drop shipping business plan pdf

Drop Shipping Business Plan & Free Template Included

If you're looking into how to start a dropshipping business , you've no doubt come across articles about what is drop shipping , how to dropship , and how dropshipping works . 

But, that information is useless if you aren't using it to help craft a detailed and actionable dropshipping business plan. This single document can outline how your business operates, give you ideas for carving out your dropshipping niche , and more.

Keep reading to learn what a dropshipping business plan is, how to create one, and access our free template to get you started.

What Is a Drop Shipping Business Plan?

A dropshipping business plan is a document that outlines the structure, finances, operations, and competitive advantages of your business. The business plan acts as a roadmap that will guide your decision-making and help you grow your business and dropshipping profit margin .

How To Make a Drop Shipping Business Plan

Drafting a dropshipping business plan starts with a lot of research. You need to understand what type of business you'll build, clarify your dropshipping business ideas , and establish guidelines for future employees. Don't underestimate the value of data, or you'll be making one of the most common dropshipping beginner mistakes and hamstringing your business before you start.

Here are the things you'll need to look at before drafting your plan:

• Business Identity. If you don't already have a clear picture of what you want your business to be, you're not far along enough to draft a business plan. Ask yourself what your business will do and why they'll do it. This will play a major role in your dropshipping eCommerce marketing and dropshipping ads in the future. It will also help keep you on course as you grow, so you don't just jump on the latest eCommerce trends as they happen.
• Problems in the market. Your business needs to be solving a problem that consumers are having if it's going to succeed. This problem may be an underserved niche, poor customer service for dropshipping , or even a complete lack of the types of products you'll be selling. Determining the gaps in the market now will make it much easier to position your new business for success.
• Customer demographics. Knowing who your prospective customers will be, what motivates them, and how they like to shop are valuable factors in growing your business. Unfortunately, this isn't information you'll find in dropshipping books or in a dropshipping course . You'll need to do your research on the market, track the activities of your prospects, and build a profile for your ideal customer. This will make it much easier to adapt your model to meet their needs.
• Competition. It's nearly impossible to start a business that has no existing competitors. This is especially true for dropshipping, where your dropshipping suppliers will likely also be working with your competitors. You'll want to understand what they do right, what they get wrong, and areas where you can show that you're the right business to buy from. You may discover they used the wrong dropshipping website builder or that you can use drop surfing to undercut their prices while maintaining your margins. The more information you have, the more dangerous you'll be.
• Sales and marketing channels. You'll be building a dropshipping website for sure, but what else will you be doing? Social media marketing may be on the table or traditional advertising may be a factor. Take a look at some of the best dropshipping websites in your chosen niche and click through various social media links to see how they market their products. Learn from their successes and failures and stick with the channels that seem to work best.

Dropshipping Business Plan Outline

To start off on the best foot, you'll need to create an outline for your business plan. In the end, this document will likely end up as ten or more pages, but not every section you include will be as long or valuable. Luckily, a dropshipping business plan is nearly identical to an eCommerce business plan , so the sections are pretty standard.

You need to include the following sections in your dropshipping business plan:

1. Executive Summary

This first portion of your business plan should act as a summary of everything that follows it. In the simplest terms, try to distill your business into a single page. Cover your business concept, product offerings, target market, competitive advantage, finances, and more. A mistake or missed opportunity on this page can cost you investments and loans. Most investors go straight to this page before deciding whether they'll even continue reading. If you can't answer " is dropshipping worth it ?" in this section, you'll never get the money you're seeking.

2. Company Mission and Overview

Here, you'll take a bit of a closer look at who you are and what defines your business. You should view this section as an introduction to your business that can establish what makes you unique and further clarify why you're worth investing in. Make sure to address the business structure, your background and experience, and what team members you'll need (think of the various dropshipping jobs available). This is a great section to emphasize your strengths and set up the expectations for the rest of the document.

3. Market Analysis

All of that research we told you to do above will come in very handy in this section. You'll want to outline the competitors in the field and how you'll be able to take market share from them. The most common way to do this is to perform and include a SWOT analysis. This is a breakdown of your business's strengths, weaknesses, opportunities, threats. This section really highlights what qualities you bring to ensure your business will be a success. For some insight into how they work, here’s an example of SWOT analysis for restaurant .

4. Product Types Offered

Here, you'll want to go in-depth about the different dropshipping products you'll be selling. Try to be as specific as possible and cover each different category you plan on operating in. You can also include a timeline if you plan on rolling out different categories at different times for seasonal demand planning . The big value in this section is that it will help keep you focused in a particular industry and keep you from trying to expand too quickly into areas that you aren't well-suited for.

5. Marketing Plan

Whether you're looking to score investors or just want to increase sales, your marketing will play a major role in your success. You'll need to explain what channels you want to advertise on and why. If you choose to use eCommerce PPC ads or affiliate marketing vs dropshipping , you'll need to create a dedicated budget. The more specific you are here, the more likely you are to avoid excessive spending or adopting networks that offer little return.

6. Operations Plan

Your operations plan helps define how you go about finding, buying, selling, and shipping products. Luckily, part of this section is easy to explain as having your suppliers handle the shipping is how to make money dropshipping . Still, you'll want to explain where you find these suppliers and what types of criteria you'll use to weed out products and suppliers you don't want to work with.

7. Financial Plan

Finally, you'll need to explain what your initial capital is and how you'll use it to create a profitable business. Usually, this section will include an income statement, balance sheet, and cash-flow statement. This section is often the largest in a business plan and needs to be thorough and mistake-free. Nobody will want to invest in a business that doesn't have a strong understanding of finances and how to make money. Think of things like, "Which one of the best banks will you open an account with" and "How will you accept payments?" Answer these questions here before an investor has to ask, and you're more likely to get funding.

Dropshipping Business Plan Sample

You can also build your dropshipping business plan using this free downloadable dropshipping business plan sample .

Once you download it, give it a look through. You’ll see an example of a food dropshipper's business plan for reference. We've included all seven sections and a few subsections to help you see the amount of detail expected in a business plan. It's mostly filler text, so you can edit the areas that you need and remove the rest.

Luckily for this business owner, BlueCart’s online marketplace is a great choice to find food suppliers for your burgeoning dropshipping business. With over 92,000 buyers, BlueCart offers one of the best dropshipping platforms on the market, and we can help you take your business to the next level with exposure and access to buyers and sellers alike. Not to mention, we have a strong bank of dropshipping articles that can help you go from asking questions like, " is dropshipping dead ?" and " is dropshipping legal "? to making money.

Frequently Asked Questions About Dropshipping Business Plan

Since dropshipping business plans can feel overwhelming to create, there are a few topics that come up regularly. Let's take a quick look at the most frequently asked questions.

Do You Need a Business Plan for Dropshipping?

Yes, you need a business plan for dropshipping! You should never start a business without planning out how you'll grow it for long-term success and dropshipping businesses are no different. You may consider using a business process flow chart template to map out your processes.

How Profitable Is Dropshipping?

Dropshipping businesses can be very profitable if you choose the right niche and manage to market yourself well. Though margins can be low, the costs are also very low, and you can scale at a much faster pace than other business models.

How Much Do Dropshippers Make On Average?

Most dropshippers make a profit of between 15%-20%. However, the most successful dropshippers have seen a margin of nearly 300%. Since costs are very low, most dropshippers choose to keep all the profit themselves, rather than reinvest the money in the business.

That's the Plan, Stan

Creating a solid and informed dropshipping business plan will go a long way to helping you build a successful business. Do your research, invest in the right people and tools, and adjust your business plan as you grow. These steps can help you build a long-term business with strong margins.

For more guidance, check out our dropshipping for dummies guide where we cover topics ranging from dropshipping automation to reverse dropshipping and more.

• Start free trial

Start selling with Shopify today

Start your free trial with Shopify today—then use these resources to guide you through every step of the process.

How To Start a Dropshipping Business: 9-Step Guide (2024)

Dropshipping is a low-risk way to sell products online. Follow these nine essential steps to start your dropshipping website.

Starting a dropshipping business is an accessible path to entrepreneurship. When a customer orders from your dropshipping store, the supplier ships the product directly, so you don’t need to hold inventory and overhead costs stay low.

Follow these nine steps to get your dropshipping business off the ground.

How to start a dropshipping business

• Decide if dropshipping is the right business model
• Choose a dropshipping niche
• Research competitors
• Choose a supplier
• Select products and set prices
• Build an ecommerce store
• Decide on a business structure
• Set up finances
• Market your dropshipping business

Related article

How to dropship on shopify (2024).

Discover three easy ways to start dropshipping on Shopify, each suited to different experience levels and business goals.

1. Decide if dropshipping is the right business model

Dropshipping is just one way to run an online store. Before diving in, take time to ensure it’s the right business model for your goals.

Typically, dropshipping is suited to people with marketing skills who want to run a store with minimal upfront investment. Since you don’t need to stock or handle products, it’s possible to start with just a laptop and an internet connection.

However, this accessibility comes with tradeoffs. Dropshippers tend to have less control over the goods in their catalog, and because other retailers are likely to sell the same products, competition can be tough.

If you plan to focus on marketing and aren’t looking to build your business around a flagship product, then dropshipping could work for you .

2. Choose a dropshipping niche

A niche is a segment of a market. You can target a niche with your store, brand, and product selection.

Selecting a dropshipping niche helps you identify a target audience. With specific customers in mind, it’s easier to search for products to dropship .

There are two general methods for selecting a business niche:

• Choose a niche that you’re knowledgeable or passionate about.
• Choose a niche based on market demand.

The aim of the second method is to find niches with high customer interest but low competition. Dropshippers assess market demand through keyword and product research.

Finding a niche with keyword research

Keyword research shows you what people are searching for online. Tools like Google Trends , Facebook Audience Insights , and Keywords Everywhere reveal popular product-related searches that your online store might serve.

When assessing search demand, look at historic interest as well as search volume to find a niche with sustained or increasing popularity.

For example, eBike Generation founder John Murphy used keyword research to build a $3 million dropshipping company, by identifying an underserved niche: ebikes for hunters .

Finding a niche with product research

Product research helps you discover trending products and understand consumer tastes for different product categories.

Dropshipping apps like DSers let you see product order volume on marketplaces such as AliExpress to gauge the potential size of your business.

Use both types of research together to build a full picture of a dropshipping niche. Consumer habits change rapidly, so perform regular check-ins on keyword trends and product popularity.

To align your business with product availability, you could also decide to choose your dropshipping supplier before you select a niche.

3. Research competitors

Competitor analysis helps when starting a dropshipping business. Spend time gathering information about rival stores in your niche.

By observing what your competitors, especially other dropshippers, are offering, you can identify potential products and marketing strategies. Review product pages and social media ads to see what appeals to customers.

Conduct thorough competitor research with these tasks:

Run a Google search

Use competitor analysis tools, browse social media, check marketplaces.

Start by searching for keywords relevant to your niche to see which businesses appear. For example, if you’re starting a dropshipping business in the pet supplies niche, you might search for “pet toys,” “pet food,” or “pet brushes.”

Look closely to see which businesses consistently show up in the search results. These are likely your main competitors for organic search audiences. For more in-depth insights, try an SEO tool .

You may find top-ranked competitors optimize their content for long-tail keywords , which are longer, more specific phrases that customers are searching for.

Long-tail keywords have less competition, making them a strategic target for smaller dropshipping websites.

For example, your competitor analysis might reveal the keyword “dog collars” is contested by large retailers, while “LED dog collars” has less competition—and “LED dog collars for small dogs” has room for your new business.

Competitor analysis tools are another way to find insights into rivals’ strategies. Uncover data by monitoring traffic sources, visitor counts, and social media engagement.

For instance, if you find a competitor relies heavily on paid ads, you could consider a rival campaign, or invest more in SEO content. If they’re active on a social platform you’ve overlooked, starting a channel might be beneficial.

Follow competitors’ social media pages to understand how they engage with followers. Pay attention to the types of posts that generate the most likes, comments, and shares.

For example, if a competitor in your pet supplies niche is going viral with DIY grooming videos, consider creating similar content. Also, watch for any gaps—perhaps there’s underserved demand for content on pet wellness tips.

Sellers within your niche on marketplace platforms like eBay , Amazon , and Etsy also offer insights.

Note how many listings exist for similar products. If the market looks saturated, consider how you might differentiate your product listings, either by reducing your prices or offering a premium customer experience that’s not possible through a marketplace.

Track all your competitor research in a spreadsheet to make it easy to search and reference your findings.

4. Choose a supplier

A dropshipping supplier sources and manages inventory, accepts orders and payments, and organizes shipping to customer addresses.

With such core responsibilities, your choice of supplier will have a large impact on the success of your dropshipping business.

Depending on your niche and the products you sell, you might work with a single supplier, or partner with multiple suppliers using a supplier directory.

Popular supplier directory apps and websites automatically connect your store with a large network of dropshipping suppliers.

For example, the DSers app lets Shopify users dropship products from AliExpress , the global marketplace.

5. Select products and set prices

The products in your store are dictated by your supplier’s inventory. You’ll encounter many of the same products in rival dropshipping stores, so it’s important to curate a selection that resonates with your niche audience.

A well-chosen product catalog creates opportunities for cross-selling and upselling , where shoppers add additional or higher-priced items to their shopping carts.

When picking products from an app or marketplace, study reviews from other sellers, as well as the supplier’s performance history. Once you have a shortlist, order product samples to assess quality and consistency.

If your strategy includes partnering with overseas suppliers, consider choosing products eligible for expedited mailing services such as ePacket shipping from China. This can significantly cut down delivery times.

Pricing your dropshipping products

Whether it’s electronics, clothing, or toys, you will need a pricing strategy that keeps your dropshipping business sustainable and allows you to make a profit from each sale.

No matter the price point, set a profit margin for every product by calculating your costs, including the price paid to the supplier and other operating expenses. Balance this against the price of similar products in the market to ensure your store is competitive.

6. Build an ecommerce store

Your online store is a hub for your dropshipping business, showcasing your product catalog and giving customers a way to check out. It’s also the destination for traffic from your social media ads.

Beyond product pages, your store can feature content to enhance the customer experience. This includes product reviews, user guides, buying guides, and relevant blog posts. Additional content not only helps customers make decisions, but also improves store visibility in search engine results.

Shopify’s store builder comes with the internet’s best-converting checkout and flexible design options. Customize your store’s appearance with professionally designed themes that fit your brand.

Adding a dropshipping app to your Shopify store simplifies product management and order processing. Popular apps include:

• DSers , for syncing with AliExpress.
• Zendrop , featuring more than a million products.
• Spocket , with suppliers from the US, Europe, Brazil, and India.

Use AI to enhance product pages

AI is built into every Shopify store to help you manage products and sell more effectively. Use AI to enhance product listings with content that goes beyond the basic information provided by your supplier.

Share a few keywords with Shopify Magic to generate product descriptions that outshine competitors, with SEO-friendly language that’s suited to your target audience.

Transform the product photos you receive from a supplier into distinctive, branded images with unique backgrounds, through AI-enhanced image editing. Original visuals differentiate your product pages from competitors.

Click the stars icon whenever it appears in the Shopify Admin to harness the power of Shopify Magic for your dropshipping store.

Dropshipping with Shopify Collective

Connect with US-based Shopify brands to easily sell their products. Use Shopify Collective to curate items from like-minded stores and ship them directly to your customers.

7. Decide on a business structure

Writing a business plan and creating a legal entity are key initial steps in setting up your dropshipping business for the long term.

Three common business structures for a dropshipping business are:

Sole proprietorship

• Limited liability company

C corporation

A sole proprietorship is run by one person and doesn’t require complex paperwork or additional tax filings. This makes it a popular business structure for dropshippers who want to keep things simple and affordable.

However, sole proprietorships offer no protection of personal assets if the business runs into legal trouble.

Limited liability company (LLC)

Setting up a dropshipping business as a limited liability company keeps personal finances separate from the business, which is not only safer but also makes accounting clear.

Compared to a sole proprietorship , LLCs offer flexible tax benefits, which might help you save money. But you’ll need to comply with additional filing requirements and pay incorporation fees.

Many large businesses are set up as C corporations due to the extensive liability protection. C corps are often expensive to incorporate and are subject to double taxation, as income doesn’t pass directly to the shareholders.

Before choosing a business structure, it’s advisable to consult with a lawyer to understand the best fit for your situation.

Apply for an EIN

Most US businesses need an employer identification number (EIN), serving as a Social Security number for your business. An EIN is necessary for filing taxes, applying for wholesale dropshipping accounts, opening a bank account, and other business activities.

