South Africans are hustling to make ends meet mate! In these uncertain times, the days of relying on one business or relying on a 9 – 5 are over. Everyone needs a side hustle!
If you want to earn a decent passive income by launching your own e-commerce store but are skeptical about complexities like inventory, shipping, and keeping records, then dropshipping is the perfect option.
WHAT IS DROPSHIPPING?
Dropshipping has been around for a while now. However, contrary to popular belief, it is not a get-rich-quick scheme. It is simply a very cheap and accessible business model.
It is basically a retail fulfillment method where a store doesn’t own or maintain an inventory. Instead, you purchase the item from a third-party supplier and get it delivered to the customer directly.
You don’t have to handle the product yourself or take care of the shipping process.
One of the biggest differentiators between a regular e-commerce or a brick-and-mortar store and a dropshipping store is that the person selling the product doesn’t handle the inventory or logistics, at all. If you want to learn more about dropshipping, here is a quick FAQ.
DROPSHIPPING FOR BEGINNERS: FAQ.
Here are some quick answers to the most frequently asked questions:
As already mentioned, Dropshipping is a business model where you can sell your products online, without having to stock, supply, distribute, or deliver the product yourself.
Dropshipping requires you to act like a mediator between the consumer and the supplier.
It’s simple! The customer puts an order on your store, then you forward that order to the supplier, and finally, the supplier delivers the order straightaway to your customer. Your role as a drop shipper is to focus on marketing and promoting the product, while the supplier fulfills the entire supply chain cycle, including maintaining the inventory, packaging, shipment, etc.
Dropshipping is a profitable business model. The best part is that you don’t require massive capital or spend money on things like inventory management, warehouse rent, and shop rent, among others.
You can expect a profit margin of 20-40% and a conversion rate of 1-3% on average . These metrics might change according to the industry and situation.
To start your dropshipping business, you can follow a step-by-step process:
- Join our dropshipping training program here
- We will help you decide what type of product(s) to sell.
- We will share our Partner suppliers.
- Sign up with a e-commerce platform like Shopify
- We will show you how to market your dropshipping store and generate sales.
Not much since you don’t require any shop, and you won’t hold any stock, you don’t need a substantial investment at the start. You need to be able to cover basic costs like hosting, and possibly have a marketing budget if you plan to do paid advertising.
Yes, you can. The beauty of dropshipping is that since it’s online, you can target the entire global target. Your customers could be from anywhere in the world.
Of course, you can. In fact, it’s highly recommended to sell your products across multiple channels, such as marketplaces.
The margin primarily depends on the cost of the items that you sell, and the volume of items sold. However, on average, you can expect to make a profit of anywhere around 20% to 40%.
As long as you are generating profits, yes uncle sam needs his cut.
There are several ways to promote your website. You can buy advertisements on websites, ecommerce stores, and social media platforms. You can also buy YouTube advertisements, get involved in customer engagement on social media platforms, conduct webinars, and more.
While choosing your suppliers, go for someone punctual, tech-savvy, has an in-house team of experienced sales representatives, and has the reputation of providing top-notch quality products. Make sure to look at online reviews before selecting suppliers.
If you are looking to scale-up and build your own brand, it’s better to have your own online store. You have greater control over the user interface and display of your products and can boost your brand image accordingly.
At the start, when the business is small, you can work alone. However, as the business starts to expand, it will get difficult for you to manage all aspects of the business. Keeping expansion in mind, hiring assistants for specific roles is recommended. You can hire virtual assistants from websites like Upwork, Fiverr, Guru, and more.