Dropshipping Meaning and How to Make Money with It [Guide]

Should you be interested in knowing more about dropshipping but are encumbered by a lot of doubts such as what it is, whether it is for you, how to commence, this article is for you! In this article, we will explain dropshipping meaning, how to do dropshipping effectively and 7 periods of the year that should be used to expand your business.

So, let’s get to the topic!

What does dropship mean?

So, what is a dropship business? In this kind of business model, the seller in question does not keep any goods with them – there are no stock inventories held by the seller.

For example, when the seller gets the order from their customer, the seller goes and finds the same product from another seller who sends the product directly to the customer. This basically eliminates the rationing of stocks and even reduces the transportation problems of the whole enterprise.

How does dropshipping work?

Creating an online store and adding products to your website that you may never even see, is the key aspect of dropshipping. One more aspect of dropshipping is mentioned above.

This is how it goes:

1. Establishment of an e commerce platform: An ecommerce platform is made, showing products from different suppliers without any physical stock.
2. Order taken from the customers: While a customer requests for a certain product, he or she is made to provide the necessary payment and shipping information.
3. Passing on the customers order to an external supplier: The store then passes on the order placed by the customer together with shipping details to a supplier who plays a retailing role who in turn covered the customer with whom the product is bought at wholesale price.
4. Supplier ships orders directly to customers: The supplier sends the item straight to the consumer to whom the product has been purchased for shipping purposes and it does not contain any branding from the supplier’s name suggesting that the online store shipped the item.

Pros and cons of dropshipping

Now that you know the dropshipping definition and how it works, let’s move on to the pros and cons:

Dropshipping offers an accessible way to start a business with low startup costs, no inventory, and flexibility in scaling. It allows entrepreneurs to sell a wide variety of products without the hassle of managing stock.

Nevertheless, it has its shortcomings too, such as lower profit margins, presence of cut-throat competition, and lack of adequate control over the entire supply chain and the experience of the end users.

Dropshipping is successful largely due to the marketing of the products, the supplier’s smoothness and the level of customer support.

Is dropshipping right for your business?

Whether dropshipping is good for your business or not depends on many different aspects. Here are 3 key factors to consider:

1. Your business goals:

It’s important to state whether you intend to make quick returns or you are focusing on building the brand as dropshipping is often not profit making unless a threshold sales volume is achieved.

Think of how much you would be willing to spend on advertising and establishing the brand and be ready to spend the same amount of time in establishing your site.

2. Your skills and expertise:

Exceptional marketing, branding, and customer service skills are mandatory to beat the competition in dropshipping.

Besides that, expertise in some of the basics of internet business operations such as setting up an online shop, search engine optimization, and webpage analytics will make running the venture easier.

3. Market and niche analysis:

Scout several products that have a ready market but with low competition. Make sure that there are suppliers who will guarantee shipment of the items.

Lastly, do the mathematics on your profit margins so that you can ascertain whether the niche will be viable in the long run.

How to start a dropshipping business?

Embarking on a dropshipping business journey can be both thrilling and lucrative, yet it demands meticulous planning. Here’s a comprehensive step-by-step guide to assist you in initiating your venture:

Remember that success in dropshipping requires dedication, continuous learning, and adapting to market changes. It’s crucial to stay customer-focused and maintain high-quality standards in your products and services.

>>> Read more: Dropship 101: How to Start Dropship for Beginners [2024 Guide]

Best ways to advertise your dropshipping store

Having a successful dropshipping business is not just about opening a store, and it is not even enough to have a great product. To truly understand the dropshipping meaning and make your business fruitful, it is necessary to apply appropriate advertising strategies to generate sales.

When advertising your dropshipping store, you have a variety of options at your disposal, each with its own strengths and weaknesses. Here are some effective platforms to consider:

Paid Ads

Platforms like Google, Facebook, Instagram, and TikTok offer powerful ad targeting options, allowing you to reach specific demographics and interests relevant to your products.

TikTok Ads

One of the fastest-growing and most downloaded social apps on the planet, TikTok is the place where trends are born, stars are made, and the hottest products sell out in minutes.

TikTok ads for dropshipping can be a great strategy for reaching a younger and engaged audience. You can also spend time on everything related to targeting, ad design, insight reports, and ad management tools. Here’s how to effectively grab attention and drive sales on TikTok:

Create a TikTok Business Account if you don’t have one already. Besides, if you want to make your account more trustworthy and reach more potential customers, you should own the TikTok blue tick on your business account.

