2021 Guide to Start a Dropshipping Business from the Ground Up
You have no products, but you still dream of your e-commerce business. Fortunately, you have an excellent opportunity to start dropshipping business right now and get into the world of entrepreneurship.
That’s an impossible question to answer with a single solution. The short answer? Read this guide.
The long answer? Seriously, read this guide…
By the end of this guide, you’ll have your online store live and get an in-depth understanding of how to start selling products online without having any products or building an inventory, or even worrying about how to ship these products directly to your clients and without even touching them.
You’ll learn also how to find the best things to dropship, the best niches for dropshipping in 2021, and how to start a dropshipping business using the ExpandCart platform in easy, practical steps.
Get Your PDF Version
Download the PDF version of the 2021 Dropshipping Guide for easier offline
reading and sharing with coworkers.
Let’s start with the table of content to get an overview of what you’re going to learn.
Table of Content
- What is Dropshipping?
- How Does the Dropshipping Business Model Work?
- Top 5 Benefits of Dropshipping
- 5 Disadvantages of Dropshipping No One Talks About
- Is Dropshipping Worth It in 2021?
- Is Dropshipping for You?
- How to Start Dropshipping Business in 2021?
- Best Niches for Dropshipping 2021
- How Does Dropshipping Work on ExpandCart?
- How to Start a Dropshipping Business Using ExpandCart?
- In Conclusion
What is Dropshipping?
In its simplest meaning, dropshipping is a retail fulfillment type where you display other vendors’ or third-party suppliers’ products on your own online store after adding a profit margin for you.
When you receive orders, you can simply order products from the vendor’s site then ship them directly to the consumer by adding your customer’s address as the shipping address.
The best thing about this retail fulfillment method is that you don’t have to deal with inventory; it’s all assigned to the third-party supplier that handles the product.
And all you have to do is to take care of acquiring customers and processing their orders, acting as a middleman.
If you prefer, you can watch this tutorial video about dropshipping in detail.
How Does the Dropshipping Business Model Work?
Dropshipping is a simple business model that could be sustainable, easily managed, and extremely rewarding. This is how a dropshipping model works:
- You have a dropshipping store.
- A customer purchases a product from your store.
- A manufacturer, distributor, or wholesaler packs and ships the order to your customer’s door.
- The customer pays the price you set.
- You pay the suppliers’ wholesale price and the rest is a profit for you.
In the dropshipping business model, you are responsible for building your online store and creating your own brand, as well as choosing and marketing for the products you want to sell. You are also responsible for establishing shipping costs and prices that result in a good profit margin.
Now, it’s time to realize both the pros and cons of setting up a dropshipping business, which will ease the process for you and make it more effective.
Top 5 Benefits of Dropshipping
Need to make the case for starting a dropshipping business? Here are just five powerful benefits of having a dropshipping store…
1. Low Capital is Needed
To stock a warehouse, it requires a lot of capital. Starting your business by using dropshipping can eliminate the risk of going into debt. It’s the biggest advantage to dropshipping — you can launch an e-commerce store without having to invest thousands of dollars.
Instead of purchasing an extensive inventory and hoping that it sells, you can start building a dropshipping store with zero inventory and immediately start making money. So, your overhead expenses are very low.
We can say that dropshipping is a home-based business, requiring no more than a laptop and a few expenses to promote and operate your store. As you grow, these costs will likely grow but will still be lower than other traditional or online businesses.
2. No Complex Processes to Start
You don’t really need much experience to get going, just the business basics are enough to kick-start your dropshipping business. No warehouse, no stocking, no shipping headache, and no upfront investments are needed. Besides, you could get it up and running in a matter of hours.
All you need is the functional knowledge and using the right tools, which you can easily find in this guide, which will equip you with the proper knowledge to get you started.
3. Ease of Growing Business
Not much effort is needed to scale up your dropshipping business, you will just need to up your sales and marketing efforts while keeping your daily efforts almost the same. Moreover, you can do most of the activities by yourself from your very laptop, keeping the cost at a minimum as your business grows.
4. Ease of Management
Sales growth always brings extra work especially that is related to customer support, but businesses that utilize dropshipping can easily manage this growth.
