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How to set up a Drop Shipping Company

by Tandava Krishna


We all keep on trying to find innovative ways to earn money. It is not that we are willing to work less, but creating a business opportunity that doesn’t involve a lot of resources but still generates good payment is a dream for many. One such is the idea of Drop shipping business. Although it is not something new but people have come a long way and the use of internet has attracted a lot of people to business. The drop shipping is an order fulfilment method in which you are not required to keep the products in stock or have an inventory of your own. Instead, the manufacturer of product is responsible to ship the product to the buyer and you are only responsible to get certain percent of each purchase that undergoes thorough you. Many people believe that drop shipping is a easy and quick way of getting rich, but mind you, it a business that requires a lot of time to settle in and the profit is not very high. There are day-to-day management struggles that you should be aware and always be ready for.

If you are interested to bring the most out of this business opportunity and have the right skills, here are following way to make money with an online drop shipping business:

Create a Plan

Decide what services you are going to take in this business. Decide what will be your reach. How will you generate the fund for the given size of your business? If you want to run your business only on online mode then do you know enough about how business functions in e-commerce market? Make a plan for what is going to be the size of your business at first. The growth will only follow if you thrive in the market and the drop shipping business needs investment and good knowledge. One should always be ready for good and bad days.

Do your research

To open start up a business, as easy as people make it look like, is sure a big deal. You have to do a lot of research about how the market functions and what is the demand and supply chain in this business. The business requires your understanding of trends, styling, and presentation. Do thorough research about your competitors in the market and develop a strategy to advance them and create a bigger brand. You need to have great conversational and marketing skills and understand the risks and analyse the opportunities. You must know how to attract the client and make them believe that your words and actions are in sync.

Find Your Niche

When you have knowledge about what are the various aspects and concepts of drop shipping, you must have understood an arena that you would enjoy the most. As a drop shipping company, you can do business with many local companies who do not have enough resources or knowledge to do so. But you must decide what are the industries you would be most interested in. Finding a niche will help you find a direction for your business before setting up. You can start with your area of expertise and expand and be open to more projects once you set your feet in the market.

Decide the size and mode of your business and plan accordingly

These are the basics as you’ll need to collect funds for your business according to this plan. Before you start your drop ship business, you must decide how you are going to organize your business and what will be the size of it. As you are going to bring your services to the internet and are open to national and international opportunities? If you are setting up an office then decide how you’ll get funds for all these. If you are providing your services from an online platform make sure that you are able to build trust with the businesses you have collaborated with. Make sure you decide how are you going to manage time, decide the payment methods, and assure you are going to receive commission on time.

License and Permit

To start any business in India, you need to have legal permission sorted beforehand to avoid any hassles with government officials. You’ll need to get yourself registered as a business person, get all the necessary approvals, and get all the documentation handy. 

Understand your customer

Any business needs you to be focused on their target audience. In drop shipping business, you’re your income is based on how many buyers you get for your clients. Take notes of the product that you are going to market in great detail. People who buy from you should also trust you. Make sure the site you are using is welcoming and have personal touch to it and is appealing to people. If your customers are not satisfied, your hard work is bound to fail.  Take their reviews sincerely and ask them for what varieties they would like you to offer in the future. Focusing on the target audience is very important in this business so keep that in mind.

Create an attractive website

Setting up any business requires a strong local connection and communication so that the business can propagate but with the rise in the use of e-commerce, things have become a lot easier. Make a website for your drop shipping business to attract potential customers. Market your projects and show off your skills. Use various models and tools which are available online to make your website catchier and more attractive. It is of prime importance! You need to set up a user-friendly glitch-free website or an app. Appoint a technician who would be available at all times to prevent any probability of site going down as it is a big turn off for users. Make the online interface easy to use as it’ll be used by people of all age groups who are not tech-savvy. The easier and smooth the handle is the better will be the inclination of customers in using the site.

Build a team of hard-working people

Since you do not have to set up and office or inventory but you have to do a lot of marketing. Have a team who have experience in this industry, you can also have freshers who are willing to learn and provide their services at the office who have done courses related to online marketing and worked for college societies in similar work strata. Once you have your agency setup and you desire to build it bigger, have a trusted group of people who will help you on each level as this is not a task that can be handled alone. Build a team you can trust.

Marketing on different platforms

Be ready to do a lot of marketing. Social Media is used by almost everyone around the globe. It is almost certain that at least one person in a household must be using any social media platform. There will hardly be people who know it better than you. What you do for others, do it for yourself too. Putting up pages on Facebook and Instagram, developing a strong SEO. You can invest in WhatsApp Business and use its marketing tools to propagate your business. It is convenient to use and digitally provides a personal touch as the medium is one to one messaging which has become one of the best provisions of converting prospects to customers.

Set a Business Model

Plan how you are going to price your services, how you will arrange the billing, create the funds. Have a set of rules and regulations and have a legal team to layout contracts and agreements with your clients to avoids any problems in the future. 

Generate Leads

This is one of the most important aspects of drop shipping if you are looking to expand and make it bigger. When you are learning, try to do a maximum internship to learn the process of generating leads and know more people in this business. People should be fond of your marketing skills. You will be charged for the services you provide and not the items that you sell. This works like commission and to keep floating in the business, you must also keep looking for new business opportunities. Make yourself visible on LinkedIn, Meet up, etc where potential clients can locate and contact you easily.

Create a brand name and logo

Although this sounds very common but if you are going to start any business, you will need a name by which you will be known. Understand that a brand name is very important in this industry. Make sure once you decide the name and logo of the brand, get a patent for it!

Starting any business takes a good amount of planning. If you want your new business to succeed, understand the risks that come with entrepreneurship. It often takes a few years to get a business off the ground even with the best-laid business plan and advanced marketing. To open any business, one should be ready to work hard and show a lot of perseverance and determination. Any business will have good and bad days but it depends on the owner how they want to go about it. All the best

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