TikTok offers 11 various ad formats, including In-Feed Ads, Catalog Listing Ads, TopView, etc. Let’s choose the ad format that aligns with your goals and budget. You can use all types of TikTok Ad formats with a TikTok Ad Agency Account. Furthermore, you will receive many other benefits when using this account, such as:

• Target all markets, for example, the United States, Europe, and Canada.
• Optimize your TikTok ads campaign with unlimited customization and customer insight.
• Reallocate your funds to another ad account in case of perma-suspension. So you can keep advertising without any delay.
• Access to experienced professionals who can help you optimize your campaigns and improve your ROI.

Facebook Ads

Facebook is where everyone can connect and communicate with others, so it is by far the most popular place, especially for social media marketing. As of Q2 2023, Facebook has over 3.030 billion monthly active users (MAUs), making it the largest social media app in the world. So how to run Facebook ads?

If you’ve never launched a Facebook ad campaign before, seek professional help to advertise your dropshipping store on Facebook. With Mega Digital – a Meta Business Partner, our experts have the knowledge and experience to give you valuable advice, save you time, and make more people interested in your dropshipping store, boost conversions, and revenue.

Instagram Ads

Instagram was also started as a photo-sharing platform and now it has grown to DM, videos, reels, IGTV,… The platform thrives on captivating visuals, allowing you to showcase your products, services, or brand story in a way that resonates deeply with users. High-quality images, engaging videos, and immersive story ads can grab attention, spark curiosity, and drive higher engagement than just text-based ads.

Google Ads

Google Ads can put your ads directly in front of users searching for keywords related to your products. So you should optimize your website content and product listings with relevant keywords to improve your ranking in search engine results pages (SERPs).

Create valuable blog posts, articles, infographics, or videos related to your niche to attract potential customers and establish yourself as an expert. Share your content on social media and other relevant platforms. This takes time and effort but can yield long-term organic traffic. This requires careful keyword research and campaign optimization for the best results.

Other Marketing Methods

• Email Marketing: Build an email list and send regular newsletters featuring new products, promotions, and valuable content. Offer incentives for sign-ups and segment your list for targeted campaigns.
• Affiliate Marketing: Partner with other websites or bloggers to promote your products for a commission. This can be a cost-effective way to reach a new audience.
• Online communities: Actively participate in online communities and forums related to your niche. Offer helpful advice and subtly promote your products where appropriate.
• Public relations: Reach out to journalists and bloggers who might be interested in featuring your products or brand story.

Frequently Asked Questions about Dropshipping

In this section, we’ll address common questions to help clarify the dropshipping meaning and provide insights into how this business model works.

#1 How to find dropship suppliers?

A good starting point for identifying dropship suppliers is to look at well-known websites such as AliExpress, SaleHoo, Oberlo, and other directories of reputable dropshipping suppliers.

Trade shows can also be visited, and conversely manufacturers can be called to find out whether they have dropshipping services available.

Furthermore, it is wise to read reviews, check the ratings of suppliers, order their products for quality evaluation, and so on prior to engaging with them.

>>> Read more: [2024] Top 20+ fast ship & low-cost dropshipping suppliers in USA

#2 What are the special occasions of the year to scale up?

Times that are favorable in upscaling your dropshipping business involve any of the major shopping days such as black Friday, cyber Monday, and even Christmas or New Year’s.

Other common occurrences include back-to-school, Valentine’s day, Mother’s day and summer sales. There is increased consumer spending at these particular times hence it is recommended to promote your business using these sales drivers for maximum revenue generation.

Megadigital has an ebook ready for download on the topic of advertisement in tsales period.

#3. Can I dropship without money?

Of course, it is possible to start dropshipping with little to no money. While you may encounter some initial costs, there are ways to minimize them and get your business off the ground without breaking the bank. Here are 4 tips to make it come true:

• Build a strong brand
• Develop customer relationships
• Implement SEO for your TikTok channel
• Optimizing your advertising campaigns on TikTok

>>> Explore more: How To Dropship With No Money? 8 Ways to Get Started in 2024

Overall

Dropshipping can be a great way to start an online business with minimal startup costs and flexibility. However, it’s important to be aware of the challenges and put in the effort to build a successful brand and marketing strategy. I hope you now understand the dropshipping meaning and how it works! Let me know if you have any other questions about advertising for your dropshipping business.