Never Start A Dropshipping Business Before You Can Answer These 5 Questions
Planning to start your own dropshipping business? It may not be as easy as you thought.
According to Statista, global retail e-commerce revenue will continue to grow, and is estimated to reach $4.88 trillion by 2021. Being part of this trend, dropshipping is still a very popular business model due to its low startup cost.
However, the reality is that over 90 percent of dropshippers quit their businesses within the first three months.
What does this tell us? The dropshipping game is not as easy as you thought.
In this article, we list 5 questions that you must be able to answer before you start your dropshipping business.
- What is your budget?
Forget about the tips you learned from articles like “How to Start Your Dropshipping Store With $100.” It simply doesn’t work.
It’s true that dropshipping doesn’t require a large amount of upfront cost for inventory. However, for most dropshipping stores, Facebook paid traffic is their primary method of getting people to visit their websites.
If you haven’t set a budget aside for advertising, it can be tough for you. Here’s why.
With the competition on Facebook Advertising nowadays, it’s becoming increasingly expensive to get people click on an ad. For a new dropshipping business, it takes certain website impressions to “train” Facebook Pixel to identify who is more likely to buy the products. This means a new seller needs to go through a learning period to optimize the advertising cost.
Does your budget allow you to keep investing in Facebook Ads to find the best interest in targeting and ad creative?
If you are prepared for the advertising cost of your business, it can put you miles ahead of other sellers.
- What is your niche?
As you already know, there are two types of dropshipping stores: general stores and niche stores.
Even though general stores give you the ability to test products from different categories, they do not help you win in the long term. On the flip side, niching down to a specific target market opens up the heavy door for you to make big bucks.
“Wouldn’t it be more profitable if a store has more winning products?” you may ask.
Quite frankly, dropshipping is not about only making one sale from a customer; the key to long-term dropshipping profits is building a client base so that customers keep coming back to your store for more products. That’s why dropshippers are constantly looking for new ways to increase the lifetime value of a customer.
Having a niche also helps you to establish the connection between your customers and your brand. It could be done through advertising, emails, and social media platforms. Ultimately, organic traffic will bring the most profits to your store.
What’s the lesson? Decide on a niche before you start your business.
There are many training videos on this subject on YouTube; simply search “dropshipping niche” to get started.
- What is your marketing strategy?
As mentioned earlier, Facebook paid traffic is the primary source of visitors for most dropshipping businesses.
Apart from that, there are also paid advertising on Google and Bing, social media marketing, influencer marketing, etc.
Just like investing, you will never want to rely on a single source of traffic. Diversifying traffic sources will allow your store to better withstand the seasonality of e-commerce.
However, no matter which marketing strategy you choose, learn from people that have already masteredhat skill. There are courses, books, and tools on each of those marketing strategies. And it’s always a good idea to pay someone to learn a skill, rather than making all the mistakes and wasting time, money, and energy to learn it yourself.
If you’d like to learn how to make Facebook Ads generate money for your business, check out our free Facebook Advertising Cheat Sheet.
- What is your “why?”
What is your motivation for starting your e-commerce business?
It doesn’t matter whether you want to make more money to travel the world, or you just want to be able to quit your job and spend more time with family.
What matters is that your “why” is strong enough for you to go through the hard times of your business.
There’s no such thing as an overnight success in business. All successful dropshipping businesses have seen products fail, lost money, or even had their Facebook Ads account shut down.
As tough as that sounds, it doesn’t mean the end of the world if you have a strong enough “why.” If you can’t stand the difficulties, your business will fail. But if you can, the rewards will be very fruitful.
We recommend you sit down and write out your reason for starting a dropshipping business. And stick that paper somewhere you can see frequently.
- What is your availability to work on your business?
Even though an established dropshipping business is “semi-passive,” it undoubtedly takes a large amount of time when getting started.
Are you prepared to spend at least two to three hours every day working on your business?
If you don’t have the time, are you willing to find the time so that you can create your ideal business?
We have seen so many people start a dropshipping business. Two months later, they are still building their website!
Business doesn’t reward you for the hours you put in, but for the results you can create and the value you can bring to your customers. At the beginning, it takes time to create all the assets for the business to run on its own.
We recommend you review your calendar and commit at least two hours every day to building your business.
Dropshipping is not easy. But when done right, it is truly rewarding. When you can create a profitable business, improving thousands of people’s lives, you will appreciate all the hard work and efforts you have put in.
If you still believe dropshipping is the right business model for you, we’d like to be part of your success story. Check out our free video training series – it will give you the tools to get started right away.