Apply for a free EIN online through the IRS.

8. Set up finances

Separating your personal banking from your dropshipping business helps simplify accounting and keeps your business’s financial health visible.

Consider these basic financial tasks:

Open a business checking account

Open a business bank account to deposit revenue. A dedicated account for your dropshipping store makes tracking income and expenses easier and ensures financial transparency.

Apply for a business credit card

Consider getting a business credit card to pay for product orders, software subscriptions, ad fees, and other expenses. This helps keep your personal and business expenses separate and can also earn you rewards if you choose a card with benefits.

Check local business license requirements

Even if you operate from home, your city might require a business license . The requirements can vary, so checking with your local government is essential to ensure you comply with all local laws.

Collect sales tax

Collect sales tax if your business operates in a state that requires it. You generally don’t need to collect sales tax for orders outside your state, though it’s prudent to stay updated on the latest rules.

If your state does charge sales tax, be prepared to collect taxes from eligible customers .

Manage sales tax from Shopify

Shopify Tax puts sales tax insights and collection in your control and makes everything manageable from your Shopify admin.

9. Market your dropshipping business

Once your dropshipping store is live, turn your attention to marketing. An active marketing strategy that brings traffic to your store will give your dropshipping business the best chance of success .

Develop a strategy for these marketing channels :

Influencer marketing

Content marketing, communities, mobile marketing, email marketing.

Experiment with ads on Facebook , Instagram, TikTok, YouTube, and Google. Social media ads help increase your brand’s reputation among related audiences, while Google Ads target consumers with specific buying intentions.

Testing ads on both platforms can help you determine the most effective approach.

Collaborating with influencers on platforms like TikTok and Instagram can help extend your reach and credibility, potentially leading to increased sales.

Use Shopify Collabs to connect with influencers in your niche and pay them using a performance-based affiliate marketing model.

Developing a content marketing strategy can enhance your brand’s visibility. Consider starting a blog , making instructional videos, or launching a podcast related to your niche. Good content can keep customers engaged post purchase.

Get involved with groups of people who are passionate about your niche. Participating in discussions on platforms like Reddit and Facebook Groups can build trust and foster relationships—as long as you’re not overly sales-focused.

If you can generate a list of subscribers, SMS (text message) marketing strategies tend to receive high engagement levels. Consider creating a VIP group chat, offering live chat support, or sending messages with limited-time promo codes .

Email marketing helps maintain relationships with customers after they exit your website. Sending personalized emails with promotions and useful information can encourage repeat business.

Dropshipping mistakes to avoid

Like any retail business, running a dropshipping store comes with challenges. Avoid these common dropshipping pitfalls to keep your business growing:

Ignoring sales data

A common error among new dropshippers is not paying close attention to what their sales data is telling them.

Continually monitor sales, and don’t be afraid to pivot your store to optimize for profit. Regularly check:

• Which products are selling well and which aren’t.
• How much money you’re making from ads.
• Which products are giving you the best profit.
• How trends in sales are changing over time.
• Where your customers are coming from and what devices they use.

Skipping SEO

Whether your customers find you via Google or social media, your online visibility is crucial, as it directly influences traffic and sales.

As a result, not working on your website’s search engine optimization can limit your growth. Be sure to focus on:

• Creating original, helpful content for product pages.
• Improving your website’s loading speed.
• Making your website easy to use on mobile devices .

Shopify stores come with fast loading and responsive page design. Use Google Search Console to see how your website performs and find areas for improvement.

Not planning for growth

Not preparing to grow can bottleneck your business. Build your store to accommodate next year’s order volume, not today’s. Avoid limitations such as:

• Relying on one supplier. Always look for alternatives to mitigate risks and keep products in stock.
• Manually handling orders. Use a dropshipping app that automates order processing.

A benefit of dropshipping is the ability to accept increasingly large order volumes without significant investment. Have the systems in place to handle more orders when they arrive.

Neglecting unhappy customers

While dropshippers don’t deal with inventory directly, they are the primary touchpoint for customer support . Failing to focus on customers, especially those with complaints, can lead to negative reviews and high return rates.

To enhance your customer experience:

• Create accurate product descriptions
• Provide clear contact information
• Respond to every customer question and concern
• Manage returns and refunds quickly, before reaching out to the supplier

The latest customer service AI tools and chatbots give you the power to answer customers immediately.

Start your dropshipping business in 2024

Starting a dropshipping business has never been easier. Whether you’re a side hustler , an entrepreneur, or looking to expand your existing store, Shopify makes dropshipping efficient and low-cost.

Start your free trial today and connect a popular dropshipping app or sell products from known brands with Shopify Collective .

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• Is Dropshipping Worth It in 2024?

How to start dropshipping FAQ

How do i start a dropshipping business.

• Identify a niche: Select a specific market to target.
• Research competitors: Analyze what businesses in your niche are successful and why.
• Choose a dropshipping supplier: Partner with a reliable supplier that stocks products you want to sell.
• Create an online store: Design and build an ecommerce website to showcase your products.
• Market your business: Use social media ads and engaging content to attract customers.

How do I find the best products for dropshipping?

To identify the best products for your dropshipping business, start by choosing a niche with high demand but low competition. Research trends and customer interests using tools like Google Trends, and analyze market data to determine profitable products.

Is dropshipping really profitable?

Dropshipping can be a profitable business because sellers are not responsible for shipping or manufacturing. There are many dropshippers who earn more than $100,000 per year . However, because of the accessibility of starting a dropshipping business, competition among dropshippers is often fierce, limiting potential profit margins.

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Drop Shipping Business Plan Template

Written by Dave Lavinsky

Drop Shipping Business Plan

You’ve come to the right place to create your Drop Shipping business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Drop Shipping companies.

Below is a template to help you create each section of your Drop Shipping business plan.

Executive Summary

Business overview.

ShipSmart is a startup drop shipping company located in Terre Haute, Indiana. The company was founded by Jim Royer and Stacy Tamarin, both of whom formerly worked for a nationally-known drop shipping company. Jim Royer was the former client relations manager and Stacy Tamarin was the former administrative assistant for the drop shipping department. Jim and Stacy are confident they can replicate the best characteristics of their former employer, while introducing unique services and protocols that enhance the customer’s experience.

ShipSmart will offer a wide array of drop shipping options for individuals within the tri-state area: Indiana, Illinois, and part of Wisconsin. ShipSmart will be the one-stop provider for everything needed to secure a fast, reliable drop shipment with the added stability of confirmed deliveries to the correct addresses. ShipSmart will offer the lowest prices for their services because the company will be small, guaranteeing flexibility, and consistently reliable, guaranteeing return customers and long-term contracts.

Product Offering

The following are the services that ShipSmart will provide:

• Stable and reliable shipment of all product assortments
• Fast ship times to meet client and customer needs
• Repacking, boxing or bagging services
• International shipments (extra charge)
• Ecommerce drop shipments
• Business extension ecommerce
• Retail price matching with clients

Customer Focus

ShipSmart will target all ecommerce buyers, both from Shopify and as a business extension for retail stores that do not have an ecommerce platform. ShipSmart will focus on long-term contracts from major brick and mortar stores. ShipSmart will target companies that need repacking, boxing or bagging services. ShipSmart will also target international customers who require additional services.

Management Team

ShipSmart is owned and operated by Jim Royer and Stacy Tamarin. Jim and Stacy formerly worked for a nationally-known drop shipping company. Jim Royer was the former client relations manager and Stacy Tamarin was the former administrative assistant for the drop shipping department.

Jim will be the client relations manager and co-own the company. Stacy will be the administrative manager and co-own the company. Jim and Stacy are confident they can replicate the best characteristics of their former employer, while introducing unique services and shipping protocols that enhance the customer’s experience every time they ship. Their services will cement the customer’s loyalty to the ecommerce or retail store and further extend needed drop shipping services.

Success Factors

ShipSmart will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly-qualified team of ShipSmart
• Wide array of services and products designed to grow their clients’ loyal customer base.
• Accurate package tracking for each shipment with a guaranteed delivery date for the customer.
• Services 24/7 via chat or online representative.
• Extra-care services for fragile items, such as jewelry or breakables.
• ShipSmart offers the best pricing in town. Their pricing structure is the most cost-effective when compared to the competition.

Financial Highlights

ShipSmart is seeking $200,000 in debt financing to launch its drop shipping company. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:

• Office space build-out: $20,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph outlines the financial projections for ShipSmart.

Company Overview

Who is shipsmart.

ShipSmart is a newly established full-service drop shipping company in Terre Haute, Indiana. ShipSmart will be the most reliable, cost-effective, and performance-based choice for retail stores and ecommerce companies within the tri-state area of Indiana, Illinois and Wisconsin. ShipSmart will provide a comprehensive array of drop shipping services for any client business to utilize. Their full-service approach fully complements drop shipping.

  ShipSmart will be able to manage a multitude of shipments generated daily from long-term contracted clients and individual retailers, as well. The team of professionals are highly qualified and experienced in drop shipping and all the processes that support drop shipping. ShipSmart removes all the headaches and issues for clients who need shipments to buyers and ensures all issues are taken care of expeditiously while delivering the best customer service.

ShipSmart History

Since incorporation, ShipSmart has achieved the following milestones:

• Registered ShipSmart, LLC to transact business in the state of Indiana.
• Has a contract in place at one of the office buildings, where ShipSmart will set up its office and inventory space within 30,000 square feet.
• Reached out to numerous contacts to pre-sell long-term client contracts.
• Began recruiting a staff of six and office personnel to work at ShipSmart.

ShipSmart Services

The following will be the services ShipSmart will provide:

Industry Analysis

• The drop shipping industry is expected to grow during the next five years to over $1030 billion.
• The growth will be driven by companies that are expanding into new markets.
• The growth will be driven by diversifying marketing channels.
• The growth will be driven by companies that incentivize customers: loyalty programs, discounts, or referral incentives to encourage repeat purchases and foster brand loyalty.
• The growth will also be driven by the creation of partnerships.
• The growth will be driven by the extent of influencers who promote products.
• Costs will likely be reduced as drop shipping becomes the predominant method of shipping.
• Costs will also likely be reduced by the proliferation of drop shipping companies who experience a high rate of profitability and require new processes and products for their companies.

Customer Analysis

Demographic profile of target market.

ShipSmart will target ShipSmart will target all ecommerce buyers, both from Shopify and as a business extension for retail stores that do not have an ecommerce platform. ShipSmart will focus on long-term contracts from major brick and mortar stores. ShipSmart will target companies that need repacking, boxing or bagging services. ShipSmart will also target international customers who require additional services.

Customer Segmentation

ShipSmart will primarily target the following customer profiles:

• Shopify clients
• Ecommerce platform clients
• Large retail clients willing to sign long-term contracts
• Small retail chains will to partner in long-term contracts
• Clients who require international shipments

Competitive Analysis

Direct and indirect competitors.

ShipSmart will face competition from other companies with similar business profiles. A description of each competitor company is below.

ShippingMart

ShippingMart provides drop shipping services for brick and mortar retail stores within the Indiana city and region. The ShippingMart company provides a brand, “Ships on Time Every Time,” and has garnered customer loyalty since first launching in 1992. The company is co-owned by George and Georgia Hughes.

ShippingMart offers drop shipments for retail stores that do not have ecommerce platforms, but need ecommerce-style deliveries of goods. Products are shipped to ShippingMart and the inventory is held until sold. The long-term contracts in place provide a steady revenue stream and a reliable forecast for the future. However, more retail stores are taking on ecommerce business than in the past; the services for retail stores needing the services of ShippingMart may end within just a few years.

QuickSend is located in Indianapolis, Indiana and serves the city and surrounding areas with drop shipments of school supplies and educational products for the multiple school districts within Indianapolis. QuickSend has held long-term drop shipping contracts with every school within the Indianapolis region for the past 20 years and has grown a loyal teacher base of customers for the reliable shipments sent and received.

The National Association of Educators (NAE) holds a long-term contract with QuickSend as of 2003. The teachers’ association offers a reasonable wholesale rate for the services provided; however, the teachers’ association has continued to raise their wholesale rate, which has lowered the revenue expectations for QuickSend.

Patricia O’Healy and Donald Cummings co-own QuickSend. In the past twenty years, the long-term contract with the NAE has been the most profitable for their company; going forward, they are looking for new business to subsidize that current contract.

Taft Drop Shipping

Taft Drop Shipping has built a steady base of loyal customers since opening in 2015. Their main portal for finding drop shipping clients is Shopify, the largest platform for artisan and craft businesses who work on an ecommerce basis. Taft Drop Shipping has drop shipped almost entirely for jewelry artisans, who provide low minimums for their ecommerce shippers and fulfillment needs are typically small shipments in small packaging. This reduces the costs for transportation and shipping via mail or expedited services.

Taft Drop Shipping is owned by Tom Taft, an entrepreneur who has also built his own jewelry company and ships through Taft Drop Shipping. Taft Drop Shipping is one of the few shipping companies that offers international shipments, which is partly due to the small sizes of packages being sent, but it also adds a unique value proposition to the company and has built a following of clients and customers, as a result.

Competitive Advantage

ShipSmart will be able to offer the following advantages over their competition:

• Wide array of services and products designed to grow their loyal customer base.
• Reasonable pricing for customers, made in partnership with seller clients.
• Friendly, knowledgeable, and highly-qualified team of staff at ShipSmart.

Marketing Plan

Brand & value proposition.

ShipSmart will offer the unique value proposition to its clientele:

• Highly-qualified team of skilled employees who are able to provide a comprehensive array of services at reasonable client pricing.
• Long-term contracts with client companies to drop ship for business extensions that have no ecommerce capabilities, as well as those artisans who work with Shopify and other multiple-base clients.
• Unbeatable pricing for clients. They offer the lowest prices and best quality services in the tri-state area.

Promotions Strategy

The promotions strategy for ShipSmart is as follows:

Word of Mouth/Referrals

Jim Royer and Stacy Tamarin formerly worked for a nationally-known drop shipping company. Jim Royer was the former client relations manager and Stacy Tamarin was the former administrative assistant for the drop shipping department. Between the two of them, they have built up an extensive list of contacts over the years by providing exceptional service and expertise to their clients. Former clients and customers have indicated they will follow Jim and Stacy in this new venture with ShipSmart.

Professional Associations and Networking

Jim Royer and Stacy Tamarin are already active and involved in national associations for drop shipping companies. They plan to attend national trade shows for both their client-customers and drop shipping companies. They also plan to target the tri-state areas: Indiana, Illinois and Wisconsin for new, large retail brick and mortar store chains.

Website/SEO Marketing

ShipSmart will utilize the website, SEO and Social Media marketing platforms. The website will be well organized, informative, and list all their services that ShipSmart provides. The website will also list their contact information and contain multiple pages of inventory available for sale, along with shipping rates. They will also manage ShipSmart’s social media platforms and SEO marketing tactics. Anytime someone types in the Google or Bing search engine “drop shipping company” or “drop shipments near me”, ShipSmart will be listed at the top of the search results.

The pricing of ShipSmart will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.

Operations Plan

The following will be the operations plan for ShipSmart. Operation Functions:

• Jim Royer will be the Co-owner of the company. He will oversee and manage client relations.
• Stacy Tamarin will be the Co-owner of the company. She will be the administrative manager for all operations and office processes and procedures.
• Chip Anderson will be the Staff Accountant, providing all accounting, tax payments, and monthly financial reporting.
• Stan Maren will be the Shipping Manager, providing all oversight to inventory and shipping processes.

Milestones:

ShipSmart will have the following milestones completed in the next six months.

• 5/1/202X – Finalize contract to lease building space
• 5/15/202X – Finalize personnel and staff employment contracts for the ShipSmart
• 6/1/202X – Finalize contracts for ShipSmart clients
• 6/15/202X – Begin networking at industry events
• 6/22/202X – Begin moving into ShipSmart office and building area
• 7/1/202X – ShipSmart opens its doors for business

Financial Plan

Key revenue & costs.

The revenue drivers for ShipSmart are the client/customer fees they will charge to stock and/or drop ship their products.

The cost drivers will be the overhead costs required in order to staff ShipSmart. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

ShipSmart is seeking $200,000 in debt financing to launch its drop shipping company. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the website and social media marketing plans. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of Customers Per Month: 296
• Average Revenue per Month: $ 33,910
• Office Lease per Year: $100,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Drop Shipping Business Plan FAQs

What is a drop shipping business plan.

A drop shipping business plan is a plan to start and/or grow your drop shipping business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Drop Shipping business plan using our Drop Shipping Business Plan Template here .