In dropshipping, you’re mainly responsible for reaching customers and processing orders, meaning you’ll be a middleman. With minimal commitments, as soon as you have secured your supply source and set the whole thing up, you will mostly be only managing your online store.
5. Flexibility and Diversity
In short, you get to be your own boss, play by your own rules, and work at your own pace, making dropshipping one of the most flexible career paths you may take.
It’s also flexible in the sense that it gives you the chance to adopt the decisions that benefit you the most, besides the option to manage your store on the fly where you are away, allowing you more freedom to do more.
Additionally, you can sell an array of trending products to your potential customers. If suppliers stock any new items, you can list them for sale on your online store at no additional cost.
Jumpstart your dropshipping business with ExpandCart.
Open a business without the hassle of purchasing inventory or managing packaging and shipping.
15-day free trial, no credit card, no hidden fees
5 Disadvantages of Dropshipping No One Talks About
Before you put all your savings into a new dropshipping business, read the below five cons about dropshipping to keep in your mind and work to overcome them.
1. Slim Profit Margins
Surely, dropshipping enables you to invest less money in, but you get less money out as well. That means you have to do a lot of business just to stay afloat, let alone turn a satisfactory profit. You need to expect low-profit margins at least initially, as the product margin in some types of products could be small.
The problem is even bigger when you dropship in a competitive niche, as you fight to grab customers’ attention, so it’s better to opt for niches with less competition. Still, your profit might plateau after a while, so it’s better to maintain a decent amount of sales so that your business stays being profitable.
💡 You can build a rough model for your dropshipping business’ profitability.
Fit Small Business says that you can expect profit margins of 20% on your core products and conversion rates around 2%. So, you can use the below formula to estimate your dropshipping business’ profitability.
Estimated Profit = (Traffic x .02) x (average order x .20)
For example, if you sell smartphones for $1,000, you would expect to make $200 on each sale. If you have 1,000 people visit your online store per month, then you would estimate that 20 of those people will buy your product. If you made $200 per sale and had 20 sales, you have made $4,000, and so on.
2. High Competition
Let’s face facts, very little capital is required to start a dropshipping business and this means very high competition. Moreover, prepare yourself that you are likely to compete with e-commerce giants who reduce their markups and offer lower prices than you. The matter can be worse as you may not have an exclusive deal with your suppliers.
That means that competitors could be selling your exact same products and customers can buy it from someone else for cheaper — why would they buy from you?
In this case, you need to search for a niche market to enter it and to carefully choose your products. You could also search for your USP – unique selling point. Add an edge to your product, an extra benefit. This could be gift wrapping, after-sales service, door delivery, etc.
3. Difficulty of Order Processing
Dropshipping usually works simply — a customer orders products, and it’s fulfilled by the supplier after you process the request. But imagine sourcing products from multiple suppliers, and each of them uses a different shipping solution, this could actually be a problem for both of you and your customers.
Because costs can be higher than expected, and shipping multiple products from multiple suppliers to one customer can be problematic as each product can be shipped to the customer separately.
Also, suppliers can use different systems for processing and billing your shipments, and it can get challenging while managing them and the related activities.
4. Lack of Control
Another disadvantage is that you lack control over important aspects of the dropshipping process such as stock, order fulfilling, and order shipping — especially when you want to provide a seamless experience yet you rely on your suppliers.
As we previously mentioned that dropshippers are essentially responsible for gaining customers and processing orders trapped, so they have nothing to do related to suppliers. All they can do is hope that the supplier fulfills the order and addresses the customer’s problems.
5. More Challenging Customer Service
This is another problem that happens when orders go wrong or suppliers fail. Because you’re just the storefront and don’t have a lot of control, it can be difficult to sort out orders and handle customer support.
Because you are just the storefront, you lack full control when a supplier makes a mistake or delivers a wrong order, so it could be a bit challenging to sort out orders and handle customer interactions.
Also, you will take the blame of your customers when they complain, so it’s crucial to be willing to handle suppliers’ issues effectively when they arise.
Get started with your dropshipping business with ExpandCart.
We’ll help you to not just push obstacles, but take them away!
15-day free trial, no credit card, no hidden fees
Is Dropshipping Worth It in 2021?
The dropshipping market was valued at US$ 162.44 billion in 2019 and is projected to reach US$ 591.77 billion by 2027; it is expected to grow at a CAGR of 18.3% from 2020 to 2027.
