Do you wish to start an online business in India but don’t know where to begin? Many entrepreneurs don’t want to venture into production or product manufacturing, while others can’t understand what types of products to sell. If you are one of those, don’t be disheartened. You still have a profitable business opportunity – starting a dropshipping business in India.
What is Dropshipping?
A dropshipping business in India is a business where the seller does not manage the stock or inventory. As per the business model, the seller depends on a manufacturer (third party) for product production and delivery.
According to the dropshipping process in India, the seller receives customer orders and informs the manufacturer. The manufacturer is responsible for order delivery to the customer. In most cases, the seller does not see the actual product since the manufacturer delivers it to the customer directly.
How is Dropshipping Business in India different from standard retail?
Unlike traditional online retail business or standard retail, in dropshipping business, the selling merchant does not need to stock or purchase any inventory. A third party makes the purchases, either a wholesaler or a manufacturer, while the seller acts as the middleman.
The dropshipping process includes four steps:
Step 1: Order Placement
The customer orders a product from your online store.
Step 2: Notify Supplier
Through your online store, the dropshipping supplier is informed about the order automatically.
Step 3: Order Fulfillment
The dropshipping supplier packs and labels the customer’s order.
Step 4: Order Delivery
The dropshipping supplier delivers the product to the customer.
Benefits of Starting a Dropshipping Business in India
If you want to start an eCommerce business in India, dropshipping is a cost-effective route. It lets you act as an online seller without the hassles of carrying, storing, and maintaining product inventory. You also do not have to manage shipping and order fulfilment. Therefore, the dropshipping model is a low-risk business model for starting an online store.
According to a study by the India Brand Equity Foundation, the Indian eCommerce market was valued at USD 46.2 billion as of 2020 and is projected to rise to USD 188 billion by 2025. As a result, a dropshipping business in India is a lucrative opportunity for business owners. It is the perfect way to enter the market and assess business feasibility, customer response, and growth prospects, regardless of the products you choose to sell.
India has a vast market of raw material suppliers across various industries. As you venture into the dropshipping business in India, you can choose from a wide range of local manufacturers or suppliers to ensure on-time delivery of orders.
Here are the benefits of a dropshipping business in India:
- With dropshipping, setting up an online store becomes convenient and straightforward. The seller does not need to hassle about inventory management. Moreover, the seller does not have to incur any expenses for product management. The drop shipper’s role entails selecting products and payment methods to launch the online store.
- The product range for a dropshipping business can be vast since there is no limitation on selling only the ones you manufacture or trade-in. Your online store can display products from across the world.
- The seller does not need to pay for storage or inventory management. The supplier or the manufacturer takes care of storage and production.
- Since there are no operating costs, the drop shipper can expand the business through marketing and other means.
- The business can operate from anywhere due to the facility of the internet. The drop shipper can cover the entire horizon.
- When products are sourced from suppliers, you can change the inventory as per the customer’s taste and preferences and the latest trends. The product inventory is flexible, easily changeable, and adjustable.
How To Establish a Successful/Profitable Dropshipping Business in India?
Dropshipping is a highly profitable business model worldwide. You do not have to bear the expenses of product manufacturing and shipping. The profit starts from the sales you make early on. However, to make more sales, you need to select a product that people are interested in and need, and you must have the right supplier providing you with the products.
How to Start a Dropshipping Business in India?
Before starting any business, you need a business plan. Here’s a guide to help you understand how can you start and run a dropshipping business effectively.
1. Find a niche
The first step to starting any business is identifying a niche. Of course, you can launch a general store that sells a range of products, but focusing on a narrowed target market in the initial phases is advisable. Once you gain an edge, you can expand to other categories and market segments.
Many young entrepreneurs are attracted to the dropshipping model because of its low overhead costs. Besides, there is no need to manage inventory and product shipping. However, one must understand that the competition in this realm is pretty high. To survive in the market, you must find a competitive edge.
Before you finalize a niche, make sure it is not too narrow. For instance, if you are deciding to sell front load washing machines, offer a few variations based on features, look, or price. With business growth in the future, you can add more relevant products, such as vacuum cleaners, top load washing machines, televisions, air conditioners, etc.
