If you've been daydreaming of starting your dropshipping business but didn't know where to begin, you're in the right place.

Whether you're a beginner or want to improve your existing knowledge, we'll break down all the essential steps to start dropshipping.

Thinking about choosing a product, setting up your store, legal matters, and (of course!) making those all-important sales.

Grab a comfy seat, perhaps a cup of coffee, and let's dive in!

7 Steps to start a dropshipping business

Starting a dropshipping business might seem like a maze at first, but when you break it down, it's just a series of manageable steps:

  1. Choose the right dropshipping product
  2. Find a dropshipping supplier
  3. Set up an online dropshipping store
  4. Brand your business
  5. Set up the legal and financial infrastructure
  6. Market your dropshipping business
  7. Grow your dropshipping store

From picking products to marketing your brand, we've mapped it all out for you.

Let's get to it!

1. Choose the right dropshipping product

Picking the right product is one of the most essential steps in starting your dropshipping business.

Think about it: no matter how flashy your website looks or how stellar your marketing is, if your product doesn't resonate with your audience, those virtual shopping carts remain empty.

So, where do you start?

Choosing a product isn't just about what's trendy or what you personally like.

It's about finding a perfect blend of demand, profitability, and passion.

The best products to sell in a dropshipping store are called 'winning products,' and you'll find their five main characteristics below:

5 Characteristics of a winning product - Infographic

Now that you know what products to dropship, it's time to find them.

Our favorite method of finding winning products is by using product research tools:

IMAGE PRODUCT
Sell The Trend
  • Pricing: $39 per month
  • The Nexus: One of the most powerful features of Sell the Trend is the powerful AI engine which uses an algorithm to show the products trending across all ecommerce stores.
  • A lot of examples: They have a ton of data for each product.
TRY IT NOW →
AliExpress Dropshipping Center
  • Pricing: Free
  • No need to dropship via AliExpress: You can use the dropshipping center even if you don’t use AliExpress for dropshipping.
  • Great basic product research options: You can view ‘Sponsered Products’ to get some great inspiration.
CHECK IT NOW →
Dropship
  • Pricing: $29 / $49 / $79 per month
  • Includes free tools: There is an Interest Explorer to find hidden Facebook interests, a ROAS Calculator, a Profit Calculator, and more.
  • Clean and easy-to-use interface: The design is clean, and using the tool is intuitive, even if you’ve never seen it before.
TRY IT NOW →>
Thieve.co
  • Pricing: $15 / $49 per month
  • Free supplier tools: Search for suppliers by AliExpress URL or image for free on Thieve's website.
  • A lot of filter and sorting options: With Thieve Supply, you will see a lot of filter and sorting options.
TRY IT NOW →
Dropship Spy
  • Pricing: $0 / $19 per month
  • Facebook targeting help: They got so much information for you about who to target.
  • AliExpress product research: They added a tool that will help you get instant live sales data from AliExpress products.
TRY IT NOW →
Ecomhunt
  • Pricing: $0 / $29 / $49 / $69 per month
  • A great free account option: They have a free account option available for you.
  • A lot of inspiration for each product: They include a lot of extra information for each of the products they add.
TRY IT NOW →
Niche Scraper
  • Pricing: $13 per month (with our discount code)
  • Great free account: Great for people that don’t want to spend anything on product research tools; just use their free account option!
  • A few great tools inside for product research: This is one of those tools that has both tools inside to help you find great products.
TRY IT NOW →
AliShark
  • Pricing: $20 per month
  • A lot of filter options while doing product research: You can literally filter by anything that you can imagine!
  • Great trial: You can get a full trial before you start paying the monthly plan.
TRY IT NOW →
Intelligynce
  • Pricing: $39 (monthly) / $79 (yearly) / $ 99 (lifetime)
  • Easy to use: It can access from any device with internet connections.
  • Monthly update: You can see the monthly visit overtime using their tool.
TRY IT NOW →
Minea
  • Pricing: $49 / $99 / $399 per month
  • Ideas for new products to sell: By showing you ads and products others are finding success with.
  • One of the largest databases: They have close to a billion ads.
TRY IT NOW →
FindNiche
  • Pricing: $9 / $59 / $99 per month
  • Data Extraction: Extract meaningful data from big raw data.
  • Programmable Search Engine: Support tens of filtering, sorting, and searching methods.
TRY IT NOW →
Shine Commerce
  • Pricing: $0 / $99 / $199 / $499 per month
  • Best selling products: It lets you see the best-selling products, Facebook Ads, and monthly site visitors.
  • Trends: They’ve added a new feature where you can see the top dropshipping trends like top posts and products.
TRY IT NOW →
TrendingProducts
  • Pricing: $147 or $297 per month
  • Find inspiration: Its Discover feature allows you to find some amazing ecommerce stores you can get inspired by.
  • Lots of features: It helps you analyze stores, find suppliers, look up trends, download products details, and more!
TRY IT NOW →
ProfitBusters
  • Pricing: $15 / $38 per month
  • Top-selling designs: Print on demand research tool that reveals top-selling designs from some of the biggest POD stores.
  • Latest and greatest designs: Helps the speed up process of POD by digging into current trends and winners, for you.
TRY IT NOW →
Dropshipping Copilot
  • Pricing: $0 / $29.90 / $59.90 per month
  • It can help with a lot: Find winning products, write product descriptions, fulfill orders in bulk, and more!
  • Free to use: The free plan offers all the core features you need.
TRY IT NOW →
WinningHunter
  • Pricing: €49 / €79 / €249 per month
  • All-in-one tool: You can spy on both Facebook Ads and TikTok Ads, and you can see lots of metrics for each ad and advertiser.
  • Download TikTok Ads without a watermark: But don't run the exact same ad!
TRY IT NOW →
Pexda
  • Pricing: $2 (15 days) / $25 / $100 per month
  • Great trial: Offers a 14-day trial for $1.95.
  • Select awesome products: They add a few hand-picked dropshipping products each day.
TRY IT NOW →

