Another example of how you can customize your packages is by dropshipping from Alibaba since the website allows product shipping directly from the manufacturer. Therefore you can negotiate directly with the producer to add your brand. Keep in mind that you’ll have to be willing to pay more upfront because changes usually require the minimum order quantity.
- Dealing with angry customers. The most difficult part of customer service is dealing with complaints about wrong items received, damaged goods, or late deliveries. Since you don’t control inventory or the shipping logistics because your supplier is the one who handles it, it’s hard to control the outcome. Unfortunately, you’re the one to blame since the client purchased from you directly.
In such cases, you must open up a dispute with your supplier. Whenever a client complains about a specific issue, always ask for proof.
- Profit margins could be low. Even though you definitely can profit from drop shipping, there’s always a small catch: your profit margin will be low – at least at first.
When starting dropshipping for beginners, you will face a vast number of competitors; therefore, it won’t be easy to get a lot of traffic into your store. Until you get a solid customer base, you must keep your price pretty low in the order. Another approach is selling high-ticket dropshipping products, but it requires deep market and product research.
Make sure you look like a legit brand to gain a little bit of credibility from customers. This means that it could benefit you to invest some time in creating the name of your store, working on your store templates, eBay business policies, etc. This way, you could price your products a little higher.
Is Dropshipping Legal?
When starting dropshipping for beginners, many newcomers are afraid of getting into trouble, and it’s understandable – no one wants to do something that is not permitted.
The e-commerce dropshipping model started to grow more and more, but marketplaces began to see a trend. Fundamentally, online platforms, brands, and supplying retailers prefer straight supply chain sales. So it boils down to consumer transparency, and dropshipping arbitrage sales seem to increase the risk of consumer confusion, complaints, and returns.
Some marketplaces don’t allow the regular drop ship model – sourcing products from another retail website. Back in 2019, eBay implemented Dropshipping Policy that prohibits listing items from other marketplaces. eBay wants sellers to own the products they offer on hand, so they developed tools that quickly find such listings, cancel them, and restrict the sellers.
However, you can still work around this policy and start dropshipping on eBay.
Now, to be completely clear, eBay policy does not prohibit Retail Arbitrage, which is when an online seller buys goods from another retail website at a discount price and then sells that item on eBay. In that case, the seller has the item in stock, and eBay has no issues with such sales.
I would advise you to start dropshipping for beginners if you don’t have a lot of capital to invest in your business. Yes, you may struggle a little with getting sales and traffic since you will not completely comply with the platform’s policy. However, you can still make some sales and start gaining some profit.
Look at the drop ship model as a temporary business approach. It will help you gain eCommerce experience and profits in order to invest more. Eventually, you can team up with a supplier oriented towards drop shipping (CJDropshipping, Spocket, etc.) and open an online store on one of the popular eCommerce platforms (like Shopify, or Wix). Moreover, you can also purchase the inventory of products you know will sell well.
This leads us to another question, is it worth dropshipping nowadays?
Is Dropshipping Worth It In 2023?
So now you know what is dropshipping and how it works, the pros and cons of dropshipping model, and its legality. Now the question is – is dropshipping worth it?
There was a study in 2019 where Research and Markets, a global market research store, executed a Dropshipping Market Forecast from 2020-2027. It showed that the global dropshipping market is segmented into four major regions: North America, Europe, Asia-Pacific, and the Middle East.
Asia, along with India, leads the global drop shipping market with more than 31.9% revenue share, followed by Europe and North America. Users in these countries are inclined toward online shopping, which leads to sellers opening up more stores.
Furthermore, as previously mentioned, dropshipping is one of the cost-effective models for entrepreneurs to start an eCommerce business. It enables an entrepreneur to sell products online without having to carry inventory.
As I mentioned earlier, the drop ship model is not perfect. However, it is the best way to start building up your business without having a high capital to invest or even dealing with manufacturers to purchase inventory ahead – not to mention that there is a huge market for dropshipping!
The good news is that with some careful planning and consideration, most of these hurdles can be resolved and need not prevent you from building a thriving, profitable drop shipping business.
