In 2020, the dropshipping eCommerce market was valued at 128.6 billion US dollars worldwide. Between the years 2021 and 2026, the dropshipping eCommerce market was predicted to jump to a staggering 476.1 billion US dollars.
And for good reason.
Dropshipping is a relatively low-risk business model. You can sell products without incurring the steep costs that wholesalers do. You don’t have to worry about direct shipping. And, most importantly, you don’t have to store your own inventory.
In fact, your role as a dropshipper mostly focuses on outreach, marketing, and managing your online presence. That means less time managing the process side of things and more time focusing on earning profit.
If you’re ready to start a dropshipping business in 2022, we have just the article you’ve been looking for.
In this quick guide, we’ll walk you through how to start a dropshipping business in the USA in just seven easy steps.
Table of Contents
1. Solidify your goals/brand mission
Every great business starts with a clear mission.
So think about it. Why do you want to start a drop-shipping business?
Are you looking to create passive income in the future? Do you need a side hustle to pay your way through grad school? Have you always wanted to start an online business?
Whatever the case may be, get laser clear on why you want to have a dropshipping business and what your long-term vision is.
Here’s an example:
“I want to start a dropshipping business to set myself up for retirement. My long-term vision is to have my business run on autopilot by 2025.”
Next, break up your long-term vision into micro goals.
For instance:
- Micro goal one: Establish my dropshipping business by November 2022
- Micro goal two: Test best-selling products and collect customer feedback between November 2022 and February 2023
- Micro goal three: Test various business automation processes between February 2023 and July 2024
- Micro goal four: Solidify business automation processes between August 2024 and December 2024
- Micro goal five: Have a completely automated business by January 2025
2. Choose a business entity and register your business
Whenever you decide to start a business in the United States, there are certain legal steps you need to take to make sure you stay compliant.
Your first legal responsibility? Choosing a business entity, form an LLC, and register your brand.
Your business entity doesn’t just describe your personal and business liabilities, it also outlines how you’ll pay taxes.
For example, LLCs pay tax as a pass-through entity, whereas C-Corps may be subject to double taxation. Meanwhile, an S-Corporation can avoid double taxation on personal and business income while attaining a credible, formal legal structure. You can start an S-Corp in Texas with GovDocFiling agency to take advantage of these benefits.
Whichever entity you decide to go with, make sure it’s in line with your priorities. If you’re not sure which entity would suit you best, consult with an experienced certified accountant or registered agent.
3. Conduct product and market research
You can’t serve your customers if you don’t know who they are and what they need.
In this step, get clear on your target audience and what they’re looking for by conducting product and market research.
Here’s what to focus on when conducting research:
- Top dropshipping products and why they’re popular
- Products that align with your long-term business goals
- Who’s buying popular products and why they’re buying them
- Buyer needs, pain points, and consumer habits
- How your competitors sell their products
- The pricing structure your competitors use
- How you can differentiate yourself from your competitors
- Dropshipping business, marketing, and outreach strategies
After conducting research, outline your target customer using the following template:
- Who are they?
- What do they need and how can you help them?
- What are their pain points and how can you solve them?
- What do they buy and why?
- How can you sell to them better than the competition?
- How can you serve them better than the competition?
- How you plan on marketing to them
- Your sales outreach plan
4. Choose your dropshipping supplier
A dropshipping business model is essentially a partnership between yourself (the vendor) and the supplier.
As the vendor, you depend on your supplier for shipping, inventory management, compliance, and product quality. That’s why it’s essential to choose your supplier carefully.
When researching suppliers, make sure their products are high-quality and you agree with their shipping process.
Here are some questions to keep in mind when researching suppliers:
- How does the supplier ensure your orders?
- How does the supplier manage returns and damaged packages?
- What do the supplier’s customer support options look like?
- What do other dropshippers have to say about the supplier?
- How long does the supplier take to fulfil an order from start to finish?
Before partnering with a supplier, make sure to get everything in writing so you have a professional work agreement.
To give you a leg up, here’s a quick list of some of the top dropshipping suppliers:
1. eWorldTrade
eWorldTrade is a trusted supplier for B2B dropshippers, wholesalers, and buyers. If you’re looking for a B2B supplier with a pristine product delivery process and plugin compatibility, then check out eWorldTrade.
Best for B2B dropshippers.
2. SaleHoo
SaleHoo has a large directory and helps connect vendors with suppliers from around the world. If you’re looking for an international supplier with a large inventory, then look into SaleHoo.
Best for International dropshippers.
3. AliExpress
AliExpress offers millions of products at reasonable prices. With AliExpress, you can order single units of items, which means there’s no need for a dedicated inventory offsite. If you’re looking for bargains and an easy way to sell products, AliExpress could be your go-to supplier.
Best for: Affordability and ease of use.
4. Worldwide Brands
Worldwide Brands offers a simple way to find high-quality, vetted suppliers. They also offer dropshipping business and supplier training. If you’re looking for someone to connect you with a supplier you can trust, Worldwide Brands could be the best option for you.
Best for: Training and dropshippers looking for vetted suppliers.
For a more comprehensive list of suppliers, check out this article.
5. Choose your tools
In step five, consider which tools you’ll need to operate your business.
To decide which tools to prioritize, outline your business operations by category. Then, consider the tools you’ll need to make sure your operations run as smoothly as possible.
For instance, if your marketing operations include social media marketing, then you’ll need a social media management tool, such as Planable.io.
If you’ll be managing large volumes of data, then you might need a modern data stack tool to increase efficiency.
Here are some other examples of tools you might need:
- Accounting template software to manage invoices, bills, and taxes. You can also use an accounting workflow process software solution for managing accounting task and your accountant.
- Chatbot software so you can offer 24/7 customer support
- Digital asset management software to organize your marketing assets
- Productivity software to organize your tasks and daily to-dos
6. Choose your outreach and marketing methods
How do you plan on reaching new customers? How do you plan on nurturing existing customers?
And what about sales outreach? Which businesses can you reach out to establish high-volume vendor agreements?
If you’re new to the entrepreneurial scene, brush up on your business lingo so you can communicate effectively.
Be sure to discover:
- Your target market’s ideal messaging preferences
- How suppliers prefer to communicate
- How to write sales copy that converts
- How to write ads that convert
7. Solidify your business processes and list your products
In this step, solidify your business processes so they function as efficiently as possible.
When ironing out your processes, pay close attention to shipping. Although your supplier will handle most of the shipping process, you may need to enlist the help of a courier service to help speed it along.
For instance, if your products ship from China, the shipping timeline will likely be longer. A courier service can help you get the products in your customer’s hands faster so you can avoid unwanted customer disputes and inquiries.
Some other processes you’ll need to outline include:
- How you plan on catering to customers throughout the buyer’s journey
- Your customer support processes
- Your hours of operation and how to handle inquiries past office hours
- Your daily, weekly, monthly, and annual operations
- Employee processes and responsibilities if you plan on hiring a team. Make sure to generate pay stubs as some states of the USA require firms to file and issue pay stubs.
- Your ordering and fulfillment processes with your supplier
- Your record-keeping process
- Your budget and financial management processes
- Business exit strategy in case you ever want to sell your business for profit or to start something new.
Wrap up
It’s only natural to want to start a dropshipping business.
With its low overhead, simple processes, and hands-off business model, dropshipping continues to grow in popularity.
If you’re ready to start a dropshipping business in 2022, we hope this article has empowered you to do so!
On the hunt for a B2B dropshipping supplier? We’ve got you covered. Register with eWorldTrade for free today.
Craving more helpful articles like this one? Head on over to our business blog.