Tip: If you're feeling overwhelmed with all options for product research tools, don't hesitate to try out our product research tool quiz!

Not sure which product research tool to pick

To give you a product example, here's a pet shampoo brush we found using Sell The Trend:

Winning dropshipping product example: Pet Shampoo Brush

Guess what? This could definitely be a winning dropshipping product!

Let's walk through the criteria together:

  1. The 'wow' factor. If you've never seen a pet brush like this, it could definitely have a 'wow' factor! It’s the kind of product that makes you think, “Wow, looks amazing! I didn't know a pet brush with a built-in soap compartment existed!”
  2. Problem solving. This brush solves the struggle of juggling a soap bottle while trying to effectively shampoo a lively pet.
  3. Good profit margins. This product is listed at just $1.20. When you add shipping, you could probably get it for under $4. That leaves plenty of room for a great profit margin!
  4. Not easy to find in local stores. When customers realize they can't just walk into any local store to pick up this unique item, it increases its perceived value and urgency to purchase online.
  5. High quality. If this is a high-quality brush, your customers will be satisfied with their purchase. The result? You'll get amazing reviews and repeat purchases!
Pet shampoo brush

If you want to see more examples, check out our list of the best dropshipping products here!

Lastly, be careful not to step into some common pitfalls when choosing a dropshipping product.

Here are a few you should be aware of:

  • Extremely low margins. If a product costs almost as high as its retail price, you will struggle to generate profits after marketing and other expenses.
  • Complicated or fragile items. Think about shipping. Products that are delicate or overly complex might lead to higher return rates.
  • Heavy or bulky items. Shipping costs can quickly eat into your profits if you're dealing with large or heavy items. Unless there's a significant demand and you're confident about the pricing strategy, it's generally a good idea to avoid them.
  • Counterfeit products. While it might be tempting to start selling popular branded items at a fraction of the price, selling counterfeit goods is illegal and can get your business into serious legal trouble.
  • Seasonal products without a plan. While seasonal products can significantly boost sales (think Halloween costumes or Christmas decorations), relying solely on them without a clear off-season plan can result in inconsistent income.
Example of a dropshipping product to avoid
Example of a dropshipping product to avoid (fragile and bulky).

At the same time, don't try to reinvent the wheel when searching for a product!

Look at what successful dropshippers are doing. Try to analyze their product range and determine what they're doing right.

Ultimately, choosing your product is a bit of science mixed with gut instinct.

Trust yourself, but make sure you're backing your decisions with solid research!

