If you tell people you want to start a business, most will question if you have enough capital. They will tell you starting a business is a very risky venture as most startups close down in a year. They will ask you to spend 10-20 years to save some money first. They believe business failure will cause a million dollars loss and your life will come to an end.
However, is it true? Is it true that it’s impossible to start an online store for free?
Starting a Business for Free is Not a Dream
In the past, I really thought I had to at least work for 20 years in a job to save a million dollars before I can try to create my own business. I even thought I would have to seek funding from angel investors.
Until I learnt the concept of dropshipping, I realised these are just my misconception. It’s really possible to start a business with no money.
Unlock the Goldmine for Free
If dropshipping is a new concept to you, congratulations as you’re going to unlock a goldmine that you did not discover before. Dropshipping basically means when a customer places an order with you, you pay for the supplier to fulfill the order for you. Your supplier will pick, pack and ship the product for you. There’s no minimum order quantity that you can just place one order each time you got an order.
In the process, you don’t have to pay a penny from your pocket as you simply pass a portion of the money you got from your customer to the supplier and earn the spread.
Unlike traditional trading business, you don’t have bear the inventory cost. What you’re responsible for is to test marketing strategy for sales and provide customer service for satisfaction.
In the following sections, I will explain step-by-step how you can build a successful online store by dropshipping.
STEP 1: Set Up Your Online Store On Shopify
Shopify is an Ecommerce platform that I highly recommend, which can help you easily build your online store. It’s suitable to anyone, especially those who don’t have advanced computer skills like coding. There are readily made themes that you can use to build an online store in an hour, and Shopify has all the systems set up for you to process transactions.
The best thing is that on Shopify, you have access to thousands of apps that you can install to optimise your store so that you don’t have to employ expensive developers to create softwares yourself.
If you want to know more about Shopify, you have 14 days free trial to test it out.
STEP 2: Research Hot Products to Sell
After you’ve set up your Shopify store, the first critical question you have to decide is what product to market. Not all products are worth promoting. You have to analyse if there’s a market demand and most importantly whether there is enough profit margin for marketing campaigns.
For dropshipping, you’re not creating a unique product, so you can go to Amazon to see what products are hot-selling. Simply google ‘Amazon Best Sellers” and you will see what products are having a huge market demand.
Although it’s not necessary to choose a niche that you’re interested or passionate about, it would be easier if you have some expertise in certain products so that you understand the target customers better and can provide some valuable information on your product page.
Another way to reduce information cost is to get inspiration from your competitors. This is the easiest way to dig out what products are hot selling. You can either visit MYIP.MS to find out the Shopify stores with the most traffic. And to view the best-selling products on these popular Shopify stores, simply append this to the end of the website URL: /collections/all?sort_by=best-selling. That way, you will have an idea what products other Shopify stores are selling well so that you consider promoting it as well.
If you want to further reduce information cost, you can then do a search on Google Trends and Google Keyword Planner to see if the product is trending in terms of searching volume.
After that you can start to search on Aliexpress to see if you can find the same product. If you find the product on Aliexpress, you can further validate your idea if there is market demand by simply looking at the order number on Aliexpress. If the order number is huge, it implies there’re many dropshippers promoting this product and there should be large market demand. But one point to note is that it means the competition is intense in the market, so you may have to find ways to differentiate yourself in the marketing campaign.
STEP 3: Source Suppliers and Products from Aliexpress
Aliexpress is a marketplace similar to Amazon where you can find million of products at cheap prices. There is no upfront cost or fee. The beauty of dropshipping from Aliexpress is that you can do a lot of testings on different products without costs. You don’t have to invest any money on products and store in your warehouse. You can simply launch your new product by listing on your storefront.
Usually, there are several suppliers selling the same product. To protect yourself, it’s important to find a reliable supplier in terms of product quality and shipping speed. Here’re the simple criteria that you can use in choosing the supplier.
- Epacket delivery is available: it’s important to choose a supplier who can ship by ePacket because ePacket is the most economical and quicker option to ship to the United States and many other developed countries from China.
