Starting A Dropshipping Business | Dropshipping Mavericks

Starting a dropshipping business is a great way to start a company with little up-front investment.

Here are the 10 steps you can take to get started on building your very own dropshipping business.

10 Steps to Launching a New Dropshipping Business

1. Choose Your Type of Dropshipping Business

The first step in launching a dropshipping business is to identify the type of dropshipping business you want to launch. You might choose from the following types among others:

E-commerce storefront: You’ll need to set up an e-commerce platform such as Shopify or BigCommerce to host your product catalog and checkout process. You’ll also be responsible for marketing your store and generating traffic for it.

Marketplace seller: You can sell products on existing marketplaces such as Amazon, eBay, or Etsy. You’ll need to set up your seller account and list your products on the marketplace.

Dropshipping supplier: You can create a dropshipping business by establishing relationships with retailers, processing their orders, and shipping products directly to their customers.

2. Name Your Dropshipping Business

Give your dropshipping business an identity so people will think of it as a well-known and respected brand. You can take the name of your dropshipping business from your industry, focus on a geographical location, or use your own name among other options.

The main goal for naming your dropshipping business is to make it sound appealing and trustworthy so people will want to do business with you.

3. Determine Your Dropshipping Business Model

There are several possible types of business models for a dropshipping business including:

Order fulfillment: In this type of dropshipping business model, you take orders from customers and then place those orders with a supplier. The supplier ships the products directly to the customer’s door.

Inventory management: In this type of business model, you manage inventory for your suppliers. When a customer places an order on your site, you purchase the product from the supplier and have it shipped to the customer.

Product development: In this type of business model, you work with a supplier to develop new products. The products are then manufactured and shipped directly to customers.

No matter which model you choose, make sure that it aligns with your business goals and the services you offer.

Read more about choosing the right business model for your dropshipping business.

4. Choose a Legal Form for Your Business

By incorporating your dropshipping business, you will limit your liability. You can incorporate as a Limited Liability Company (LLC), a C Corporation (C-Corp), or an S Corporation (S-Corp). Or you can operate as a sole proprietorship.

The business structure you choose for your dropshipping business will determine the amount of taxes you pay and which state or federal tax forms you need to file.

Read our article comparing the most common dropshipping business structures.

5. Write a Dropshipping Business Plan

All dropshipping business owners should develop a business plan.

A business plan is a document that outlines the goals, strategies, and operations of a business. It can be used to secure funding from investors or lenders, as well as to guide the day-to-day operations of the business. The business plan should include information on the company’s products or services, market analysis, financial projections, and management team among other things.

Read our article about how to write a dropshipping business plan.

6. Apply for the Necessary Permits and Licenses

There may be required licenses and permits you need to obtain before launching your dropshipping business.

For example, if you are selling food, you will need to obtain a food license. If you are selling alcohol, you will need to obtain an alcohol license. And if you are selling tobacco, you will need to obtain a tobacco license.

You must also register your dropshipping business as a legal entity with the state where you plan to do business. You can simply file an online form through your Secretary of State website.

Registering with the federal government is also essential so you can properly pay taxes for your business. You will also need an Employer Identification Number (EIN), which you can apply for at the IRS website, if you plan to hire employees.

Read our article about obtaining the proper dropshipping business licenses.

7. Determine Your Budget & Apply for Funding as Needed

In developing your dropshipping business plan, you will figure out how much funding you need to start and grow your business.

If you have your own funds to invest in your dropshipping business, you may consider taking advantage of that. In addition to your personal funds, other forms of potential funding for your dropshipping business include traditional bank loans, SBA loans, credit cards, angel investors and family and friends.

Read our article about the costs associated with starting a dropshipping business to help you determine if funding is needed.

8. Get the Technology & Software Needed to Run Your Business Efficiently

When you start your dropshipping business, it’s essential to have the right technology in place to maximize efficiency. You definitely need a computer with Internet access, and accounting software for tracking expenses and revenues.

You may also want to invest in ecommerce software, which will make it easier for you to manage your online store, as well as dropshipping apps to automate various tasks like product sourcing and order fulfillment.

Read our article about the technology and software you need to run a dropshipping business.

9. Market Your Dropshipping Business to Potential Clients

Before you start selling your services, you have to let the world know you exist. The first step is to create a website so people can learn more about your services and how they benefit them.

