There are many blog posts, Youtube tutorials, and paid online courses or masterclasses on how to start a dropshipping business. It can feel like too much confusing, conflicting, and useless information for someone wanting to learn dropshipping or eCommerce.
We will clarify everything and explain how to start dropshipping for free or at least for very little.
Overview
As with any other business, eCommerce retail business (not just drop shipping) only works if it provides value to customers (in exchange for money). That value can be a product that customers want. It can be in the form of a physical or digital product, service, or valuable information.
For the products to be valued more than their cost to customers, customers must perceive them as such. The seller must inform the customers about the benefits of these products and present the products for purchase where it is convenient to customers. It is vital that the items’ quality and shipping terms also meet the customers’ expectations.
If you are starting an eCommerce store but are not going to drop ship, keep reading. We provide information about the best dropshipping tools if you want to create the product yourself, use warehousing, or sell digital or Print On Demand goods.
What is Dropshipping?
As of 2023, dropshipping (or drop shipping) is a form of online retail commerce that allows a seller to offer their customers products that are shipped directly from the supplier or the warehouse without the seller having to maintain an inventory.
With drop shipping, the shopkeeper sells somebody else’s product. Therefore based on the discussion above, a dropshipper, to be successful, must provide value that arises from something else besides the product itself.
Below, we discuss the strategies for how to start dropshipping with no money or minimal upfront costs and become successful.
How To Start Dropshipping For Free (Or Low-Cost) In 7 Steps:
- Decide on a product to sell
- Confirm the product idea is viable by checking trends and competitors
- Find a supplier (and a warehouse agent)
- Set up a website for the product with Shopify’s free trial, or build one cheaply yourself
- Market the product (and optimize to scale your business)
- Maintain good relationships with customers
- Keep up with tax and legal obligations
Product Ideas
Many new entrepreneurs look for the latest fad or viral gadgets because they want to make a quick buck, and that way, at least, they can be sure that there is a demand. Tiktok, Amazon, Facebook, and Instagram are good places to look for dropshipping business ideas.
Searches And Hashtags:
- Amazon’s must-haves
- Amazon’s most popular
- Amazon’s new and interesting finds
- amazonbestfinds
- tiktokmademebuyit
- productsyouneed
- Facebook’s what’s trending
It can be a winning method, but sooner or later, the market will get saturated by all the new entrants or the fads going away. We recommend developing more steady product ideas that differentiate you from competitors. Achieve it by establishing a private label brand and adding unique features, packaging, and logo.
In any case, as many gurus will tell you, a successful product should have a “wow factor” (be interesting) plus solve a real problem.
Find Ideas For The Products Using These Tools:
- Spocket
- Google Trends
- Trending on eBay
- Alibaba’s first look at the next season’s products
- Instagram and Facebook’s most popular ads
- Trendhunter
- Minea
- Ecomhunt
- AliShark
Competition
After selecting the niche and products, the next step is checking your competition. Who is selling these or similar products? What selling and marketing strategies are they using? How saturated is the marketplace?
Checking competitors is good for motivation and inspiration. You can see their strategies to become successful and improve on them. Or you may understand that moving on to the next product idea is more practical.
Use these tools for checking competition:
- Dropship Spy
- Semrush
- Moz
- Instagram and Facebook’s most popular ads
- Amazon’s most popular
- Ecomhunt
- AliShark
- Follow dropshippers on TikTok
Supplier And Warehousing Services
When starting a drop shipping company, many people test their products using supplier sites such as Ali Express. It is fine at first because it is the most economical way to test your dropshipping business ideas.
The problem with that is many hubs and suppliers ship from China. And it could take up to three months for customers to get their items.
Fast shipping, however, is vital for the business’s survival because many competitors, like Amazon, offer 2-day shipping, and customers do not want to wait unreasonably long.
The solution is to negotiate with the supplier for the fastest shipping possible or find a local one like Zendrop.
Zendrop has a Free Plan for beginners (who want to know how to start dropshipping for free).
The other option is to order the product in bulk and deliver it to a local warehouse, where it can then be shipped to retail customers as the orders pour in.
Still, you can run a profitable business if you ship from China. Thoroughly check the shipping information on sites like Aliexpress. Many sellers offer faster shipping times with ePacket. Contact them directly to get the fastest shipping.
Many Print On Demand services that can drop ship for you are located in the United States, so shipping times will be excellent if you decide to go that route.
Resources For Finding Suppliers And Warehouse Agents:
- Aliexpress
- Alibaba
- CJDropshipping
- MiniInTheBox
- LightInTheBox
- Usadrop
- BigBuy
- SourcinBox
- Spocket
- SupplyMeDirect
- Shift4shop
- Taobao.com
- 1688.com
- ThomasNet.com
- Worldwide Brands
- Maker’s Row
- Next Level
- Honest FulPhilment
- Fulfillman
- Sup Dropshipping
- EcommOps
- EboxMan
- Zendrop
Third-Party Logistics (3PL):
- ShipMonk
- Red Stag
- Ship Bob
Print On Demand:
- Printful
- T Spring
- Red Bubble
- Merch by Amazon
To find out about a reliable, low-cost supplier that ships from the US, check out our Zendrop Review: Pros, Cons & 5 Best Features.
Website
The next step is choosing a platform to offer the product to customers. That is where most of the upfront costs of starting your online store are. But there are ways to avoid and minimize most of the costs initially.
How To Start Dropshipping For Free On Closed Platforms
There are many options, like Fulfillment by Amazon, eBay, and Etsy. You don’t need money upfront to sell there. But they prohibit most forms of dropshipping, so you must ship products yourself or use warehousing or approved suppliers if you use these platforms. In addition, you risk being closed if they decide it.