- Over 300 orders: suppliers who have processed 300 orders or above for the product implies the supplier is more reliable than average.
- Supplier’s rating: You should try to look for supplier with ratings of 95% or above. Also, you should see how long the supplier’s store has been established because you should try to avoid stores opened for less than 1 year.
- Price is low enough with high margin potential: sometimes, the prices may vary among different suppliers. Although price is not the most important factor, you should always choose a supplier offering a reasonable price, otherwise you won’t have enough margin potential for marketing campaigns.
- Communication Effectiveness: it’s a good practice to send a message to the supplier and see how responsive and helpful they are before cooperating with them.
After you’ve chosen the best supplier, it’s time to list the product on your shopify store. To do this, you have to use an app like Oberlo, which can be downloaded from the App Store. Oberlo is an amazing software that helps you streamline and syn your store with Aliexpress. When you receive an order, you can place fulfill your orders on Aliexpress automatically with Oberlo.
Oberlo will also notify you of any inventory or price changes from your supplier. When your supplier ships your order, Oberlo will help send a tracking code to your customer to keep them updated. With the help of all this automation, you can actually operate the whole business on your own at the beginning, saving you money on hiring staff.
STEP 4: Promote Your Products to Target Customers
Now, you have your online store set up and products ready for sale, here comes the most important part: get people to buy from you.
First of all, to make your marketing campaign easier, it’s better for your store to specialise in a certain product or niche. Otherwise, your marketing campaign is easy to lose focus. You don’t have to cater to everyone to build a successful store.
Another thing is about your mindset. You may question why people would buy from you if they can get the same product at lower price on Amazon or EBay. The reason is that what you’re selling is not only the product itself but insights, information and solutions for a particular problem in the niche.
Prospects may not have seen the product you’re selling. And if you can demonstrate your expertise by providing information and solution and build the trust with your prospects, most customers would just buy from you.
So how do you find out and reach your potential customers?
Of course, you can use marketing strategies that are totally free such as build up an Instagram account from scratch or start a blog for organic traffic. However, if you want faster way to make profit, there is no better ways to promote your products by Facebook ads. In fact, the money spent on Facebook ads are not expenditure, but investment.
There’re many strategies you can use when it comes to running Facebook ads. Here, I would like to introduce an effective strategy that I have tested and proven to work for most products.
As I mentioned, in marketing your products, you shouldn’t focus on the product itself, but the information or solution you can provide for your prospects. As there’re many salesy Facebook Ads, it’s hard to stand out if you just follow others by simply displaying your product and extending your hands to prospects for money. If you do this, you may have few sales but the revenue may not be enough to cover your ad cost. The reason is that you didn’t follow the customer buying cycle. Most people do not make a purchase at the first instance.
The customer buying cycle can be broken down into 3 stages: awareness, consideration and purchase. Imagine you simply put out your product, most customers have the tendency to see it as nuisance and pass it.
Therefore, a more effective way to promote is by offering value first. You can offer value by writing an article about the issue that can be resolved by your product. The article should not sound salesy but to offer help and insights for the prospects you know are likely to have the issue. Then you can advertise your article, not the product, on Facebook. I’m sure an informative and helpful article will attract prospects’ attention more than simply a product advertisement. Prospects wouldn’t see it as a nuisance to take money from them but a helpful and free advice from you.
Now you will be able to build up some trust and relationship with some prospects who have read your article. Then you can create a custom audience on Facebook ads manager and retarget them with your solution, i.e. your product. When you do this, you’re following the customer buying cycle and the principle of reciprocity in marketing your product and as a result, your conversion rate will be much higher than a simple product ads.
There’re many other strategies in running Facebook ads, but I believe this strategy should be enough to get your started.
Capital is Never an Issue if You Do it Right
You don’t have to be rich to start a business, but a business can make you rich.
If you want to avoid losing million dollar in business, it shouldn’t stop you from starting a business. Business is an intellectual game that the one who keeps learning will know how to minimize risk and crack the code of success.
Now you know how to do dropshipping without capital, you have no excuse not to start it right now. Just do it and at the same time, keep learning and testing different business strategies.
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