The Correct Approach To E-commerce Dropshipping
So, we’ve covered drop shipment meaning, what the drop ship model is, what most dropshippers do, how to source products, and if this approach is legal. When it comes to legality, as mentioned before, this business model is not an illicit practice.
However, sourcing from another retailer may be against some marketplace policies. Therefore, the best way to approach drop shipping would be by working hand in hand with different suppliers or manufacturers directly.
The idea is to be the middleman between dropshipping suppliers and the final customer.
E-commerce dropshipping model works better as a means to an end, not the end itself. If you want to start dropshipping for beginners and execute this approach properly, consider these points:
It’s crucial to understand the market whenever you approach any business model. However, when it comes to e-commerce dropshipping for beginners, you can mitigate the risk by trying different products that may or may not work. The beauty is that you don’t hold inventory, so you can constantly change the merchandise you offer.
Furthermore, there are tools for market research, such as eBay Terapeak. This amazing marketing tool provided by eBay will help you understand what, when, and how to dropship on the eBay marketplace.
Another great option is Thieve.co dropshipping tool designed specifically for sourcing products from AliExpress. It provides trending and best-selling AliExpress products curated by a team of eCommerce experts and dropshippers.
You can follow our guide How To Find Dropshipping Products to learn about the best free and paid product research tools.
Offering trending products, or at the very least items that will always have a high demand on the market, will allow you to drive more traffic into your store and potentially drive more sales.
The drop ship model is a perfect option for businesses facing shipping issues in areas outside their profitable regions. By partnering with a supplier with warehouses located in various parts of the country or even around the world, businesses can benefit from faster and more efficient shipping.
In addition to its usefulness in market research, drop shipping can be valuable for testing new markets and niches. It allows businesses to assess product demand in different locations without significant upfront investments.
Low Ticket-Products & High-Ticket Products
Product research is mandatory in the e-commerce dropshipping model as it can help you identify products that are likely to sell well and generate profits. Low-ticket products are items with high demand that can be sold at a relatively low price point. These products can drive traffic to your store and improve your seller metrics, leading to increased sales and long-term profitability.
In contrast, high-ticket products are more expensive to acquire, but you can dropship them at a higher price point, allowing you to cover the cost and generate profits. You can learn more about high-ticket products in our High Ticket Dropshipping Products guide.
It is generally better to start dropshipping for beginners with low-ticket items because they can help you build visibility and establish your store. To optimize your listings and improve your chances of success, conduct thorough product research and consider such factors as market demand, competition, and shipping costs.
E-commerce Dropshipping Supply Chain
In e-commerce dropshipping, a supply chain is a process that consists of moving a product from a manufacturer to a customer – it seems simple, but there is a bit more to it.
The drop shipping supply chain consists of the involvement of three parties:
- The manufacturer.
- The supplier.
- The retailer/distributor.
Manufacturers play a key role in the e-commerce dropshipping model, as they produce the products you will be selling. Typically, manufacturers sell their products in large quantities to suppliers and wholesalers.
There’s a way you can cut the supply chain by drop shipping directly from the manufacturer. This way, you pay less for your products. Another upside is that you will also be able to customize your branding a little too. However, manufacturers usually have a minimum order quantity (MOQ) you’ll have to meet. This means you’ll have to invest large sums of money upfront, which for dropshipping beginners, can be risky. To minimize these risks, you must conduct thorough research and negotiate with the manufacturer to ensure the MOQ is manageable for your dropshipping business.
You can use Alibaba instead of AliExpress if you decide to go this way. Alibaba is a platform that can help you connect with manufacturers and simplify the ordering process.
Suppliers and wholesalers are responsible for purchasing products in bulk from manufacturers and selling them to retailers, individual sellers, and dropshippers. These suppliers often specialize in a particular niche or product category, which can make it easier for you to find the items you want to dropship and ensure their quality.