Let’s take the Asia Pacific region as an example of the great growth of the e-commerce market. The Asia Pacific region has witnessed an increase in disposable income and a rise in online shopping preference. This growth across the e-commerce sector is, of course, further expected to favor the practice of dropshipping in the region.
There are many ways to start and grow a dropshipping business. There are many success stories that talk about merchants who have started dropshipping businesses to make a few extra hundred bucks a month, while others have grown multiple six-figure stores. Whether you are looking to start dropshipping as an introduction to e-commerce or a business model to last forever, it is important to understand how dropshipping can be profitable to you.
Dropshipping could definitely be profitable, with merchants making what ranges from hundreds of dollars per month to others who have stores that are worth a six-figure number, thus it’s useful to understand how dropshipping could be profitable to choose the model that suits you.
Is Dropshipping for You?
This means that dropshipping isn’t for everyone, especially if you are looking for a quick way to get rich. If you are serious about drop shipping, you might have the following doubts:
- “Not sure if I have enough time for starting and committing to a business”
- “I don’t want to underperform at my 9-to-5 job”
- “Not sure if I could get fired from my day job.”
So here are 2 approaches that could work:
- Starting a dropshipping business as a side job
- Starting a dropshipping as a full-time e-commerce business
Let’s dig deeper into each one…
1. Starting a Dropshipping Business as a Side Job
What is dropshipping’s main appeal? Because it’s flexible and it doesn’t demand much, it’s the ideal side job. Many entrepreneurs choose to do dropshipping on the side while they have a main job that provides a steady income. In other words, you don’t have to sacrifice your day job to pursue your dreams of becoming an entrepreneur.
Dropshipping is appealing due to its flexibility with the minimum required effort and time making it an ideal side job, so you can definitely have a day job while pursuing an online storefront that fulfills your love for entrepreneurship.
Not much time and effort are needed to maintain a dropshipping business, it could just take a couple of hours each day to secure a successful online shop.
All it requires is a bit of time management and organization skills to manage both your day job and side hustle efficiently without sacrificing your lifestyle, just find a schedule you can stick to each day and you are good to go.
The first and most important step is to check your company’s policy that it allows a side business (most companies are fine with it); then you are good to go.
2. Starting a Dropshipping as a Full-Time eCommerce Business
And while you can make dropshipping a side job, it’s absolutely a viable career path that you can do full time, too.
It’s possible to scale up easily at a low cost so that when you have attained a certain volume of sales that satisfies you, you can transition from a part-time job to a full-time one, at a pace that’s favorable to you.
This, however, will take some time to happen, once you have reached an effective formula that secures a steady income for you. Once you have done that, your business could start to feel as if you are generating a passive income. Moreover, since it doesn’t take a lot of time to maintain, you could even start a side part-time job while managing your dropshipping online store.
💡 If you find it difficult or don’t have the time to build your own all-inclusive online store, ExpandCart offers you a “Launch My Store” service to do it for you. All you have to do is to send your requirements and ExpandCart’s experts will accomplish the mission in less than 10 working days.
How to Start Dropshipping Business in 2021?
After we’ve reviewed the basic information you should know before starting your dropshipping business, such as the industry’s concept, business idea, advantages, and disadvantages, it’s time to find out how to get started with your dropshipping store using ExpandCart platform.
Starting an online drop shipping business needs to provide a few components and a very simple set of procedures, after which you can easily sell and increase sales and profit. We’re going to explain the components and basics of starting with the lowest costs in no time.
Here is a quick brief of the basic 5 steps:
- Create a professional online store
- Choose the best suppliers
- Define store departments and product ratings
- Promote your products
- Receive orders and make a profit
Let’s explain each step in more detail…
1. Create a Professional Online Store
The first and most important step is to have an online store, through which you can display the products of the suppliers you contract with, start receiving orders, transfer them to the supplier, fulfill them, and finally get the profit margin that you’ve set.
In this regard, you need to contract with a platform that designs online stores as a service, provided they have innovative dropshipping solutions. The most important criterion in choosing a store builder platform is to provide effective and appropriate integrated selling solutions, as well as providing the advantage of integration with the best and largest dropshipping sites and companies that help you reach the best suppliers around the world.
