Are you planning to start a dropshipping or e-commerce business? You probably heard of the confusing term ‘logistics’ thinking, “What is this?” At first, we were puzzled too because of different web pages answering it differently. Now that you’ve landed here, let me explain it in simple words.
A Brief Introduction to Logistics
So, what is logistics? It is a collection of procedures for moving unprocessed materials and finished products throughout the supply chain. Now, if you’re a newbie, the word ‘supply chain’ might be a little confusing. The supply chain is a network of all the organizations and individuals from which you buy goods and to which you sell the finished products. So, the supply chain includes everything from the delivery of raw materials to production to the delivery of the end product to the consumer.
There are many steps involved in logistics:
- Receiving goods.
- Management of stock.
- Predicting the demand for your product or service
- Packing and shipping.
- Managing transportation.
- Order fulfillment.
Every e-commerce startup business owner must have a deep understanding of logistics.
Can Selling Goods Online Make You Good Profit?
The thing is that anyone can sell things online. A 10-year-old can do so by posting a toy on Facebook. But selling for profit requires much more than just a good product. You can make a big profit with an excellent strategy, market research, and promotions. And, of course, authenticity is a no-brainer.
You may be able to sell your stock using ‘evil’ strategies for one time. But it won’t bring you any customers for the next time. And can even get you in trouble, legally.
In conclusion, making a hefty profit from selling online depends upon you and your product.
There are several ways you can opt for it. Either stock your warehouse and then sell the product. Or, sell other people’s merchandise, then take a percentage of money for yourself. That is known as drop shipping. It is not as effortless as it sounds.
With Strikingly’s very simple drag-and-drop features, you can build an online shop within a few minutes. You can visit our homepage for more information. And seek help from the help center if you’re stuck.
Is Dropshipping Business Easy?
I know it is a hard pill to swallow, but no. Making money in any field is not easy. However, once your startup idea takes off, the efforts will be worth it.
Many people think, what’s so hard about selling someone else’s goods and taking a cut? Well, dropshipping is not just that. Investment, logistics, laws and other numerous things should be considered. Give the steps below a read for an even better understanding.
Commit to the business
Like any business model, dropshipping cannot make you six-figures in the beginning. Be patient. It will take time for things to settle and for your self-shopping store to gain customers. Realistic expectations will make you less likely to quit before the business takes off.
But hey, this business model is less risky.
The dropshipping business requires more time investment than money. With the right combination of free trials and low-cost plans, you can start your business for just 100$.
However, giving it time is crucial. This time will be spent researching your market and learning the inside-outs of the business, so you don’t spend money on developers and marketers before generating profit.
Pick Your Niche
Research the demand for products in the niche you’re interested in. Furthermore, a specific niche helps build a customer base. Let’s say you sell iPhone covers. An iPhone user will buy one from you. If they like the product, they might come back for new designs, as they’d know that your store specifically sells iPhone covers.
Again you will be researching the product you have chosen or are yet to select. Look for the trends in the market. Do competitive research and aim to provide something better that sets you apart from other competitors. After all, there should be a reason for consumers to come to your store and not go to the other selling similar products.
Choose a Dropshipping Supplier
Choosing a supplier is an essential step. Without that, you wouldn’t have anyone to get products from and sell to customers. For example, you can go for Alibaba, where suppliers worldwide list their products for wholesale.
More sites are AliExpress, SaleHoo, CJDropshipping, and many others.
Build an Online Shop
After you’re done with the above steps, it’s time to build an online shop. This is where you will be selling your products. Strikingly requires very little to no developing experience for building an online store. It’s as simple as choosing the templates and making changes according to your liking. That too with free or very low cost.
Over 12 million global users, use Strikingly to build their websites.
Sort Out Your Finances
A separate account and credit card is necessary for your business. Mixing business finances with personal ones is a big no-no.
If the state from which you’re selling collects sales tax, then you should collect sales tax. Furthermore, if your state doesn’t take sales tax, but the location from which the customer is ordering takes it, you need to collect sales tax.
Look into the laws of your area if a local business license is required for dropshippers. If it is necessary, then you need to get it.
Promote Your Store
Lastly, market your store to drive traffic to it. There are numerous ways how you can promote your business.
- Run paid ads. You can run a promotional post on Facebook, which costs around 97 cents per click. Or Google ads, which on average, costs between 1$ to 2$ per click on the Social Network.
- Reach out to influencers. You can decide on an affiliate fee. They will make money off each sale, and your product will be advertised for way cheaper than running ads on Google or Facebook.
- Groups and Communities. You can engage in conversations in Facebook groups dedicated to your product's niche. Or you can interact with people on Reddit or Quora. One thing to remember is to help them first, then talk about your service or product. Building relations is crucial here. Customers need to be shown the benefit they will gain from your product.
Another idea is starting your blog. You can start publishing articles about matters surrounding your store’s niche. In each blog post, you can involve keywords that will help the articles rank on Google. Resulting in more traffic toward your store and growth in sales. Strikingly has many articles that will guide you around SEO. Another thing to remember is to copyright your blog to protect its content.
Image taken from Strikingly blog
Analyze and Improve
You have completed every step and launched your dropshipping store. It’s time to analyze the statistics. You can look at the records and improve your business per customers’ reviews.
Is Dropshipping Legal?
Yes, dropshipping is a legal business model.
The Downside of Dropshipping
Just like any other thing on this planet, this business model has its cons too. You can come across a scammy supplier. Or the quality of the product is not up to the mark. This will result in risking your store’s reputation. So, be careful with the suppliers you choose.
A Deeper Dive in Logistics for E-commerce
Let’s break down each step in e-commerce logistics.
This step refers to checking the quality and quantity of the goods delivered. After that, you will need to mark them with tags and keep a record that you have received the requested stock.
Also, it is crucial to store them properly in the warehouse, so the material doesn’t get damaged as long as it is in the warehouse.
Management of Stock
This is one of the most essential processes of logistics. Inventory management requires keeping track of the goods you have stored and the products you have used or sold. It also involves storing the stock according to the demand. Keeping less than the demand can lead to losing orders. Therefore, low sales.
Predicting the demand for your product can result in increased profits. You can always research people who are self-shopping in your niche. And also lay eyes on what’s trending from your store. This will help forecast demand correctly.
Packaging and Shipping
This is a simple process, exactly as it sounds. Get the orders packed rightly and ship them off to the customer.
Transportation logistics management requires analyzing and negotiating skills. It involves moving goods in the supply chain, whether from the wholesaler to you or the customer from your store.
It is crucial to consider the means of transport which is efficient for time and money both.
Logistics doesn’t end once you have shipped the order to the customer. In some cases, to be precise. If the buyer wants to return an item, giving back their money is handled by this process.
Now that you’ve understood the logistics for e-commerce and dropshipping, why don’t you try to build your store using Strikingly’s easily modifiable templates? If you go to a developer, that might cost anywhere from $100 to $500. And probably even more for a custom design.
Image taken from Strikingly product