Keep in mind that in order to generate a profit, suppliers typically mark up the price of the products they sell. This markup can vary depending on the supplier, the product, and other factors, so it is important to research multiple dropshipping suppliers and compare their prices to ensure you get a fair deal. Additionally, you should factor in the cost of shipping and any other fees associated with working with the supplier when determining your profit margins.
As a dropshipper, you will be acting as the retailer in the drop shipping process. Your job is to be the point of contact between the final seller and the customer, ensuring that the product and delivery meet customer expectations.
One of the key tasks for any reseller in the dropshipping model business is pricing. Unlike traditional retail business, the drop ship model involves marking up the price of products in order to generate a profit. However, it is crucial to strike the right balance between profitability and competitiveness. Setting your prices too high can drive away potential customers and send them to your competitors. On the other hand, too low pricing can erode your profit margins and make it difficult to sustain your business over the long term.
To set pricing effectively, conduct market research and analyze the competitors’ prices. Additionally, consider all the costs associated with dropshipping, including the cost of goods, shipping, fees, and other expenses. By carefully considering these factors, using supply chain analytics, and achieving the balance between profitability and competitiveness, you can build a successful drop shipping business that generates steady profits over time.
Best E-commerce Dropshipping Marketplaces
When it comes to the e-commerce dropshipping model, you have several options where you can start your business. When starting dropshipping for beginners, I would recommend working with a platform that allows you to easily create a seller account.
eBay dropshipping is a great way to start your eCommerce business. With over 187 million active users, eBay is one of the largest eCommerce platforms in the world, offering unparalleled access to customers and a wealth of selling opportunities.
One of the main benefits of eBay dropshipping model is the ease of getting started. It is really easy to open a seller account on eBay, so anyone can start dropship right away. Additionally, eBay offers powerful tools like Terapeak Product Research, which can help you identify the best-selling products on the platform and optimize your listings for maximum visibility and sales.
Another advantage of eBay dropshipping is the affordability of the platform. eBay’s monthly plans are affordable, so you don’t need to spend a lot of money upfront to start your dropshipping business. However, it’s important to note that there are still costs associated with eBay dropshipping, including eBay selling fees and shipping costs.
To succeed with eBay dropshipping model, it’s important to follow best practices for optimizing your listings and generating sales. This includes conducting market research to identify high-demand products for eBay dropshipping, optimizing your product listings with high-quality images and compelling descriptions, eBay SEO, and providing excellent customer service to build a strong reputation and positive feedback.
Lastly, it’s worth noting that eBay has an integrated payment method for sellers called eBay Managed Payments. This system allows sellers to receive their funds and pay off eBay’s commission and selling fees in a streamlined, efficient manner. By taking advantage of this new payment system, you can further streamline your eBay dropshipping business and maximize your profits.
This will help you to avoid eBay account suspensions. Otherwise, you risk getting a permanent ban.
Facebook is a great option for sellers looking to create their own dropshipping store. With over a billion active users, the platform’s marketplace boasts around 250 million stores worldwide.
Selling on Facebook Marketplace is straightforward, especially if you sell items you own. Simply upload pictures of the product you want to list, provide a detailed description, and set your selling price. Facebook’s focus on local selling means users generally sell items in areas close to their homes.
However, it’s worth noting that starting Facebook dropshipping is easier for US residents. There are specific requirements to meet if you want to become a Facebook seller, so you must research these before getting started. Nonetheless, with its vast user base and easy-to-use interface, Facebook remains a top choice for those looking to start dropshipping for beginners.
If you go with this FB marketplace for drop shipping, these best practices to sell on Facebook will help you a lot.
With social shopping on the rise, more and more social networks implement eCommerce features. You can dropship on popular platforms like Facebook, Instagram, TikTok, and others. Find out more in our guide What is Social Commerce And Why You Should Try Social Shopping.
Amazon is another popular marketplace where many online sellers tend to go if they want to build a successful eCommerce business.
When engaging in Amazon dropshipping, sellers must ably by some standard rules:
- Identify yourself as the seller on packing slips, invoices, and other information in connection with products. Check out invoicing checklist to get the full details.
- Remove all information that identifies the third-party seller before shipping the order, which is very important.