2. Perform Market Research
If you want to earn profits in a dropshipping business, you need to find a product at a lower cost and sell it to your target audience at a higher price. While this may seem easy, you must know if your target audience is comfortable paying the marked-up price you’ll offer.
Market research is an effective tool for gathering the required information. Start with identifying and analyzing your competitors:
- Who is their target market?
- How do they acquire and approach customers?
- What is customer behaviour?
- What are their marketing strategies?
After you have the answers to these questions, you can identify your target market and potential customers. The next step is to focus on devising marketing efforts to do better than the competitors.
3. Choose the Right Products
A dropshipping business in India offers flexibility in terms of product selection. Nevertheless, you must understand that not every product sells and earns you profits. You must sell products that people will buy. Start by going through trending lists of products to sell. Next, find a product that helps to solve a problem of your target audience. Find the pain points of your niche to understand the problems they are experiencing and if there are any products to sell as solutions.
Furthermore, if you’ve decided on a niche, check out what are the competitors offering. What are their top products and their pricing strategies? Businesses do market research all the time, and you must benefit from this technique as well. Use a product research tool to find winning products from different marketplaces.
4. Find reliable Dropshipping Suppliers in India
After you identify your target market and winning product, you need to find a reputable supplier. You can partner with a local vendor or supplier after negotiating the terms to source products at competitive products and earn a profit margin on dropshipping. You and your supplier must agree on issues like damaged product delivery, the wrong shipment, return, or refund.
5. Develop an Online Store
You cannot run a dropshipping business in India without an online store. Since there is no physical inventory, you cannot have a brick-and-mortar store. So, you need to set up a professional and attractive online store for your business. Here’s a list of tools you can use to run a successful dropshipping business.
- Chili Hunter
After your online store is ready, add products to your online catalogue. Provide accurate information about your products and write SEO-friendly descriptions to increase the discoverability of your products online. Remember to add product photographs for marketing.
6. Market your Dropshipping Store
Once you’ve set up your entire store, you need to spread the word for people to visit your store. A dropshipping business plan is incomplete without marketing strategies. The first step of marketing lies in building a high-converting dropshipping website. Key elements of such a website are attractive design, clear message, value proposition, and many noticeable call-to-action buttons. Moreover, make sure you spend on professional product photography. You might be selling a great product, but if the photos on your website are low quality, you cannot attract the customer.
Focus on search engine optimization as well. You want your website to appear on the first page of Google search engine results. A better ranking gives people more reasons to stay and explore your website. You must also give them valuable information via blogs as it makes visitors stay.
Email marketing is another effective method to reach out to existing website visitors and potential customers. Offer a discount to website visitors who sign up for a newsletter. That way, you have their email address to communicate with them in the future.
Social media should be your go-to marketing strategy. However, there are many platforms, and there is no need to use them all. Focus on one or two platforms where you know your audience is active. Moreover, spend time getting familiar with the platform. Social media marketing isn’t about posting frequently. You must identify the right tone of communication and the timing to reap maximum benefits.
Lastly, become a part of online communities where your interested customer exists. Reddit, Facebook groups, and Quora forums are good places to start. Get involved and become a trusted source of information and suggestions.
7. Deliver exceptional Customer Service
One of the major disadvantages of a dropshipping business in India is the longer shipping and delivery time. Most eCommerce players today offer same-day or next-day delivery, which can be a big problem.
One way to make up for this drawback is by offering exceptional customer service. You must make the customer feel like the king. Some of the tricks to offer good customer service include:
- Providing tracking details
- Responding to queries and questions
- Sending regular updates about the order
- Handling after-sale queries efficiently
- Ensuring seamless order delivery
Growing a Dropshipping Business in India
Running a dropshipping business in India is easier and hands-free. However, your involvement is crucial to its success. Spend time identifying a niche, finding the right product, and a reliable supplier. Use the dropshipping builder tools to launch a high-converting online store. Focus on marketing to let people know about your store. Choose platforms that will help you achieve your goals the best and focus on getting more sales and building a bond of trust between you and your customers. Provide exceptional customer service so that the delayed shipping and delivery do not seem like a problem. By focusing on the right efforts, you can grow and scale your business up, building an entire brand out of it.