How to Start a Dropshipping Business: The Ultimate Guide

Cutting costs is vital when you’re running a business. When you cut excessive costs, you can reinvest the funds to improve your business or use them to get useful materials that will help you.

The dropshipping business is a business model that eliminates the option of stacking goods in a warehouse. Instead, you send them directly to the customer who has placed an order for it.

Everyone can do dropshipping but how to start a dropshipping business that will be profitable and scalable is the point of concern. Well, that’s what you’re about to learn from reading this article.

What is Dropshipping?

Dropshipping is a method of retailer compliance in the shop does not keep in stock the products it sells. Instead, when a store sells a product using a model of direct shipping, they simply purchase the item from a third party and send it directly to the customer. As a result, the seller does not have to deal directly with the product.

The biggest difference between the standard retail model and drop shipping is that a seller merchant is out of stock or owns the inventory. Instead, the seller purchases the inventory as needed from a third party, usually a wholesaler or manufacturer, to fulfill orders.

What are the Requirements To Start a Dropshipping Business?

Starting a dropshipping business doesn’t need pen and paper. Because of the vastness of the online space, certain measures must be in place before you can start this line of business.

After a complete assessment, we have broken these things down into three core strategies which include:


Starting any type of business demands some level of capital. Although dropshipping doesn’t require so much money to start, you still need to ensure you have some capital in order to set up a magnificent structure for your business to run.


Suppliers will ensure your customer’s orders get to them. So, in choosing a supplier, you must ensure they’re efficient, and can get the job done. There are a plethora of suppliers to choose from, although Oberlo has gotten strong ratings.


A website is your location on the web. Without a website, your customer won’t find you and make orders for products of their choice. In fact, without a website, you don’t have a dropshipping business at all.

How to Start a Dropshipping Business in 2022: The Ultimate Guide

If you want to start a dropshipping business, then you need to follow certain delegated steps. When you follow these steps, you make scalability easier in your line of business. These steps include:

1. Commit to Begin a Dropshipping Business

Similar to any other business, dropshipping requires a lot of commitment and a long-term perspective. If you are hoping for a six-figure income from six weeks of part-time work, you would be hugely disappointed.

However, when you approach the business with realistic expectations about the required investment and your potential for profit, you will avoid frustration and maintain your focus.

When starting a dropshipping business, you will need to invest heavily using one of the following two currencies: time or money.

Investing sweat equity into your dropshipping business will give you a superior advantage in comparison with your competitors. There’s so much you can gain which include:

  • Business operations vital for managing others as your business grows and scales.
  • Customers and target market, allowing you to make better decisions.
  • Budgeting and spending less on projects that aren’t vital to success.
  • Several skills that improve you immensely

Although you might have a lot of money and feel a strong need to outsource many responsibilities, you might lose more than you’ll gain. And you know the next line of action when dealing with an unprofitable business.

So, ensure you invest enough time and a reasonable amount of money to start your dropshipping business. With the right team, persistence, and long-term planning, you’ll make it profitable.

2. Choose a Dropshipping Business Idea

Performing market research is vital when you want to start your dropshipping business. It follows the same trend when you open a retail store and you’re looking at different locations and competitors. You would want to investigate a niche that interests you and decide based on the profitability.

Shopify curates a list of trending products based on the top-selling product categories on their platform. Using this data, you can get ideas on the type of ideas to pursue when you want to start your dropshipping business. However, focusing on niche products will gain the attention of shoppers and gain traction without competing with larger, established businesses.

Well, because niche products often have a more passionate customer base, which can make selling to specific crowds easier by raising awareness for your products. Fitness, fashion, beauty products, electronics, phone accessories, and yoga-related items may be a good entry point to start dropshipping with no money.

If you love to get more data regarding some products that are hot in the market, you can access certain resources to help your goal. These resources include:


Spocket is truly exceptional in three aspects, the first one being the pricing. The average discount for merchants is mind-blowing 30-60%, which means great margins for you. The second advantage is the addition of your company branding to all receipts and invoices, which is not as good as the logo on the packaging, but still creates a positive impression.

Spocket even allows you to order sample products, so you can judge not only the shipping speed but also the quality of any product and customize the description, photos, and pricing according to your own impressions. Technically, it also deserves nothing but praise, with an automated update of inventory, one-click fulfillment of orders, and such.


Using Oberlo, you can look for products based on order volume to determine the potential of your business idea. Despite the growth in ecommerce is a lucrative benefit for those looking to start a dropshipping business, it also introduces serious competition. And this will push you to perform competitor research when putting together your dropshipping business plan to find success in selling your products.


You can sell with Modalyst a vast range of goods, including men’s and women’s apparel, shoes, bags, bridal wear, children’s clothes, plus-sized clothing, homeware, beauty products, and accessories, to name just some. In finding top-selling goods, it’s a perfect resource.

It integrates directly with the Shopify store, which means you can add products with just one click. It also provides features for managing orders and tracking inventory. What else? It automatically updates changes in prices, notifies about inventory levels, and provides data feeds in real-time mode. Overall, it is a truly exceptional app with a good-looking intuitive interface.

3. Execute Competitive Research

After deciding what you’re going to sell in your store, you would love to spy on your competitors and understand the way they work. Your competitors may have workable strategies to succeed, and this can help you build a stronger marketing plan for your dropshipping business.

If your market has many competitors, you can simply limit your research to about five other dropshipping companies, and you can involve some big sharks like Walmart or Amazon. This way, you’ll maintain your focus and will plan your next steps carefully.

Execute Google search: Search engines are a great place for any research. Use Google to build a list of your top five competitors. Start with key search terms in a simple search, like “earrings.” The top 10 results will give you an idea of your competitors and their product promotion strategies. If you want to focus on a specific country, you can use a third-party tool like Ahrefs or SEMRush to find keyword data in those areas.

