[METHOD] 6-Step Guide to an easy and successful dropshipping ecommerce business for less than $200 ...

[BigBoy69]

DISCLAIMER:
Part 1:This method is not for quick cash but for the long term, don't expect to get significant ROI before 2-3 months unless you are an ecommerce wonderkid.
Part 2: This is not a guide on Magento, although you can download some great guides such as official-magento-user-guide(01-13-2010).pdf or The Definitive Guide to Magento - A Comprehensive Look at Magento Dec 2009.pdf (I wanted to attach them but they are too big) for in depth use of Magento.

Introduction:
Hi guys, I have been lurking around the forum for some time adding my 2 cents here and there but I think it's time for me to share my own method, my way of giving back for all I have learned here. After seeing a couple of threads like "I have $1K.. how to invest it?" and the likes, I thought I would share this. I currently own an ecommerce website which I launched in early April 2012, and this October I have just achieved my first target of 1000 euros net profit / month, and I've still got 7 days left in this month OK, enough with my bragging, now read this:


HOW TO CREATE AN ONLINE SHOP WITH LESS THAN $200 START UP CAPITAL

Step 1 - Build your shop.. on an excel file

What we're gonna do here is select some hot selling products. For this, you can find most of your dropshippers on eBay or Alibaba, or something like that, why not even local shops around your flat, whatever, think outside the box like a boss. I started out with about 600 different products, and have since uploaded another 400.

Tip: Amazingly, the hottest selling products are really not the ones I first expected.. and this is the first golden rule: PICK NICHE PRODUCTS THAT HAVE LOW COMPETITION.
Imagine you are a shark, swimming in the ocean. There is one spot with lots of food, but it is full of other sharks, most are much bigger, faster and stronger than you. There is another spot, there is not so much food, just a bit.. but there is just 1 other shark, same size as you. You are much more likely to get more food (aka money) from the second spot than the first one, even if there is not much demand. At the end of the day, its still about ranking for low comp keywords.


When I select my products, I save this information in my product master file:

SKU - Link to my supplier's product - Photos (in a folder named by SKU) - Cost (including shipping) - Price - Keyword/title - Description

This is probably the longest part, as you have to write a lot of information, edit a lot of photos, remove watermarks, do a lot of price research, etc.. The most important here is to do your keyword research, and optimize your product titles and descriptions for your targeted KW.

Once you are happy with the number of products you have selected, build yourself a nice clear category tree and then you are ready for step 2.

INVESTMENT - $0, but lots of time


Step 2 - Build your shop on Magento

Magento is not only totally awesome, but its also open source, free and SEO friendly, which makes it my favorite shopping cart platform.

You will want to purchase some hosting and a good domain name, and install the latest version of Magento on your server. This is very simple and fast. After you've installed Magento, your shop is ready to be set up. You will need to go through all the configuration options in the backend, but that is quite easy and there are lots of tuts and ebooks about that available. The most important is linking your Paypal account to the shop, as well as your moneybookers account which processes credit card payments very easily.

Get yourself a nice template, there are some very professional ones available from about $70 and I highly recommend not getting a free one, cos this is your money site, you gotta take care of it and make it unique.

Install the template (ridiculously easy), and then your shop is ready for step 3.

INVESTMENT - $153.40
$83.40 for 1 year hosting + free domain name with Siteground (there is much cheaper but I like them for their customer service since I am still a noob at technical stuff. If you want a discount with them, PM me)
$70 for a magento template off theme forest for example.


Step 3 - Upload your products

There are 2 ways to do this. Manually, if you have less than 50-100 products, its ok and very simple.

In bulk. In this case, create manually 1 product, then go to your system tab in the backend, click on import/export > dataflows and export your manually created product. You'll then get a template, which you must use as a model. Fill in the template with all your other products (price, descrpition, SKU, category code etc...) and put your product images (each in a folder named SKU1, SKU2, SKU3, etc..) into your import and media files in your directory. You can now re-upload to your shop through the same dataflows tab. I personally hate this kind of stuff, so I just paid a freelancer to do it (he did a great job and still helps me out when I have stuff to fix, let me know if you need his contact info).