Learn more: How to Find Winning Dropshipping Products

2. Find a dropshipping supplier

Alright, you've got a killer product idea. Awesome!

Now, it's time to find the right dropshipping supplier.

A dropshipping supplier is a manufacturer or wholesaler who manages inventory and shipping for a dropshipping business. They're the ones who make or supply the products, store them, pack them, and ship them directly to your customers.

And this second step is as crucial as the first.

Imagine having a fantastic product that your audience loves, but your supplier constantly lets you down.

Frustrating, right?

Working with a reliable supplier ensures that your customers get quality products on time, every time. It directly impacts customer satisfaction and your brand reputation.

So, how do you find a dropshipping supplier?

It's easy!

Just check out this overview table containing today's best dropshipping suppliers:

SupplierLocationPricingRead Review
SpocketUS, EU, CA$40 / $60 / $100 / $299 per monthSpocket Review
SynceeUS, UK, EU, CA, AUS$0 / $29 / $49 / $99 per monthSyncee Review
AppScenicUS, UK, EU, CA, AUS$24 / $47 / $78 per monthAppScenic Review
DSersChina$0 / $20 / $50 per monthDSers Review
CJdropshippingChina / WorldwideFreeCJdropshipping Review

Tip: Check out our guide here if you want to start dropshipping for free!

Before we move on, we would like to highlight something important: the supplier's location.

You might have noticed that when trying to find a dropshipping supplier, there are both local and overseas options.

On the one hand, working with a supplier from China, for instance, often allows for lower product prices, which could mean higher profit margins for you. Platforms like DSers and CJdropshipping are popular for finding overseas suppliers:

CJdropshipping homepage - dropshipping supplier example

On the other hand, choosing a local supplier - from the US, Europe, or whichever region you're targeting - could mean faster shipping times, which is a significant factor for many customers.

You can use platforms like Spocket or AppScenic to find local dropshipping suppliers:

Spocket homepage

Tip: If you can't decide which supplier is best for you, take our dropshipping supplier quiz here!

Not sure which dropshipping supplier to pick?

Alternatively, you can also do more research yourself to find the perfect supplier for your needs.

If you do so, here's how you can determine whether it's a good supplier:

  • Chat with them. Sounds simple, right? It is! If they reply quickly and clearly, that's a good sign. If they leave you on ‘read’ for too long, think twice.
  • Delivery speed. We all hate waiting, right? Make sure the supplier can ship products quickly. Long shipping times can be a dealbreaker for many customers.
  • Test the goods. Always order samples. This way, you can judge the product quality firsthand and check if it aligns with your brand promise.

Here are some more factors you can think about before partnering with a dropshipping supplier:

How do you spot a good dropshipping supplier - Infographic

And there you go!

Remember, the best supplier relationships are like friendships - built on trust, understanding, and mutual respect. Once you get this duo right - product and supplier - you're well on your way to dropshipping success!

3. Set up an online dropshipping store

You've got your winning product and a reliable supplier.

What's next?

Setting up a dropshipping store where your customers can shop!

And for this, you need an ecommerce platform.

Again, we will make it easy for you! Here are some of the best ecommerce platforms for dropshipping:

You need:The best option(s) for you:
The best platform overallShopify
The most flexible and best SEO performanceWooCommerce
The platform that's built specifically for dropshippersShopBase
The cheapest optionShift4Shop (in the US) or ShopBase
What is the best dropshipping ecommerce platform for you?

Basically, Shopify is the best ecommerce platform for dropshipping overall for the following reasons:

  • It is really easy to start a Shopify store as a beginner
  • It is affordable and scalable
  • It offers world-class customer support
  • It has the speed and security you need
  • It offers marketing and SEO tools
  • It is mobile friendly
  • And lastly, it provides resources and apps specifically for dropshipping stores!
Homepage of Shopify

Tip: Have you already created your Shopify account? If not, sign up by clicking this link here to get a free 3-day trial + 1 month for $1!

Get your free Shopify trial

And if you don't believe us. Just know that Shopify is the third-largest retailer behind Amazon and eBay.

Their premium product, Shopify Plus, is used by well-known corporations like Pepsi, Heinz, Tesla, and even celebrities like Lady Gaga!

That said, Shopify isn't the best platform for everyone.

