Dropshipping is a very profitable business as long as you got the right products and the right tools. I started working on my first dropshipping website and I’ll tell you how you can do it also.

So today I actually started my very first drop shipping website. I know I had previously mentioned dropshipping before, but very briefly.

The chart above details basically what a dropshipping business is like. You can use ebay or you can make your own website. The process is pretty much the same.

You’ll need to get in contact with a dropshipper, list his items in your store (or ebay auction), and then when you get money from the buyer, you pay the wholesale price to the dropshipper and they’ll send the item to your customer.

A pretty simple business, but nonetheless effective for many.

For my dropshipping-based business I decided to use my own website instead of Ebay. If you are making your own website you have more choice in what kind of products to sell. Obviously you can’t sell something as common as iPods because everyone sells those. You want to choose something that there is a market for, but that you won’t have as many competitors for.

If you do sell on Ebay though, you can pretty much sell any item. All iPods get bought so you’ll make sales. The trade-off is that the sales aren’t as profitable and you also won’t be able to control the price as well (with bidding) and you won’t be able to utilize SEO tools and other promotion to promote your site.

Why would you want to do a dropshipping business?

Unless your business is in the service industry, most startups will require an initial overhead fee. For example, if you sell pens, you’ll need to buy 1000 pens at the beginning. This is expensive and unneeded. Dropshipping gets rid of these fees and makes everything smoother.

So how do you choose your product?

Definitely go with something that isn’t widely available. I won’t reveal what I chose because I don’t want to give away my business because so far I have close to ZERO competitors in the US (this product is mainly sold in other countries).

Now with zero competitors it is likely that there is no market for your product. So you have to research. I did my research and found out that there was demand for the product in the US, but there just wasn’t a retailer with an english language website (actually there were a few, but these websites overcharged heavily).

On the other hand, with something that has TONS of competitions, like iPods, you’re going to have a hard time with your website. Most people will buy their iPods from the Apple Store anyways and there’s no way you can compete with them. Maybe something like “used iPods” would be a better target audience.

How do I find a dropshipper?

Don’t Google your product because most likely you’re not going to find a legit dropshipper or you’ll just find retailers. Alibaba.com is the website I used to find my dropshipper. There are also other websites such as WorldWideBrands.com where you can find dropshippers.

How do I set up a shopping cart?

For my website I used Opencart, which is a free software that you can get at OpenCart.com. I am a coder and designer so I didn’t need to get it fixed or anything, but if you don’t know much about coding, you might want to hire a professional coder to create a layout for you.

There are other free shopping cart programs out there. Check out OsCommerce for another solution. Or Google it for more.

How do I promote it?

Search engine optimization and Google Adwords are what I’m planning to do for my website. I won’t cover search engine optimization in this post but I will in a future post. As for Google Adwords it is quite simple to use. Get an account, pay to get shown to keywords (so if you’re selling “iPods,” buy the keyword that fits your product, which is “iPod”), and you’ll pay Google whenever your ad gets clicked by another user.

Good luck

I have yet to make any sales with my store, but I will keep you guys posted.

UPDATE: I made a total of three sales in January, but haven’t had any sales since. Still, my 3 sales accounted for about $100 in profit.