CJDropshipping is one of the few apps allowed to dropship on closed marketplaces such as Amazon, Etsy, eBay, and Walmart. Read about it in our CJDropshipping review.
Best Platforms To Test Dropshipping Business Ideas
To have more control, we suggest using platforms that cater specifically to dropshippers, like Shopify, Wix, and Bigcartel.
Wix and Shopify offer a super convenient way to run an eCommerce store. They offer hosting, domains, taking and automating orders, and payment with many plugins and themes. These are considered premium options designed explicitly for dropshipping and other eCommerce ventures.
Hosting providers such as Web.com, Bluehost, and many others are much less costly ways to create an eCommerce website.
With Bluehost, you can create a web store for under $10/month using WooCommerce and WordPress – the most widely used website-building system. And with widget plugins like Stripe, sellers can accept payments without upfront fees.
How To Start Dropshipping For Free On Shopify
Shopify is a fantastic platform for those who want to learn dropshipping. They offer a Free 14 Day Trial and $1 per month for three months after that. Only a few other platforms have that.
Hosting Service Providers:
- Shopify
- Wix
- Bluehost
- Bigcartel
- Web.com
- Hostinger
- HostGator
- SiteGround
- Namecheap Hosting
Building a website is simple but challenging. The general rule is that services that offer the most straightforward solutions are less customizable. You can use one platform, several, or all of them.
Other Valuable Tools For Building A Website:
- Visme (free logo design and web images)
- Grammarly (check grammar, spelling, and plagiarism)
- Namecheap (buy domains for cheap)
To learn more about Visme as the best Canva alternative, read our Visme review.
Marketing
After you build your online shop, the next step is to attract potential clients. The most popular ways to do that now are paid ads with Google and Facebook. In fact, many successful dropshippers report that paid ads run as high as a third of their revenue. (Another third is operating and product costs. The last third is profits).
It is often tricky for new sellers to run successful promotions without running into losses by overspending on ads when they are unsuccessful. So watch out!
How To Start Dropshipping For Free Using These Marketing Strategies
Many entrepreneurs find inventive ways to get free organic traffic to their stores. SEO tools like Semrush and Ahrefs can help you get organic traffic from Google searches.
Popular apps like TikTok, Instagram, Facebook Reels, and Pinterest posts can drive a lot of traffic to your website. There are also influencers; contact them and make a deal. Some will work without upfront payments.
Another popular way to attract traffic to your site is to utilize classified ad websites that are mainly free to use and have millions of visitors.
We want to accentuate that marketing is the most critical step for dropshippers. It is where they add their value. And their value is proportional to how well they can connect customers with the products they want.
If you want to know more about creating graphic designs for your marketing, read our Canva Pro Pricing: Pros, Cons & Best Features In 2023.
Customer Service
In the beginning, you will only have a few orders, which is normal. But as your business grows and you have more and more sales, there will be returns.
How you manage them is essential to customer satisfaction and your reputation. How you handle returns will depend on your profit margin, supplier location, and your supplier’s return policies.
You can refund the items without returns or send them to your supplier or the warehouse agent.
You should establish your policies and put them in writing on your site, pages like Terms Of Use, Privacy Policy, and other information and disclaimers that inform customers about how you conduct business with them.
You can generate most of these pages through your hosting provider or services like Termly, but you should read and change them accordingly.
You also must reply to emails from the customers. And since you want to know how to start a dropshipping business for free, you will have to do all of it yourself. Later, you can outsource this task to freelancers hired on Fiverr or Upwork.
Legal And Tax Issues
Paying sales and income taxes is your responsibility. If you sell in the US, you should check with your state’s tax department, register your business, and keep up with required tax payments. Companies like Shopify can help you automate sales tax collection when customers make purchases.
You likely don’t need to worry about income taxes until you start making money. But when you do (the latest minimum amount for sole proprietors at this time is $400), you have to report it to the IRS. The good news is that you can deduct most of the expenses and must only pay taxes on your profits.
If you don’t incorporate your business, you pay as a sole proprietor, and it will add a form or two to your individual tax return (NOT A LEGAL OR TAX ADVICE – always check with the current tax laws at https://www.irs.gov/ and your state tax department. This is just how WE do it.)
Forming An LCC
Most drop shippers do not incorporate their businesses or become an LLC (Limited Liability Company) when they start. (Since they want to know how to start dropshipping for free). But it is a good practice to do that eventually because it allows you to separate your personal finances from your company’s.
We would argue that it is a good idea to do that from the beginning if you’re serious about your enterprise, as you should be, because, with online retail, you deal with many issues (as opposed to just starting a blog).
Companies such as Legal Zoom or Bizee (formerly Incfile) can help with most organizational matters of creating an LLC entity.
But the basic rules are:
- Don’t plagiarize the content on your website.
- Don’t infringe on any trademarks.
- Don’t mislead your customers.
If you follow these rules, you should be fine.
Conclusion
Dropshipping can still be a great side hustle in 2023 if done correctly. With so many low-cost website hosting services and free tools, it is an excellent way to test new products and marketing ideas. And with eCommerce scaling selling 10,000 items is as easy as selling 10.
Eventually, moving to branding your products as a private label and using a local warehouse in the country where you sell your products is preferable. And while it will increase your investment and financial risk at the beginning, It will guard you against direct competition, give you more control over your supply chain, and tremendously increase your profit margin.
We hope we have explained how to start dropshipping for free or with no upfront costs. But we’d like to point out that free and low-cost tools are only practical for those with limited capital trying to learn dropshipping.
The goal of any business is not to save money but to make as much of it as possible. And investing money in your company makes sense as long as doing so brings profit.
Namecheap not only offers affordable domains and hosting; to find out more, read our Namecheap VPN Review: Pros, Cons & 5 Best Features.
