In 2019, the size of the global eCommerce market was US$3.535 trillion. In 2021, the figure is expected to hit US$5 trillion and increase to US$6.5 trillion in 2023.
Interestingly, in 2019, most online purchases were completed with smartphones as compared with PCs.
So, what does this mean for a budding entrepreneur?
It means online shopping is the new normal. These habits are now a regular part of consumer behaviour, and the opportunities for tapping into this market are at an all time high. Starting a dropshipping business can be an incredible way to meet this growing demand, and the best time to start is: now.
In the era of Amazon, the growing demand for fast shipping is at an all time high with 40% of customers expecting delivery within two days. For those targeting the largest consumer market in the world,the USA, this guide will give you the steps you need to take to build a successful dropshipping business - with US suppliers.
What is Dropshipping?
In a nutshell, dropshipping is an order fulfilment method in which the retailer sells a product and passes on the order to the supplier who later ships it directly to the customer.
This means the seller doesn't keep any product inventory in stock, but focuses on website design, customer acquisition, and marketing instead.
Dropshipping is a highly scalable business model with almost zero set-up costs, which makes it a favorite among new entrepreneurs with lower risk tolerance.
With the right marketing strategy and strong customer relationship management, dropshippers can expect to generate a good amount of revenue and scale up pretty quickly.
Many online stores of various sizes have enjoyed the benefits of operating with this model. For instance, Wayfair and Blinds are still using dropshipping as their fulfilment model, and they’ve scaled into a household name with hundreds of millions in revenue.
In the past, Amazon and Zappos started out with this model as well.
While actual results vary, we've have success stories from newbies who earn anywhere from a few hundred dollars to tens of thousands of dollars in monthly sales revenue. Eventually, they replace their full-time job with earnings from their eCommerce store.
Advantages and Disadvantages of Dropshipping
Advantages
Easy to Start
Popular eCommerce platforms WooCommerce, Shopify and Wix can be conveniently tweaked for dropshipping by installing a dropshipping platform for this purpose.
Literally, with a minimal barrier of entry and near zero risk, you can start selling various trendy and profitable products almost instantly. How sweet is that?
Low-risk and minimal cost
Dropshipping has a low initial starting cost, and a low risk in getting started. You can start with nothing, build your social channels, and eventually invest in marketing based on any budget that works for you.
You can start dropshipping with any website building hosts as well. WooCommerce itself is a free eCommerce Wordpress plugin and you can opt for the free trial on Shopify or Wix to get a feel for the advantages of either option.
With Spocket, you can simply download the plugin and immediately start selling products from dropshipping suppliers in the USA and EU as well as Asia. Sign up for free and check out the product selection!
Skip the Supplier Screening
By comparison, conventional eCommerce stores source their products from suppliers or wholesalers, which can be domestic or overseas. They have to worry about supplier relations, scaling as well as volume.
The time it takes to research, screen suppliers and products, build a relationship, and test the products is enough of a deterrent for most people starting out.
Opting for a dropshipping platform allows you to skip the entire process of finding and screening suppliers, and get straight to work with marketing and product research.
Skip holding Inventory (and the costs associated with it)
With a typical business model, Products are stored and maintained in a local warehouse before they can be sold. This means overhead costs, a system of managing inventory as well as costs and time associated with maintaining this part of your business.
Dropshipping allows entrepreneurs to skip this grueling process, which translates to a zero warehousing cost and more time to focus on the building of your brand and marketing.
Easy Product Importing and Management
Dropshipping platforms provide automated product selection, description importing, and image uploading, which would save hundreds of man hours and costs associated with photography and copywriting.
Spocket makes the whole fulfilment even faster as most products are from pre-vetted suppliers based in US, Canada, EU, UK, Australia, New Zealand, and some parts of Asia. This alone reduces shipping time from 3 weeks to just a few business days and makes customers, and the retailer, happy.
By providing fast and affordable shipment, you're a few steps ahead of the competitors that source their items from China. After all, satisfied customers are repeat consumers!
Flexibility
Have you ever wondered how the people who travel the world and work from anywhere do it? Well dropshipping is one of those liberating routes.
As long as you have an internet connection, you are able to manage your business from anywhere at any time. Whether it’s on a beach or at home with your kids, the choice is yours.
Drawbacks
High Competition
Like any other business model, dropshipping also has its down side. With its low barrier of entry and almost zero startup costs, the competition is tremendous. Thus, selecting the most appropriate niche is key to having highly sellable products that generate significant profits.
Returns and Refunds
Another drawback is having to deal with returns and refunds, in the case of dissatisfied customers. However, such risks can be significantly lowered by providing utmost care and the highest level of customer service right from the beginning and with strong business relationship with suppliers.
Any seasoned dropshipper will tell you horror stories of having to send return products to Aliexpress suppliers that had language and time zone barriers to deal with. Most would end up having customer returns sent to their home, where they absorb the costs associated with the shipping and refund.
With dropshipping suppliers from the USA, these products are mostly made from small business owners who take care of their retailers with fair return policies and frequent communication. This makes returns easy and fast, with a policy that saves your pockets, and makes your customers trust you.
Choosing Profitable US Dropshipping Products
Dropshipping allows you to experiment with various categories. But choosing the right niche and products is where most dropshippers get stuck. Starting off with a niche you love and searching for products that have high potential for sales are your keys to success from the beginning.
Find a niche (you love)
Successful dropshippers focus their dropshipping business on niches they love, and are already well versed in. Erin started a store for pets when she realized that her experience (and love) for dogs would give her all of the insight she needed to get to her target market. How? Because she is in that niche herself.
So, take your time here and choose something you can see yourself advertising for years on end.
Choose Impulse Products
A great dropshipping product is something so exciting and novel that the customer doesn’t think twice about buying it.
You can find products within your niche by using a niche scraper and looking for dropshipping suppliers in the USA that have these items. These tools give you insights into possibly trending products that you may want to start selling before anyone else does.
For example; take a look at this customized ring:
Who wouldn’t love a ring that had an imprint of the moon on their birthday? It’s so unique and special that couples or best friends all over the world will buy it for their loved ones (and themselves).
Using Google trends you can gauge how much demand there is for specific items. Like below:
You’re looking for a consistent or growing google trends graph, to let you know that these products are evergreen, and always in demand. Once you have a US supplier, You’re golden and ready to make some sales.
This brings us to our next critical point: do your research.
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