Beginners – Your Guide to Dropshipping

Did you know that dropshipping actually started back in the late 19th century?

The roots of dropshipping can be traced back to mail-order businesses.

Companies like Sears, Roebuck & Co. in the United States used catalogs to sell products to customers who lived in rural areas. These companies didn’t always stock all items but would fulfill orders by sourcing from suppliers after receiving a customer’s order.

Now? 

Dropshipping is a way for you to find, source, and send awesome products to your customers — all without leaving the comfort of your sofa.

Let’s talk about what dropshipping is — and exactly how you can use it to build a successful e-commerce business. 

What is Dropshipping?

Here’s our “official” definition: Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when the store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.

And yes, it’s just as awesome as it sounds. 

You don’t have to create the product or ship the product. All you have to do is sell the product.

In fact, you might be surprised to learn that 27% of online retailers use dropshipping in their business model.

Now you’re probably thinking, “That sounds too good to be true.” Is it really possible to just throw up an online store, sell, and let someone else take care of fulfillment? 

Yes. Yes it is. 

But as with anything, there are pros and cons. So let’s talk about them.

Pros & Cons of Dropshipping

Here are some of the main pros and cons you should be aware of with a dropshipping business.

Pros of Dropshipping

Low Startup Costs:

• No need for a physical storefront or warehouse.
• Minimal upfront investment as you don’t need to purchase inventory in advance.

Reduced Overhead:

• No costs associated with managing or maintaining inventory.
• Lower ongoing expenses like rent, utilities, and storage fees.

Wide Product Selection:

• Ability to offer a wide range of products without the need to stock them.
• Easier to test and add new products to your store.

Scalability:

• Easier to scale your business as you don’t need to worry about inventory management.
• Suppliers handle the shipping logistics, allowing you to focus on other aspects of your business.

Location Independence:

• Operate your business from anywhere with an internet connection.
• Flexibility to manage your business remotely.

Reduced Risk:

• Lower financial risk as you only purchase products after making a sale.
• Less risk of unsold inventory or overstock.

Focus on Marketing and Sales:

• More time and resources to focus on marketing, customer service, and optimizing your online store.

Cons of Dropshipping

Lower Profit Margins:

• Higher competition and reliance on suppliers can lead to lower profit margins.
• May need to sell a high volume of products to achieve significant profits.

Inventory Issues:

• No control over stock levels, leading to potential stockouts or backorders.
• Difficulty in managing multiple suppliers’ inventory levels and availability.

Shipping Complexities:

• Complex shipping logistics when dealing with multiple suppliers.
• Potential higher shipping costs and longer delivery times can impact customer satisfaction.

Quality Control:

• Less control over product quality and packaging.
• Increased risk of receiving defective products or poor-quality items from suppliers.

Supplier Errors:

• Mistakes made by suppliers, such as incorrect shipments or delays, can reflect poorly on your business.
• Challenges in managing customer service issues related to supplier errors.

Branding Limitations:

• Limited ability to brand products as your own.
• Difficulty in creating a unique and memorable brand identity.

Customer Service Challenges:

• Handling returns, exchanges, and refunds can be more complex and time-consuming.
• Potential for dissatisfied customers if issues arise with suppliers.

Dependence on Suppliers:

• Reliance on third-party suppliers for product availability, quality, and fulfillment.
• Risk of suppliers changing terms, prices, or going out of business.

Build Your Dropshipping Store Now (FREE)!

How to Create an Ecommerce Store With Dropshipping

Now that you have a grasp of what dropshipping is… and the pros and cons of creating your own dropshipping store, I should mention that you can click here to build your dropping store for free — using ClickFunnels and Zendrop.

Pretty cool, huh?

Now let’s walk through the steps of how you can build a successful e-commerce store with dropshipping (learn how to build a dropshipping funnel).

Step #1: Find Your “Blue Ocean”

This is the critical first step when you’re building any type of business — whether e-commerce, informational, or something else. 

You need to identify your “blue ocean”.

What is that? 

It’s an idea that Russell Brunson explained in his book, Expert Secrets (you can get a free copy at that link). 

You can think of a “red ocean” as one infested by sharks (i.e. competitors). There are already a lot of people in that spot and they are competing for food. 

But a “blue ocean” is a place where there’s not too much competition, a place with opportunity that is relatively unexploited. 

When you find your blue ocean, you make it 100 times easier to succeed! 

Here’s how you do it. 

Start by choosing a market: health, wealth, or relationship.

Then, choose a submarket, for which there are many — here are some examples…

• Health —> Weight Loss, Strength Training, Nutrition
• Wealth —> Investing, Real Estate, Finance
• Relationships —> Dating Advice, Marriage Advice, Love

Once you’ve selected a submarket, go one layer deeper to find your niche (or your “blue ocean”).