What are the Main Types of Drop Shipping Businesses? 

There are a number of different kinds of drop shipping businesses , some examples include: Print on demand (POD) drop shipping, and Business extension drop shipping, and Shopify drop shipping.

How Do You Get Funding for Your Drop Shipping Business Plan?

Drop Shipping businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Drop Shipping Business?

Starting a drop shipping business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Drop Shipping Business Plan - The first step in starting a business is to create a detailed drop shipping business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your drop shipping business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your drop shipping business is in compliance with local laws.

3. Register Your Drop Shipping Business - Once you have chosen a legal structure, the next step is to register your drop shipping business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your drop shipping business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Drop Shipping Equipment & Supplies - In order to start your drop shipping business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your drop shipping business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful drop shipping business:

• How to Start a Drop Shipping Business

Start and grow your dropshipping business with all-in-one platform

Dropshipping Business Plan – 13 Tips for Creating Yours

Are you teeming with a groundbreaking dropshipping business idea but uncertain how to kickstart your venture? Fear not! Crafting a meticulous dropshipping business plan is your compass.

My comprehensive guide covers the pivotal steps and 13 indispensable tips to ensure your dropshipping success.

From defining your business model to pinpointing suppliers, marketing strategies, and financial projections, we leave no stone unturned. Discover the roadmap to setting clear goals, attracting investors, and navigating legalities.

With insights from top dropshipping store owners, learn why a business plan is your playbook, guiding every strategic move.

So, if you want to learn how to create a short business plan for dropshipping, keep reading!

Table of Contents

What Is a Dropshipping Business Plan?

A dropshipping business plan is a comprehensive document that outlines the essential elements of starting and operating a dropshipping business. So, whether is the dropshipping business model , or any other ecommerce model , creating a business plan is crucial.

👉 Learn How To Start A Business With No Ideas + Top Picks For 2024 .

Hence, a dropshipping business plan covers key elements, starting with an executive summary detailing the business overview, mission, and objectives.

It defines the dropshipping model, target market, and niche. Also, the plan includes a thorough market analysis, articulation of products, identification of suppliers, and a robust sales and marketing strategy.

Not only that, but operational aspects, financial projections, legal compliance, risk assessment, technology specifications , and exit strategies are integral components as well.

A simple dropshipping business plan should give you a good idea of your goal . Additionally, it should guide you through each stage of starting and running your online venture.

👉 Check out the Top 25 Ecommerce KPIs to Track For Your Dropshipping Store.

Moreover, the goal is the roadmap of your business and the guide for setting all your activities so you can achieve them.

So, since you can set it clear in your business plan for dropshipping, you can always go back to the first page and remember where you want to see your dropshipping business in a certain period of time. And there you go, back on track!

So, why exactly is the business plan for dropshipping crucial?

👉 Check out the Top 11 Richest Dropshipping Store Owners In The World.

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Why Is Business Plan Important When Starting A Dropshipping Business?

✅ get clear on your goals.

Ever tried reaching a destination without a map? A business plan is your map. It helps you figure out where you’re going and why.

✅Think Strategically

Picture it as your playbook. A business plan lets you strategize – who your competitors are, who you’re targeting, and how you’ll stand out.

✅ Use Your Resources Wisely

Money matters! A business plan helps you budget smartly and understand what you need to make your business rock.

✅ Spot Risks Before They Spot You

Ever heard the saying, “Forewarned is forearmed”? Your business plan helps you spot risks ahead of time and come up with plans to tackle them.

✅ Attracting Investors or Financing

Need cash? Investors and lenders want to see you’ve thought things through. A solid business plan makes them say, “This person knows what they’re doing!”

✅ Business Plan is Your Communication Tool

Explaining your business to others? A business plan is like your cheat sheet. It helps you express your genius idea in a way everyone gets.

✅ Measure Your Progress

It’s like a report card for your business. Are you winning or losing? Your business plan helps you keep score and tweak your game if needed.

✅ Your Daily Operational Guide

Ever felt lost during the daily grind? Your business plan is like a compass, guiding your day-to-day decisions.

✅ Stay on the Right Side of the Law

Legal stuff can be a headache. A business plan helps you make sure you’re following the rules, and avoiding any nasty surprises.

✅ Planning as a crucial part of your dropshipping business plan

Planning for the long haul? A business plan can help with passing the baton, ensuring a smooth transition in leadership or ownership.

You cannot underestimate the importance of proper planning because it is core to how your business takes shape.

It is crucial to a successful launch and making better decisions in the future. And it is actually the foundation of success. Here I share the best predictions: What is the future of dropshipping ?

Think of it as a road map; you can travel without one, but it can only increase your chances of getting lost along the way.

Now you are probably aware of the importance of proper planning. But if you have never created an e-commerce business plan, and you do not even know where to start, you do not have to look for dropshipping business plan examples elsewhere.

However, before creating your e-commerce business plan, you need to gather certain information. Then, you can get everything down on paper.

👉 Learn about Dropshipping: Is It A Real Business or a Get-Rich-Quick Scheme?

How to Create a Dropshipping Business Plan?

I will guide you through several essential steps for developing a business plan for dropshipping. However, there are various free dropshipping business plan templates to use as well.

Step 1: Choose a Product To Dropship

First thing first, you need to make a decision about what you want to sell. Thus, this step mainly contains brainstorming about the products that are mostly selling on the market, or maybe products that you have the most knowledge of.

Surely, I know that the beginning is always the hardest, and making a decision about the one that sells most and the one that I desire is hard too.

However, I recommend you make a mix between the two. Thus, as a dropshipper, you can choose a one-product store or a niche store . And believe me, both work perfectly fine!

For example, you can go to Google Trends , type each product keyword, and see the results from customer searches.

👉 Learn The Ultimate Guide: How to Use Google Trends for Dropshipping .

This tells you a lot since you can see what customers mostly demand. Using this tactic you can also check which products to include in your niche store. So, let’s try it out.👇

Here’s our guide on how to dropship phone cases successfully.

Next, you can check trending or winning products on some popular and trustworthy websites, like Dropshipping.com , or AutoDS . Hence, this way you can also check what customers mostly buy.👇

Finally, we recommend you always check product profitability . Thus, check product supplier prices, and market prices, and this way you can see the profit margins.

Luckily, today you have various dropshipping platforms that have already done that for you, so the only thing you should do is do a little research.

For example , I visit the Dropshipping.com product directory , then I type in the specific product keyword, and I get all the results I need. Take a look.👇

Also, you can sort the products by shipping costs or product prices, but that’s up to you.

Step 2: Do An In-depth Market Research

However, looking for products over the internet getting ideas, and checking the results on Google Trends is not enough. Therefore, next, conducting market research is essential for your business plan for dropshipping. Thus, you need to make an in-depth industry analysis.

First, you can start by checking the industry market share, or the industry leaders. But, more importantly, you better start by checking whether the products you selected are desirable.

Thankfully, you have various amazing product research tools that can help you find your winning products.

Thus, I use the AutoDS product research tool personally, and it’s great for quickly finding, checking, and bringing in products.

With it, I can easily look up popular products and get info like product details, suppliers, profitability, prices, shipping, ratings, and reviews.

👉 Check out Sell The Trend Review: Find Winning Dropshipping Products .

Step 3: Competitor Analysis

Correspondingly, do not underestimate your competitors! Instead, get to know them as if they are your best friends. You know the rule – keep your friends close, but enemies closer.

If you want to always be a step ahead of them, you should check their dropshipping store in-depth. Of course, you will compare the pricing of their products, the marketing tactics they use, or the dropshipping suppliers they interact with .

Moreover, you can even check what dropshipping tools and apps they use to manage their business.

But, my advice on this one is to analyze every aspect of their store , not just the logistics. But also, check:

• How do they give customer support?
• How do they offer additional value for customers, do they have information blog posts, or something else?
• The website navigation, call-to-action buttons they use, the website design, and the information they serve.
• How simple is their buying process, what payment options do they offer, etc?

For instance, I use AdSpy to check out my competitor’s work. It is a tool that focuses on checking out what your competitors are doing with their ads.

It helps you understand their advertising methods and figure out how to make your own ads work better.

The tool gives you details about your competitors’ ad designs, who they’re aiming at, and how well their ads are doing. This way, you can get a good overall picture of what’s working for them in advertising.

Step 4: Find Dropshipping Suppliers or Manufacturers

Well, it is step 4, but maybe the most important one of the dropshipping business plan as well. I assume that you already know how dropshipping business model works.

👉 Read about Everything You Need To Know: Dropshipping Business Model Explained .

The dropshipping suppliers are the only ones who see and check the products before they are delivered to your customers. Therefore, it is essential to choose the one you trust the most!

Thus, you can find dropshipping suppliers on your own. Just open the Google search engine( or whoever you use), and google it.

But you will never be certain if they are reliable. For that purpose, I recommend you rely on trustworthy dropshipping agents.

For example, I regularly find helpful information on Dropshipping.com’s supplier directory . It’s a free resource with over 2000 trustworthy suppliers.

This directory assists me in refining my search based on my specific dropshipping niche, supplier location, shipping costs, and other preferences.

I also gain access to important details such as each supplier’s pricing, order processing time, minimum order quantity (MOQ), warehouse location, and product range.

Also, you can learn about the 13 Best Directories To Find Wholesale Dropshipping Suppliers.

💡 Tip : Check out the Top 100 Ecommerce Suppliers For Sourcing Dropshipping Products .

Step 5: Build A Marketing Strategy For Your Product

What will set you apart from your rivals is a well-planned marketing strategy. Since a competitor’s plan could not work for you, copying is not the solution in this situation.

In addition, you already have a business plan for dropshipping, so you are aware of where your business is heading.

In spite of this, the following step is to provide a slight boost.  And this is where marketing takes place.

Making a client acquisition plan that takes into consideration your marketing budget is the most efficient method to do this.

👉 Follow the 7 Tips For Creating a Bulletproof Dropshipping Marketing Strategy in 2024 .

Therefore, in our opinion to advertise your company, you should use both a short-term and long-term strategy.

Short-term marketing includes :

• Pay-per-click ads on search engines, such as Google ads.
• Social media ads on TikTok , Facebook , Instagram , or Pinterest
• Digital marketing adverts, such as banner placements
• Influencer marketing
• Video marketing can effectively highlight your products, showcasing their features, functionality, benefits, and usage instructions.

On the other hand, long-term marketing includes :

• Search Engine Optimization , so you can rank higher in Google SERPs.
• Consistent Email Marketing strategy so you can stay in touch with your consumers, encourage repeat purchases, and increase brand recognition.
• Content Marketing , like writing blog posts,

Also, there are various marketing apps nowadays that can help you promote your dropshipping business, thus we recommend you to check out the 16 Best Marketing Apps on Shopify.

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What Do You Need to Cover In Your Short Dropshipping Business Plan?

If you do not have previous experience in writing something like that, you have come to the right place. Just read on!

Here are the key elements of a simple business plan for dropshipping:

1. Executive summary

Although your executive summary needs to appear first in your plan, you should write it last. As its name suggests, it is a summary and is supposed to highlight what you intend to discuss in the rest of your plan .

In addition, it is a brief outline of your business purpose and goals . Therefore, in this section, you need to highlight the key points you have uncovered while writing your dropshipping business plan.

Briefly write what your business is and why it will be prosperous.

In other words, summarize basic information about your business concept, mission, goals, target market, product, marketing strategy, and current/projected financial state.

In fact, if you need help, here’s my example:

Business Name: XYZ Tech Solutions Location: Silicon City, CA ➡ Mission Statement: XYZ Tech Solutions is committed to providing innovative and reliable technology solutions that empower businesses to thrive in the digital age. ➡ Business Concept: We specialize in developing cutting-edge software applications for small and medium-sized enterprises, with a focus on enhancing efficiency and scalability. ➡ Market Analysis: Our target market includes businesses in the technology, healthcare, and finance sectors. With a comprehensive understanding of market trends, we aim to capture a significant share in the rapidly growing software solutions industry. ➡ Unique Selling Proposition (USP): Our modular and customizable software solutions, coupled with a user-friendly interface, set us apart. We offer unparalleled customer support and continuous updates to ensure our clients stay ahead in the dynamic tech landscape. ➡ Business Model: XYZ Tech Solutions generates revenue through a subscription-based model, offering tiered packages with varying levels of features and support. This approach ensures a steady and scalable income stream. ➡ Financial Summary: Projected annual revenue for the first three years is $2 million, with a net profit margin of 20%. We are seeking $500,000 in funding to accelerate product development and expand our sales and marketing efforts. ➡ Team Overview: Founded by industry veterans with a combined experience of over 30 years, our team comprises seasoned software developers, marketing experts, and customer support professionals dedicated to the success of XYZ Tech Solutions. ➡ Milestones and Achievements: In the past year, we successfully launched our flagship product, securing contracts with five prominent clients. We are on track to double our client base in the coming year. ➡ Future Plans: XYZ Tech Solutions aims to become a market leader in the software solutions industry, expanding our product line and entering new markets. We anticipate achieving a 30% market share within the next five years.

2. Company Description

Company description is the second key element of your e-commerce business plan. Here, you should provide detailed information about your business.

In simpler terms, this section of your dropshipping business plan should include information about:

• Your business structure. Seek legal advice and decide which legal form of ownership is best for your business. You can choose from a sole proprietorship, a limited liability company, and a partnership.
• Your business model. As you are planning on starting a dropshipping business, your business model is dropshipping, of course.
• Your industry. Determine what industry you are about to sell your products in.
• Your short- and long-term business goals. Set clear, short- and long-term goals. This can help you stay focused and stop your online venture from becoming stagnant.

Also, here’s an example. 👇

Certainly! The company description in a business plan provides a detailed overview of your company, its history, mission, vision, values, and the products or services it offers. Here’s a fictional example: Company Description Company Name: XYZ Tech Solutions, Inc. Founded: January 2018 Location: Silicon City, CA Mission Statement: At XYZ Tech Solutions, our mission is to revolutionize the way businesses operate by delivering innovative and reliable technology solutions. We are committed to empowering organizations with cutting-edge software that enhances efficiency, fosters growth, and drives success in the digital era. Vision: To be a globally recognized leader in providing modular and customizable software solutions that cater to the evolving needs of businesses across various industries. We aspire to create a positive impact on our clients, employees, and the communities we serve. Values: Innovation: We embrace creativity and continuously strive to push the boundaries of what technology can achieve. Integrity: We operate with transparency, honesty, and a commitment to ethical business practices. Customer-Centricity: Our clients’ success is our top priority, and we are dedicated to delivering exceptional value through our products and services. Collaboration: We foster a culture of teamwork, recognizing that collaboration and diverse perspectives drive innovation. Business Overview: XYZ Tech Solutions specializes in developing and delivering state-of-the-art software applications for small and medium-sized enterprises (SMEs). Our comprehensive suite of products includes cloud-based project management tools, customer relationship management (CRM) systems, and business analytics solutions. History: Founded in January 2019 by a team of industry veterans with a shared vision for technological advancement, XYZ Tech Solutions has steadily grown into a dynamic player in the software solutions market. Our founders, each with over a decade of experience, identified a gap in the market for user-friendly and scalable software tailored to the unique needs of SMEs. Products and Services: Project Xcelerate: A cloud-based project management tool designed to streamline collaboration, improve communication, and enhance project efficiency. ClientConnect CRM: An intuitive customer relationship management system that empowers businesses to build and maintain strong client relationships. DataInsight Analytics Suite: Comprehensive business analytics tools that provide actionable insights, enabling data-driven decision-making. Market Presence: XYZ Tech Solutions has successfully established a strong presence in the technology, healthcare, and finance sectors. With a growing client base and positive feedback from industry leaders, we are poised for expansion into new markets and industries. In summary, XYZ Tech Solutions is a forward-thinking technology company dedicated to driving the success of businesses through innovative software solutions. Our commitment to excellence, customer-centric approach, and passion for technological advancement set us apart in the competitive landscape.

3. Market Analysis and Customer Segmentation

The market analysis section of your plan is very important because it needs to provide a detailed overview of your industry and market. This means you must do comprehensive market research before writing this section.

In this part of your simple dropshipping business plan, you should address everything from estimated market size to your target market.

That is to say, you should provide detailed statistics and define things like:

• Your industry. Now that you know what industry you are about to sell your products in, learn more about the market size, trends, growth rate, and outlook.
• Your target market. Clearly define your target audience. To put it simply, find out how many people need your products. Also, learn more about their age, gender, location, lifestyle preferences, purchase potential, etc. Just be as specific as possible about who you are trying to reach.
• Your competitors. Do a detailed analysis of your industry while addressing the strengths and weaknesses of your competitors.