INVESTMENT - $183.40
$30 for freelancer to bulk upload products (optional)


Step 4 - Drive traffic

This part needs no explaining here. Once your Magento store is fully optimized, start building links, articles, social bookmarks, etc. etc. You know the story. I also use some offline marketing techniques such as flyers because my target customers can easily be concentrated in particular areas/events.


Step 5 - Fulfilling orders

If you are a pure dropshipper or affiliate seller and your suppliers ships the products directly to your customers, then you can just notify him of any orders and your job stops there. If you're like me and want to see what you are selling, then the next step is going to be a big investment in time.

I don't have any stock, whenever I receive payment for an order, I then purchase the product myself. This is great if you don't have any money to invest, but will increase your processing time. I simply inform my customers that processing time is 2-3 days, this is your private website, its not eBay, so you can do whatever you want. Once I get the product, its not rocket science.. Check it the size and color is OK, check if it is in good condition, package it, fill in the invoice and ship to the customer. Then update the tracking number in his Magento account, and he should be happy!

BALANCE SHOULD START TURNING GREEN AFTER 1-2 MONTHS HERE


Step 6 - Invest profit in more marketing, and possibly employees once you are getting regular business

I am considering employing a part time staff now as I have a 9 to 5 job and have a lot of work when I get home. Once you reach this step, my advice will only be speculative as I am not there yet, but the idea is to keep scaling it up, growing the business, etc. I currently have a conversion rate which fluctuates between 1.50% and 2%, which I am happy with and as I said, this month hit my first 1K EUR after 6 months, which is pretty much what I was aiming for. My goal now is to X5 that in the next 6 months, and try and create a few jobs... for now I'm not getting tired of making up and seeing 3 orders during the night and my paypal/moneybookers stacking up


Having your own private shop is IMO more beneficial then selling on Amazon or eBay. Why? No fees, no feedback issues, no disputes, just payments coming in and products going out. Although it takes some time to build up, it is really worth it I think. Also, having an ecommerce shop, especially if you're fulfilling the orders yourself, is very broad and requires a lot of general skills, not just IM skills (ie. pricing, supplier assessment, organization skills), although your success at first will largely depend on your ability to find a low-comp, high profit niche and rank for it.


I hope this guide will be helpful, maybe for some newbies since to be honest when I started out, I only knew the very basic white-hat stuff and it has worked well for me. I will share one more secret with you, and this has been the real key to my success. Go for countries where there is not much competition, and particularly non-English markets. South America, East Europe/Russia, Middle East, those markets are totally untapped and have loads of customers dieing to buy cool stuff online but not knowing where to go.

To sum up, in a nutshell:

1. Prepare an excel file with your (hot) product info and category tree
2. Buy hosting and a domain name
3. Install Magento and configure your store
4. Upload your products
5. Receive orders, purchase product and ship to customer (optional.. can also sell affiliate products or your supplier dropships directly to your customer)
6. Re-invest profits into SEO tools and employees.


If you have any questions, don't PM me, I will not reply. Post them in this thread, so that maybe others who have the same question will benefit from my answer too!

Happy e-selling!

[peasandham]

Thanks for posting this. Great overview of everything.

Im a little hazy on the excel file .. can you tell us more what you mean about building an excel file? I have seen a few people do this and also in CVS files but I am unsure what linking to the suppliers url does to your site or database.

I have a few suppliers that are happy for me to be a reseller and use their images and descriptions but how do I remove their watermarks? Also where do yo suggest I go to find a freelancer. I have tired some of the various freelancer sites and it is a little hit and miss.

Thanks

[luckyboy]

can u plz give me some links of suppliers and dropshippers who got many products so i can become reseller and sell their products?

[peasandham]

Try worldwide brands for reliable dropshippers and suppliers

[SexyStuff]

I'm sure this will be very useful for newbies...

[therams]

Finally a worth to read share in this section!

[luckyboy]

great guide, can u also tell us where to find good suppliers / dropshippers apart from ebay and alibaba?