This can be anything — here’s one example for each market path…

• Health —> Weight Loss —> Personalized Meal Planning
• Wealth —> Finance —> Paying Off Debt
• Relationships —> Love —> Going Through Divorce

See how this works?

When you go a bit deeper, you’re able to identify a niche where you can operate without too much competition. 

There are a TON of people competing in the health niche, fewer people specifically in the weight loss niche, and even fewer in the personalized meal planning niche. 

It might be difficult to choose just one niche, but the more that you can do that… the easier it’s going to be when it comes to actually selling your e-commerce products.

Step #2: Create Your Branding & Messaging

The next step is to create your brand and your messaging. 

Why is this important? 

Because one of the things that make a product or e-commerce store POP is the brand or its vibe. Think of Liquid Death. 

That is literally just a can of water.

Heck — if I told you you should start a brand selling water in a can, you’d think I was crazy. There are already so many water brands that it’s ridiculous. To imagine that there might be more market share would seem nuts.

But there was. And there is.

Liquid Death has experienced significant growth since its inception. Recently, the company closed a $67 million funding round, bringing its valuation to $1.4 billion. This is a notable increase from its previous valuation of $700 million in October 2022​.

Pretty wild. 

But the question is WHY.

And the answer is that, although they’re just selling water, they’re doing it in a way no one else is — with “death metal” branding that a lot of people identify with.

This is a great example of how you can differentiate yourself with your branding — and create your own blue ocean that might not even exist yet.

Here are some questions to ask yourself…

1. What is your unique selling proposition (USP)?

What makes your product different from the competition? This could be the quality, the price, the customer service, or the branding itself. For Liquid Death, the USP is their unique, edgy branding.

2. Who is your target audience?

Who are you trying to reach? Understanding your audience helps tailor your branding and messaging to their preferences and needs. Liquid Death targets a specific demographic that appreciates unconventional and rebellious branding.

3. What is your brand’s story?

Every great brand has a story. What’s yours? How did your business come to be, and what are its core values? Liquid Death’s story revolves around breaking the mold of traditional bottled water brands and creating something that stands out in a crowded market.

4. How will you visually represent your brand?

What colors, logos, and design elements will you use? Your visual identity should align with your brand’s personality and appeal to your target audience. Liquid Death uses dark, bold imagery to match its “death metal” theme.

5. What tone and voice will you use in your messaging?

The way you communicate with your audience should be consistent and reflect your brand’s personality. Liquid Death’s tone is irreverent and bold, which resonates with its audience.

6. What platforms will you use to reach your audience?

Different platforms serve different purposes. Social media, websites, email marketing, and more all play a role in how you connect with your customers. Liquid Death has effectively used social media to amplify its unique voice and engage with its audience.

7. How will you build a community around your brand?

Community building is crucial for brand loyalty. How will you engage with your customers and make them feel like part of your brand’s journey? Liquid Death has fostered a strong community by aligning its brand with a lifestyle and culture.

When you’re creating your brand image, try to nail down…

• Your slogan — Your slogan is a concise statement that captures the essence of your brand and what it stands for. It should be memorable, catchy, and convey the core message of your business. A good slogan differentiates your brand from competitors and leaves a lasting impression on your audience. For example, Nike’s “Just Do It” encapsulates the brand’s ethos of empowerment and action.
• Your values — Your values define what your brand stands for and guide your business practices. They should reflect your company’s mission and ethical standards, influencing every decision you make. Clearly, articulated values help build trust with your audience and foster a loyal customer base. For instance, Patagonia’s commitment to environmental sustainability is a core value that resonates strongly with its customers.
• Your name — Your brand name is the first thing people will notice about your business, so it should be unique, easy to remember, and reflective of your brand’s identity. A well-chosen name can set the tone for your brand and make it stand out in a crowded marketplace. Think of names like “Apple” or “Amazon” which are simple yet powerful, and evoke a sense of innovation and vastness respectively.
• Your visual identity — Your visual identity includes your logo, color scheme, typography, and overall design aesthetic. It is the visual representation of your brand and should be consistent across all platforms and materials. A strong visual identity helps create a recognizable and professional image, making it easier for customers to connect with and remember your brand. For example, Coca-Cola’s red and white color scheme and distinctive script logo are instantly recognizable worldwide.

… and make it all align so that when people arrive on your website, it feels like something truly special and unique. 

The last thing you want is to feel like every other storefront in your niche! 

Step #3: Build Your Storefront

Just like you used to have to build and source your own products, you also used to have to design and code your own online storefront. 

But now it’s easy as pie. 

With ClickFunnels, you can use our AI Smart Funnels to create a funnel from scratch in less than 10 minutes — just answer a few questions. 

Even better, you can then use our AI assistant to help you with any changes you want to make to your funnel or website. 