This is the part of your dropshipping business plan where you should figure out whether your business idea is viable.

However, as I mentioned above, various dropshipping tools can help you automate the entire process. Thus, you can use product research tools to find your winning products, and see what your customers mostly want, or competitor spy tools to check on your competitors.

Plus, here’s my approach.

Also, if you are a creative fella, I have an idea for you. Hence, when I segment my target audience, I make different Ideal buying persona profiles.

Thus, you can simply use ready-made templates from Canva , and add their personal information, professional career, hobbies, reasons why they would buy your products, and more. Accordingly, I even write down their income or buying power .

Thus, I make multiple customer profiles, and that is how I make my market segments.

4. Management and Organization

This section of your plan should cover two main aspects of your startup:

• The organization. Define the way your business is structured and the people involved.
• The management. Provide details about team members, if any.

You should incorporate this section into your dropshipping business plan if you intend to set up a multi-member limited liability company or a partnership. Also, you can draw an organogram , or organizational structure to clear it all up. Thus, on Canva you can find premade templates and use them for your organogram.

But if you are planning on running your business alone, you can simply skip it.

However, here’s an example of how you can describe your organizational structure:

Executive Summary: XYZ Tech Solutions boasts a seasoned and dynamic management team with a collective experience of over 5 years in the technology sector. Our team is dedicated to driving the company’s vision of providing innovative software solutions to businesses across industries. Organizational Structure: Here you can place your organogram. Profiles of Key Management Team Members: John Doe – CEO and Co-founder Education: MSc in Computer Science, Stanford University Experience: 15 years in software development, previously a senior executive at Tech Innovators Inc. Jane Smith – CTO and Co-founder Education: PhD in Computer Engineering, MIT Experience: 12 years in software architecture, led development teams at Innovation Solutions Co. Management Team Roles and Responsibilities: John Doe oversees the overall strategy and vision of the company, while Jane Smith is responsible for the technical direction and development of our software solutions. Advisory Board: XYZ Tech Solutions is currently in the process of establishing an advisory board to provide strategic guidance. Potential members include industry experts and successful entrepreneurs. Key Personnel and Positions: Sarah Johnson – Head of Marketing Mark Thompson – Head of Sales David Rodriguez – Head of Customer Support Succession Plan: The management team is committed to developing internal talent and has identified potential successors for key roles through mentorship and training programs. Compensation and Ownership Structure: Executives receive a combination of salary and performance-based bonuses. The ownership structure is distributed among the founders and key executives based on their contributions to the company. Human Resources Plan: We will prioritize recruiting top-tier talent in software development, marketing, and customer support. Regular training programs and employee development initiatives will be implemented to foster a high-performance culture. Future Growth Plans: As XYZ Tech Solutions expands its product offerings and enters new markets, the management team will scale accordingly. Plans include hiring additional executives and specialists to support the company’s growth trajectory.

5. Product Details

As you can assume, you need to clearly describe the products you will sell through your online store in this part of your dropshipping business plan.

Furthermore, describe how your products will differ from those of your competition. Plus, you may also want to include the prices of your products here.

In short, you should highlight the features and benefits of your products. Keep in mind that there is a difference between the features and benefits of a product.

The features are the aspects of your products, whereas the benefits are the effects your products will have on your customers.

Just try not to get too bogged down in unnecessary information and description here. So, it is advisable to use a numbered or bulleted list to easily and fast highlight important information.

Thus, here’s an example: 👇

Product/Service Description: XYZ Health Tracker is a cutting-edge mobile application designed to empower individuals to take control of their health and wellness. The app seamlessly integrates with wearable devices to provide real-time insights into physical activity, sleep patterns, and overall health metrics. Key Features and Benefits: ➡ Personalized Health Dashboard: Users can view a comprehensive dashboard that aggregates data from various health metrics, offering a holistic view of their well-being. ➡ Activity Tracking: The app records and analyzes physical activity, providing customized recommendations to help users meet their fitness goals. ➡ Sleep Analysis: Advanced sleep tracking algorithms offer insights into sleep quality and patterns, allowing users to make informed decisions for improved rest. ➡ Nutritional Guidance: An integrated nutrition feature provides personalized dietary recommendations based on individual health goals and preferences. Cost Structure: Development costs include software development, API integration, and ongoing maintenance. Operational costs cover server hosting, customer support, and marketing efforts. Pricing Strategy: XYZ Health Tracker adopts a freemium model, offering basic features for free and a premium subscription for advanced analytics and personalized health plans. Pricing tiers are competitive and cater to a broad user base. Distribution Channels: The app is available for download on major app stores (Apple App Store and Google Play). We are exploring partnerships with health and fitness retailers for in-store promotions and distribution.

6. Sales and Marketing

In the world of dropshipping, there is no shortage of competition. And without a good marketing strategy, people simply cannot learn about your store.

Thus, a carefully planned marketing strategy included in your overall dropshipping business plan is indisputably crucial to ensuring the success of your dropshipping business.

So, in your sales and marketing plan, you should address the following topics:

• Your products. Again, focus on your products.
• Your pricing strategy. Define your pricing strategy – set competitive prices but still leave room for a reasonable profit.
• Your sales plan. Identify sales approaches that are suited to your target audience.
• Your marketing and advertising plan. Describe how you will attract and retain customers; e.g., through social media, e-mail, content marketing, Google ads, etc.
• Specify the marketing channels you will use (e.g., online, offline, social media, email marketing).
• Create a timeline for the execution of your marketing strategies.

The simplest way to develop your marketing plan is to define the marketing efforts of your business for a period of one year.

Set your marketing strategy, advertising, and promotional activities planned for that period.

7. Logistics and Operations plan

This part of your e-commerce business plan should outline the way you are going to turn your business idea into reality. Here, you need to explain in detail the steps you will take to complete your business mission. Focus on things like:

• Wholesale suppliers . Figure out how you will source your products and make sure you partner with a reliable, certified supplier.
• E-commerce platform . Include the e-commerce platform you will use to enable the commercial process of selling over the internet; e.g., Shopify, WooCommerce, BigCommerce, etc.
• Your dropshipping store . Highlight where you will sell your products.
• Shipping and fulfillment . Mention that your dropshipping supplier will be responsible for that.

8. Financial Analysis

This section of your dropshipping business plan needs to contain information about the expenditures for your business . That is why you should calculate and evaluate the startup costs for your online business.

You are about to start a dropshipping business , right? Therefore, estimate the costs of website development, e-commerce platforms, dropshipping automation apps, marketing, advertising, e tc. Also, do not forget to include financial projections for the first year.

And remember that accurate financial forecasts can help you make your online venture a success.

👉 Learn How To Add Afterpay To Shopify: My 4-Step Guide + Examples .

Frequently Asked Questions About Dropshipping Business Plan

1. do you need a business plan for dropshipping.

Yes, having a dropshipping business plan is essential for your business, since it acts as a well-planned roadmap of all the resources, budget, or marketing tactics.

Thus, you need the dropshipping business plan to clarify your plans for growth, understand your financial needs, and attract funding from investors.

2. How Much Do Dropshippers Make On Average?

The usual profit margin for dropshippers is 15% to 20%. However, The most successful dropshippers have reported margins of around 300%.

3. Is Dropshipping Still Profitable?

Yes, dropshipping is still a profitable business model. Check out why is still profitable here .

4. What is dropshipping?

Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when you sell a product, you purchase the item from a third party and have it shipped directly to the customer.

👉 Learn about How Does Dropshipping Work – Everything You Need To Know.

5. Why should I consider starting a dropshipping business?

Dropshipping offers lower startup costs, reduced inventory risk, and the ability to focus on marketing and customer service. It’s also a flexible business model that can be managed from anywhere.

6. What are the key components of a dropshipping business plan?

A comprehensive dropshipping business plan should include sections on market research, product selection, supplier evaluation, marketing strategy, financial projections, and operational plan.

7. How do I choose the right products for my dropshipping store?

Conduct market research to identify trending products, analyze competition, and understand your target audience. Choose products that have a demand and fit within a specific niche.

8. How do I find reliable dropshipping suppliers?

Look for suppliers with a good reputation, clear communication, and a reliable track record for timely deliveries. Consider using reputable dropshipping platforms and directories to find trustworthy suppliers.

9. What are the potential challenges in dropshipping?

Common challenges include product quality issues, shipping delays, inventory management, and intense competition. It’s essential to have contingency plans for these challenges.

10. How can I market my dropshipping business?

Utilize digital marketing strategies such as social media advertising, search engine optimization (SEO), influencer marketing, and email campaigns. Building a strong online presence is crucial for attracting customers.

11. How can I ensure customer satisfaction in a dropshipping business?

Choose reliable suppliers, provide accurate product descriptions, set realistic delivery expectations, and offer excellent customer support. Transparency and clear communication are key to building trust.

12. What legal considerations should I be aware of in dropshipping?

Familiarize yourself with e-commerce and dropshipping regulations in your target market. Ensure compliance with consumer protection laws, and have clear terms and conditions, privacy policies, and refund policies on your website.

👉 Learn Do I Need an LLC For Dropshipping? The Sellers Guide.

13. How can I track and analyze the performance of my dropshipping business?

Use analytics tools to monitor website traffic, track sales, and assess the effectiveness of your marketing efforts. For example, Ahrefts is a valuable tool that can help you monitor your dropshipping website.

Regularly review key performance indicators (KPIs) to make informed business decisions.

Remember that the success of your dropshipping business de

Grow With a Short Dropshipping Business Plan

In conclusion, mastering the art of dropshipping requires more than just a groundbreaking idea; it demands a meticulously crafted business plan.

My guide for creating a dropshipping business plan has equipped you with the essential tools to navigate this dynamic landscape successfully.

From goal clarity and strategic thinking to smart budgeting and risk mitigation, your comprehensive plan is the key to sustainable success.

Remember, a business plan isn’t just a document; it’s your daily operational guide, your communication tool, and your progress report card.

As you embark on this exciting journey, let your business plan be the unwavering foundation that propels you towards your dropshipping dreams. Happy dropshipping! 🌟

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How to write a business plan for your dropshipping business.

Dropshipping is a great way to start a business because it requires minimal startup costs and no inventory or shipping costs, allowing you to focus on growing your business through marketing and customer service.

Additionally, it is a great way to test new products or services with minimal risk.

But, first thing first, you need to write a business plan.

A business plan is essential for any new project, because it will provide a roadmap for success and help identify potential risks and opportunities. It is also a great way to ensure that everyone involved is on the same page.

In short, a good business plan will help ensure the profitability of your dropshipping business .

What should you consider when writing a business plan for a dropshipping business? What should be the overall layout? What financial metrics should be included? How can I write a business plan efficiently and effectively?

Get ready to have all your questions answered in this article.

Also, please note that starting your business plan from scratch is not mandatory.

Instead, you can download our comprehensive business plan for a dropshipping business and customize it for your business.

How to craft a business plan for a dropshipping business

Do you need to develop a business plan for your dropshipping business.

Yes, you need to develop a business plan for your dropshipping business.

Drafting a viable business plan will help to:

• get familiar with the dropshipping market
• get a handle on the emerging industry patterns
• discover what makes a dropshipping business solid and successful
• understand customers' product interests and trends to curate an attractive and profitable online store
• come up with a winning value proposition for your online retail business
• assess competitor brand reputation
• identify strategic advantages for your dropshipping business
• find a business model that guarantees a return on investment
• formulate a resilient strategy to achieve success in the short and long-term
• identify and manage risks specific to a dropshipping business, including inventory management, supply chain disruptions, and customer satisfaction

Our team has created a business plan for a dropshipping business that is designed to make it easier for you to achieve all the elements listed.

How to structure a business plan for a dropshipping business?

A carefully constructed business plan provides a complete package of content, metrics, and financial information. There should be a clear outline, to make easy to read and digest.

When we designed our business plan for a dropshipping business , we made sure to structure it propertly.

You'll come across 5 sections (Opportunity, Project, Market Research, Strategy and Finances).

1. Market Opportunity

The introductory section has been named "Market Opportunity".

Explore this section to access valuable data and metrics related to the dropshipping business model, providing insights for aspiring entrepreneurs.

We constantly update all the data there.

2. Project Presentation

The second part is where you introduce the "Project" of your dropshipping business. You can describe the range of products you offer, supplier relationships, order fulfillment process, online storefront or platform, customer support services, and the unique value proposition that offers a seamless and efficient shopping experience for customers without the need for inventory management.

Remember to introduce yourself at the end of this section.

Discuss your expertise in dropshipping, your range of products, and how you plan to provide a convenient and efficient online shopping experience for customers. Highlight your partnerships with reliable suppliers, your seamless order fulfillment processes, and your dedication to delivering quality products and exceptional customer service through your dropshipping business.

We wrote some content in our business plan. Change it to fit your concept.

3. Market Research

Then, we have the "Market Research" section.

In this section, you will find a market segmentation analysis for your dropshipping business.

It includes a study of other dropshipping businesses in the industry that will be competing with you. Your business's unique product offerings and competitive advantages are also highlighted. A customized SWOT analysis is included.

4. Strategy

In the "Strategy" section, a detailed 3-year action plan is provided, which highlights all the crucial steps and initiatives to transform your dropshipping business into a highly profitable venture.

Furthermore, this section includes a marketing strategy, a plan to mitigate risks, and a filled-out Business Model Canvas.

5. Finances

In conclusion, the "Finances" section offers a detailed overview of the financial aspects and indicators of your project.

How to make an Executive Summary for a dropshipping business?

The Executive Summary offers a brief glimpse into the business plan of your dropshipping business.

Don't go beyond 2 pages; ensure you include only the critical information.

The aim of this document is to grab the reader's attention and make them want to read your business plan.

In the Executive Summary of your dropshipping business, answer the following questions: what products do you sell through your dropshipping business? who is your target audience? are there other dropshipping businesses in the market? how do you differentiate from them? what is your budget?

How to do the market analysis for a dropshipping business?

Analyzing the market for your dropshipping business allows you to gain insights into factors such as customer preferences for online shopping, competition within the e-commerce market, and emerging trends in supply chain management.

By conducting a comprehensive market analysis, a dropshipping business can identify profitable product niches, establish strong supplier relationships, optimize pricing strategies, and implement targeted marketing campaigns, ultimately leading to increased online sales, customer satisfaction, and a successful dropshipping venture.

Here's what we've included in the "Market Research" section of our business plan for a dropshipping business :

• fascinating data points and trends in the dropshipping market, including successful niches, customer acquisition strategies, and revenue growth
• a compilation of potential market segments for a dropshipping business
• the competitor study
• the potential competitive advantages for a dropshipping business

The key points of the business plan for a dropshipping business

What's the business model of a dropshipping business, business model of a dropshipping business.

A dropshipping business model centers around selling products online without maintaining inventory or shipping logistics. Revenue is generated through product sales, with the supplier directly fulfilling customer orders.

The business model focuses on curating an appealing online store, effective marketing to target customer segments, building relationships with reliable suppliers, and providing exceptional customer service.

Success depends on identifying profitable product niches, establishing a strong online presence, selecting reliable suppliers, optimizing marketing and customer acquisition strategies, and maintaining a seamless customer experience from order placement to delivery.

Business model ≠ Business plan

Don't misunderstand the terms "business plan" and "business model."

A business model shows how a company operates and turns a profit.

In a business plan, you outline your business model using a tool called the Business Model Canvas.

And, of course, there is a Business Model Canvas (already completed) in our business plan for a dropshipping business .

How do you identify the market segments of a dropshipping business?

Market segmentation for your dropshipping business involves dividing your potential customers into different groups based on their product preferences, demographics, and shopping habits.

These categories may include factors such as niche markets, trending products, target age groups, or specific consumer interests.

By segmenting your market, you can curate a product selection and marketing approach that caters to each segment's specific preferences. For example, you might focus on offering niche products for specialized hobbyists, showcase trending products for a younger demographic, create curated collections based on specific consumer interests, or develop partnerships with influencers and target their follower base.

Market segmentation allows you to effectively target your marketing efforts, optimize your product offering, and deliver a personalized shopping experience that resonates with each customer segment.

In the business plan for a dropshipping business , you will get a detailed market segmentation, helping you understand your target audiences and their needs.

How to conduct a competitor analysis for a dropshipping business?

Without surprise, you won't be the only dropshipping business in your industry. There are other entrepreneurs leveraging online platforms to sell products and fulfill orders through third-party suppliers.