Use competitor spy tools: Online tools help you track your competitors’ online activity. They give you a list of competitor website information including their social media profiles, top traffic sources, number of visitors, and who their competitors are. You can use Ahrefs, Owletter, and Similar Web.

Browse social media: Search for Facebook ads in your niche and check out the top brands in the market. Look at how the business communicates with its customers, how its feed is designed, how much engagement it gets—you can even follow its feed to never miss a beat. Use this information to find ways for your business to stand out and improve your social media marketing strategy.

Subscribe to competitors’ email lists: Using email lists, you can get competitors’ updates straight to your inbox. Just get into their email list and get a look inside their marketing strategy. You can also learn more about the promotions and deals they use to entice customers to buy.

4. Select a Dropshipping Provider

Choosing a dropshipping supplier is a vital step towards creating a successful dropshipping business. Without quality suppliers, your dropshipping business wouldn’t have any products to ship to customers and, therefore, cease to exist.

At this point, you would have known the products you want to sell and the line of suppliers that will give you the products. Ecommerce platforms like Shopify give you a plug-and-play style option for finding potential suppliers by connecting Oberlo to your online store.

5. Create An E-commerce Store

When you start your dropshipping business, creating an e-commerce store should be a serious priority for you. You can use either Amazon or Shopify depending on your preference.

Both platforms make it easy to build and launch your e-commerce website. On them, you can sell in multiple places, including online, sell in multiple currencies, and easily manage products and accept payments. 

You don’t need to be a designer or developer to use any of them. You just need to do drag and drop. There are so many tools you can access to help you build your website.

6. Define Your Business Model

If you’re serious about starting your dropshipping business on a strong start, you’ll want to set up a legitimate business entity. There are so many entities you can use, however, the two entities below are commonly used by individuals in your line of business. They include:

Sole Proprietorship

This is the simplest business structure anyone can implement as it offers personal liability protection. In other words, if they sue your business, your personal assets also may be in trouble. Filing requirements are minimal and you simply report your business’s earnings on your personal taxes. It requires no other state or federal business filings.

Limited liability company (LLC)

An LLC grants you a higher level of protection for your personal assets by establishing your business as a separate legal entity. While the liability protection has its holes, it does offer more protection than a sole proprietorship. However, you must abide by many filing requirements as you will pay both incorporation and ongoing fees.

7. Structure Your Finances

Without a well-structured financial plan, your business will fail. Finances keep a business afloat and having straight books can attract quality investment opportunities for your business when it grows big. So, ayou would want to ensure you get everything right from the onset.

To help you keep your books in order, you need to get:

Business Checking Account

You should put all of your business finances through one primary checking account. All business revenue has to be deposited into it and withdraw all expenses as well. Hence, this will make accounting much easier and cleaner.

Credit Card

For all your business expenses and dropshipping inventory purchases, you’ll need a credit card. Because you’ll be buying a lot of merchandise from suppliers, you can gain some serious rewards with the right rewards travel cards.

Local Business Licenses

Most cities and towns require businesses to get a business license they must renew regularly. However, this requirement may differ for dropshipping businesses, many of which likely will be operated from home offices. You’ll want to look into your local laws and regulations to see what they require.

8. Marketing Your Dropshipping Store

Your dropshipping business would not sell itself. You would need to employ the right marketing team, tools and strategies. However, since you’re starting out alone, bringing in a team might be too much of an overhead cost for you.

Hence, when you start your dropshipping store, some marketing strategies you can employ include:

Google ads offer you about $97 per day as the best option when you want to run ads on a keyword relevant in your industry. Although Facebook ads are scalable, products can perform well on them, and they tap into people’s desire to buy on impulse, other platforms like LinkedIn and Instagram have shown great possibilities when it comes to running ads.

Running Shopping Ads in Google and targeting long-tail keywords will increase the probability of your audience making a purchase from you. Google Ads are highly competitive and can cut holes in your pocket, however, they can be very rewarding.

Influencer Marketing

When you start your dropshipping business, you might not have a lot of money to invest into paid advertising, however, you can use another model called influencer marketing. Influencer marketing is a cheap method to reach your target audience because people tend to trust influencers more than traditional advertising.

If you follow this strategy, you would need to negotiate an affiliate fee with the influencer versus a flat rate. It’s usually a win-win situation because it will mean lesser costs for you and your influencer can earn a commission on every sale.

Content Marketing

Content marketing usually takes a lot of effort and time, however, it remains the strongest and surest strategy to bring in new leads into your dropshipping business plan.

To effectively use content marketing in your dropshipping niche, you would have to create content that informs and entertains your target audience. Additionally, you could also set up a YouTube channel, create infographics, or start a podcast to help you spread the message of your dropshipping business.

9. Create Outstanding Offers

Outstanding offers make more sales than normal offers. No one would patronize your dropshipping business when you throw out the same measly offers anyone can find anymore. Creating an outstanding offer requires a serious level of research wherein you investigate some offers that have made astounding sales.

In creating a highly saleable offer, you must:

  • Focus on highly converting channels i.e. channels wherein you make the highest sales
  • Consistently improve your search traffic
  • Build presence on search engine using search engine optimization techniques
  • Check monthly reports on data insights
  • Have strong KPIs
  • Have a Growth Plan


It doesn’t matter if you’re a new entrepreneur or a veteran in the ecommerce industry, a dropshipping business is a great low-risk, low-cost way to start selling online. Because of the rise in third-party apps and marketing automation tools, selling online has become easier.

Hopefully, this article on how to start a dropshipping business inspires you to create a pathway to success and financial freedom, so you can build your business, increase employment rates and impact lives too.


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