Blog Post

How to Start a Dropshipping Company

Organize and run a simple business using dropshipping and eCommerce.

Published

4 years ago

October 29, 2021

Dropshipping is one of the easiest online businesses to start. Creating a fully functioning, 100% operational dropshipping business and company in less than 30 days. Be up and running online (and in real life) in less time than that. The most important parts of your business are extremely simplified and allows you to focus on the core qualities to produce your company.

Important things to remember when dropshipping:

You are running a business that is largely brand and marketing driven. When it's all said and done, the pull from your business entirely comes from your customer base, which needs to be identified immediately. You don't have to be a computer wiz but you do need to clearly get to know specific terms like SEO, CPM, PPC, and even affiliate marketing and a brand ambassador program.
Your brand has to represent authenticity and originality, and you can do this by taking care of key startup business tasks like identifying your audience and market, and building a community that you can solve problems for and offer your solutions. In 2021 and the 2020's generation in general, we recommend and show by example that educating your client and creating a channel to communite with your customers in, will create the loyal environment a business needs to succeed in.
The easy part is listing your products. The hard part is maintaining your traffic and sales. This is a retail-style industry inside of the ecommerce lane. If you've experienced a job setting in a mall, you may recall the visual merchandise setups and how important it is to have a nice looking store to attract families inside to shop around and spend money. Now, you're doing this in the digital lane, where most of your work of uploading your products is simpler than the complexities of keeping and growing a customer base through large traffic.

So what is dropshipping?

Dropshipping is a business model for companies. Dropshipping is based on the same metrics a regular brick-and-mortar retail store is. In brick-and-mortar businesses, you buy your product in bulk and then sell at a fair markup of around 25%. With dropshipping, you do the same thing with your markup, but instead, you sell one-offs of each product, on a 1:1 customer and product basis.

If 25% is somehow generous, you might be in a super lucrative market and are forced by tough market practices to compete at a price a higher percentage of around 30%-55%.

So before you decide what is fair based on what sounds good and attracts impulsive buyers, be aware of the actual market and market prices. You do have to be delicate in that you take your research very seriously. Dropshipping companies can be rushed and treated like cute & easy side projects and when finished, can look like low budget and low quality materials and marketing for what can be seen as a low quality store.

It's very important that you research as much as you can to understand the do's and don'ts related to the industry and market that your dropshipping business or products are in. That way you don't undercharge or overcharge and miss out on the opportunity of growing a long-lasting business.

Why use the dropshipping model?

Starting a company is starting to look a whole lot different, if it wasn't already in the 2010's era. Now in the 2020's generation of tech and social, CEOs, Founders, and Entrepreneurs can benefit from low budget startup tools and business models like dropshipping to cut costs on inventory and use affiliate marketing to help with sales.

1 Research

@ Kampus Production / Pexels

Get familiar with all that you can out of your industry. Think of it as binging your favorite show, if you will. Find the best parts of the topic that draws you into dropshipping the most. If it's already a niche, all you have to do is identify what brings you to the hobby community to begin with, and then study what you and others in your hobby group have in common.
Your style of research will usually inherent your level of interest, but you're encourage to go beyond the limits here so that you can survey the industry for business purposes and so that you can maximize your efforts from all your planning and strategizing.
Taking in as much research as you can is the precursor to turning your hobby into a business. Find ways to ask questions that need to be answered in order to get data you can look at and compare.
Important data to compare are things like, how many people are tweeting about said topic over Twitter, or how many people have hashtagged a topic on Instagram, how many times have certain posts been reshared on Facebook, or reblogged on Tumblr. Using these metrics across the internet can help you guage the level of success your dropshipping business will gain.
2 Creative (and professional) Process

@Pixabay / Pexels
When stepping into the fun and creative zone of your business, here are a few key areas you should identify to make sure you stay on track:
- Logo Design
- Branding
- Marketing
- Website Design
- Communication Style (including artwork)
You want to have fun when you step into your creative zone. And you don't want to hinder this process and make it too cookie-cutter or corporate. The key here is to make sure you understand what makes you do what you do, creatively, and why you do it.
When it's all said and done, the logo is already made, the branding is simple, the marketing and communication style is unique and intentful, and your website design will only reflect the effort you put into your overall feeling, and brand message.
When you design your own work or hire someone to do the creative labor, you'll have a structured and labeled breakdown of what your intentions are, and together with a creative mind you'll be able to identify what is and what is not necessary in your creative design to smooth out the creative creases, and to have a valuable and clear, creative message to communicate to your clients and potential customers.
3 Profit Margin and Sales