Thoroughly analyzing your competitors' strengths and weaknesses is crucial when creating a successful business plan.

Take stock of their weaknesses (such as unreliable suppliers, inconsistent order fulfillment, or poor customer service).

Why should you pay attention to these points? Because these weaknesses can impact the success of dropshipping businesses. By addressing these aspects, you can offer a wide range of high-quality products, provide reliable and efficient order fulfillment, and deliver excellent customer service, positioning your dropshipping business as a trusted and preferred choice for convenient and reliable online shopping experiences.

It's what we call competitive advantages—invest in cultivating them to differentiate your business.

Here are some examples of competitive advantages for an e-tailer: wide product selection, convenient online shopping experience, competitive pricing.

How to draft a SWOT analysis for an e-tailer?

A SWOT analysis is useful when starting a dropshipping business because it identifies the strengths, weaknesses, opportunities, and threats associated with the business.

As you can guess, there is indeed a completed and editable SWOT matrix in our business plan for a dropshipping business

The strengths for a dropshipping business

When we talk about the "S" in SWOT, we're referring to Strengths, which are the project's internal advantages or distinctive features.

For a dropshipping business, some possible strengths are low overhead costs, access to a wide variety of products, the ability to scale quickly, and no inventory storage costs.

The weaknesses for a dropshipping business

The "W" represents Weaknesses, which are the weaker areas or aspects of the project that require enhancement.

For a dropshipping business: Low margins, limited control over shipping and quality assurance, reliance on suppliers, and lack of customer data.

The opportunities for a dropshipping business

The "O" in SWOT symbolizes Opportunities, indicating the potential advantages or positive factors that can support the project's growth.

In the case of a dropshipping business, potential opportunities include selling electronics, apparel, home decor, and health and beauty products.

The threats for a dropshipping business

T represents Threats, which are the external factors or conditions that can pose risks or challenges to the project's success.

How to outline a marketing strategy for an e-tailer?

Including a marketing strategy in your business plan is important for enticing customers and achieving sales goals.

An e-tailer can connect with online shoppers by developing an effective marketing plan that highlights the e-tailer's diverse product offerings, competitive pricing, secure online transactions, and efficient shipping and customer support services.

Customers won't shop at your e-tailer without effective marketing; highlighting the convenience of online shopping, variety of products, and secure transactions is necessary.

Are you utilizing marketing tactics to promote your e-tailer business? Consider optimizing your e-commerce website for search engine visibility, offering personalized product recommendations or targeted discounts, and utilizing email marketing campaigns to engage with your customer base and drive repeat purchases.

No need to panic if you're struggling to come up with ideas for your project's marketing strategy.

How to build financial projections for an e-tailer?

A comprehensive business plan requires a thorough analysis of financial data to ensure its success.

As part of your business plan, it will be necessary to forecast the revenue for your dropshipping business.

A revenue forecast that is relevant and credible plays a significant role in making your business plan investor-friendly.

Our financial plan for a dropshipping business is designed to be user-friendly, incorporating automatic verifications that assist in identifying and correcting any assumptions. This ensures you can build credible projections with confidence.

Without a doubt, you will be required to draft a provisional budget for your dropshipping business . Make sure to include every expense (by the way, they are all listed in the financial plan we've made).

The break-even analysis is an essential component of your financial plan, as it provides an indication of whether your dropshipping business will generate profits or not.

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Drop Shipping Business Plan Template

Written by Dave Lavinsky

Drop Shipping Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their drop shipping companies. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a drop shipping business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Drop Shipping Business Plan?

A business plan provides a snapshot of your drop shipping business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Drop Shipping Business

If you’re looking to start a drop shipping business or grow your existing drop shipping company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your drop shipping business to improve your chances of success. Your drop shipping business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Drop Shipping Businesses

With regards to funding, the main sources of funding for a drop shipping business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for drop shipping companies.

Finish Your Business Plan Today!

How to write a business plan for a drop shipping business.

If you want to start a drop shipping business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your drop shipping business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of drop shipping business you are running and the status. For example, are you a startup, do you have a drop shipping business that you would like to grow, or are you operating a chain of drop shipping businesses?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the drop shipping industry.
• Discuss the type of drop shipping business you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of drop shipping business you are operating.

For example, you might specialize in one of the following types of drop shipping businesses:

• Print on demand (POD) drop shipping: This type of drop shipping business is one in which the business owner can create their own designs to be printed onto a product once a customer orders it. Popular POD products include apparel, keychains, and coffee mugs.
• Business extension drop shipping: This type of drop shipping business involves working directly with brick-and-mortar retailers who don’t have an online presence to sell their products online for them.
• Shopify drop shipping: This type of drop shipping business uses an established platform such as Shopify to make the drop shipping process easier. These types of platforms offer lots of tools to simplify the process.

In addition to explaining the type of drop shipping business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of customers served, the number of items sold, and reaching $X amount in revenue, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the drop shipping industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the drop shipping industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your drop shipping business plan:

• How big is the drop shipping industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your drop shipping business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your drop shipping business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, schools, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of drop shipping business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

Finish Your Drop Shipping Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your business plan?

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other drop shipping businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes other types of online retailers and brick-and-mortar stores. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of drop shipping business are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you make it easier for customers to acquire your products or services?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a drop shipping business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of drop shipping company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide print on demand or business extension drop shipping services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your drop shipping company. Document where your company is situated and mention how the site will impact your success. For example, is your drop shipping business located in a busy retail district, a business district, a standalone office, or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your drop shipping marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your drop shipping business, including answering calls, connecting with suppliers, marketing your products, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to make your Xth sale, or when you hope to reach $X in revenue. It could also be when you expect to expand your drop shipping business to a new city.  

Management Team

To demonstrate your drop shipping business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing drop shipping businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a drop shipping business.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you expect to sell 10-20 products per day, and will you offer discounts for repeat customers? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Example 5 Year Annual Income Statement

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your drop shipping business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Example 5 Year Annual Balance Sheet

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a drop shipping business:

• Cost of equipment and office supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, computer software, and equipment

Example 5 Year Annual Cash Flow Statement

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your product catalog, or testimonials from happy customers.  

Writing a business plan for your drop shipping business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the drop shipping industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful drop shipping business.  

Drop Shipping Business Plan FAQs

What is the easiest way to complete my drop shipping business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your drop shipping business plan.

How Do You Start a Drop Shipping Business?

Starting a drop shipping business is easy with these 14 steps:

• Choose the Name for Your Drop Shipping Business
• Create Your Drop Shipping Business Plan
• Choose the Legal Structure for Your Drop Shipping Business
• Secure Startup Funding for Drop Shipping Business (If Needed)
• Secure a Location for Your Business
• Register Your Drop Shipping Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Drop Shipping Business
• Buy or Lease the Right Drop Shipping Business Equipment
• Develop Your Drop Shipping Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Drop Shipping Business
• Open for Business

Learn more about   how to start your own drop shipping business .

Don’t you wish there was a faster, easier way to finish your Drop Shipping business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to learn about Growthink’s business plan writing services .

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Top 10 Drop Shipping Business Plan Templates with Examples and Samples (Editable Word Doc, Excel, and PDF Included)

Mohammed Sameer

If you’re exploring the world of drop shipping, it is likely that you have come across many blogs discussing the ins and outs of this e-commerce phenomenon – from explaining the basics of drop shipping to understanding how it works.

But here’s the hard truth: Knowledge alone will not fuel your entrepreneurial journey. Without a mindfully-crafted and actionable drop shipping business plan, your aspirations may remain just that – aspirations. The business plan showcased here is a roadmap that can transform your dreams into reality, outlining the blueprint of how your business will thrive, helping you discover your unique drop shipping niche, and much more.

The following sections dive deeper into drop shipping, going beyond the basics. We'll explore what a drop shipping business plan is, guiding you through the process of creating one, and providing you with an invaluable resource – our customizable template – to kickstart your journey toward drop shipping success.

Table of Contents

• Executive Summary
• Company Overview
• Industry Analysis
• Customer Analysis
• Competitor Analysis
• Swot Analysis and Porter’s Competitive Analysis
• Operational Plan
• Financial Plan
• Management Summary
• Exit Strategy

Let’s get started!

Section 1: Executive Summary

The Executive Summary is the core of your drop shipping business plan, serving as a condensed yet compelling overview of your venture’s essence. Within this segment, you’ll find sample executive summaries that guide you in conveying your drop shipping services, target market analysis, and financial projections with persuasive precision. This section serves as the initial point of contact for potential investors, partners, or clients, demanding both informative substance and captivating presentation.

Reasons to Download:

1.  Efficiency and Elegance : Use our templates to streamline the development of an impactful executive summary, saving you valuable time while ensuring a polished and persuasive presentation.

2.  Clarity and Persuasion : The presence of sample executive summaries ensures that your essential business details are communicated with crystal-clear precision, making a lasting impact on your readers.

3.  Engagement and Success : A well-crafted executive summary is your best opportunity to make a strong first-impression on investors, partners, or clients, enhancing the prospects of your business plan's success.

Download this business plan template

Section 2: Company Overview

Crafting an effective Company Overview is essential for setting the tone of your drop shipping business plan. It's within this section that you define your drop shipping niche, articulate your mission, and present your vision. The PPT Layout below serves as an inspiration, simplifying the process of effectively communicating your drop shipping focus. It explains your venture's purpose and the foundational principles underpinning your mission and vision. Establishing both credibility and alignment of stakeholders with your drop shipping business's core values, this section lays the groundwork upon which your business plan is built.

1.  Structural Clarity : This PPT Preset offers a structured framework for defining your drop shipping niche, articulating your mission, and outlining your vision, ensuring that no crucial aspect remains unaddressed.

2.  Alignment and Credibility : It empowers you to align stakeholders with your business values, enhancing both credibility and the unity of purpose among your team while attracting potential investors.

3.  Effective Communication : It offers a means of communicating the unique aspects of your drop shipping business to potential partners and investors.

Section 3: Industry Analysis

A profound understanding of the drop shipping industry is important for informed decision-making. Our industry analysis section goes beyond the surface, providing invaluable insights into prevailing market trends, emerging opportunities, and lurking challenges unique to the drop shipping landscape. You’ll gather and analyze data using our PPT Design, gaining a competitive edge. This section acts as your strategic compass, helping you identify profitable niches, untapped markets, and emerging trends within the drop shipping sector, positioning you to make strategic choices.

1.  Strategic Insights : This PPT Slide offers insights into market trends and opportunities within the dynamic drop shipping industry, enabling you to make informed decisions finely tuned to evolving market dynamics.

2.  Competitive Edge : Using this PPT, you'll gain a competitive edge by identifying untapped markets and emerging trends, positioning your drop shipping business for success amid the competition.

3.  Data-Driven Decision-Making : It provides a channel for data-driven decision-making, ensuring your strategic choices are well-informed and aligned with prevailing industry trends.

Section 4: Customer Analysis

Targeting the right customers is key to the success of your drop shipping business. Our Customer Analysis PPT Design helps craft detailed buyer personas, facilitating tailored services and precise marketing strategies. This section ensures personalized experiences that resonate with potential clients, nurturing customer satisfaction and fostering enduring loyalty.

1.  Laser-Sharp Precision : Use this PPT Framework for precise targeting of your services and marketing strategies, ensuring that they align precisely with the needs of your clients.

2.  Personalization Mastery : Gain insights into target demographics to create profoundly personalized experiences, strengthening client engagement and satisfaction.

3.  Loyalty Cultivation : Craft strategies that resonate with your clients, boosting satisfaction, fostering unwavering loyalty, and forging lasting client relationships.

Section 5: Competitor Analysis

Remaining competitive within the bustling drop shipping industry necessitates a profound understanding of your rivals. This PPT Set guides you to distinguish their strengths and pinpoint their vulnerabilities. Assimilating insights from your competitors' offerings, pricing strategies, and customer feedback, you'll be well-equipped to refine your value propositions, differentiate your strategies, and optimize your pricing models. In this section, you gather your competitive edge, fashioning strategies that allow your drop shipping enterprise to shine brightly in a crowded marketplace.

1.  Competitive Mastery : It facilitates achieving a competitive edge by providing a close understanding of your rivals’ strengths and vulnerabilities, optimally positioning your business.

2.  Strategic Precision : Insights derived from your competitors' offerings are invaluable in refining your value propositions and pricing models, endowing your business with a competitive advantage.

3.  Market Leadership : These templates are instrumental in forging effective strategies to stand out in a bustling marketplace, rendering your drop shipping business more appealing to potential clients.

Section 6: SWOT Analysis and Porter’s Competitive Analysis

Conducting SWOT and Porter's analyses is important for crafting effective strategies within the drop shipping industry. Our PPT Sets simplify this process, advising you in identifying internal strengths and weaknesses and external opportunities and threats. These analyses help your enterprise thrive in the highly competitive drop shipping sector. Using our PPT Presentation, you'll construct a well-informed roadmap, align your business acumen with prevailing market trends, mitigate risks, and optimize resource use.

1.  Holistic Perspective : This PPT Set is key to gaining a holistic view, guiding you to evaluate internal strengths and weaknesses and external opportunities and threats.

2.  Risk Mitigation : SWOT and Porter's analyses provide tools to minimize risks and maximize resource efficiency, fortifying your business's resilience in enduring tough times.

3.  Strategic Illumination : The templates serve as the beacon for making informed decisions, ensuring your drop shipping business remains agile, adaptable, and positioned to harness prevailing market trends.

Section 7: Marketing Plan

A well-thought-of marketing plan is fundamental to reaching out and engaging your target audience. Our PPT Preset delivers a structured approach, helping you develop marketing strategies that deliver desired results. This strategy enables you to engineer methods for generating awareness, strengthening your outreach to your intended audience, and communicating your drop shipping business's unique value proposition. This section, rendered through our templates, not only underlines your mastery of market dynamics but also instills confidence in stakeholders and potential investors.

1.  Structured Precision : It helps develop effective marketing strategies with unparalleled precision, ensuring that no critical facet of your marketing plan without a thorough check.

2.  Confidence Induction : The adept presentation of your understanding of market dynamics promotes stakeholder confidence, signaling your capacity to adapt to the market landscape.

3.  Elevated Client Engagement : The structure to build strategies, present in our PPT Set, helps promote awareness, the expansion of outreach to your target audience, and the communication of your value proposition, collectively improving client engagement and acquisition.

Section 8: Operational Plan

Our operational plan slide provides a clear roadmap for managing the operations of your drop shipping business. It covers staffing, facility management, processes, technology, and more. Using our PPT Design, you ensure optimal resource allocation, streamline processes, and adeptly demonstrate the pragmatic feasibility of your drop shipping enterprise.

1.  Operational Efficiency : It is an efficient means of managing drop shipping operations, streamlining processes, and optimizing resource use.

2.  Resource Allocation Mastery : You control wastage and maximize productivity.

3.  Feasibility Proof : The templates serve as a compelling means to illustrate the practical feasibility of your drop shipping business to stakeholders, assuring them of your business's viability.

Section 9: Financial Plan

The Financial Plan is the bedrock upon which your drop shipping business is built. Our PPT Set clarifies revenue projections, cost structures, and funding requisites for stakeholders. It details startup costs, revenue forecasts, break-even analysis, and return on investment. It helps assess your drop shipping business's financial health and sustainability, offering insights into its long-term viability.

1.  Clarity of Financials : Our financial plan template ushers in clarity on revenue projections, cost structures, and funding requisites, ensuring that stakeholders grasp the financial facets of your business unequivocally.

2.  Informed Decision Enabler : It is a tool for stakeholders to make well-informed decisions concerning funding and investment, optimizing the business's access to essential resources.

3.  Financial Health Revelation : Through this PPT Design, users are equipped to evaluate your drop shipping business's financial health and sustainability.

Section 10: Management Summary

Highlighting the expertise and experience of your management team is essential for building trust and credibility within your drop shipping business. Our management summary design serves as the perfect canvas for showcasing the pivotal roles and profound contributions of each team member. Via this medium, you explain to stakeholders the qualifications and significance of the management team in steering your drop shipping business toward success. This section stands as a tangible testament to the caliber and expertise driving your enterprise, proffering stakeholders a stronger trust in the leadership's competence.

1.  Trust and Credibility Augmentation : It is a perfect medium for highlighting expertise, thus fostering trust and amplifying your business's credibility.

2.  Roles Illumination : The roles and contributions of each team member are illustrated, ensuring that stakeholders grasp the unique significance of each individual in your business's success.

