The COVID-19 outbreak did not prepare us for what was about to happen. The stock market plunged, and all the many years that people spent waiting to grow their investment portfolio for financial independence just went down the drain.
What if I tell you that there is a way to achieve financial freedom without investing in stocks, bonds, and mutual funds? Not that there is something wrong with these things—I just find it concerning that you have no control of these investments.
With e-commerce, you are in full control of your business, most especially so if you are in the dropshipping industry. As a dropshipper, your business is cushioned against outbreaks that cripple the global economy.
But how can this happen, and how does e-commerce help you achieve financial freedom?
Today, we will talk about two things:
- Reasons how e-commerce can help you achieve financial freedom
- Steps to build your e-commerce business the right way
Let us get started!
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Reasons how e-commerce can help you achieve financial freedom
Let us start by taking a look at how a dropshipping store can help you get out of the rat race. Establishing a brick-and-mortar store is costly. An online business can also eat up a considerable chunk of your savings if you do not dropship.
With dropshipping, you do not have to stock up on inventory—it is your supplier who does this, and you only pay for an item if there is an order from your store.
1. Low investment cost
Dropshipping is one of the most cost-effective businesses that you can build. It only takes $29 per month to get started with a Shopify store, and you do not even have to buy inventory.
What you would spend on are advertisements and web content. Your new store must have a blog. You can hire a freelance writer who offers affordable web content to do this for you. Stay away from content mills that charge $50 per article of 600 words—you will run out of funds sooner than you think.
Here are some of my blog posts that you may be interested in reading:
In dropshipping, you do not have to buy the products—you only buy them once a customer already placed an order. As such, the only monthly overhead you have is the cost of your store hosting.
Your two main options are:
WooCommerce — free to use but you have to pay a web hosting service provider, the price of which is at least $4 per month. An example of a web hosting provider is Bluehost.
Shopify – an all-in-one platform for e-commerce and dropshipping. The basic plan costs only $29 per month. With this plan, you have a fully functional store with a payment processing system.
If you are a beginner in web building, I strongly suggest that you go with Shopify. WooCommerce requires basic technical know-how, and it can derail your plans if you have no idea how to create a website from a CMS tool like WordPress.
Here are some of my blog posts about Shopify if you are interested to learn more:
2. Semi-automated business processes
Dropshipping is a semi-automated business in the sense that you have tools that make the whole process easier to manage.
For one, there are dropship supplier and order tools that you can integrate with your store. Here are some of the things that these tools do:
- Help you find suppliers
- Make it easier for you to import the supplier’s product to your store; just click some buttons to add them to your store—no need to manually take a screenshot of the product photo or copy-paste the product description
- Fulfill customer orders from inside your store—no need to go to your supplier’s website to order the product
- Automate the fulfillment process – instead of you ordering the product, the supplier is notified immediately once a customer orders from your store. The supplier ships the item to your customer.
These tools have reporting and analysis capabilities, plus you will also have access to research databases that can show you which products are hot and which ones are not.
The three tools that I recommend are SaleHoo, Spocket, and Dropified. If you have not heard of these three, or if you want to know more, read my product reviews about these tools through my blog links below:
Dropshipping is a wonderful business because you only have to visit your store once a day, fulfill the orders, answer customer inquiries, and then you can do something else. If your store is already making a profit, you can even hire a virtual assistant from Fiverr for $10 a day to manage your store for you.
3. Build scalable businesses
What does scalable business mean?
It means that you can grow it. While it is true that all businesses are scalable, the level of difficulty to expand varies from one industry to another.
In dropshipping, it is so easy to add products to your store. Let us say that you started out selling women’s clothing. After a while, you can add women’s shoes, make-up, etc.
You can even expand your clothing store into a full-on online boutique for men, women and children. This is what we mean when we say scalable. You can set up your shop to target a specific niche if you are starting out, and then branch out later on as you see success.
The other option is to create a separate shop that serves a different market. In some cases, this is the only choice, especially if you branded your first store as a shop for women only. In this situation, you are better off building a new store for men or kids.
Here is a great article from Forbes on how to scale your business: The Six Steps To Scaling A Business.
4. High-profit margins
In dropshipping, you control your profit margins. A lot of pundits say that the profit margin in dropshipping is low because of competition.
But why even bother competing? You must realize that for every product in the world, hundreds of people are selling it. Will you really beat your head trying to figure out that sweet spot of a selling price?
What you need to focus on is value—what can you offer to your consumers that other dropshippers don’t?
Besides, you can buy a product in AliExpress for a dollar and sell it for $9. Isn’t that high enough? At that rate, your profit margin is a staggering 800%.
The profit you make in dropshipping is only limited by your capability to market—a good salesperson can sell ice to an Eskimo for a premium price.
This is what I have always been talking about: it is easy to build a store and choose products to sell, but what makes dropshippers fail is their lack of understanding of how marketing works. You have to invest in your marketing skills to make this business work.
My eBook, The Beginner’s Guide to e-Commerce Product Pricing, provides a lot of details about this subject matter. You can download this eBook on my FREEBIES section if you subscribe to my blog.
