Tue. Jul 23rd, 2024

How to start dropshipping? Step by step

Starting dropshipping sales requires a few basic steps. However, it is important to remember to commit all your efforts to each of them. Only diligence and reliability is able to work for results on the market, where you can see the ever-increasing competition.

1. Product selection, the future assortment for your store – Product selection should be made on the basis of the above advice. Using these, you can be more confident about the future of your industry. By completing the formalities and insuring yourself properly, later most will depend on your marketing skills, implementation of the strategy and software of your online store.

2. Creating an online store – Building an online store for many may seem like an obstacle. This is because they think of it as something huge. Some retailers think that e-shops can only be created from scratch with dedicated software. Nowadays, however, subscription-based SaaS (Service as a Software). This is because of their efficiency, ability to create a store quickly and easy integrations with the help of the platform provider.

3. Agreement with a dropshipping wholesaler – Now that you know what you want to sell and your store has been set up, it’s time for the formalities. These include, among others, a contract with a dropshipping wholesaler. The contract should include all arrangements made between you as partners in the long run. Both in terms of billing, shipping, handling complaints, the possibility of including the store’s brand on packaging and more. In the end, there should be a contract containing all the arrangements in the context of cooperation.

4. Taking care of marketing and sales – If you have an agreement with a wholesaler and the online store has been created, it remains to integrate with it and proceed with marketing activities. It is their effectiveness in the long run that will determine whether you will make it in the market as a business. Building a strong brand can take a long time, but you also have a few actions at your disposal that can bring quick results in the form of placed orders. The best solution would be to build a comprehensive marketing strategy considering each of the channels. The next step is to have a plan that allows us to set measurable goals. If we do it in a proper and professional way, we can easily measure the effectiveness of each action and limit ourselves to the most successful ones.

Accounting for dropshipping – What is the tax base?

A pretty big surprise for many sellers will be the tax base when dropshipping. Settlement of sales in this model refers to the margin that the entrepreneur imposes on the product of the wholesaler. It means that in fact if you have a price of 500 pln from wholesaler, and you sell for 600 pln, the tax base is 100 pln.

If you have doubts in dropshipping settlement and don’t know how to go about it, take care to contact your tax advisor. With relevant and current information he is able to advise you so that you feel safe planning for your future.

Do I have to set up a company to sell on dropshipping??

Sales in the dropshipping model does not require the establishment of their own business only if the value of sales does not exceed half of the minimum rate. If you exceed this amount, it will be better to set up a business.

This is especially useful when working with wholesalers who may be much more willing to work with companies. The economic activity because it helps in gaining credibility and smooth passage of formalities. Remember also that when selling goods you need to issue a proof of sale in the form of an invoice or receipt in physical or electronic form.

Course on dropshipping sales – How it looks like?

If we were to briefly describe the dropshipping sales process, it would not be very complicated. Usually consists of several elements and looks similar to the one used during offline distribution.

1. The consumer, i.e. your customer, orders the product by going through the process in the store and makes a payment to the indicated account.

2. You, i.e. the online store owner, pass the order to the partner wholesaler.

3. The customer receives the goods from the aforementioned wholesaler.

4. Remember that in the meantime, you should send an invoice or receipt (proof of purchase of the product) to the customer’s e-mail address from which the order was placed.

5. You settle with your supplier for commissions, product costs and more, according to the arrangements finalized beforehand.

6. You accept the refund, if any, and in case of complaint send it to your partner who should analyze the situation. Of course, there are also individual situations where you manage to negotiate with a wholesaler even to handle returns, but these are in the minority.

We hope that now you understand dropshipping online store. We are sure that the above information would help you to start this ecommerce adventure and earn rewarding profits in the long run. We have also tried in other articles to provide you with complementary information. We hope that with this knowledge your sales in this model will grow even more. You want to learn more? Read the article: Dropshipping – how to get started?