3.  Capable Leadership Assurance : Stakeholders are assured through this PPT Slide that your business is under the stewardship of seasoned and capable individuals.

Section 11: Exit Strategy

In the continuum of your drop shipping business journey, an orderly and graceful exit strategy is imperative. This PPT Set aids in the crafting of a comprehensive exit strategy. It offers a structured framework that accommodates exit options, timing, financial aspects, and contingency plans. Whether the path leads to selling your business, orchestrating a succession plan, or navigating the intricacies of going public, our templates lend unparalleled clarity and confidence to this pivotal aspect.

1.  Structured Exit Blueprint : Through this PPT Layout, you access a structured methodology that harmonizes considerations of exit options, timing, and financial nuances, ensuring a meticulously crafted exit strategy.

2.  Clarity and Confidence Induction : Users are poised to plan their business exit with clarity and confidence, safeguarding against undue uncertainty and disarray.

3.  Contingency Preparedness : It strengthens your exit strategy with contingency plans, ensuring a smooth transition for your drop shipping business.

That's the Plan!

Crafting a solid drop shipping business plan will go a long way in helping you build a successful venture. As you journey through the dynamic world of drop shipping, remember that it's not just about gathering knowledge; it's about translating that knowledge into action. Your business plan is an asset that helps you tackle logistical challenges, master supply chain management, and navigate the terrain of online retail. You've got the means to build an effective one - our Business Plan PPT Templates. We've laid the foundation, and now it's your turn to bring your entrepreneurial vision to life. Go ahead and download your blueprint for success today!

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Drop Shipping Business Plan Template [Updated 2024]

Drop Shipping Business Plan Template

If you want to start a Drop Shipping business or expand your current Drop Shipping company, you need a business plan.

The following Drop Shipping business plan template gives you the key elements to include in a winning business plan. It can be used to create a business plan for a drop shipping company or an ecommerce drop shipping business plan.

You can download our business plan template (including a full, customizable financial model) to your computer here.

Below are links to each of the key sections of a successful drop shipping business plan. Once you create your plan, download it to PDF to show banks and investors.

Drop Shipping Business Plan Home I. Executive Summary II. Company Overview III. Industry Analysis IV. Customer Analysis V. Competitive Analysis VI. Marketing Plan VII. Operations Plan VIII. Management Team IX. Financial Plan

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How To Start a Dropshipping Business: A Detailed Step-by-Step Guide (2024)

Starting a dropshipping business is an excellent way to dip your toes into the world of entrepreneurship . It allows you to sell products without needing to stock inventory or make upfront payments. And with dedication and hard work, this business model can lead to a steady income over time.

This complete dropshipping guide details essential business and financial steps to consider. Some steps are necessary from the beginning, while others are beneficial. Considering them early on will save you time and headaches down the road.

What is a dropshipping business?

Dropshipping is a business structure that allows you to operate your store without holding any inventory. Once you’ve made a sale, your supplier will ship the products from their warehouse directly to your customer’s doorstep. This eliminates the hassle of storing, packaging, and shipping products yourself.

How does the dropshipping business model work?

Dropshipping is an order fulfillment model that enables online stores to sell products to consumers without holding any inventory. When a customer buys a product from their catalog, a third-party supplier ships it directly to them.

The selling process involves setting a retail price higher than the wholesale price you pay the supplier, with the difference being your profit. There’s no need to handle products directly or invest in inventory.

To start selling, you only need to set up an account with a supplier.

To find suppliers for your dropshipping business, you have three main options:

• Supplier databases. Platforms like Alibaba or AliExpress enable you to find a diverse array of suppliers.
• Integrated supplier directories. Tools such as DSers directly integrate with your store’s back end, simplifying the process of browsing and selecting suppliers.
• Print-on-demand services. Services like Printify give you access to a network of print-on-demand suppliers who can customize products with your designs upon order.

The simplest dropshipping method for Shopify store owners is using DSers. It lets you find and add millions of AliExpress products to your store with one click.

In dropshipping, your tasks include developing your website and brand, selecting and promoting your products, handling shipping costs, and setting prices that ensure profitability.

What are the advantages of dropshipping?

A dropshipping business is a profitable business model where you only pay for the products that you sell. This means you’re not burdened with the cost of creating products or carrying inventory. As such, the startup costs of running a dropshipping store are quite low compared to those that come with operating a standard ecommerce business.

In this business model, you also avoid the costs of maintaining unsold inventory and employing staff for packaging and shipping products. While it will require daily work when it comes to processing orders, most of the order processing steps are automated and only require the click of a button. The dropshipping business opportunities are endless—you just need to take the first step.

How to start a dropshipping business: The 8-step dropshipping business plan

1. choose a dropshipping business idea.

The first step in launching a dropshipping business is comprehensive market research. It’s akin to evaluating different aspects like location, competition, and market trends when opening a retail store. Your aim should be to explore a niche that not only interests you but also holds profitability potential.

Products catering to specific niches often attract a dedicated and passionate customer base. As such, it’s easier to sell them and generate higher profit margins for your dropshipping business.

Examples of niche dropshipping products include:

• Handcrafted leather wallets for minimalist enthusiasts
• Organic skin care products for eco-conscious consumers
• Customized meal prep containers for health-conscious individuals
• Sustainable fashion accessories for trendsetting shoppers

By focusing on niche and trending items, you can catch the eye of potential customers and gain momentum without facing off against larger, more established ecommerce brands.

There are a few tools and tactics you can use to validate your dropshipping business ideas:

• Google Trends . Google Trends is a valuable tool for learning about product trends. It provides insights into whether an item is trending upward or downward over time, as well as the seasons when it tends to be most popular. Although you don’t see the search volume for a specific term, you get enough data to conduct keyword analysis and assess the product’s popularity in search.
• DSers order volume. DSers lets you search for products based on order volume. A higher order volume indicates a stronger demand and potential success for your business idea.
• Keywords Everywhere . Keywords Everywhere reveals monthly search counts and competition level for your products. This data helps you understand your dropshipping idea’s popularity and can spark ideas for future products.

2. Do competitor research

Once you have decided what to sell, you now need to educate yourself on who your competitors are, what they sell, and how they sell their products. Market research is an essential part of this step, and there are many ways to do it.

• Run a Google search. Search engines are a clear starting point for mapping out your competition. Enter key terms related to your niche to see who you’re up against. For example, if you’re selling eco-friendly water bottles, enter terms like “sustainable water bottles” into Google. Examine the companies that appear in the search results and study how they promote their products. If targeting a specific geographical area, utilize tools such as Ahrefs or Semrush to get keyword data related to those regions.
• Browse social media. Look for Facebook ads related to what you sell and note the top brands. See how they talk to customers, how they design their pages, and how much people interact with them. You might even follow them to keep up with their posts. Use what you learn to make your business more visible and improve your approach to social media marketing.
• Use competitor spy tools. Online tools like Similarweb are invaluable for tracking your competitors’ online presence. Use them to get a detailed snapshot of competitor website information, including their visitor counts, main traffic sources, social media engagement, and main competitors. This information can help you strategize and position your business more effectively.

Study your main competitors thoroughly: website, pricing, marketing strategies, product details, and reputation. Organize this research in a spreadsheet for quick reference when deciding on your store’s strategy.

3. Find a dropshipping supplier

Suppliers are the backbone of a successful dropshipping business. They ensure the store has a steady supply of products, handle shipping directly to customers, and maintain the quality and availability of merchandise.

Ecommerce platforms like Shopify make it easy to find dropshipping suppliers . Once you’ve created an online store, install the DSers app to find potential suppliers for your business.

DSers is a marketplace for dropshipping suppliers to showcase their products. It features a wide range of items, including toys, electronics, and women’s apparel. You can add any product to your store with one click and benefit from automated order forwarding to suppliers. Best of all, getting started is completely free.

The DSers app connects to AliExpress to give you easy access to a wide range of products for your store. On the DSers product page, you can find detailed information on product quality and shipping times, or learn more about a supplier.

Clicking on a supplier’s link redirects you to their AliExpress page. There, you can find customer reviews and their top-selling items.

On the DSers suppliers page, remember to select products with ePacket shipping if your supplier is based in China.

ePacket is an efficient and affordable shipping method from China to countries like the US, the UK, and Canada. Instead of waiting months, your customers can receive their packages in up to two weeks, for just a few dollars.

4. Set up your dropshipping store 

There are a few components to building a dropshipping business store the right way:

Domain name

Your domain name is especially important if you’re building a long-term brand. You can use a free business name generator to simplify the process. Always opt for a .com domain , regardless of your niche. If you want your niche to be a keyword in your new domain, make sure it’s broad—like “beauty,” “jewelry,” or “fashion”—rather than specific. This way, you won’t need to change your domain name down the road.

Ecommerce platform

Shopify is the most comprehensive ecommerce platform on the market. With new features, tools, resources, and apps being added regularly, you’ll find it easy to run a business on the platform. Plus, Shopify connects with print-on-demand services, should you choose to diversify your dropshipping approach

As a Shopify user, you get access to free themes . One of these is Minimal Motion . It offers a clean and user-friendly interface, perfect for those just starting out with store design. As your store begins to generate revenue, consider upgrading to a premium theme to further improve your store’s appearance.

Dropshipping app

To manage your inventory and place orders efficiently, you’ll need a reliable dropshipping app. DSers is a solid choice that allows you to explore products in a variety of popular niches. When starting out, it’s advisable to focus on 10 to 25 products, as writing descriptions for a larger inventory can become overwhelming. If you have questions or need guidance, you can turn to the DSers blog, its social media pages, or Shopify’s own support line.

5. Decide on a business structure

If you’re dedicated to your project, consider creating an official business entity. Though we aren’t legal advisers and cannot give legal guidance, we can outline three common types of business structures for you:

Sole proprietorship

This is the simplest form of business structure, but it lacks personal liability protection. If your business is sued, your personal assets could also be at risk. The filing requirements are minimal, and you just include your business’s income on your personal tax returns. There are no additional state or federal business filings required.

Limited liability company (LLC)

Most dropshipping companies prefer forming an LLC. This structure better protects your personal assets by recognizing your business as a separate legal entity. Although the liability protection isn’t perfect, it’s stronger than that of a sole proprietorship. You’ll need to meet more filing requirements and pay both incorporation and ongoing fees.

Related:   Sole proprietorship vs. LLC: A Breakdown

C corporation

Most major corporations are established as C corporations, which offer the greatest liability protection when set up correctly. However, they are more expensive to start and C corps face double taxation, where the business’s income is taxed at both the corporate level and again as it is distributed to shareholders.

You’ll want to consult with a lawyer before making any incorporation decisions. These professionals know the ins and outs of each structure and can help you choose the ideal one for your dropshipping business.

Request an EIN number

You’ll need an employer identification number (EIN) number, which the IRS requires every business to have one. It works like a Social Security number, but for your business. You need it to file taxes, sign up for wholesale dropshipping accounts, open a bank account, and do other business tasks.

The good news is, getting an EIN number is simple and doesn’t cost anything. You can apply for it online .

6. Market your dropshipping business

You’ve selected your products and set up your store. The next step is to market your dropshipping business.

This is a crucial component of any dropshipping business plan. For those just starting out and likely on a tight budget, it’s worth noting that effective marketing doesn’t have to be expensive. Here are some methods to explore:

Facebook and Google ads

Facebook ads tap into the impulse to buy, are scalable, and can highlight your products well. Google Shopping Ads allow targeting of long-tail keywords to attract ready-to-purchase shoppers. You can test both platforms to see which advertising method leads to better results for your business.

Influencer marketing

If you’re just starting and have a tight budget, influencer marketing is a cost-effective way to reach your audience. People often trust influencers more than traditional ads. Instead of paying influencers a fixed amount, consider a deal where they earn for every sale they bring. This method is more affordable for you and rewarding for them.

Content creation

To keep visitors coming to your store, start creating content. Launch a blog focused on your niche. Aim to both entertain and educate your audience. Other options include making YouTube videos, creating infographics, or starting a podcast to raise awareness of your brand.

Community engagement

Join groups passionate about your niche. Start discussions with potential customers on Reddit, Facebook groups, or forums. Focus on being helpful, not just selling. This approach builds trust and makes people more likely to buy from your brand.

Email marketing

Email marketing is a powerful tool for building long-lasting relationships with customers and driving repeat purchases. Consider sending personalized content, such as product recommendations, promotional offers, and informative newsletters, to increase engagement and boost sales.Shopify Inbox is available at no cost for managing these communications in your Shopify store.

7. Streamline your finances

Starting your own dropshipping business comes with a crucial financial management step: separating personal and business finances. Mixing these can lead to confusion, complicate accounting, risk personal assets, and attract IRS scrutiny during audits.

Creating distinct accounts for your business is the best practice. This includes:

Business checking account

This account should handle all your business transactions. All business income goes in, and expenses come out, streamlining your accounting processes.

Business credit card

Opt for a credit card dedicated to business expenses, especially useful for buying dropshipping inventory. Choosing a rewards card can earn you significant benefits from frequent supplier purchases.

Sales tax collection

You need to collect sales tax if your state requires it and you sell to someone in your state. For sales outside your state, current laws may exempt you from collection, but keep an eye on potential legal changes.

If collecting sales tax is necessary, register with your state’s department of commerce as an online retailer to understand your obligations.

Local business licenses

Many places require a business license, which might vary for home-based businesses . Research your local requirements to ensure compliance.

Incorporating outside the United States

For international merchants aiming to enter the US market, setting up a business in the United States is possible but requires understanding and fulfilling specific legal requirements. This might involve traveling to the US, partnering with someone in the country, or hiring an agency to manage the setup.

8. Test and optimize

Once you’ve spent time building your website, brand, and marketing, you can start to analyze the results of your hard work. You may find that certain marketing activities are hugely successful, while others not as much. You can also compare your prices to that of your competition and see if you could make things more competitive.

You can use tools like Google Search Console or Google Analytics to evaluate your online traffic and make sure it’s increasing, not decreasing. If you’re using third-party tools for email marketing or social media reporting, set up weekly or monthly automatic reports to remind you to analyze this information regularly. Even a quick snapshot of data from a tool can be enough to decide if a campaign is working or not.

Overall, the most important part of a successful online ecommerce store is to test and optimize. This ensures that your website will not fall behind best practices and keeps you ahead of your competitors.

Where to find dropshipping businesses for sale?

If you don’t want to build a Shopify dropshipping business from scratch, you can easily find a dropshipping business for sale on Flippa .

Flippa is a marketplace of websites for both people looking to invest in a fully functioning business and those who want to skip the building phase and start directly with marketing. Flippa has a great collection of online stores, including dropshipping ecommerce businesses, of varying price ranges and niches that you can choose from depending on your budget and interests.

So, if you’re looking for a dropshipping business for sale, Flippa has got you covered.

Factors to consider when buying a dropshipping store

When choosing to buy a store, take into account the cost, the design, the age of the website, how much money it has made, the popularity of the niche, penalizations, and the type of business.

Type of business

If you plan on buying a dropshipping business, you need to select the ecommerce filter on Flippa. Other options may require you to buy and hold inventory, which can cost more money over the long term, especially in unsold inventory.

Do you have a budget that covers not just the cost of a premade store but also allows for its growth? If so, you need to work out what your budget looks like. What price are you willing to pay for a business? Is there room to negotiate a better deal?

Does the store look like it was designed by a professional or by a new entrepreneur who’s looking to make a quick sale? If the store design looks professional, clean, and easy to navigate, it may be worth pursuing.

Age of website

On Flippa, you can choose an ecommerce business based on its age. An older website will typically have a better chance of ranking online than a newer one.

Sometimes you’ll see that a store made a lot of money. However, a question you need to ask is, “How much money was it making at its peak, and how much is it making now?” This will help you understand if the dropshipping business is growing or dying.

Niche popularity

You probably don’t want to be selling fidget spinners anymore, or any trending product. However, if a store is within an evergreen niche and sells trending products , it could work out well. Broad topics (beauty) tend to perform better than stores focused on a specific type of product (makeup brushes).

Penalizations

Before buying a dropshipping business, you need to double check that the website hasn’t been penalized (removed from Google’s search index). You can use a tool like Is My Website Penalized to determine if a website has been penalized by Google. If a store has been penalized it may be harder for you to rank in search engines. You also want to ask, “Were any of the business’s Facebook ads banned?”

Getting started with dropshipping

Whether you’re new or seasoned in business, dropshipping with Shopify is your low-risk gateway to online sales. Sign up, choose your plan, add DSers, and select your niche products. Customize, import, and sell—your ecommerce journey begins now.