This is really what “ExpandCart” platform achieves for you by providing an excellent dropshipping system for all customers as well as integrating with the best dropshipping sites and companies, including AliExpress, Knawat, Printful, and Tagerly.
In a separate paragraph, we will explain how to start your dropshipping business through the “ExpandCart” platform.
15-day free trial, no credit card, no hidden fees
2. Choose the Best Suppliers
In the next stage, and after building your online store and adjusting all the settings for launching and starting work, you need to choose the best supplier that supplies your store with the products you sell.
As we mentioned earlier, drop shipping mainly depends on the supplier who owns the products that you sell and who receives the orders of your customers after transferring them from your online store. Suppliers also take over all the tasks of fulfilling the orders, starting from storage and packaging products, and ending with shipping the products to the customers’ door using the best shipping method for dropshipping.
In this regard, you must rely on the suppliers and companies that provide the service as an intermediary between your store and the multiple suppliers from different countries of the world, especially AliExpress and other sites.
Keep reading on, we will put a list of the best dropshipping websites for you around the world to choose the right ones for your business.
But in general, there are some questions to ask yourself before signing on to do business with a supplier. These questions are:
- How does the potential supplier handle returns or damaged products?
- How long does it take them to fulfill an order — from the sale to delivery?
- How is their customer support? (You can even test this yourself)
- Do they offer fraud protection?
- Do they ensure orders?
- Can you find reviews or references online?
3. Define Store Departments and Product Ratings
In the third stage, it’s the time for doing some tasks related to the user experience within your online store, which begins with settling on and organizing the store departments as well as the product classifications that you will sell with commission.
All of these things greatly improve the user experience while shopping inside your store, which in turn helps increase customer loyalty to your brand and thus increase sales in the store.
4. Promote Your Products
Since most of the tasks related to the workflow of the dropshipping system are the responsibility of the supplier, the store owner bears one of the most important tasks which is to promote those products.
As the basis of your work in dropshipping as a store owner is to make more marketing efforts that help the wider spread of the products you sell and thus increase the demand and increase the profit margin you get. In order to succeed in marketing the store’s products, you need to develop an effective marketing plan.
Use this pre-built free marketing plan template to ensure you have a thorough, effective, and deliberate plan of action.
5. Receive Orders and Make a Profit
At last, you will have nothing left to start and generate the revenue from the dropshipping. After taking the aforementioned steps and, you will start receiving requests for store products, which are automatically transferred to the supplier who fulfills them until they reach the customer’s door, and then you will get the profit margin.
By now, we have explained to you what you need in order to start your own e-commerce and online dropshipping business. Now we are moving on to learn more about the dropshipping selling service from the “ExpandCart” platform.
Best Niches for Dropshipping 2021
There is an endless number of articles dealing with a ranking of the best dropshipping niches 2021 and the best selling dropshipping products, but have you ever asked yourself on what basis these rankings are built?
Actually, many of these rankings are based on the owners’ perspectives rather than on accurate research to get valid results that benefit business owners. Finding accurate data about profitable dropshipping niche will always be a pain for dropshippers.
That’s why it’s smart enough to use a dropshipping tool’s niche research to find out a competitive edge of profitable and promising niches. Try to use the FindNiche tool to analyze hundreds of niches within a short amount of time and hunt the most profitable ones. Sometimes, you’ll be surprised that the less popular dropshipping niches might generate more profit than the trendier ones.
FindNiche tool was designed with dropshippers in mind. It has an analytic ability to curate AliExpress and categorize product demand based on their number of orders, performance, the potential return on investments (ROI), and several indicators.
FindNiche can not only help you to find the best dropshipping niches and the best selling dropshipping products, but it will also ensure that you gain accurate insight into the ever-changing market demand, helping you decide whether to invest in a particular product or not.
💡 Important Note:
Amid the COVID-19 pandemic, people’s lives have changed, and accordingly, their purchasing needs and purchasing habits have changed. There are an increasing amount of people working from home and people concerned about health. There is also an increase in “free” time and a decrease in travel. So, when choosing the best dropshipping niches in 2021, it’s important to keep your eyes on the niches that are related to “the New Normal.”
How Does Dropshipping Work on ExpandCart?
