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In 2020, US Consumers spent a mind-bending $861 Billion online. That’s a 44% year-over-year increase! Most people know that e-commerce is exploding in popularity. What you may not know is that side hustlers can take advantage of this massive trend and make money by selling products online through e-commerce. In this post, we’ll cover exactly how you can make money with dropshipping.
By the way, what I’m covering today is just one small part of a proven 5-step process to starting an e-commerce business. If you want to learn any of the other steps, like figuring out what product to sell, choosing a supplier, getting your store up and running, defining your target customer, or marketing - you can learn more about all 5 steps (for free) here.
What is dropshipping?
One of the most popular e-commerce business models is called dropshipping.
It’s an exciting opportunity for many entrepreneurs because you can get started with an incredibly small budget.
But what is it?
Dropshipping is a retail fulfillment model where the business owner accepts customer orders but does not store any inventory themselves.
With a dropshipping agreement, a product supplier allows you to list THEIR product on YOUR store without requiring that you buy any inventory.
Once a customer places an order on your store, you communicate that order to the supplier, who ships the product directly to the end customer. You never even have to touch the product yourself!
Next, let’s dive deeper and learn exactly how thousands of entrepreneurs are making money online with dropshipping.
How to make money with dropshipping
There are 4 steps to starting a successful dropshipping business:
- Choose your product or niche.
- Create and optimize your online store.
- Deploy your marketing strategy.
- Test, Evaluate, Revise, Repeat.
The available technology tools make steps 1 and 2 insanely easy. Let’s go over each one.
Choose your product or niche
One big misconception about e-commerce is thinking that you must invent a brand new product in order to start a business.
That’s not the case at all!
With dropshipping, you can make money reselling a supplier’s product, acting as a middleman between the supplier and the end consumer.
My recommendation is to only sell products that fall within a market (or niche) that you understand very well. Take inventory of your hobbies, interests, and skills. Most people don’t think of these as potential product markets - but that’s exactly what they are!
Next, consider two easy-to-use resources for finding dropshipping suppliers.
First, consider using a print-on-demand service, such as Printful or Printify. These services allow you to dropship custom designed items, such as T-Shirts, Hats, Flip Flops, and more. This model is very popular for creative entrepreneurs!
Tip: Use a tool like Canva to create your own custom designs!
Second, check out AliExpress. This extensive marketplace allows you to find unique, very cheap, and high-quality products. Most of these suppliers are based in China and offer dropshipping services. You can find items for sale in any niche under the sun!
Tip: you can use a product research tool to sort through the products on AliExpress and find out which ones are selling well. Check out these searchable databases that are designed to help you find the diamond in the rough:
Create and optimize your online store
Once you think you’ve found a solid product to sell, it’s time to create your e-commerce storefront!
Don’t know how to build a website? That’s OK.
Shopify is a turnkey e-commerce solution that allows you to set up a website in minutes. You don’t need to know how to write code. You don’t need to know a thing about web design. In fact, with their 14 day trial, you don’t even need to pay a dime up front (after the trial ends, Shopify costs just $29 per month).
In case you’re wondering, you really can make money with dropshipping. My first Shopify store, called Yugenite, did $80k in sales in its first year in business!
Here is a YouTube video showing exactly how to make a Shopify store (and add products to it from AliExpress) in less than 5 minutes.
As shown in the video, Shopify integrates with AliExpress seamlessly via an app called Oberlo. That means you can import products directly from AliExpress into your new Shopify store with a single click! Then, when a customer places an order, it’s just a few more clicks to tell your supplier about it. They will then ship the product directly to the customer.
Just to briefly recap: so far, you’ve found unique trendy products to sell and added them to your own functioning online store that is wired to accept payments. And you’ve spent $0.
How cool is that!?
Deploy your marketing strategy
Now that you’ve chosen some awesome products to sell and added them to your brand new e-commerce storefront, you’re ready to get your first sale!
To make that happen, you’ll need to create a thoughtful marketing plan. Since your supplier handles all inventory management and order fulfillment, marketing is 100% on your shoulders.
Thus, marketing will comprise the majority of your time, energy, and costs.
There is a lot that goes into this part. But it’s one of the most fun things you can learn!
To help you continue to move forward, I’ll link some additional marketing-related resources at the end of the article.
For now, here’s a 1,000-foot overview for how to make money with dropshipping.
Dropship Marketing: The Basics
- Understand your target customer: Brainstorm and research the demographics (the “WHO”) and the psychographics (the “WHY”) of the person who would buy your product. This way, you know exactly who to target and how to connect with them emotionally - convincing them to buy. That’s the key to the rest of the steps below!
- Optimize your product pages: you can import the product title, description, and images directly into your store from AliExpress. However, I recommend that you update these so that they convey the best features and benefits of your awesome product. Talk directly to your target customer. This step makes it so that when someone arrives at your store, they can't help but buy!
- Drive traffic to your store: Paid Advertising and Influencer Marketing are some of the most popular ways that dropshipping entrepreneurs drive traffic to their website. Facebook Ads allow you to target people at a very granular level and the platform is incredibly easy to use, inexpensive, and effective at driving sales! Additionally, you can use content marketing, either through social media, a blog, YouTube channel, or podcast, to be seen as an expert in your niche and funnel interested prospects to your store.
If any of these sound like they are out of your wheelhouse, don’t worry! You can learn any of these skills, and outsource the things that you really don’t want to do. You can find a freelancer on Upwork or Fiverr to do many of these tasks for you.
One Last Thing About Traffic…
The biggest misconception about “traffic” is thinking that you have to CREATE it. The truth is that the digital “highways” are filled with lanes of your ideal customers.
All you have to do is… “stand in the middle of the road”, so to speak.
What do I mean by that?
Well, the internet has advanced to such a stage that online communities exist for just about every interest, hobby, and business market.
Once you’ve defined your target customer, it becomes a simple matter to locate their existing online communities.
To put this into practice, conduct a series of Google searches and create a spreadsheet listing the Facebook Groups, Blogs, Forums, Podcasts, YouTube Channels, Keywords, and Influencers that are relevant to your target customer. Take note of the audience size, URL, and contact info of each community, if it’s available.
When I explained this secret to Loren, an entrepreneur who took my bootcamp course, she said “Charles, it’s like the lights just came on. I can’t wait to implement this!”
I completely understand her excitement.
Completing this exercise gives you the direction you need for the rest of your marketing efforts, including all of the strategies outlined in the previous section.
Test, test, test!
Since you can add products to your store with 0 expenses, it means that the risk level inherent to dropshipping is incredibly low.
If you add a product, run a few ads, and don’t see any sales, you haven’t sunk a ton of money into inventory. You simply learn from the data, delete the product from your store, and try again.
If your very first dropshipping product is not a smashing success, don’t worry. I guarantee you’ll learn far more by “doing” than you did from reading this blog post.
So my best advice is to get started today!
Concrete Next Steps
If you want a detailed blueprint for starting an ecommerce business, check out my E-Comm Product Launch Playbook. This is the best shortcut available online to starting and scaling an online business. I used the information in this guide to do my first $100k in online sales.