@Karolina Grabowska / Pexels

Your profit margins and markups are important to pay attention to before, during, and after the launch of your dropshipping business. You want to make sure that you are balanced within the market and are offering competitive prices along with competitive quality.
Dominating a niche market isn't hard, and in fact it's encouraged by smaller businesses such as dropshipping companies or those that follow a dropshipping business model. It's easier for dropshipping companies to pay attention to niche communities and offer them products they're looking for without taking a huge bend or turn in their marketing, which for bigger companies, cost a lot more in marketing expenses to address said communities.
When bigger companies do start marketing toward niche communities, they tend to wear it all out, in a heavy-handed sort of fashion, which makes this a great lane and opportunity for companies that work from a dropshipping model.
4 Niche Communities, Sub-Genres, Fan Clubs

@Leah Kelley / Pexels

Who can you connect to?
Your community is a major part of your success in the dropshipping world of business and ecommerce. Being part of a niche helps you leverage smaller channels and lanes of communication to make a bigger impact on revenue. On the other hand, you can also support your favorite fan club or hobby group by developing your brand in a direction that supports these niches.
A lot of different dropshipping companies experiment with niche/hobby t-shirts and merch for sale and try pitching it to related clubs to see how it does in the community. Some fans are looking for different color ways to match their outfits with and you might be the apparel company to create the perfect t shirt to go with their novelty hoody or collector's hat.
An example of boutiques making niche clothing are streetwear brands that create t-shirts with colorways to match the next upcoming Jordan sneaker release, so that Jordan sneaker fans already have potential clothing to match their (usually preordered) sneakers.
Another example is Star Wars and how fans like custom artwork graphic tees of their favorite characters. A more recent example is Roblox graphic tees, Minecraft graphic tees, and Fortnite graphic tees.
You can pair up almost any cool and fun hobby group and address the community with entertaining graphic artwork based in the group's interests and create merchandise and lifestyle based products for the different community members looking across the internet for them. Being part of the dropshipping business model, they'll be able to buy from you at any given moment, 24/7, online via debit or credit card once your store is integrated online with a marketplace style platform or your own website.
5 Marketing Approach, Brand Ambassadors, Sponsorships, and more

@Nataliya Vaitkevich / Pexels

When you run a brand from a startup position, it's easy to think about how much help you need. But because you're on the dropshipping side of things, you get a lot more of your time and energy back that you would from a traditional brick-and-mortar business. It's important to take into account how many brands you can offer quality brand collaborations with by looking at your own brand message, and the message of brands and creators around you that coexist with each other.
Start thinking about potential creators, stars, and athletes who you can reach out to and tap in with when your company does make enough sales to sponsor talent. This is still a marketing tactic which gears your company toward sales, so it's important to always keep in mind that it takes money to make money.
Considering your future partnerships will keep your dropshipping company goal-oriented and sponsorships and brand ambassadors or affiliate marketers are sometimes one of the safest risks in marketing and sales. It's up to you, but with a digital position in the industry, they usually go hand-in-hand and support both the ambassadors or affiliates and the companies, alike.
Reach out to talent and inquire about their prices for Instagram posts, Facebook posts, Snapchat posts, endorsements, and the likes. You can get a feel for what you need to prepare a budget for, and you might find to your surprise that some creators are doing deals and can offer you a great price on advertising your dropshipping brand to their followers. You can look into micro-influencers from 200-10,000 followers, or bigger influencers from around 15,000 followers and up.
Thanks for reading! We hope you found the information provided in this article useful. Stay in touch with us across social media platforms on the web, we'd love to keep you updated with more content when it comes.
Social Media Links: @PostAffect on all platforms:
Facebook | Twitter | Instagram | LinkedIn | Post Affect!