As we emphasized in the previous paragraph, the online store is the most important and first component that must be provided in order to start your own business in selling with the dropshipping system. This requires you to search for a ready-made online store service provider that has smart dropshipping solutions along with integration with powerful dropshipping sites.
Therefore, starting an online drop shipping business has become easier than ever. We offer you the “ExpandCart” platform as the best option to start your business in the Arab world and the Middle East region. It offers exclusive dropshipping solutions in the region with integrations with the best websites and companies that offer dropshipping programs in the Middle East: AliExpress, Knawat, Printful, and Tagerly.
Let’s take a glance at the top dropshipping companies integrated with ExpandCart, to choose which fits you best.
If you want to sell fashion-related products in your store and do not own these products, Knawat platform will be your best choice in order to start successfully.
Knawat is one of the best dropshipping sites that provide store owners with apparel and fashion products. The platform provides you with the best and latest items of Turkish fashion for you to easily add to your online store. Their products are available at the wholesale price, which gives you enough flexibility in deciding the profit margin you want to collect after completing the sale.
ExpandCart provides free connection service with Knawat platform on all its subscription packages. Just one click is all you need to link your online store on ExpandCart with Knawat platform.
Printful platform is one of the most important partners of ExpandCart. If you have a store on ExpandCart, you can choose Printful from your store control panel for free to start your own dropshipping business.
First, you need to create your own account on Printful platform itself, and then you can easily link your account to your store on ExpandCart.
The following features are available in the app:
- You can add custom designs to your products.
- When you get an order, you can send it to Printful for processing and shipment.
- All of your products are managed in your store on ExpandCart.
Recently, ExpandCart has partnered with Tagerly, the first Egyptian dropshipping platform that brings together a large number of suppliers and merchants in one place.
You can easily integrate your online store on ExpandCart with Tagerly platform and get many advantages that include:
- Determining the products you want to sell.
- Determining the profit margin you want.
- Providing the fastest shipping.
- Providing professional customer service.
- Collecting profits from customers and get your profit on the same day.
ExpandCart also offers you the ability to integrate with one of the most famous and oldest dropshipping sites “AliExpress.” There is no store owner or retailer who has started their own business in this industry without using products from AliExpress.
AliExpress contains a large variety of products. It also offers the best shipping method for dropshipping — “ePacket Shipping”. Through your online store on ExpandCart, you can integrate with the AliExpress website, import products from it, and display them on your store in the same way.
The most important features available on AliExpress dropshipping include:
- Use the Google Chrome browser app to search and import products directly from AliExpress to your store.
- Import products in bulk or import one product at a time.
- Import product name, description, photos, options, etc.
- Edit product details before importing them into your store.
- Easily handle your product orders on Express, the app guides you to the product page of AliExpress website.
How to Integrate ExpandCart Online Store with Dropshipping Platform?
Let’s take AliExpress website as an example and explain the steps needed to integrate both your online store on ExpandCart platform and your account on AliExpress website.
If you prefer, you can watch this tutorial video of how to integrate your ExpandCart store with AliExpress dropshipping platform.
Please note that the same steps can match any other dropshipping platform like Knawat, Printful, and Tagerly, except that integrating with AliExpress website costs monthly fees.
- From your store control panel on ExpandCart, click on the “Apps & Services” option.
- Search for the AliExpress dropshipping app among the apps and then click “Order Now” to buy one of our monthly or annual plans or click on “Try” to get a 7-day free trial.
- After that, press “Edit” to adjust the application settings.
- Make sure to choose “Module Configurations” from the side menu and then change the application status to “Enabled.”
You will notice that the application consists of a group of different sections where you need to enter certain data in order to be able to successfully integrate your store with your AliExpress account. The following is an explanation of all these sections:
- Google Map API key: It is for adding the Maps API Key to your Google account, as some suppliers need to specify the actual location through the maps in order to be able to ship the product directly to the customer, and this is based on the old policy of the application. You can get the key by following the steps shown when you click on “GET GOOGLE MAP API KEY.”
- Dropshipping User Group: It is for specifying the group of managers/admins who have the authority to use the application in case you want only a specific person/group to be able to import products from Ali Express. The moderation groups are added and modified for administrators and users from the store control panel by clicking on “Settings” >> “Administrators.”