After you launch your website, start promoting it through social media channels like Facebook, LinkedIn and Twitter. Also consider networking with other people in the dropshipping industry through social media and blogs so they can help share your business.

You also need to start gathering the materials needed to execute on your promotions strategy, which is your strategy for attracting new clients. Dropshipping businesses should consider the following promotional strategies for which you should start getting prepared:

Create a website that outlines the benefits of using a dropshipping business.
Use social media to promote your website and attract potential customers.
Connect with other businesses in the dropshipping industry to share leads and resources.
Invest in e-commerce software and apps to automate tasks related to your business.
Develop marketing materials, such as e-books, webinars and whitepapers, to attract new clients.
Invest in search engine optimization (SEO) to ensure potential customers can find your website.
Attend trade shows and other events related to your industry.
Advertise your business through online and offline channels.
Get involved with charitable causes to generate goodwill for your business.

Read our article about how to market your dropshipping business for more tips.

10. Get New Clients & Grow Your Business

When you promote your services, you’ll start to get interest from potential clients.

Make sure you’re ready to serve these clients. Also, be sure to establish systems to ensure consistency and reduce costs. And be sure to find and train the right people to help you grow your dropshipping business.

Read our article about how to effectively grow your dropshipping business to learn more.

Starting a Dropshipping Business FAQs

Why Start a Dropshipping Business?

Dropshipping businesses offer entrepreneurs a low-risk way to start an online business. You can launch your business quickly and without a large investment. And you don’t have to carry inventory, which saves you money.

What is Needed to Start a Successful Dropshipping Business?

To start a successful dropshipping business, you need to choose the right niche, find quality suppliers, create attractive product listings, and market your services to potential clients.

How Can I Start a Dropshipping Business From Home?

You can start a dropshipping business from home by establishing a workspace and home office. You’ll also need to invest in the right technology and software to run your business. And be sure to market your services to potential clients.

Then, follow the rest of the tips outlined in this article.

How Can I Market a Dropshipping Business Online?

There are a number of ways to market a dropshipping business online. You can start by creating a website and promoting it through social media channels. You should also consider networking with other businesses in the industry, investing in eCommerce software, and developing marketing materials. Finally, you can invest in search engine optimization (SEO) to ensure potential customers can find your website.

What are Some Tips for Starting a Dropshipping Business?

Here are some tips for starting a dropshipping business:

Choose the right niche.
Find quality suppliers.
Create attractive product listings.
Market your services to potential clients.
Invest in the right technology and software.
Connect with other businesses in the dropshipping industry.
Develop marketing materials.
Invest in search engine optimization (SEO).

Where Can I Find a Simple Checklist for Starting a Dropshipping Business?

A simple checklist to use when starting a dropshipping business is as follows:

Choose Your Type of Dropshipping Firm: This should be based on what you are best at and how much experience you have. Remember to keep your interests, skills, and experience in mind at all times.
Name Your Dropshipping Business: This should be done with care, as your brand is important for attracting the right clients. A simple, memorable name will go a long way.
Choose a Legal Form for Your Business: Whether you choose to become a sole proprietorship, partnership, LLC, corporation or another option will depend on your business. Ensure that you are aware of all the implications of each type.
Determine Your Dropshipping Business Model: Determine how your business will make money. Will you sell products, services, or a combination of both?
Write a Dropshipping Business Plan: Your business plan will also help you determine what your start-up costs will be and will provide a roadmap with which you can launch and grow.
Apply for the Necessary Permits and Licenses: In most locations you will be required to apply for a business license and/or permits before you can begin operations.
Determine Your Budget & Apply for Funding as Needed: You will need to know how much money you have to spend on all of your business-related expenses before opening any doors. If needed, apply for a small business loan or other funding options.
Get the Technology & Software Needed to Run Your Business Efficiently: You need to have the right tools in place to succeed. Implement software that will help you manage your time, contacts, and business operations in general.
Market Your Dropshipping Business to Potential Clients: A solid marketing plan will be crucial to your success. It should focus on attracting the right clients so that you can provide them with the services they truly need.
Get Clients & Grow Your Business: Once you have a solid marketing plan, it's time to actively pursue and secure those who could benefit the most from your services.

Summary

Starting a dropshipping business can be a great way to make money. By following the tips in this article, you can increase your chances of success. Be sure to choose the right niche, find quality suppliers, create attractive product listings, and market your services to potential clients. With these tips, you can start a successful dropshipping business.

How To Start a Dropshipping Business