- Take responsibility for accepting and processing returns.
- Follow all terms of your seller agreement and Amazon and dropshipping policies.
When it comes to selling fees, Amazon takes 15% of your profits. It might not look great on paper since the average dropshipping profits are between 10% and 30% margins. However, this does not mean that Amazon dropshipping is not a profitable business. It just means that you would need to be patient and slowly scale up your business in time.
Follow our guide on How to Start Reselling on Amazon to learn the best practices of selling and dropshipping on Amazon.
Walmart is one of the most profitable marketplaces you can drop ship on. It has great profit margins between 25-45%, plus the platform charges only a 15% referral fee without additional subscription fees. Furthermore, the marketplace is very selective, so the competition is relatively low.
Walmart marketplace allows only certain types of drop shipping. Sellers can drop ship on Walmart under three main categories:
- Walmart Dropship vendor (DSV).
- Reseller Walmart items through other retail websites such as Amazon or eBay.
- Selling dropshipping products on Walmart com.
Furthermore, since Walmart is very selective when considering allowing sellers to use their platform, starting dropshipping for beginners will require an established US business to apply. There are some great outsourcing companies that can help you through the process, such as JungleRover. com.
Walmart is popular enough to have multiple integrations and third-party apps. For example, here are the Top 5 Walmart Automation Dropshipping Services.
There are a ton of other marketplaces where a seller can start drop shipping. You can also choose well-known Chinese retailers such as Alibaba or AliExpress. It mainly depends on where you want to focus your dropshipping efforts, how much working capital you must invest, and how well-established your business is.
E-commerce Dropshipping Suppliers
As with any other business strategy, the e-commerce dropshipping model is a business where having a supplier or multiple providers for sourcing products is a key factor for success. Especially because you rely on your suppliers for everything related to items and shipping logistics.
Before we dive into some dropshipping supplier options, it is important to note the top 4 tips to find a proper drop shipping supplier for your business:
- Read reviews. If the supplier has customer reviews, see what people say about their products and customer service. This is crucial because it’ll give you insights into how customers will perceive your own quality when you dropship those products yourself.
- Review policies. Since you 100% rely on your suppliers for products, shipping, and policies, it’s crucial to understand how a supplier handles broken products, missing packages, returns, and more.
- Product rating. Quality assurance it’s crucial. Remember that you do not handle inventory in the dropshipping model. This means there’s no way you can completely guarantee that the product is of high quality. So when you are at the product research stage, always check up on the item’s star rating given by consumers once you find a winning product. Moreover, check the reviews and how many orders that product has.
- Look for automation processes. As your business scales, it’s nearly impossible in terms of time management to manually manage inventory, place orders, and track shipments. Ideally, the supplier should have integrations with your eCommerce platform to automate these workflows, allowing you to focus on growing revenue streams.
That is why you can check out what DSM Tool offers in terms of dropshipping integrations. The platform allows dropshippers to connect with 50+ different supplier websites.
Don’t wait for success to come. Hire yourself and start your own dropshipping business
I will not dive into the different dropshipping suppliers, as we have already covered this topic in a few articles. Also, there is no single best supplier – it depends on your niche, product quality, pricing strategy, target location, shipping, etc. Here are a few articles with the overall best suppliers you can work with for drop shipping:
- 55 dropshipping suppliers to dropship on eBay/Shopify/Amazon/AliExpress.
- Print On Demand Shopify Apps: Best Print On Demand Companies In 2023.
- US Dropshipping Suppliers: The Ultimate List.
- Dropshipping Suppliers UK: 20+ Best Sources.
- Best AliExpress Alternatives: 15 Sites Like AliExpress For Dropshipping.
- TOP 15 Best Wholesale Suppliers for Dropshipping on eBay.
- List of 12 Free Dropshipping Suppliers Without Membership Fees.
E-commerce Dropshipping Categories & Products
When drop shipping, certain products sell better than others. These products tend to be in specific categories that most users look for when purchasing on any marketplace.
