Dropshipping has quickly become one of the largest and most profitable ways to earn online profit. In 2022 alone, the global dropshipping market was valued at over $225 billion. But that's not all: From 2023 to 2030, the market is predicted to see a significant compound annual growth rate of 23.4%.
As a result, this business model has garnered the attention of thousands of entrepreneurs. So here we'll examine why dropshipping has won such a strong foothold and how you can get a slice of the pie.
There's lots to cover, so let's dive in:
What is Dropshipping?
Dropshipping is an eCommerce fulfillment model where sellers don't manufacture or handle their own product(s). Instead, merchants sell items from established third-party manufacturers on their own websites, often adding their branding. Then, when a customer makes an order, this is forwarded to the manufacturer, who ships the item out on behalf of the seller.
As such, dropshipping requires little prior investment. Sellers don't have to create and stock their own inventory, allowing them to work from the comfort of their homes without expanding their premises. The model also doesn't require entrepreneurs to waste time with packing and shipping, which means it requires little practical effort. As a result, merchants can focus their attention on marketing their wares and building a solid customer base.
There are also tons of dropshipping suppliers, so merchants can access thousands of products.
This means sellers of all niches can utilize this model.
With so many advantages, it's not surprising dropshipping is on the rise, which leads us nicely to our next section...
Dropshipping Is on the Rise
If the stats in the intro didn't convince you of dropshipping's rise, here are a few more figures to take a gander at:
27% of online retailers use dropshipping as their primary business model.
By 2025, eCommerce sales are estimated to reach 7.4 trillion USD.
An estimated 23% of all online sales are fulfilled through dropshipping.
On average, dropshipping businesses generate 50% more profits than merchants who sell their own inventory.
Why Is Dropshipping on the Rise?
The surge in dropshipping's popularity goes hand-in-hand with technological advances.
For instance, the smartphone revolution bolstered online shopping sales and, consequently, the profits of those running dropshipping stores. It's never been easier for consumers to shop while on the go. So much so that at least 79% of smartphone users have purchased something online via their mobile devices.
It's also worth noting that while North America is seeing the fastest growth in dropshipping, 33.9% of revenue generated by dropshipping manufacturers comes from southeast Asia. The expansion of telecommunications infrastructure and internet speed here has made it much easier for these manufacturers to sell abroad. Manufacturers in southeast Asia often offer lower base prices for their products, making setting higher profit margins for dropshipping merchants more sustainable.
We think it's also safe to say the recent shift in worker mentality is another reason dropshipping is snowballing. Gone are the days when people are contented with a traditional 9-5 job. Instead, the allure of being one's own boss, making more money, and enjoying more flexibility has prompted many entrepreneurs to launch their own dropshipping businesses. Not least because it's an inexpensive way to get started with eCommerce, so you have little to lose by trying!
How to Get Started with Dropshipping
Here's a step-by-step guide to setting up your dropshipping business using Spocket. But first:
What is Spocket?
Spocket is a game-changing dropshipping supplier platform that helps you find the best dropshipping suppliers and products. Quality assurance is the name of the game. While many dropshipping products are known for being cheap and low quality, Spocket only lists the highest quality items by carefully vetting every supplier and investigating each product's quality. But don't just take their word for it: With a 25% discount on sample products, you can order the item and see if it meets your standards.
Spocket's suppliers are predominantly based across the US and EU to ensure fast shipping to those markets. In addition, because Spocket easily integrates with top eCommerce solutions like Shopify, BigCommerce, WooCommerce, Wix, eBay, Squarespace, etc., introducing Spocket into your workflow is seamless.
On top of that, Spocket also integrates with AliScraper for automated AliExpress dropshipping.
With a better idea of what Spocket is, let's dive into how to get your dropshipping venture off the ground:
Step 1: Make a Plan
Many dropshipping businesses fail because they don't have a clear business plan. According to Mark Robinson at Fishtank, 90% of dropshipping companies fail because they don't know how to provide enough value to their customers. So, first things first, create a plan that addresses the following:
Your niche: This defines the small industry segment you'll operate in. For example, products for pug lovers, eco-friendly fitness clothes for women, aesthetic decor for home offices, etc. These are just a few ideas, but hopefully, you get the gist!
The products you're planning to sell. Get ideas by exploring Spocket's winning products collection. Ideally, you should choose products you're passionate about so you can advertise authentically.
Identify your target audience. Here are some pointers for doing that:
Research your competitor's audiences- where do they interact with the brand, what are their demographics, etc.?
Establish buyer personas to help you dig deeper into the kinds of people who might be interested in your products.
Visit social media groups with similar interests to better understand your audience's needs.
Register your business in your state and ensure you've met all the legal requirements for trading in your country.
Create an online store. Look at Spocket's eCommerce store integrations for inspiration on which platform to use to build your e-store.
Step 2: Set Up Your Spocket Account
Sign up to Spocket and choose your preferred pricing plan.
Integrate Spocket with your chosen eCommerce solution (Don't worry; Spocket's native integrations ensure this can be done in just a few clicks. From there on out, importing products onto your site is easy, and orders are automatically forwarded to the relevant supplier).
Note: You can browse Spocket's catalog on its free program. However, upgrading to one of Spocket's three premium plans unlocks access to premium products, 24/7 chat support, supplier communication, AliExpress dropshipping, branded invoicing, and more.
Step 3: Find Winning Products
This should be easy if you've already used Spocket's catalog to fuel your product research (as mentioned in step one). It's now time to pick the dropshipping products you want to sell on your online store. Items are organized into categories, including:
Toys
Pets
Accessories
Apparel
Bath and Beauty
Sports
Bags and Wallets
...and more.
Remember: Every item you sell should complement your chosen niche. This ensures your site feels cohesive and meets the interests of your target audience.
Pro Tip: Order sample products to assess their quality and take unique product images that complement your brand's vibe.
Step 4: Set Prices
Once you've picked your products, it's time to set your profit margins.
The supplier charges a base price for each product. Therefore, the difference between this and your retail price determines your margin.
Fortunately, Spocket has a profit margin calculator to help simplify this process. However, this calculator doesn't include shipping. So, once you've set a price, you'll need to add shipping rates to your store, so you don't lose out.
Step 5: Grow and Market Your Dropshipping Store
Regularly review trending products and keep your offering up-to-date. But most importantly, you have to get the word about your store out to your target audience. To help get the ball rolling with this, we've provided a few pointers below:
Establish a presence on social media by posting valuable content.
Create a blog and publish posts regularly.
Offer free lead magnets like small eBooks, discounts, webinars, etc., to help build your email list. Then send regular newsletters, offers, and updates to keep your following in the loop.
Consider paid advertising on sites like Google or Facebook to extend your reach.
Rise with Dropshipping
Dropshipping has a solid foothold in the eCommerce market, and in the years to come, more and more stores will pick up on the ease of this business model. So, dropshipping might be worth exploring if you're looking for an inexpensive way to start your own online business.
Tools like Spocket make it easy to get started today. With reliable quality assurance and a great product offering, Spocket can help you develop a strong brand. So, why not get started for free today to find winning products for your new store?
