Opening a Shop without Goods: 4 Steps to Business on Chinese Shops
- August 06, 2018
- by Vladislav Grishchenko
- Reviews: 0
In the era of the Internet, any person can make money online, from anywhere on the globe. But not everybody is fast to seize the opportunity.
I am going to tell about dropshipping for those who still do not know how easy it is to create an online business.
Dropshipping is a business model which implies that a seller has an online store but does not have a warehouse. The seller orders goods only after they are paid for by the end customer and they are delivered to the customer from the supplier directly. Thus, the dropshipper does not physically see the products represented on his or her website.
The working business model is as follows:
PAYPAL — SHOPIFY — DROPWOW — FACEBOOK
• Register an LLC and integrate it with PayPal account;
• Create a store in Shopify;
• Install Dropwow application;
• Purchase advertising on Facebook/Instagram and start testing.
Registration is required in order to do business legally and to be able to withdraw money to your personal accounts.
In Russia you can register as an individual entrepreneur, but it will be difficult to connect payment systems which are popular in the rest of the world. At the same time, when registering an LLC in the USA, you will not have any problems integrating with PayPal.
Of course, the state duty for registration in the US is higher ($50-500 vs. 800 rubles in Russia). But it is of advantage that you can have an LLC opened remotely.
Creating a Store
First of all, you will need a trading site of your own. You can easily construct it yourself – there are special online constructors available on the Internet for this purpose.
Shopify is one of those constructors. All you need to do to start working with it is purchase a monthly plan which costs $30 and design your website interface. It does not take a long time and does not require any programming skills.
But it is the phase where your product page is created which predetermines success of sales. It includes everything a user sees on the website: photos, descriptions, prices and discounts, pop-ups, etc. It is presentation of your products. If you catch your customer’s attention here, you will have the highest chances to have orders.
Finding Products and Suppliers
You could already take orders … but you have nothing to sell yet. The easiest way to get it going is to connect to commercial platforms such as Dropwow.
Dropwow is a specialized service for working based on the dropshipping model. On the one hand, it represents suppliers that upload their goods catalogs onto the platform. On the other hand, there are online stores that can import those goods directly to their own landing pages. Sellers do not have to communicate with suppliers, coordinate delivery schedules or discuss any other transaction details.
Advantages of using Dropwow: it is free for online stores and goods it represents can be added to your landing page at any time.
You have to choose the products you are interested in, import them to your store and charge prices. In order to select a correct pricing strategy, take all your expenses into account including the first cost and delivery, payment service fees and the cost of advertising.
The service allows applying the same pricing strategy for all product categories: you only have to specify the mark-up you want to have in order to make profit.
Let us suppose that you have already determined your target audience and chosen goods for sale. Now you have to tell people about your goods.
The easiest way is to start advertising in Europe and the USA: the audience of those regions is best represented in Facebook and Instagram. Besides, the western segment of FB has higher solvency than the Russian one.
Then, you launch an advertising campaign with a $5 limit for a single product which is quite enough. Facebook usually spends it in 24 hours, so it is recommended that results of tests be checked at least once a day. Products with conversion are selected based on the results and the related budget is increased. Products without conversion should be replaced with others.
Testing may become the longest phase in launching of a business: some products are harder to sell and your primary goal is to find the segment with the highest demand and try to get into it. The higher is your starting budget for tests, the better. You should plan it at a rate of at least $200-300.
Of course, it is not that perfectly easy and rose-colored: there are at least two computer algorithms which can prevent fast promotion of your business.
First, if the price of a product on Facebook is increased abruptly, the system algorithms will deduce that your price per click is too low and it will be increased threefold. But there are some ways to circumvent this problem: you can raise the price gradually (by 30% every three days) or create a duplicated advertisement with a higher price (the old one should later be deleted).
Secondly, there are payment service algorithms. They may block account activity if they consider it abnormal. This may happen if advertising attracts an unexpectedly large flow of customers. You should take care to see that the payment system is always working.
Advantages of the Business Model:
• No expenses for renting a warehouse;
• Low entry threshold (starting budget within $1000);
• Low product first cost (about $10 on average);
• No strict peg to the product category;
• Fast launching (it can take just one month);
• Not very time consuming (2-3 hours per day for tests);
• Simple conduct of business (instant unloading of goods, price calculators, synchronizing of accounting and delivery tracking).
In fact, this kind of business can be conducted with other regions as well, not only with the USA and Europe. According to Dropwow statistics, the platform yields good returns in Australia and Canada (especially on sale days such as Black Friday and Cyber Monday).
Besides, there are lots of other online constructors, dropshipping platforms and sites where you can purchase advertising and generate traffic. The model will work, this way or another, but its components (and, consequently, performance) may vary.
Feedback from Dropwow users:
Tammy dela Cruz
I started to use Dropwow in April as a way to add some sending money. I am on disability which does not leave me any money once my bills are paid. What features do you like in Dropwow? I like that my orders are right there and all I have to do is pay for it. Dropwow does the rest, ships to customer, provides tracking number and as of recently when I import items they provide the description.
I have been selling a linen shirt for little boys (my best seller), an unisex windbreaker and there was a red white and blue ladies dress. So Clothing is my best seller
I had been spending about $50 a month in advertising on Facebook — I would say that I spend about 75% on advertising. But I am learning ways to not spend so much, just "promote" on facebook. Ebay is another story you need to watch that, they charge you quite a bit to even have a sore on ebay. With both sites you need to be careful because before you know it you are spending most of your revenue on advertising.
Start small — I added to many things at first and I think it was overwhelming to shoppers. I am trying some "gimmicks" to get people in to the "store" like Christmas in July and I had done Summer for all. I am doing this like I said for spending money, so I pick things I like and put them in the store.
Watch your advertising, Facebook and Ebay especially. You can blow your budget before you know it. Communicate with your buyers, let them know (through ebay if you use them) that you are the middleman, you do not physically have the items. Provide tracking numbers as soon as they come in. Also use a sight like Postal Ninja so you can track the item.
I like the automated Order processing drop wow offers. I think it is a great feature.
I am women's clothing boutique which sells apparel, jewelry and accessories. my biggest sellers are 2 pieces sets and swimsuits
My average revenue is $3000.00 a month. It has grown 100% each month for the past 3 months and we are only 3 months old.
The right way to start is research your niche and then just do it! The only way to learn is by doing.
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