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Opening a digital business - local dropshipping
All you need to know before starting and keep in mind during the process.
Hope the 3rd post on this blog finds you well, I hope the last post about simple SEO strategies was useful for you. Today we are going to talk a little bit about opening a digital business, concentrating the focus on local dropshipping.
In my 4 years of work I have been in contact with tens of small and medium size businesses that I have seen failing, managing to survive or having great success. There are many variables when trying to figure out what made a business fail or succeed, ranging from management to business idea, and in rare and extreme cases factors that were impossible to predict (such as regulations imposed unexpectedly), or even lack of analysis.
Most of the businesses that did succeed or managed to survive the years were the ones which, of course, had most of its business online, and almost 100% of them had no brick and mortar stores, or got rid of them during the digitization process. The business model for this kind of businesses is quite popular today, you just need a target market, a little bit of knowledge about the products and the needs of the clients, an e-commerce platform and some marketing budgets. Well, that is the simple way to name it, but then there is the hidden part of the iceberg that goes deep and is more complex than you might think.
Choosing the market:
You might be tempted by the classic dropshipping business model to just search Ali Baba or other well known suppliers and just find some products that you can sell further, but this kind of business model is so common that the dropshipping market is over saturated currently, only those who really know what they are doing being able to succeed. A good way to choose your market is to try to find producers or big e-commerce platforms in your country or in a location that will enable your deliveries to be made fast (1-3 working days). One of the best options would be to find a producer that is not currently available in your country or he is available, but you could do a better job at promoting his products. The other option would be to find a big e-commerce platform in your country or region which has constant stocks of the products and is open to expanding their business in this way. The connection between your companies in order to automate the process of reselling would be to obtain an API from your partner that you can connect to your online store, this way if the products become unavailable it will be automatically flagged as out of stock. One of the problems you will face would be the payment towards your supplier, of course you can work with him on developing an automation that will automatically take funds from a dedicated account of yours every time an order shows up.
Knowing your client’s needs:
Maybe the 2nd most complicated part of this business model, after finding the partner/partners that will be the local/regional supplier, is to get to know your market. You can do this by spying on your future competitors, being their client and seeing how their process of ordering and delivery goes, trying to ask as many questions as possible to their staff in the process, reading studies about your target market and any other way you could think of and is useful.
Building an e-commerce platform:
Accessible nowadays for everyone through various services such as: Shopify, Wordpress (WooCommerce) and others, building an e-commerce store is not expensive at all if you start with a low budget and need this kind of services. If you plan to invest more in this business model, you can consider having a custom built e-commerce platform for you which is quite expensive sometimes, but it all depends on your plan. After you have your platform built you will need to research SEO (search engine optimization) strategies in order to make your platform more visible to organic traffic (this process might take some time), good SEO strategies will also decrease your costs with PPC campaigns.
Digital Marketing for your e-commerce store:
Here you should apply a marketing mix. You should mainly focus on doing your keyword research before writing the descriptions of your products, and also try avoiding using black-hat or gray-hat SEO practices, you can find more information about it in the SEO strategies for the long term win. I recommend Joe Manausa’s book “The business of getting business” which covers how he grew a real estate business using SEO strategies. You can take those strategies and apply it for your online store, and any other business. Alongside SEO, you should try to do some PPC marketing, you can try Google Ads (you should research a little bit before choosing this platform as sometimes competition might make it difficult if you have low budgets, for example competitors can raise the top bid for certain keywords which might consume your budget really fast, but you can avoid this by using the “Max CPC bid” if you target “Maximize clicks” or just focus your budget on conversions, I will prepare a post regarding Google Ads strategies in the future again, focusing on types of campaigns and their appliances), TikTok Ads (minimum 50 USD/day campaign level) or Facebook & Instagram Ads (best option) but you might face random account suspensions when doing Facebook Ads, which every advertiser did experience at least once in their lifetime.
I hope you found this information useful, feel free to share it and also leave a comment if you think there are more things to be taken into consideration regarding this topic, it will help other future reader.