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Dropshipping: Everything You Need to Know About Dropshipping

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Being at the top is lonely, but also no one likes to be at the bottom. What if you are in the middle?  When doing a dropshipping business, you act as the middleman. You connect suppliers to customers. But, is drop shipping business effective? Can you make profit while doing this business? In this article, we will discuss how dropshipping business works and how to make it a success.

What is Dropshipping?

Before we go into depth with the topic, it is important to understand what dropshipping means.  It means sellers (dropshippers) arrange, sell and deliver products to customers for manufacturers.  You start the business by partnering with a supplier and then sell their products online. The best thing with dropshipping business is you do not have to have actual stocks of the products. You operate by selling the manufactures products on your site.

How do you benefit from dropshipping? The manufacturers give the dropshippers a commission for selling their products and giving them extra exposure. The e-commerce shops receive special discounts and commissions for the assisted sales.” When you make good sales, the commission is good that it can be a source of income.

Can You Make A living with Dropshipping Business?

You can earn a living with dropshipping business only. Dropshippers main job is to market the supplier’s products to achieve good sales. The job of dropshippers is to market the manufacturers’ products. Manufactures who are well established do not need dropshippers (middlemen) to sell their products and rarely participate in dropshipping business.

The amount of profit you earn depends on how well you know to run an e-commerce shop. For example it not like opening a business and stocking it up with products ready to sell and make profit. Therefore, you need to build your site and connect with people on social media platforms to attract many customers.

The only way dropshippers can earn sensible cash is when they have built a reliable traffic to their website. You can always build your e-commerce site from scratch by applying the fundamentals of online businesses – social media and digital marketing tactics.

Advantages and Disadvantages of Dropshipping

Don’t think that running a business without actual stocks is easy. Please, you should think through this carefully. Drop shipping business has many advantages and also some disadvantages that make it a challenge.


Minimum Starting Capital.

When stocks are concerned, starting a dropshipping business is the easiest. You do not need any stacks to start your business. You do not also need to have a headache about inventory rent and shipping costs.

Low Operating Costs

Once you set up your business, the cost of operating is minimum. The overhead costs are minimized, and you can work from anywhere- at home, school or in the office.

Easy To Manage

Dropshipping remains to be the easiest business to operate since the suppliers handle everything for the sellers. This includes shipping and inventory. Therefore, the dropshippers are free to put all their energy into marketing and to improve their site.

Wide Variety of commodities

Since dropshippers have good contact with manufacturers of the products and also do not have to have actual inventory, they can stock a wide variety of commodities. This is the reason we find online store that specializes in products of one department. For example; They can stock a whole range of sporting equipment and products.

Experiment with New Products

Dropshippers can experiment stocking new commodities introduced by manufacturers in their store with nothing to lose. The fact that they don’t have to buy the actual stocks, they can discontinue the new line anytime they want. Isn’t this great?


Low Margins

To make sensible income, you need to make good sales. Remember you still spend cash when advertising and promoting your business. Therefore the income you get should cover all these expenses and still leave some money as profit. Due to this reason, many people get discouraged in doing dropshipping businesses.

Selling Unfamiliar Products

Many are times where dropshippers sell products they have never held or touched with their hand. This becomes difficult when customers as about how the products are used or operated.

Delayed Updates

There is a big gap between the manufacturers and the sellers that can bring about delayed updates. For example, you may not know when an item is out of stock until when a customer tries to buy the item.

Dependability on the supplier/manufacturer

Like any other business, you ought to be careful who you depend on or the supply you choose to work with. Some manufacturers or suppliers are more dependable than others. This means that you don’t want to work with a person who will always delay shipping customers’ commodities or who might close down in future- suppliers who are not committed and serious about doing business. Remember; when a manufacturer/ supplier closes down, you may be forced to close down too.

How to Dropship Successfully

As we have seen above, one of the advantages of dropshipping is easy to start and manage. Below are ways you can start and become successful in a dropshipping business. In case you have already stared your own dropshipping business, you should then put all your efforts in selecting the right products for your business.

Select an e-commerce platform

Selecting an e-commerce platform is the first step of establishing your Dropship business. This depends on individual’s taste that suits them best. There is no good or bad platform to build your site.

For example, some people enjoy using Shopify while others like using magneto to reasons best known y them. There are many e-commerce platforms including open cart, Prestashop, Big commerce and woocommerce.

Choose your Products

Choosing your products right is the backbone of every dropshipping business. You do not want to deal with products that will barely or not sell at all. Once you have chosen your products, you can go ahead and build your site.

