How to Build a Dropshipping Business in 4 Easy Steps

how to start a dropshipping business

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Dropshipping is increasingly one of the most effective, and easiest, ways to make money online. Unlike traditional retail and e-commerce, dropshipping has no requirements for large inventories, manufacturing, and warehousing facilities, or staff. That means you can start your business right away with minimal up-front expenses.

With dropshipping, you’re essentially taking the orders from your customers and passing them on to a manufacturer or wholesaler who sells you the product at wholesale prices and sends out the order under your company name.

That way you get credit for the completed order and you get to keep the profits from the sale.

Want to see how the whole process works? Here are 5 easy steps on how to start your own dropshipping business and website.

Dropshipping Website

1. Create a Shop1 Web Store

The first step to becoming a dropshipper is to se up an online store where your customers can find you. Shop1 is the best option since they offer stunning website templates that are easy to customize and control, as well as a host of other features designed specifically for dropshipping businesses. You should hear the things that have been said about just how attractive Shop1’s website templates are.


Your Shop1 subscription starts at $19 a month. As your business grows, there are two additional subscription tiers you can use to gain access to more features and to list additional products on your website. While the starter plan is a great place to start, the higher plans help scale businesses and take them to the next level.


To the surprise of all their customers, creating a Shop1 website only takes a few minutes. The real work comes in after the store has been set up when it comes to things like details of the products. Shop1 saves you time since they have many manufacturers you can choose from already listed and ready to go, but it will still take a while to land on the right manufacturer for you.

After your store is up and running, you might think that you need to be checking in every day and making adjustments to a variety of things like profit margins. However, this isn’t the case. Shop1 handles this and all of the background items, leaving you able to focus on marketing.


Maintenance is relatively simple since Shop1 already has a lot of the features and unctionality your website will need. Since Shop1 has already included all the bells and whistles that enefit your shop the most, you will be able to focus on light maintenance like adding keywords and updating profit margins. The idea is that Shop1 would simplify the process of starting a dropshipping business, so you can build a business faster.

Still, plan on an hour or two a week to check links and make sure your website is still loading properly. Your customers will thank you.

Cart Feature

Since Shop1 is designed with dropshipping in mind, it already comes equipped with a fully functional product cart feature. That way your customers can quickly and easily shop your website, without having to check out for each individual purchase.

Shop1 is also already equipped with abandoned cart recovery, so you’ll never lose another sale to accidental website closures and other browser problems.

best niche dropshipping

2. Choose Niche

Before you can start generating sales, you need to know what you’re selling and who you’re selling it to. That’s your niche, and it’s important to give any possible niche some serious thought before you commit to it. 

Research Target Market

If you think you have a possible niche, generally from something you need in your own hobbies and passions, or something you’ve noticed friends and family wishing they had, it’s time to research the market so you know what to expect.

How Competitive is Your Market?

Competition is one of the most important factors in dropshipping success. The less ompetitive your market, the more likely your target audience will choose your store and products. However, some of the best dropshipping markets are already very competitive, and while it’s great to be in a trending market, it can make the entry into the niche a bit harder to get
established in.

Monitor Economic Trends in Your Niche

Niche viability can change a lot over time, depending on seasonal product demand, larger market trends, and many other forces. You should always check to make sure your chosen niche isn’t experiencing a decrease in demand right as you enter the market.

Ideally, your niche should offer consistent value year-round and should have stable demand, and growth, for several years.

Research Target Audience

Research Target Audience

Now that you have your website and know your niche, it’s time to find the audience that needs your products. Your target audience research should include information about your ideal audience’s:
  • Demographics
  • Age
  • Ethnicity
  • Socioeconomic Status
  • Geographical Attributes
  • Interests
  • Politics
  • Environmental needs/desires
Narrow Niche Down

Narrow Niche Down

Okay, you now know to start a dropshipping business and have your store, your niche, and your target audience on lock. Now you need to go back to your original niche and narrow it down even further. So, a broad niche could be something like bouldering and climbing equipment. A narrowing niche within the broad niche could be bouldering and climbing hand protection or hiking and climbing boots.

Those narrower categories should be tailored to your target audience, taking their needs, geographical location, budget, and other interests into account.