For instance, if you're looking to start selling as soon as possible, ShopBase might be a better option. Or, if you're a coding wizard, you can have lots of fun with WooCommerce since it's open-source.

Either way, if you don't know which ecommerce platform is best for your business, we also have a quiz for you!

Find your ecommerce platform here

Once you've picked your ecommerce platform, you can start setting up your online store.

Here are some essential things to consider:

  • Mobile optimization. Many shoppers will visit your store on their mobile devices. So, ensure your design is responsive and looks great on screens of all sizes.
  • Fast loading times. No one likes waiting, right? Optimize images and leverage caching to speed up page load times.
  • High-quality product images. A picture speaks a thousand words, especially in ecommerce. Ensure your product images are clear and high-resolution, and showcase the product from multiple angles.
  • Engaging product descriptions. Don't just list your product's features. Instead, focus on the benefits and tell a story. Why is it awesome? How can it make life better? Keep it lively and straightforward.
  • Reviews. Let your customers do the talking. Reviews are like personal recommendations, and they build trust like nothing else.
  • Payment gateways. Everyone has a favorite way to pay. From credit cards to online wallets, give your customers payment options!
Example of a great dropshipping product page
Example of a great product page (Source)

Setting up your online store is an ongoing process.

As you learn more about your audience's preferences, you'll make tweaks to improve their shopping experience.

Remember, the ultimate goal is to make your store not just a place to buy but a destination your audience loves visiting.

And the next step will help a lot with precisely that:

4. Brand your business

You may have heard it before: 'Brands are more than just logos.' And it's true!

Think of your favorite store or product.

Got it?

Now, what pops into your mind when you think of it? The colors? The lifestyle? The feeling you get?

That's branding!

And now, it's time to create that for YOUR business.

Let's start with the name. Your brand name should be catchy, easy to pronounce, and ideally, give a hint about what you offer.

You can use a tool like Shopify's business name generator for ideas:

Shopify free business name generator

But before you fall in love with your chosen name, double-check if you can get a matching domain address.

And don't forget about Instagram, Facebook, or other social platforms. Consistency is key!

Of course, brands are also more than just names, so here are the other essentials for branding your dropshipping store:

  • Logos. Your logo is the visual centerpiece of your brand. It should be simple yet evocative. Something people will remember.
  • Color schemes. Colors evoke emotions. Think about the feeling of your brand and products. Selling relaxing spa products? Soft blues or greens could be best. Gadgets? Then something bright and bold might be the way!
  • Consistency. You want people to recognize your brand, whether on your website, scrolling Instagram, or seeing it elsewhere!
Pillow Slides homepage - example of a branded dropshipping store
Example of a top dropshipping store (Source)

One last important thing that goes with branding is product pricing.

If your products are unique, high quality, or have an awesome shopping experience (thanks to your excellent branding), people might pay a little extra!

Tip: You can find our in-depth guide on branding your business here!

5. Set up the legal and financial infrastructure

Setting up the legal and financial infrastructure might not be the most glamorous part of your journey, but it's absolutely essential.

Think of it as setting a foundation for your dropshipping business.

By ensuring you've got the legal and financial bits right from the get-go, you can save yourself many potential headaches down the line.

First up is your business structure.

The name and working principles of business structures vary from country to country, but here are your options if you're from the US:

  • Sole proprietorship. This is the simplest structure, where you and your business are essentially the same entity. It's easy to set up, but if anything goes wrong, your personal items (like your car or house) could be at risk.
  • LLC (Limited Liability Company). Offers protection against personal liability. If something goes wrong in the business, your personal belongings are usually safe.
  • C corporation. Ideal for those looking to attract investors. It's a separate entity, pays its own taxes, but comes with increased paperwork.
Older man behind a laptop

Once you've decided on your business structure, you'll have some financial preparations to make:

  • Banking. Here's a tip: keep your business money and personal money separate and open a separate business bank account. It's cleaner, simpler, and just makes sense.
  • Business licenses. Depending on your location and what you're selling, you might need specific licenses or permits. Do your research.
  • Sales tax. Understand if and how much sales tax you need to collect from customers. Each state or country has its own rules.
Someone doing taxes

Learn about taxes in this article: Dropshipping Taxes: Everything You Need to Know as Beginner

Lastly, here are some things that can help protect you and your business in case anything goes wrong:

  • Insurance. Consider getting business insurance. It can protect against unexpected setbacks like product liabilities or legal disputes.
  • Terms of service. Have clear terms of service on your website. It defines the rules of engagement between you and your customers.
  • Privacy policy. You'll be handling people's info, like names and addresses. Make sure you're clear about how you keep that info safe and private with a privacy policy.