How to start dropshipping FAQ

What are the benefits of starting a dropshipping business.

• Easy to start
• Wide selection of items to sell
• Flexible location
• Highly scalable

How do I start a dropshipping business?

• Choose a dropshipping business idea.
• Research your competitors.
• Find a reliable dropshipping supplier.
• Establish your online store.
• Market your dropshipping business.
• Assess and optimize your store.

Do I need to incorporate a dropshipping business?

Incorporating a dropshipping business has clear benefits. It separates your personal and business finances, protecting your money if the business runs into debt. Additionally, incorporating gets you an employer identification number (EIN), which makes it easier to file and pay sales tax. So if you’re planning for long-term success, think about incorporating. It’s a good way to manage your finances and taxes.

Is dropshipping really profitable?

Dropshipping can be a highly lucrative business, as it allows you to avoid the substantial overhead associated with traditional wholesaling. You bypass the costs of bulk purchases, storage, and shipping logistics—and can earn a good profit margin with the right suppliers.

Many dropshippers earn up to $50,000 per year as a side hustle. To hit such figures, you’ll need to pick the right suppliers and build a strong brand.

Keep in mind that dropshipping can be highly competitive. Because the barrier to entry is low, you may encounter numerous brands offering similar products at competitive prices.

Is dropshipping worth it?

The value of dropshipping depends on the time and money you invest in it. If you dedicate time to growing your online business, you are more likely to reap the rewards. Setting up a dropshipping business involves multiple steps: You need to set up a store, import products, decide on your pricing strategy, and start selling. All of this requires effort and commitment for your business to be successful.

Want to learn more?

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How To Start A Dropshipping Business In 6 Simple Steps

Updated: Feb 2, 2024, 11:13am

Table of Contents

What is dropshipping, test products to gauge interest in them, bottom line, frequently asked questions.

Dropshipping is a popular business model due to its low startup costs, zero overhead and simple business model. It is possible to start a dropshipping company for as little as $100, making it a good option for those keen on bootstrapping a new venture. Best of all, dropshippers can sell a full range of products without ever having to purchase or hold any inventory.

In this guide, we’ll teach you how to start a dropshipping business from scratch. We’ll cover the basic steps, helpful tools to launch your business, and key considerations.

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Dropshipping is a business system that allows a company to sell products without ever maintaining an inventory of the products. The customer places an order, and then the company notifies the manufacturer or distributor of the product that an order has been placed and it should be dropped into a shipment for the consumer. The manufacturer or distributor sends the product directly to the consumer on behalf of the dropshipping company.

The order is simple: the consumer pays the dropshipper. The dropshipper pays the manufacturer or distributor. The manufacturer or distributor sends the product to the customer. Essentially, the dropshipper is a marketer.

Because there is no inventory needed, dropshipping is a cost-effective way for new business owners to sell products without a lot of overhead. It also prevents getting stuck with inventory that can’t or won’t sell.

Here’s how to start a dropshipping business in six steps:

1. Choose a Business Concept

A business concept describes what you are selling and to whom. Because there are so many options with dropshipping, you want to start with a limited number of products that you feel will sell to a specific demographic.

For example, you might develop a business concept that says you’re going to sell graphic T-shirts to skateboarders. The T-shirts will have specific designs that appeal to this demographic and be of the quality and style that skateboarders wear.

The concept is the foundation for the products you sell, your website’s design and your marketing, so spending some time on this is crucial. However, it is good to note that because there are limited costs to implementing a dropshipping product line, you can change things up if you feel that you made a mistake or your product passion changes.

2. Source Products

A business concept doesn’t guarantee that you’ll be able to get the products to serve your demographic. Take the time before you develop a website to research products. Look for multiple distributors that sell the same products to find the best wholesale price of the product.

Some of the most popular marketplaces are:

• Worldwide Brands
• Wholesale Central

You might also search for print-on-demand apparel, home goods or books. Print-on-demand apparel companies print a custom graphic onto various brands and styles of clothing, including T-shirts, socks and jackets.

Choose a product that you get excited about, has a good margin for profit and displays nicely in the images shown on the website. Many of these suppliers also provide statistics of popular items so that you can choose things that are more likely to sell because there is already a market for them.

3. Select Suppliers

Once you find the products you want to offer, it’s time to choose the supplier that will be the actual company to ship the products to your customers. There are a few things to consider with the supplier you choose:

• Quality: Choose a supplier that offers the quality you want your company to represent. One business model is to charge more for better quality products. This is in contrast to being a discount provider of goods that might not be the best quality. How do you want to position yourself?
• Profitability: You should be able to make a reasonable profit on the product. Consider shipping and transaction costs in your calculation. Most dropshippers look to get 15% to 20% in profit margins. Of course, if you can generate higher profit margins, that’s great.
• Reliability: You want to choose a supplier that sends products in a timely fashion with reasonable shipping expenses and times. Many suppliers are overseas, and you’ll have to determine whether or not you want your customers waiting for products. You also need to have a supplier that keeps a product in stock since it is frustrating for you and your customer to have an order that can’t be filled. The best way to check for reliability is to order a few products from the supplier and note the process.
• Return policy: When possible, find a supplier that offers a return policy. Many don’t, so you need to check on this before making any final decisions. You need to think about how you state your own return policies based on what the supplier offers.

Most dropshippers use online marketplaces because they tend to have a better inventory of products with reliable suppliers. It is possible to get a direct source supplier if you have a specific product in mind. This requires some extra work to see who is distributing the product for the manufacturer and often requires a minimum number of sales per month to be eligible.

4. Build an Online Store

You’ll need to build an e-commerce store to sell your products. An e-commerce store is a site that is designed to help you display the products for sale in a pleasing way while possessing the shopping carts necessary to run the purchase transactions.

Building the store can be tricky for a newbie. The reason is there are a few moving parts.

To build a website you will need:

• A content management system (CMS), such as WordPress, Shopify or Squarespace
• A domain name
• Web hosting (if using WordPress)
• Integrations with your chosen dropshippers
• A built-in payment gateway to accept online payments

The best e-commerce websites automate the sale of the product with the order to the supplier. If this step is not automated, you’ll be manually entering in orders every day, which can be cumbersome and lead to errors. Shopify is one of the leading choices for those building a dropshipping business. However, it’s not the only option available so it’s worth learning more about the best e-commerce platforms .

Additionally, you may also want to consider selling your products through other platforms, such as Etsy, Amazon or even social media (i.e., Facebook or Instagram). Multi-channel selling helps your business gain exposure and drive more sales, so it’s generally advisable to do so. That is, if you have the bandwidth to manage multiple selling channels.

5. Register Your Business

You need to set up the company as a business, separating it from your personal assets. This means creating a name (usually the domain name you choose) and filing for an LLC or corporation with your secretary of state.

You’ll get a tax identification number (TIN) from the IRS after successfully submitting your online application . Use this TIN to open a bank account that is linked to your payment gateway. This bank account will take in all deposits and pay the company’s expenses, including web hosting and maintenance. It will also be the account that pays the supplier for the product when ordered.

You should also get a sales tax ID, or reseller’s permit, from the state tax office. Most states require you to pay sales tax on goods sold. You may also need to pay sales taxes in the states where you sell your products.

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6. Market Your Business

You can’t just set up a website and expect thousands of people to find it. You need to market the new business. Because it is online, you will likely go beyond the word-of-mouth marketing that you’d do with other businesses in your community.

Join social media groups that are relevant to your business and start participating in a productive way. Don’t just try to sell; help people with questions that they may ask. Become an expert in the community to be seen as a resource. People will find your business through this. Have specific business pages on Facebook, Instagram, TikTok and other social media platforms. Post regularly about new products, sales or tips and tricks in your focus industry.

On top of your social media efforts, you may want to invest in actual ads and sales. You can run Facebook Ads on small budgets that target specific demographics. Think about starting an ad campaign with a $10 per day budget to drive traffic to your e-commerce store. You can also write a blog that helps consumers find you through search engine optimization (SEO) tactics. For many new e-commerce stores, doing a little bit of each of these marketing strategies is the key to getting enough eyes on their store to convert to buyers.

The great thing about dropshipping is that you can test new products to see if the market has an appetite for them. This is easy to do and doesn’t cost you much more than the time to update your store and announce a new product.

Work with your suppliers to see what new products are coming out that might fit your demographic. Then choose one product at a time to launch. If you feel strongly about the product, establish a marketing budget for it. Run an ad campaign specific to the new product and see how it fares compared to the rest of your products online.

Dropshippers should always be testing new products. This helps sell more items to existing customers who already bought and trust your brand. It’s easy and cost-effective to do and should be part of your ongoing business development.

Just about anyone can open a dropshipping business by using marketplace suppliers and templated websites. It doesn’t have a lot of overhead to start, and you can quickly begin to turn a side hustle into a main gig with the right line of products that appeals to a specific demographic. You can be a business owner for as little as $100 and grow from there.

How much do beginner dropshippers make?

Every store is different, and earnings are contingent on the profit margin and number of sales the store generates. It is possible for a dropshipper to make up to $100,000 in the first year of business with the right marketing plan.

What do I legally need to start a dropshipping business?

Most states require you to get a sales tax ID number, or a reseller’s permit, for the state. You may need to charge, collect and pay the applicable sales tax of any product you sell.

Does Walmart allow dropshipping?

You can register as a Walmart dropshipper and sell dropshipped products directly to Walmart customers. You cannot dropship Walmart products to customers.

Is dropshipping legal?

Dropshipping is a completely legal order fulfillment model used by wholesalers and manufacturers globally. However, you must take care to do business with authentic suppliers who are trustworthy and will fulfill your customers’ orders expediently.

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How to write a Dropshipping Business Plan in 9 steps 

Starting a dropshipping business may sound like an easy thing to do. You don’t need to buy stock, rent a warehouse, or invest thousands of dollars in inventory. Sounds great, right? Especially if you consider how popular this form of fulfillment method is and how many people made a fortune by following it. But, there’s so much more to starting a dropshipping business than having a laptop and setting up an e-commerce store.  

So, what does it take to become a successful and professional drop-shipper? The answer is simple- you need to have a well-thought-out business strategy to guide you, and a business model you plan on following. All of this needs to be a part of your written business plan.

Below, we’ll answer the following  most important questions of writing a business plan for your dropshipping business:

• What is a dropshipping business plan?
• Why do you need one?
• How to write a dropshipping business plan in 9 steps?

Let’s break it down. 

What is a Dropshipping Business Plan?

As we’ve already mentioned, you can’t even begin to think about starting a successful dropshipping business, without a business plan.

Because there are so many details to consider and take care of before you begin selling, that it’s impossible to handle it all without a written plan and strategy.

A dropshipping plan is thus a necessity you shouldn’t skip. But, what is it exactly?

  It’s quite simple:

• A dropshipping business plan is a written document that summarizes how you plan on handling your business, from founding it and making your first sales, to running it successfully.

It’s a plan that helps you make the right choices and cover all the essentials of running a dropshipping business. Without it, you can easily fall on the first bump in the road.

Why Do You Need a Dropshipping Business Plan?

Imagine going on a vacation and sleeping in a new, unfamiliar apartment. As you wake up to go to the bathroom, you forget to turn the light on and start walking in the dark. Eventually, you do get to the bathroom, but you’ve earned some bruises as you were knocking down the chairs and bumping your head against walls.

That’s what doing dropshipping without a business plan looks like.  

It is possible to do it, but with more failed attempts, bad investments, and poor business choices.

So, a dropshipping business plan is written to help you:

• prepare for your new business venture;
• get funding from financial institutions;
• create a growth strategy;
• control your finances.

Simply put, it’s there to make the process of starting and growing a dropshipping business more successful.

9 Steps to Write a Dropshipping Business Plan

Now that you understand why a dropshipping business plan is a necessity, we can focus on the writing process. We’ve made a chronological list of the 9 crucial steps you should follow. As a result, you’ll have a detailed, efficient, and professional business plan that will help you launch, run, and develop your dropshipping business.

Here are the 9 steps to write a dropshipping business plan.

Executive Summary

The opening section of your business plan needs to be convincing and concise. Your executive summary is supposed to share all the most important information about your business with the readers.

As a result, they’ll instantly understand who you are and what you plan on achieving with your dropshipping business.

Here’s what information to include:

• your unique business idea;
• your target market and customers;
• your projections and objectives for the future;
• what makes you unique and specific.

This is the opening section of the business plan, but you can write it in the end, once you finish writing all the other sections. This section will summarize everything that comes after.

Business Description

The next step is writing a brief business description section that will provide the reader with important information about your company. This is a technical matter that you simply need to cover.

  So, write the following business information:

• company name, location, and legal structure;
• company owners/partners;
• legal permits, licenses, and tax ID numbers;
• company mission and vision statement;

This will help the reader get to know you better and start building an image of your dropshipping business in their minds.

Products Offer

To get funding for your dropshipping business, you’ll need to wisely select the type of products you’ll be selling. You need to do research and choose products that are:

• currently trending;
• in demand by your target group;

If you plan on selling products in different categories, briefly explain what makes each product category promising and profitable. Provide details such as:

• market research that shows products are in demand;
• how you’ll price the products;
• how much will your suppliers charge you;
• the profit you expect to see;
• special deals you’ve made with vendors;
• financial advantages of selling these products;

Also, explain how your products will solve the problems your target audience is facing or satisfy their current needs.  

In other words, explain why the products are going to sell.

Your business plan needs to justify your financial expectations and show the reader there’s true potential in your business idea.

Another important factor is the careful selection of your supplier. There are tens of thousands of suppliers and resellers in China, so it can be difficult to find one who can provide you with consistent service, top quality products and fast delivery. Even if you manage somehow to fish out one, there could be language barriers, or they could not take you seriously, since they trade with several bigger customers. 

Your best option is to start working with someone who has proven experience with dropshipping fulfillment, and who can help you automate a big chunk of your business. 

Someone like Yakkyofy who can: 

• Provide Real-Time B2B quotations for your products;
• Provide an all-in-one integration for several eCommerce platforms;
• Customise your Products and Packaging; 
• Automate your fulfillment Process;
• Fast Ship your items in many countries in the world;

From Yakkyofy’s dashboard you can manage all your dropshipping business’ logistic side, which means that all you need to do is simply marketing your products!

Competitive Analysis

Next, you want to show you’ve done enough market research and are ready to compete for your piece of the cake.

Here’s what you should do:

• create a list of your biggest competitors
• explain what products they offer
• analyze their website, social media , and all channels of advertising

  Show your readers that you managed to answer the most important competition-related questions:

• What are their biggest strengths/weaknesses?
• How can I set myself apart from them?
• What can I offer that is unique and specific?

This will further strengthen your business plan and show the readers you have a clear idea of how to stand out from the rest, and sell your products.

Pricing Formula

How much do you plan on charging for your products? What’s the margin going to be for you?

Your business plan needs to include this information, so you’ll need to decide on the pricing for the products you’re selling. Here’s the best way to decide:

• ask for an automatic price quote with Yakkyofy;
• see what the selling price is for these products;
• decide how much you can charge;

You need to be aware that you’re new on the market, so a lower margin might get you more sales. You can change this margin as you grow stronger. But remember, you won’t make a fortune overnight- it’s one of the dropshipping myths you have to be aware of.

The pricing strategy of your business plan should include:

• information about suppliers;
• formulas and calculations you used to decide on the prices;
• costs of production and delivery;
• your profit margin;

Be specific and clarify the methods you used and will continue to use to form the right prices.

Marketing Plan

As a new dropshipper in a popular niche, you stand no chance against your competitors unless you have a strong marketing strategy that will help you stand out. Your business plan should briefly describe your future marketing strategy in terms of:

• the platforms you’ll use;
• the type of content you’ll provide;
• content writing plans (outsourcing, hiring a content writer, or writing yourself);
• social media presence;
• email marketing;
• the visuals you’ll use;

This will also determine your marketing budget which is important for your overall financial plan.

So, write a marketing plan that goes into details about the methods, platforms, and strategies you’ll be using to reach specific business goals:

• increase sales;
• raise brand awareness;
• gain customer loyalty;

If you plan on outsourcing marketing services, write about the costs you’ll need to bear and how they will eventually pay off. Explain how this will reflect on your finances positively and why it’s a necessity.

Owners & Employees

Depending on the legal structure of your business, you’ll need to include information about the people behind the business. It could be just you, as the sole owner, or your partners who are in the business with you.