When starting e-commerce dropshipping for beginners, it’s essential to find high-demand products that are also affordable and easy to acquire. While high-end products like iPhones may have high demand, they are often difficult to source and may not offer the best profit margins. Instead, focus on products that most customers need and purchase regularly, such as household appliances and home decor.
Categories like Home Decorations, Home & Improvements, and Home & Garden tend to be highly lucrative for drop shipping. While the profit margin per sale may be lower, dropship these products on a larger scale to make significant earnings over time. It is all about consistency.
To help identify products with high demand, you can use tools like the Terapeak demand line on eBay, which tracks the popularity of specific products and categories over time.
For example, the Terapeak demand line for Home Decorations products can provide valuable insights into which products are currently in high demand.
As you can see, I filtered the category and the type of sale format (fixed priced), and, to get a better picture of the demand year-round, I filtered the results by 365 days. The results show that the demand is pretty much the same all year.
Furthermore, you also have seasonal products. These are the products linked to a time of year (swimwear, sunglasses during summer) or particular holidays (Christmas gifts), temporary events, or trends (remember spinners?). A dropshipper must prepare ahead of time – you need to understand the market and what drives sales.
Scheduling different types of listings for each season is always a great idea. For example, in the US, there are traditional holidays like Valentine’s Day, the Fourth of July, Halloween, Christmas, etc. Follow this eCommerce holiday calendar to prepare your dropshipping store for big retail events and holidays.
Seasons such as spring or summer capture buyer attention to certain products for that specific season. Let’s look into another analysis using eBay Terapeak. Summer is coming soon, and it would behoove sellers to start sourcing and listing summer-related products.
Obviously, the best time to dropship summer-like products is in June and July. However, you should start looking for these items in April or May to prepare ahead.
Another factor to consider is pricing. To compete against other sellers (dropshippers and non-dropshippers) effectively, check their pricing. It can help you set prices competitively and attract buyers looking for the best deals.
You can see that the selling price offered on eBay for the most inflatable summer products will be between $20-25 at most. It will give you some ideas of what price you can offer to be competitive. It’ll also depend on which supplier you are choosing.
Then you have high-ticket products you can also offer. However, these items are offered to a smaller niche market – more selective.
These are products that tend to sell for a higher price on the market. It is more expensive for you as a dropshipper to obtain them in your inventory. Their quality is above average, and these could be small parcel items such as jewelry, clothing, and electronics.
What to sell? This is the most often-asked question all e-commerce dropshipping beginners have.
To find your winning products, you must conduct comprehensive product research. It will help you identify products that align with your specific criteria, including target audience (age, gender, interests), niche, target market, shipping location (US, CA, EU), and more. If you need inspiration or want to explore popular products, you can check out the following articles:
- Spring Items for Dropshipping and Selling Online.
- Hot Summer Items To Dropship This Year.
- Popular Items To Sell In Autumn.
- Popular Products to Sell Online in Winter.
Dropshipping products to sell on eCommerce holidays & events:
- What To Sell On Valentine’s Day.
- Best Selling Easter Items for Dropshipping.
- What to sell on Mother’s Day.
- Great Father’s Day Gifts To Sell In Your Dropshipping Store.
- Best Halloween Products to Sell.
- Thanksgiving Items for Dropshipping and Selling Online.
- Dropshipping Christmas Products to Sell Online.
You can follow this eCommerce Holiday Calendar to prepare your store in advance.
Start E-commerce Dropshipping Today!
Congratulations! You have made it through our comprehensive guide about what is dropshipping for beginners. Hopefully, now you have a good understanding of the drop ship model. You know how to get started, which suppliers to choose, and what to offer in your online store.
Drop shipping is a popular business model practiced by millions of people worldwide. Initially popular in Europe and Asia, it has gained momentum in the US due to the growth of eCommerce. Marketplaces like Amazon and Walmart recognize the value of this approach. There are different dropshipping agreements with marketplaces and third-party vendors to ensure a safe business environment.
If you are only starting, you can source from another retailer to gain experience without investing a lot of money. However, it is wise to partner with a reliable supplier to streamline operations as you scale your e-commerce dropshipping business.