6. Market your dropshipping business

Now, here's where the magic starts to happen!

You've got a new dropshipping store with fantastic products, but how do you ensure people find it?

That’s where marketing comes in.

And in today's digital world, there are plenty of ways to let your brand shine.

The most popular way to market a dropshipping business is through social media.

Platforms like Instagram, Facebook, and TikTok are fantastic to showcase products, share customer reviews, and engage directly with your audience.

Here is an overview of the marketing methods you can use for dropshipping:

How to pick the right marketing method for dropshipping - Infographic

If you're not familiar with all of them yet, let us give you an overview of how they work:

  • Facebook Ads. These are advertisements on Facebook or Instagram. You can show your ads to specific groups of people, like those who love fitness or hiking.
  • Google Ads. Show up when potential customers search for products you offer on Google. You can target keywords and pay per click.
  • Influencer marketing. Know those popular people on Instagram or YouTube? You can team up with them! They can show off your products to their fans.
  • TikTok. The newest popular social media platform. You can learn more about dropshipping with TikTok here!
  • Pinterest. This is a great platform for some niches to run paid ads or grow free traffic.
  • SEO (Search Engine Optimization). Fancy term, right? It simply means making sure your store appears when people search on Google. It's a long-term game but can drive organic (read: free) traffic.
  • Email marketing. Collect emails and share special deals or news about products with your audience.

Marketing is both an art and a science.

It's about finding the perfect mix of marketing methods that work for your specific niche and audience.

Try to monitor your ads to understand what's working and what’s not, and iterate your strategy accordingly.

If you want to learn more about how to market your dropshipping business, we recommend reading our in-depth marketing guide here!

7. Grow your dropshipping store

Growth in dropshipping is a thrilling journey.

You've now laid down the foundation of your store with great products, a reliable supplier, and a marketing strategy.

As time passes, the small wins begin!

Your first sale, the first positive customer review, the day you hit a milestone in traffic.

Someone writing a good review

These are the moments that motivate you to keep going, to strive for more.

Yet, as your dropshipping store gains traction, you'll encounter new challenges and opportunities.

The operations that once seemed sufficient may now need tweaking. Order management, for instance, becomes more demanding.

You once had the luxury of handling a handful of orders weekly, but now, it's dozens a day!

You would likely look for automation tools to help you efficiently process orders and manage returns:

Homepage of AutoDS
Source: AutoDS

Customer service will also become more important. The occasional questions that trickled in initially now pour in daily.

Giving top-notch customer service becomes crucial. Remember, a happy customer often turns into a repeat customer.

Tidio AI-powered customer service platform
Source: Tidio

Then there's the matter of conversions. This means continually refining your website -A/B testing product pages, tweaking checkout processes, or adding upsell offers:

ReConvert Thank You page optimization
Source: ReConvert

Ultimately, growing your dropshipping store is about constantly learning and adapting. It's about celebrating the wins, learning from the setbacks, and always striving for more!

How does dropshipping work?

If you're still unsure about how dropshipping exactly works, here is a quick explanation:

Once customers start placing orders, your role as a dropshipper truly begins.

Here's how it works: a customer places an order on your dropshipping store, you review the order, then you forward it to your supplier.

Your supplier then handles the packing and shipping and sends the product directly to your customer:

How does dropshipping work - Infographic

You manage the communication with the customer, ensuring they're informed about the order status and satisfied with their purchase.

And there you have it! This is how dropshipping works.

How much do you need to start dropshipping?

Now, you may be wondering you much money you need to start.

Spoiler: starting a dropshipping store with $100 would be quite limiting, but $1,000 would be enough to start with the first steps.