Design your E-commerce Store

The way your site looks will affect your sales and your site visitors. Customers will complete their sales when the site is attractive and use friendly. Always make sure that your customers can navigate through the site with ease.

Spread word About Existence of Your Store

After creating your site, you do not just sit down and let things happen like magic. You need o create more traffic to make good sales. How do you create more traffic? Digital marketing is the only method that can help you create a significant traffic.

Also, you can create a blog that will attract visitors who are interested in the content and who may end up becoming your customer. It also improves the sites SEO. Also, you can promote your business on social media like Facebook, Twitter, and Instagram that helps create awareness about your business and brings direct visitors who are potential buyers.

Optimize your Site

After your site is up and running, you also need to optimize in the search engines. You need to ask yourselves the below questions;

  • How easily can people find me on search engines?
  • How do I rank with Google and other search Engines?
  • How much do you use on Ads both Facebook and Google?

The above questions will give you a starting point when optimizing your site. You should also know your return on investment. This will allow you allocate cash for marketing wisely and efficiently.

Price Monitoring and Dropshipping

Dropshipping business is usually done online meaning there are hundreds and hundreds of dropshipping businesses online. How do you set your price right to be competitive and also meet the marketing costs? You can only achieve this when you use a price monitoring tool.

What is a price monitoring tool and what can it do for your dropshipping business? In simple language, a price monitoring tool is a tool that is used by online businesses to (E-commerce stores) to crawl the website of their competitors to get their pricing information. They later use the pricing information they get to price their commodities.

With a reliable price monitoring tool, you do not need to hustle by trying to know what your competitors are selling their commodities. You have a chance to get up to date pricing information when you use this tool.

There are automated and non-automated price monitoring tools in the market. Therefore, it is advisable to use an automated price monitoring tool if you need fast, accurate and real-time information.

How does a Price Monitoring Tool Works?

As we have seen, a price monitoring tool works by getting pricing information of competitor websites. How does it work to complete the intended work? It works in four ways. It gives you a report that helps you monitor any competitor price changes, analyze them and later workaround their prices.

A price monitoring tool only works the way you instruct it to work. For example, it can only crawl in competitor’s websites when you instruct it to do so. It does not work like magic; you need to give it directions to achieve the results you need.

Customers always work uniquely. They always prefer to buy from sellers who offer lower prices. Even a slight price decrease of about 1% can attract many customers than you can imagine.

What are the Benefits of Price Monitoring in Your Dropshipping Business?

Price-monitoring can do wonders for your business. It gives you intelligence on your competitor’s pricing, product range, and promotions. This helps you to know when to set a favorable price that will make you competitive. Here are the benefits of using a price monitoring tool.

  • Increased sales. Knowing your competitor’s pricing systems enables you to set a favorable price that attracts customers. This will make you increase your sales and also your profits. Who doesn’t like this?
  • Increasing your profit margins. When you have a clue of what your competitors are pricing their commodities, you can avoid selling your products too cheap. By doing this, you increase your profit margins. This technique allows you to be the cheapest in the market and also making good cash.
  • Make better deals with suppliers. When you are aware of your competitor’s prices, you can use the information to negotiate better deals with suppliers. How do you do this? Sometimes you can notice that your competitor is selling a commodity at a price which the supplier supplies you the commodity. If you share the supplier with your competitor, this definitely tells you that the supplier offers better prices to your competitor. You can now take that opportunity to renegotiate the prices of the commodity.
  • Cheap and accurate. Using a competitor price monitoring tool is cheaper than hiring human resource to do investigations on competitor price changes. As long as you feed your price monitoring tool with a list of your close competitors, it will monitor any price changes and give you a precise and clear report. Even better, when you work with an automated price monitoring tool, you can get your report at real time. Real-time means getting price changes as they occur.

Hiring human resource has many shortcomings which include lack of commitment, human errors, expensive and also difficult to manage. Why then should you not work with this reliable tool?

Can Dropshippers use Price-monitoring Technique?

Price-monitoring technique can be of great benefit for your e-commerce shop. Imagine this; you have a clear picture of how other dropshippers are pricing their commodities. This will make you automatically adjust your price to the best market price.

I believe now you understand how dropshipping business works. It is not an easy get rich scheme. You need to work hard to build your site with the right commodities and use the right tactics to gain the right traffic.  If you need to survive in dropshipping business, go ahead of the game and use tools like price monitoring tools. If you follow the above tips for sure, you can make a three-digit income from your dropshipping business!