- Complete Order Status: It is to determine the status of the order when it is completed, to differentiate between the store’s requests and the requests of AliExpress in the reports. It is preferred in this case to select “Default.”
- Warehouse manager can add product: To enable managers to add products. It’s preferred to choose “Enabled.”
- Direct to store: To determine the ability to add products that have been imported directly from AliExpress. It’s preferred to choose “Enabled.”
- Product fields: To select the product fields that will be imported to your store. It is preferred to select all of them.
- Username: It’s used to link between AliExpress application at ExpandCart and AliExpress site through the extension of Google Chrome browser. You can put any user name provided that it is composed of English letters and numbers only.
- Token: It is the password or code that will be used to carry out the linking process between AliExpress application on ExpandCart and AliExpress site through the extension of Google Chrome browser; you can put any code provided that it consists of English letters and numbers only, or you can click on the “Create Token” icon at the right of the field to create your own code immediately.
- Quantity: It’s used to specify the number of product options that you want to import with the product. It is preferable to write a number, 20 for example, as leaving it blank will make product quantity “zero” and therefore is not available.
- Default Weight: It’s used to specify the default weight for products when imported into your store.
- Default Weight Class: It’s used to specify the weight unit that will be handled in your store.
- Language for Imported Products: To determine the language in which the product data will be imported. It’s preferred to select all, taking into account that the product data on AliExpress in the Arabic language is mostly translated by machine translation via Google translation service and it may not be 100% accurate.
- Imported Products Review Status: It’s used to determine whether or not evaluations and reviews can be imported with the product, taking into account that the ratings and reviews of AliExpress products are too many and may cause a slowdown in the importing process of products.
- Remove keywords/Add keywords: These two fields are used to specify the keywords that you want to remove or add with products when imported from AliExpress, to help you in archiving on search engines.
- Price: It’s used to determine the price of the product that will be fetched from AliExpress; if you choose the “Maximum” option, the highest price for the product will be fetched, for example, if the product has a discount, the discount price will be ignored and the product is brought in at its original price.
- Real Sync: It’s used to determine whether or not you want the product data to be modified periodically when it is updated on AliExpress website, such as the quantity, name, product description, etc.
Don’t forget to hit the “Save” button from the top right side.
After that, you will need to import the products you want to display in your store from AliExpress website. You can do this through the following steps:
- First of all, make sure that you are using the Google Chrome browser, then go to the following link https://bit.ly/35M8cgA to download the extension for importing products from AliExpress. Make sure also to update your browser to the latest available version.
- Go to AliExpress website and visit any section page, as the extension will only work when you open a section page, making sure to browse through the link https://ar.aliexpress.com when importing products in Arabic and browse through the link https://www.aliexpress.com/ when importing products in English.
- Click on “ExpandCart AliExpress Integration” extension, then click on “Update Authentication details.”
- Enter the store link, and the SSL Certificate must be activated on your store’s domain.
- Enter the username and the token that you have created on AliExpress app on ExpandCart control panel.
- Click on the blue button that appears on the product image when standing on it to import the product on your store, or click on the “Bulk Import” button to import all the products that have been identified on the page.
- The imported products will appear on AliExpress application on your store in AliExpress products section.
Reaching this point, you have successfully integrated your store on ExpandCart with AliExpress website. Now you can easily import products from it, and display them on your store.
Starting an online drop shipping business might seem like a daunting task, but once you have learned how to do dropshipping, it will transform into an easy process for all parties involved, especially for you, as a merchant, where you get to do everything from the convenience of your laptop without touching a single product you sell online.
And it’s useful to bear in mind that you don’t need much business experience to open a dropshipping online shop; certainly, it could help to learn more, but don’t let that stop you from launching your own gig as many other entrepreneurs have done so, without the need for a fancy MBA or heaps of experience, and that’s one of the benefits of dropshipping, that you can learn it as you go.
Additionally, there are currently many resources that explain how to make dropshipping simpler and easier than before, such as this guide, giving you a lot of advice about operating dropshipping, and making profits with even no experience whatsoever, and as the time passes you will even learn more from the hands-on experience.
What are you waiting for!! Create your store with ExpandCart and start your journey in the dropshipping world.