We have an AI chatbot named Napoleon. Click on any element on the page, and the bot will recognize that section. Then you can ask the bot to rewrite the copy, expand it, shorten it, or change it in any particular way you like… 

So not only can you build your funnel with AI — you can also refine it with AI!

Amazing, huh? 

And when it comes to dropshipping, ClickFunnels now fully integrates with Zendrop — one of the best dropshipping companies on the planet, that will give you access to list and sell literally millions of products on your e-commerce store. 

In other words, you don’t need to hire an expensive web developer or even go hunting for different dropshipping or website-building companies. 

With ClickFunnels & Zendrop, you’re taken care of 🙂

Just click below to sign up and get started — then come back here and we’ll finish up!

Build Your Dropshipping Store Now (FREE)!

By the way, if you feel a little confused and don’t know where to start, then go sign up for our One Funnel Away Challenge, where you can now take the “e-commerce” path to learn exactly how to sell one product with one traffic source and make (literally) millions of dollars. Learn more here.

Step #4: Drive Traffic

So you’ve got your storefront built and you’re ready to sell products!

Thing is… you need people to visit your store and buy. 

That’s called “traffic”. 

And there are a seemingly endless number of ways you can drive traffic to your e-commerce store. All of which are effective. 

But here are the main ways to learn about and consider!

Content Marketing — Social media is a great place to tell people about your products. If you post consistently on, say, Instagram and build a following… people will naturally want to learn more, they’ll visit your storefront, and they’ll even buy your products. The key is providing genuine value or entertainment for your audience, putting a link in your bio, and posting at least 1-2 times per day. You can learn more about Instagram marketing here. 

SEO — SEO stands for “Search Engine Optimization” and it’s all about optimizing your content to rank in search engines like Google. The more you rank, the more traffic you drive organically (for free) to your website and storefront. If you sell tennis rackets, you’d want to rank for phrases like “best tennis rackets” in Google. Then you’re getting relevant traffic. You can learn more about SEO here. 

Advertisements — If you’ve got some money to spend, then you can get results a lot faster by running ads. The easiest places to do this are on Facebook or Google. They have easy-to-use platforms that allow you to get ads up and running in as little as 10 minutes. The key here is to make sure you’re targeting the right audience with your ads, that you have a good hook, and that your funnel is dialed in so you’re not wasting money. You can learn more about advertising here. 

Sponsorships — Sponsorships are like a more “rogue” version of advertising. Instead of just running ads on the big platforms, you can find your own platforms where you want to run ads.

These could be email newsletters, blogs, specific websites, or even podcasts. It takes a bit more research because you have to find these places yourself… but you can get a lot more bang for your buck if you do it right. 

Influencers — You’ve probably seen influencers promoting products on Instagram or TikTok before… that’s because it works! You can find influencers using our “Dream 100” strategy and then reach out to them and ask them what it’d cost for them to promote your products to their audience. 

Affiliate Marketing — Did you know you can get people to sell your products for you… and you only have to pay them a percentage when they make sales? This is called affiliate marketing. You can build your very own “affiliate army” to promote your products.

Step #5: Test Different Products

Once your store is up and running, it’s crucial to continually test different products to find what resonates most with your audience. Here’s how to approach this:

Start with a Small Selection:

Begin by offering a small variety of products related to your niche. This allows you to manage inventory better and understand customer preferences without overwhelming yourself.

Analyze Sales Data:

Use tools to track which products are selling and which aren’t. Pay attention to customer feedback, reviews, and return rates to gauge product success.

Run A/B Tests:

Experiment with different product descriptions, images, pricing, and promotional strategies. A/B testing can help you determine what variations lead to higher conversions.

Leverage Customer Feedback:

Engage with your customers through surveys or direct feedback channels to understand their needs and preferences. This can provide insights into potential product improvements or new offerings.

Rotate Products:

Regularly introduce new products and phase out underperforming ones. This keeps your inventory fresh and exciting for repeat customers while allowing you to find top sellers.

Utilize Social Media and Ads:

Promote different products through social media and paid advertising to see which items gain the most traction. Track engagement metrics to refine your marketing strategy.

Final Thoughts on Dropshipping

Dropshipping presents a fantastic entry point for new entrepreneurs due to its low startup costs and scalability. By focusing on marketing and sales while leveraging third-party suppliers for fulfillment, you can quickly set up and grow your business from anywhere.

However, it’s essential to be aware of the challenges, such as lower profit margins and reliance on suppliers. Success in dropshipping requires finding a unique niche (your “blue ocean”), creating a distinctive brand, and continually optimizing your strategies.

Drive traffic using a combination of content marketing, SEO, ads, and influencer partnerships. Tools like ClickFunnels and Zendrop can simplify the process, allowing you to concentrate on growing your business.

Stay adaptable, keep learning, and focus on building strong customer relationships to thrive in the dropshipping world.

Build Your Dropshipping Store Now (FREE)!