Here are some expenses you would usually have:

  • Ecommerce platform. Most people use a paid platform. These have varying plans, usually from $30 to $300 monthly. Tip: Shopify currently has a great offer of a free 3-day trial + 1 month for $1. You can get it here!
Shopify $1 per month for3 months deal
  • Domain. Usually around $10 to $20 annually.
  • Themes. You can start with a free theme or paid one. The paid themes are usually about $350.
  • Apps. You'll likely rely on various apps for things like email marketing, reviews, or SEO tools. Some are free, but the best (paid) ones can cost anywhere from $5 to $50 a month or more.
  • Design. If you're not DIY-ing your website visuals, professional graphics can be an added expense.
  • Product samples. Buying a sample before you start dropshipping a product is highly recommended.
  • Supplier. Some suppliers have monthly subscription plans. These are usually about $30 monthly but can be much more or less.
Spocket Pricing plans
Spocket's pricing plans
  • Initial marketing. You might want to invest in paid advertising for your first sales. A $200 to $500 budget is a good starting point for platforms like Facebook or Google Ads.

Have a low budget? Check out this article: Can You Start Dropshipping With No Money? (Know This First)

Should you start a dropshipping business?

Now that you know how to start dropshipping, you're probably wondering: 'Should I jump in?'

Let's break it down together with the pros and cons and some FAQs:

Pros

  1. Low startup costs. You don't need to buy any products until after they're sold.
  2. Low risk. If something doesn't sell, you're not stuck with unsold inventory.
  3. Wide product selection. Want to sell unicorn mugs today and spaceship lamps tomorrow? No problem!
  4. Location freedom. Work from your couch, a beach in Bali, or a cafe in Paris. As long as you have internet and a comfortable workplace, you’re good.
  5. Scalability. Your supplier will take care of most operational challenges of scaling.
  6. Time efficiency. Your supplier takes care of inventory and shipping, so you have more time to focus on sales.

Cons

  1. Lower profit margins. You're not purchasing products in bulk upfront.
  2. Inventory management issues. For example, there can be mix-ups with how many products your supplier actually has.
  3. Challenges with shipping. For instance, if a customer orders several products from your store and these products come from different suppliers, the items will arrive separately.
  4. Limited control. Issues like product quality or late shipping might arise.
  5. High competition. It's a popular business model, so you'll have to compete with others.
  6. Refunds can be complicated. Each supplier may have different return policies.
  7. Limited branding options. Since your supplier also sells to others, they usually can't add customized labels.

Is dropshipping profitable?

Let's be real: dropshipping is not a get-rich-quick scheme.

But with some smart strategies, yes, dropshipping can be profitable.

It's all about finding the right products, setting the right price, and reaching the right audience. And remember, low overhead costs mean even small margins can add up.

Curious about potential profit margins? If so, check out our profit margin calculator to get an idea of how profitable your dropshipping store could be!

Calculate your profit margin here

Note: Profitability is never guaranteed with dropshipping. It's a real business!

Is dropshipping worth it in 2024?

The million-dollar question, right?

Here's the thing: like any business, dropshipping requires effort, discipline, and patience.

That said, if you're up for the challenge, it can be a great way to learn about ecommerce and make money without huge investments.

So, yes, dropshipping can still be worth it in 2024!

Taking action

Reading and absorbing information and knowledge is great (definitely if it’s free!), but do you know what’s even better?

Taking action!

So, to help you with taking action with what you have learned in this article, take a look at these points:

  • Start small. Begin searching for a niche or a product that truly sparks your interest and you think could be profitable.
  • Research tools. If you can't find a good product, dive into some of the product research tools mentioned earlier. Some have a free trial, like Sell The Trend.
  • Talk to a dropshipper. Do you know someone in the business? A quick chat can provide insights that no article can.
  • Set up your online store. Even if it's just a basic version. Remember, perfection comes with time.
  • Marketing strategy. Once your store is ready, start marketing! Even if it's just posting on social media or telling friends and family about your store.
  • Learn more. To learn more, read our dropshipping guide here!

Conclusion

From those baby steps of choosing your product to the leap of marketing your store, we've talked about quite a lot.

We get it; it can feel a bit overwhelming. But remember, even the most successful dropshippers once stood right where you're now: at the start.

To sum it up: dream big, start small, and keep learning.

Good luck with your dropshipping business!

Want to learn more about dropshipping?

Ready to move your dropshipping store to the next level? Check out the articles below:

Plus, don’t forget to check out our in-depth guide on how to start dropshipping here!

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