Scaling Your Online Business: How to Make Money Dropshipping in 2024

Dropshipping is an incredible way to do business. You can source the products from a supplier or manufacturer, and sell them to a third party without having to fulfill orders or stock items. Simply put, dropshipping puts your business right in the middle, making it the mediator between the product source and the customer. 

Dropshipping is a very popular business concept. The dropshipping market is expected to reach $301 billion this year. By the end of the decade, the market is expected to quadruple in value, reaching over $1 trillion by 2030!

Why would people go for dropshipping instead of traditional selling?

It is more affordable, less risky, and much simpler than traditional business models. The clever business model removes the difficult components of running a traditional business, lowering your investment costs and de-risking the online business.

Whether you want to add dropshipping to your existing business operations or scale your online business to only sell products from other sources, you’ve come to the right place. Our comprehensive guide will provide you with key insights and steps to take to make money dropshipping in 2024. Let’s learn how to make money dropshipping!

What is dropshipping and how it works

Dropshipping is a business model, a retail fulfillment method in which the business doesn’t produce or keep the products it markets in stock. When the dropshipping business sells a product, they buy it from a third party and ship it to the customer. 

As such, this model has revolutionized the business industry and the e-commerce landscape. It allows entrepreneurs to start a company without having to make major investments in equipment or inventory. They can simply create an ecommerce website on a ready platform like Shopify or Squarespace, spending less than $30 a month, and start selling!

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Tips on how to make money dropshipping

Later in this post, we will tell you all about starting an online dropshipping business. Before we jump into action, let’s go through the strategies you should apply to scale your online business with this sale method. 

1. Scale your dropshipping business

Let’s say that you have a dropshipping business - or at least have started creating such a store to make profits. Here are the most important steps you need to take to scale your online business.

Automate repetitive tasks 

As the business grows, you should consider automating some of the tasks, at least the most repetitive activities such as order processing or customer support. This will allow you to streamline your business operations and keep your customers satisfied. 

Even if your online business is just starting out, automation can be a very smart investment. For instance, let’s say that your business caters to people in the transportation industry. A battery intelligence software will give you instant, updated access to battery data and ways to enhance battery performance during the life of the vehicle. 

Optimize logistics 

The second step is to optimize the logistics i.e. streamline the process of getting the product from the source to its destination - the customer. 

Here are some tips you could use to optimize logistics:

• Streamline the order process. You might want to use software to automate order tracking and processing here
• Choose reliable suppliers. Work only with suppliers known for accurate, timely deliveries and stay away from those with a reputation for delaying product delivery
• Invest in other smart software solutions. Let’s go back to our transportation industry example. Using tools like fuel management software will allow you to automate maintenance management, track fuel in vehicles, receive recall alerts, track vehicle inspections, and keep updated on parts that need replacement. Investing in such a tool will allow you to optimize the logistics and streamline your business processes. 
• Enhance your shipping options. Make sure to offer varied shipping methods to meet the needs of different customers

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Expand your product offerings 

The next step to take to scale your business is to diversify your product offerings. As your business grows, you should look for new products that appeal to a broader audience. 

In dropshipping, the costs related to adding new products are minimal, so you can do this regularly and at all stages of the business’ growth. 

Here is how to do it:

• Check existing suppliers

First of all, check the existing suppliers you work with to see what else they have on offer. They likely have products that target the same audience, considering that you already offer some of their products. 

• Find new suppliers

Consider looking for new suppliers to add to your roster. This will allow you to expand your offering beyond the industry or the product niche you are currently offering. 

You might want to explore major, reputable platforms like Aliexpress, where you can choose from a diverse range of suppliers and look at their reviews and ratings. 

Establish a pricing strategy 

Dropshipping is rather straightforward. The customer pays you, the dropshipper, and you pay the supplier. You are left with an average profit of 10% to 15%.

But, how do you charge the customers?

This is something that you should consider carefully if you want to scale your online business since it can seriously affect your competitiveness in the market, as well as the profitability of your business. 

When you’re considering pricing strategies, here is what you can choose from:

• Competitive pricing. If you aim to attract price-conscious buyers, you can research your competition and match - or even undercut their prices. 
• Dynamic pricing. You can use automation tools such as dynamic pricing software that will adjust your prices based on what your competition charges or the demand.
• Bundling. Bundling means that you will offer a discount for products purchased as a bundle, encouraging customers to buy several products to save money. 

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Of course, there is no reason why you couldn’t mix pricing strategies. 

2. Make use of marketing strategies

The key to successful dropshipping lies in marketing. You can’t expect to sell anything unless you get the information to the customer, can you? Let’s go through some marketing strategies that you should include in your online business. 

• Social media 

Did you know that dropshipping businesses that are active on at least one social media platform generate 32% more revenue compared to those without one? If you want to get your online store out there for people to find - and buy from, you need to utilize social media platforms like Facebook, Instagram, and Pinterest to consistently promote your products and engage with the audience. 

• Collaboration with influencers and bloggers

Influencers are a very effective way to spread word of mouth for your online business. Reach out to influencers in the niche with collaboration requests to drive more sales for your store. 

• SEO optimization

Search engines pick websites that are optimized, so if you want your store to appear in search results for products and services you sell, you should consistently work on keywords, SEO-optimized content, etc. 

• Email marketing

Finally, make sure you build an email list by offering free e-books, introductory discounts, and those bundling offers we discussed above. Establish a strong presence on email by sending out newsletters, product updates, recommendations, promotions, and more to your subscribers. 

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3. Focus on customer satisfaction

The goal of a new online dropshipping store is to attract its first customers. The goal of an existing dropshipping store is to impress its existing customers to convince them to leave good ratings and spread the word around. One of the main factors toward success with this business method is customer satisfaction. Here are some tips to help you scale your online business by impressing the customer:

• Make sure the product descriptions/ images are accurate
• Give realistic shipping times
• Offer transparent communication
• Have clear return/refund policies in place
• Work only with reliable suppliers and conduct quality checks
• Encourage feedback

Setting up a dropship store

Now that we’ve gone through the main tips that will help you scale your online business, it’s time to go back to the basics.

If your budget is not high enough to invest in an individual website just yet, you can easily choose a platform like Shopify or BigCommerce, subscribe, and start selling. Next, it is time to customize your store to reflect your brand’s offerings and identity. 

Pros and cons of dropshipping

Dropshipping is a popular business model, but it is not for everyone. Let’s take a look at the benefits and challenges that come with it. 

Advantages of dropshipping

• Low startup costs
• Location independence
• No inventory management

Challenges with Dropshipping

• Quality control (since you won’t handle the products physically)
• More customer support responsibilities
• Issues such as delayed shipments, stock shortages, etc. 

Are you ready for a dropshipping challenge?

Dropshipping is a low-risk, cost-effective way to enter the e-commerce market and scale your business. This is a great addition to an existing company that is looking to expand its product offering or a starting point for companies that want to start with minimal risk and minimal investment. The process is not easy though, so to start making profits by dropshipping, you need to put in the effort. Start by following the tips above and keep working to scale your online business.

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