Don’t worry if narrowing only leaves you with two or three viable products, that’s plenty to start with. You’ll be able to expand your product offerings later, as your business grows.

Best dropshipping products

3. Choose Products

Ideally, your chosen products should be based on your market research and niche information and match up with one of your passions so you have a vested interest in the market and can monitor trends with an enthusiast’s perspective.

But the most important factor is how much demand there is for the product. You need to be able to sell your products after all.


It’s time for more research. Your chosen products should have at least a 40% profit margin, and the closer to 100% or more, the better. You should also start with products that are relatively high-demand since you’ll need to attract a few customers to get started.


Pay attention to market trends for any specific product you’re considering selling. Some products might be more seasonal than your niche as a whole, and that limits your earning potential.

Look for products that sell well, and aren’t trending down in their niche.

Try to Avoid Products with Political Baggage

While there are certainly some stores that do well with highly politicized products, political products are riskier and a bit more difficult to manage than products without any political baggage.

It’s important to also be aware of political policies such as Tariffs, and any international policies or issues which affect trade. There is an ongoing situation between the US and China where fees are being increased on the higher-ticket products. Just make sure you understand how the new Tariffs policy will affect your product arsenal so you can get the most from your margins!

Suppliers in Dropshipping Business


Suppliers are critical to dropshipping success. After all, they are the ones who actually fulfill your orders, and there’s nothing your customers will hate more than not receiving their products.

Fortunately, Shop1 also provides you a library of U.S. Based suppliers to choose from, so you don’t have to spend as much time on supplier research.

U.S. Based

U.S. based suppliers have several important advantages. Their products tend to be more consistent and slightly higher quality than suppliers based in other countries. They also tend to be able to ship faster, at least to your customers within the United States.

Shipping Times

Shipping times can vary quite a bit between different suppliers, but you can expect some priority shipping options since all of Shop1’s suppliers are U.S. based. While you can use your own suppliers if necessary, you’re likely to see longer shipping times.

Supplier Fees

Different suppliers will charge different fees for processing your orders. A processing fee between $2-$5 is pretty normal, but you should avoid higher fees unless you have a large profit margin on all of your products.

Product File Import Difficulties

Unfortunately, file import problems happen on even the best platforms. That’s why it’s mportant to make sure your dropshipping platform offers support and contact options for customers. Fortunately, Shop1 offers training as well as subscriber support to help you avoid and overcome product file import problems.

Supplier product files are not all the same. Keep in mind that every time they are formatted and imported into the system, or using an API integration, it will have a cost.

Marketing in Dropshipping Business

4- Set a Marketing and Conversion Strategy

The last step in setting up your dropshipping business is developing a marketing strategy that helps drive customers to your business and increases your conversion rate.

Social Media Advertising

Your most lucrative option is paying for Paid Per Click ads on the major social media companies like Facebook and Instagram, running multiple ad campaigns at the same time and monitoring the results. Be sure to increase your advertising budget towards ads that are performing well. You should be making slight adjustments to your target demographic and see what is and isn’t working.

Organic social media advertising is getting more difficult, but that doesn’t mean it’s impossible. One of the easiest options is to contact some influencers and see if they would be willing to feature your products in a photo or video, with attribution to your store, of course.

While you’ll end up paying for those kinds of plugs, they can easily drive hundreds or housands of customers to your store.

For some other free ideas, you can share videos of a product in action, have promo codes, run contests, and join online communities that are related to your niche.


If you’re reading this article, you may be first-timer and might be looking for ways on how to start a dropshipping business in a budget. Content marketing is great option that can help drive customer interest, though it can be slow to generate conversions. Free marketing includes:

  • Blog content
  • Social media business profiles
  • Youtube videos
  • Any other online content you can produce without paying a content creator.

Final Thoughts

Starting a dropshipping business is something that many are exploring. It’s a meta method of building a passive income. If you are anxious to get started, you’ve come to the right place.

Shop1 has a perfect track record when it comes to partnering with people just like you who want to start a dropshipping business but aren’t sure where to begin. Shop1 will be there for you every step of the way. Click here to get started.

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Christian Shaffer
Christian Shaffer