Steps to build your e-commerce business the right way
Now, while it is easy to build a dropshipping store, making it work is a lot harder than most people think. One reason many dropshippers fail is that they think it is a get-rich-quick scheme.
No, it isn’t.
Dropshipping is a real business, and you need to grind it to become successful. Stay away from anybody who promises to teach you how to earn thousands of dollars per day. Also, set your expectations straight—no successful business was built overnight.
To help you out, I am going to lay out a plan for you to get started. One thing I noticed about many dropshippers is that they watched a few YouTube videos here and there, and then they started building their stores.
But they have no idea how to market the products. They do not know how to run an online business, and they eventually gave up because they never made a sale.
Read on to see the steps you need to take to succeed.
1. Understand how dropshipping works—no, really
Watching a video is not enough. I made this mistake on my first dropshipping store, and it failed. At that time, I was too eager to launch an online business. I built a great-looking store, but I didn’t know squat about marketing.
I launched Facebook ads, used free software, and got no sale.
If at all, there were several inquiries from customers about my products, but no sale.
You have to spend some time learning about dropshipping, or you will end up paying your monthly dues to Shopify without earning a dime.
You may also go down the rabbit hole of adding new plug-ins and apps all the time—paid and free—believing that these apps will help you earn money.
Read. Watch. Learn.
These are the first three things you should do. Take an online course. Spend some money and invest in your education, or you end up and wasting money in your store that does not even get off the ground.
I suggest that you visit and subscribe to AliDropship. It is the dropshipping arm of AliExpress, the biggest source of dropshipping products online in the world. AliDropship is a website that offers all the education and tools you need to build a successful dropshipping store.
2. Select appropriate dropshipping industry or niche
There are millions of products that you can choose from. What now?
Before you decide what to sell, ask yourself if you have the credibility to stand behind this product. Dropshipping is not like blogging. In blogging, you can succeed even if your topic is merely a hobby and not a profession.
In dropshipping, you need to be an expert. If you are selling drones, how can you answer customer inquiries about battery packs or camera compatibility if you have never flown one yourself?
You need to choose a niche that you understand—a niche that you are passionate about. All of us are in the dropshipping business to make a living—to earn money. That is a given.
However, you will fail if money is that only motivating factor for starting your store. You will never succeed doing something you do not love.
Choose a niche that you care about. If you do this, your failures will not set you back—they are coals that light up your passion to keep on going.
3. Learn as much as you can about marketing for dropshipping
Marketing is the secret sauce to succeed in dropshipping. One problem I often see is that people in the dropshipping world have a tendency to succumb to “hacks”.
They look for hacks not to make them more efficient, but because they do not like to learn and work.
For example, they copy someone’s ad on Facebook and release that ad as their own, changing only the website URL or landing page on the ad.
The result? They fail.
To begin with, marketing is about showing your products to the right people. Even if you copy someone’s Facebook ad, there is no way you will know the targeted audience of that ad.
Sure, the ad you copied was for a dog collar. So you launch the same ad in the US. What you did not know is that the ad you copied has a following—that they used Facebook pixel to run their ad, and that they have a massive email subscriber list to send marketing materials to.
You do not have these things, so your ads fail. Can you just imagine showing a lipstick product to a group of men? Can you really make a sale?
Advertising online works the same way. You need to place your ads in front to of the right demographics. You can never do this by just copying ads.
You need to invest your time in learning how to market your products, how to reach people, how to be credible, and how to be an influencer.
And we are only talking about Facebook advertising. You still have a lot to learn about Instagram, Twitter, Pinterest, and who lot more.
4. Prepare your guns and bullets for your dropshipping battle
No half-baked business succeeds. Your dropshipping battle is an uphill journey. If you are ill-prepared, you will not see success.
After learning what you can, you have to sit back and try to see the entire business structure from a bird’s eye view.
You have to create a plan—a list of the things you will do, the money you have to spend, dates that you need to execute your plans, and so much more.
You need a spreadsheet to list down all of these, and then mark your target activities if they are completed or not. You need to be able to see your project progress to keep all your activities done in order of priority.
Here are some examples of what to think about–things you need to list down:
- Platform to use – what and how much?
- Marketing strategy – how will you do it? What is your marketing budget?
- Ad banners – what is your standard? What is the core message?
- Products – what photos are you going to use? How will you standardize the photos so all of them are uniform? Have you prepared the product description for each?
- Logos – who is going to create this for you? Do you have different logo photos in different sizes that fit different social media channels?
There are so many other things that you have to plan for. You cannot just build a store and then think about these later on.
The moment you build a store is the moment you start paying for the store hosting fee. So no, you should have all of these ready before you even register for a 14-day free trial in Shopify.
You can achieve 100% financial independence through dropshipping. People have done it, and many others will also succeed.
Will you make mistakes along the way? Yes, you will. But do not be afraid. All business people made many mistakes as far are their decisions are concerned. And you will, too.
This does not mean that you have to fumble and just try whatever you can lay your hands on.
Learn, plan, and then execute. If you have a plan, you will significantly reduce the possibility of failing.
MY RECOMMENDED TOOLS
Visit my recommended tools page if you are looking for the best software to help you build your e-commerce business!
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