Dropshipping is basically an online business model within India which has quickly become one of the most popular ways of starting a business. It allows people to start their own e-commerce business without keeping “physical” inventory with themselves. S, instead of storing their products on their own, they sell those products online while a third party supplier then ships them directly to their customers.
This essentially means that the owner of that small e-commerce business has:
- Lower startup costs
- No need for a physical warehouse
- Flexible work hours and work from home majorly
- An easier online business setup
What exactly does Dropshopping entail?
So it is basically a business model that is predominantly online instead of being a physical store. The main process and how it works is:
- A customer places an order on your website
- You forward it to a supplier
- That supplier then packs and ships the product directly to the customer
So, how do you earn profits here?
The profit majorly comes from the difference between selling price and the supplier’s price. But, you also have to set the price at a reasonable rate which allows you to be affordable for the masses but also gives you profit without waiting for 1-3 years to just break even.
How does it work?
To understand how it works, let us take a small example.
A supplier sells headphones for 700 rupees.
You list those headphones for 1,299 rupees.
When a customer buys it:
You pay the supplier 700 rupees and the supplier ships the item.
You keep the remaining 599 rupees as profit for yourself.
What are the benefits of starting a Dropshipping business in India?
In today’s climate where expenditures are increasing, budgets are limited and competition is always high – dropshipping comes as a saving grace which allows you to start your business but with very low risk.
You do not need a very high investment:
This happens because you do not need warehouses and the resources to keep it functional. Bulk inventory for all future orders or even packaging units like wrapping paper, stamps, company logo stickers and more.
Many people thus start with minimal investment as compared to traditional businesses.
You can work from anywhere:
You basically only need your laptop, internet connection, marketing strategy and your own schedule ready for calls or emails. Due to this flexibility, it is extremely popular amongst students, freelancers, working professionals and those who are stay at home entrepreneurs.
You have a huge variety of products to choose from:
Moreover, you also have variety in terms of products. You can sell fashion products, home decor, electronics, fitness accessories, beauty products, pet products and phone accessories.
And the best part is that you do not have to stock any inventory yourself.
How do you choose which product to sell?
That depends on what niche or category you are most interested in.
Choosing the right niche is extremely important because it will generate more revenue for you if you can sustain it long-term.
Step 1: Choose a profitable niche
Try to choose a good Dropshipping niche in India such as:
- Fitness products
- Mobile accessories
- Home organisation
- Kitchen gadgets
- Skin care products
- Pet accessories
- Car accessories
- Fashion jewelry
You also have to consider if this niche is in high demand, has a reasonable amount of competition, can have good profit margins and has a regular customer interest which will be long-term.
Do not choose products that have a very low profit margin or will create high return rates (such as photo frames specifically).
Step 2: Find reliable suppliers
Your supplier should be your number one priority and is the most important part of your business. He is the one who will help your business take off.
A bad supplier can lead to delayed shipping, poor quality products, customer complaints and refund issues – all of which will increase your stress.
You can also explore some great supplier places like: IndiaMART, GlowRoad, Meesho, AliExpress and even Alibaba because they have been in the game for long enough to be credible.
But before you select one, the most important tips to remember while doing so are:
- Always check their reviews and ratings from at least the last 5 years
- See their shipping speed so you know what to add in your website
- Check the quality of products they offer because this will determine customer loyalty
- What their return policies are
- Communication quality
Step 3: Create your own online store:
You now need a professional website where customers can browse and purchase the products that you have, on their own. The best platforms for Dropshipping businesses in India are Shopify, WooCommerce and Wix eCommerce all of which allow you to set up your website on your own.
Your online store should include your logo, product descriptions, product images, payment getaway return policies, customer support, contact page and shipping policy.
Step 4: Register your business:
Although many people start casually, registering your dropshipping business in India helps build long term credibility and also ensures that your business is taken seriously from the get-go because there are multiple business scams being run online at this point.
Consider adding a GST registration, sole proprietorship, UDYAM registration and a business bank account as well.
Step 5: Add payment gateways:
Add in payment gateways like Razorpay, PayU, Cashfree payments or Cash on Delivery options for your dropshipping business within India for a smoother customer experience.
Step 6: Market your products:
Marketing is what brings customers to your store. So, without marketing even a good store may not generate sales because people will not come to know what your store sells, who you are, and what makes you different.
You can use instagram marketing, facebook ads, SEO content and influencer marketing to reach your audience.
Step 7: Manage customer service:
Even though a third party does ship your products, customers will still contact you for their delivery issues, refunds, damaged products, tracking updates and returns. So that is the one main place you will have to put a lot of effort into to ensure you build customer loyalty.
Lastly, how much money is usually needed to start a Dropshipping business in India?
Some people even start with 10,000 – 15,000 rupees while others invest a lot more into advertising.
It costs around 3000 per month for Shopify subscription, around 1500 a year for your domain name, around 5000+ for ads and marketing and the cost of product testing varies from product to product.