The information your readers will care about are:

• personal and contact information;
• business experience;
• responsibilities in the future business;

Explain how you and your partners are qualified and skilled to perform each of the tasks in managing your business. Give the readers strong evidence of what makes you a great business leader and entrepreneur.

Also, explain if there’s a need to hire people to perform minor tasks that will keep the business up and running. Potential employees will influence your investment budget significantly, so don’t skip this step.

Most newly established drop shippers consider hiring:

• a content marketer;
• a personal assistant;
• a customer support agent;
• a web developer for a website;

If you do want to hire any of these professionals, write it in your business plan. Research how much their services cost and create an estimate of how much they’ll cost you.  

Financial Plan

Finally, your business plan needs to include a detailed and data-based financial plan that projects how your business is going to grow, develop, and earn profit. This might be the most important section of your business plan since most people reading it will be interested in the finances.

You’ll need to cover and go over the most important aspects of your financial projection:

• your initial investment in personal funds, loans, or funding from a bank;
• market size projection for the next 5 to 10 years;
• your predicted market share in percentages;
• expected sales and profitability by product category;
• repeat customer predictions;
• your revenue;
• your expenses in operating the business;
• the expected return of investment;

Simply put, you need to do the math and show it to the readers. They need to see the numbers and understand whether your business idea is plausible or not.

  Make this section of the business plan more convincing and understandable by using tables, charts, and reports to show the data you’re using.

Additional Documents

Once you finish writing all the main parts of your business plan, consider adding one final section with all the documentation that can support your ideas, claims, and plans.

This can include:

• a report from research and analysis you did of the market, products, competitors , etc;
• documents proving your legal status;
• your business licenses and permits;
• credit history;
• information about your suppliers;

End the business plan on a strong note and add any documents that will support your business plan.

Final Thoughts

Yes, writing a business plan for a dropshipping business is a bit complex and certainly overwhelming, whether you’re a beginner or not. But, it’s the one thing you’ll need to make sure you make all the right calls, get the funding you need, and start your new business strongly.  

The 9 steps we’ve shared with you above are going to guide you through this process. Use them to start writing your business plan today and set foot in those entrepreneurial waters like a professional.

For everything else, you’ve got Yakkyofy:

BIOGRAPHY OF THE AUTHOR 

Jessica Fender is a professional marketer and a content writer. If you ever wondered, “I wish someone would write my paper for me “, she is one of those professional academic level writers that will save you time and your degree. She enjoys the beach, martial arts, and literature.

• Dropshipping eCommerce , Dropshipping legal , Dropshipping Store , Dropshipping Strategies , Dropshipping tips

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Drop Shipping Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Online Startups » Ecommerce

Are you about starting a drop shipping business? If YES, here is a complete sample drop shipping business plan template & feasibility report you can use for FREE .

It is known fact that you will only require very minimal start – up capital to successful start and run a drop – shipping company. The truth is that it’s possible to launch an ecommerce store without having to invest thousands of dollars in inventory up front. Usually, retailers have had to tie up huge amounts of capital stocking their stores.

Basically, with the drop – shipping Business model, you don’t have to purchase a product except you have already made the sale and have been paid by the customer. Even if you don’t have major up-front inventory investments, it’s possible to start a successful drop shipping business with very minimal start – up capital.

A Sample Drop Shipping Business Plan Template

1. industry overview.

The ecommerce industry that drop – shipping business is a part of is indeed a very large industry that can boast of creating business opportunities for loads of entrepreneurs all across the globe and generating multiple billion dollars annually.

The industry generates well over $1 trillion annually on a global scale. For example, in 2012, ecommerce sales topped $1 trillion for the first time in history and the figure is still growing.

According to Wikipedia, “Among emerging economies, China’s e-commerce presence continues to expand every year. With 384 million internet users, China’s online shopping sales rose to $36.6 billion in 2009 and one of the reasons behind the huge growth has been the improved trust level for shoppers. The Chinese retailers have been able to help consumers feel more comfortable shopping online.

China’s cross-border e-commerce is also growing rapidly. E-commerce transactions between China and other countries increased 32% to 2.3 trillion Yuan ($375.8 billion) in 2012 and accounted for 9.6% of China’s total international trade in 2013, Alibaba had an e-commerce market share of 80% in China.”

Drop – shipping Business model just Amazon FBA, is a retail fulfillment method where a store does not necessarily keep the products it sells in a warehouse or a store of some sort. Instead, when a drop – shipping company sells a product, it purchases the item from a third party and has it shipped directly to the customer. hence, the merchant never get to see or handle the product in question.

One obvious difference between the drop – shipping ecommerce business model and the standard retail business model is that the drop shipping company doesn’t stock or own inventory. Instead, the drop – shipping company purchases products / stocks as needed from a third party – usually a wholesaler or manufacturer of the direct manufacturer of the products in so as to fulfill orders placed by customers.

It is important to mention that there are loads of advantages in starting a drop – shipping business hence the increase in the numbers of players in this line of business. Some of the advantages of starting a drop – shipping business are low overhead, flexibility in choosing a location for the business and a wide selection of products from different manufacturing brands or wholesale distributors.

So also, if you start a drop – shipping company, then you will not have to crack you brain on how to source for money to lease of manage a warehouse, how to package and ship orders from customers, keeping track on inventory for accounting reasons, handling returns and inbound shipments and frequently ordering products and managing stock level.

Lastly, it is important to state that the e – commerce industry is regulated by a number of federal, state, and international regulatory organizations so also if you are a player in the industry, you are expected to play by the rules and regulations.

There are laws that govern e-commerce business, such law involves complex contract and tax issues, security, and privacy issues. Because technology changes swiftly, so also the laws regulating it are renewed on a regular basis.

For example, in the united states of America, the Uniform Computer Information Transactions Act (UCITA) regulates the e – commerce industry. UCITA are responsible for creating rules and regulations that govern areas like software licensing, online access, and other transactions in computer information.

2. Executive Summary

Golden Bird® Drop – Shipping Company is a United States based international drop – shipping cum online shopping website that offers a wide range of quality products such as electronics, computers, groceries, fashion, home appliances and kid’s items. Our head office will be located in the heart of San Diego – California.

We are an e – commerce startup with a long – term goal of having our presence in major cities in the world and delivering a wide range of products from globally recognized manufacturing brands at rock bottom prices to our customers all across the globe.

Golden Bird® Drop – Shipping Company will run 24 hours a day and 7 day a week online shop, with effective and timely delivery system.

Our payment platform is highly secured and we will only deal in non-Cash Payment. Our payment platform will readily accept payment from credit cards, debit cards, smart cards, electronic fund transfer via bank’s website and other modes of electronics payment.

Our inventory management of products is automated, our portal is designed such that it reports get generated instantly when required and our product inventory management is very efficient and easy to maintain.

We have a robust business relationship with shipping companies and we are going to be shipping goods for our clients at a highly-discounted price. Our plans of strategically partnering with wholesalers and manufacturing brands makes it easier for us to deliver products on time whenever our clients make orders.

Golden Bird® Drop – Shipping Company will ensure that all our customers are given first class treatment irrespective of the quantity of products they purchase or the part of the world they reside.

We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large the numbers of our customers’ base grow to. Our customers will always be carried along when we want to make decisions that will directly affect them.

At Golden Bird® Drop – Shipping Company our staff are highly competent and dedicated to the company; they are trained to go the extra mile to resolve any complain from our customers. Our phone lines are opened 24 hours a week and 7 days a week, with highly trained call center agents manning them and also customers can freely chat with us via our website at any time of the day.

Our client’s best interest will always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely. We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for all our partners, employees and for our clients.

Golden Bird® Drop – Shipping Company is owned by Clara Davidson and her immediate family members. Clara Davidson has a Diploma in ecommerce and a degree in Business Administration. She will run the business with other experience team members who have worked in similar business venture.

3. Our Products and Services

Golden Bird® Drop – Shipping Company will ensure we go all the way to make available a wide range of goods and products from top manufacturing brands in the United States and other countries of the world to our customers.

We will have available in our online store a wide range of durable goods and non – durable goods at affordable prices. We will deal in goods such as groceries, clothes, sports equipment, beauty products, jewelry, children’s toys, baby stuffs, home furnishings and home appliances et al.

Just for clarity purpose, we have various items from world class brands in the following product categories:

• Beverages & Cigars
• Events & Tickets
• Home Appliances
• Mobile Phones

4. Our Mission and Vision Statement

• Our vision is to build a drop – shipping business (online store) that can favorably compete with international brands like Amazon and Alibaba.com
• Our mission is to establish an online retail business that will make available a wide range of goods and products from top manufacturing brands at affordable prices to a wide range of customers that will cut across different countries of the world.

Our Business Structure

Golden Bird® Drop – Shipping Company is a player in the e- commerce industry that intend starting small in San Diego – California, but hope to grow big in order to compete favorably with leading online stores and drop – shipping companies both in the United States and on a global stage.

We are aware of the importance of building a solid business structure that can support the picture of the kind of world class business we want to own. This is why we are committed to only hire the best hands within our area of operations.

At Golden Bird® Drop – Shipping Company, we will ensure that we hire people that are qualified, hardworking, creative, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders (the owners, workforce, and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the board of trustees of the company. In view of the above, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer / President

Human Resources and Admin Manager

• Business Developer

Information Technologist

• Call Center Agent

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Creates, communicates, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
• Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.
• Defines job positions for recruitment and managing interviewing process
• Carries out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversees the smooth running of the daily office activities.
• Manages the organizations’ website
• Responsible for continuous update of our online store
• Ensures that our payment platform is secured 24 / 7
• Responsible for installing and maintenance of computer software and hardware for the organization
• Manages logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
• Responsible for continuous upgrade and maintenance of IT systems
• Handles any other technological and IT related duties.

Sales and Marketing Manager

• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Writes winning proposal documents, negotiate fees and rates in line with organizations’ policy
• Responsible for handling business research, market surveys and feasibility studies for clients
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding increase sales
• Creates new markets cum businesses for the organization
• Empowers and motivates the sales team to meet and surpass agreed targets

Accountant / Cashier

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Call Center Agents / Customer Car Executives

• Welcomes clients and potential clients by greeting them in person or on the telephone; answering or directing inquiries.
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the supervisor in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries
• Receives parcels / documents for the company
• Distribute mails in the organization
• Handles any other duties as assigned by the line manager

6. SWOT Analysis

We are quite aware that there are several drop shipping cum ecommerce companies both large and small in the united states of America which is why we are following the due process of establishing a business so as to compete favorable with them.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.

Golden Bird® Drop – Shipping Company employed the services of an expert HR and Business Analyst with bias in start – up business to help us conduct a thorough SWOT analysis and to help us create a business model that will help us achieve our business goals and objectives.

Here is a summary from the result of the SWOT analysis that was conducted on behalf of Golden Bird® Drop – Shipping Company;

No doubt the fact that we have robust relationship with a wide range of third party retailers and manufacturing giants will definitely count as a strength for us. We have a well-coordinated and users’ friendly website and our customer can be rest assured that they will have their goods delivered to them in record time. Other areas of strength are; secured payment platforms, robust shipping network and excellent customer service culture.

A major weakness that may count against us is the fact that we are a new online retail store and we don’t have the financial capacity to compete with multi – billion dollars’ online stores like Amazon and Alibaba.com when it comes to wider reach and selling products at a rock bottom prices.

• Opportunities:

The opportunities available to drop – shipping companies / online retail stores are unlimited; as a matter of fact, customers can make purchase from any part of the world. We will ensure that we network with wholesalers and manufactures with warehouses in targeted countries so as to enable us cut cost of shipping and maximize the opportunity that are available to us.

Just like any other business, one of the major threats that we are likely going to face as a drop – shipping company is economic downturn. It is a fact that economic downturn affects purchasing / spending power. Other threats that may likely confront us is unfavorable government policies and the arrival of competitions within our market space who may want to adopt same business strategies.

7. MARKET ANALYSIS

• Market Trends

Over the years, loads of things have changed especially the way businesses are conducted. The advent of the computer and later the internet gave a whole new definition of how things are supposed to be done in our world.

E – Commerce is one of the fruits of the internet and for sure it has enabled loads of entrepreneur to launch multimillion dollars international businesses; business that cut across geographical boundaries and drop – shipping business is an offshoot of the ecommerce industry.

Online retail stores are in the forefront when it comes to retailing goods; it is now very much easier to cover a wide range of customers from all over the world via ecommerce business model.

Despite the fact that there are several online stores, the market is still pretty much open for more online stores to come into the market. The fact that two different online store operates from same street does not in any way affect their sales. The market available to them is the global village, especially if they are open to customers from different part of the world.

8. Our Target Market

When it comes to selling products listed in our online store, there is indeed a wide range of available customers. In essence, our target market can’t be restricted to just a group of people, but all those who shop online from all across the globe.

In view of that, we have conducted our market research and we have ideas of what our target market would be expecting from us.

Golden Bird® Drop – Shipping Company is a United States based international drop – shipping cum online shopping website that offers a wide range of quality products such as electronics, computers, groceries, fashion, home appliances and kid’s items to a wide range of customers. We are in business to retail a wide range of products to the following groups of people from our online store;

• Corporate Executives
• Business People
• About to wed couples
• Expectant Mothers
• Sports Men and Women

Our competitive advantage

A close study of the drop – shipping line of business and the overall ecommerce industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric, proactive and have a robust business network if you must survive in this industry.

We are aware of the stiffer competition and we are well prepared to compete favorably with other leading drop – shipping and online stores. Golden Bird® Drop – Shipping Company is launching a standard and international drop – shipping brand that will indeed become the preferred choice of online shoppers.

Part of what is going to count as competitive advantage for Golden Bird® Drop – Shipping Company is the vast experience of our management team and our robust business network with loads of wholesalers and manufacturing giants; we have people on board who are highly experienced and understands how to grow business from the scratch to becoming a national phenomenon.

Of course, our excellent customer service culture will definitely count as a strong strength for the business. Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (start – up drop – shipping / online stores businesses) in the industry, meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Golden Bird® Drop – Shipping Company is a business that was established to retail a wide range of products to a wide range of customers that cut across different countries via our online stores and in partnership with wholesalers and manufacturers.

In view of the above, our source of income will be in online retailing of a wide range of products from world class brands in the following product categories:

10. Sales Forecast

One thing is certain when it comes to drop – shipping / online stores business, if you have quality products from top manufacturing brands and your website is users’ friendly and your payment portal is secured, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in the drop – shipping cum online stores line of business and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow the business and our clientele base.

We have been able to critically examine the ecommerce industry cum drop – shipping line of business and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in the United States of America.

Below are the sales projection for Golden Bird® Drop – Shipping Company, it is based on the business model we are running and other factors as it relates to small scale and medium scale drop – shipping cum online stores company start – ups in the United States of America;

• First Fiscal Year-: $250,000
• Second Fiscal Year-: $550,000
• Third Fiscal Year-: $950,000

N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Our marketing strategy will center on reliability, swiftness, safety, pricing, secured payment platform, and above all excellent customer service. We will ensure that whenever our customers place orders for goods from us, they will get it delivered within the stipulated time frame.

We know that if we are able to put the above stated in place, we won’t struggle to retain our old customers and at the same time win over new customers. We are aware of the power of the internet and we will do all we can to maximize the internet to market our business.

In other words, a larger percentage of our marketing effort will be directed to internet users since our business is based on the internet; our website will become our number one marketing tool In summary, Golden Bird® Drop – Shipping Company will adopt the following sales and marketing strategy;

• Introduce our drop – shipping business by sending introductory letters alongside our brochure to third party retailers, wholesalers, manufacturers and other key stake holders.
• Advertise our business in relevant business magazines, newspapers, TV stations, and radio station.
• Open our drop – shipping company with a party so as to capture the attention of residence who are our first targets
• List our business on yellow pages ads (local directories)
• Attend relevant international and local expos, seminars, and business fairs et al
• Leverage on the internet to promote our business
• Engage direct marketing approach
• Encourage word of mouth marketing from loyal and satisfied clients
• Leverage on e – mail marketing approach

11. Publicity and Advertising Strategy

We have been able to work with our in – house brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market.

We are set to become the number one choice for online shoppers, third party retailers, manufacturers and other clients in the whole of the United States and beyond which is why we have made provisions for effective publicity and advertisement of our drop – shipping company.

Below are the platforms we intend to leverage on to promote and advertise Golden Bird® Drop – Shipping Company;

• Place adverts on both print (newspapers and magazines) and electronic media platforms
• Sponsor relevant community based events / programs
• Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote our services
• Install our Bill Boards on strategic locations all around the United States of America
• Engage in road show from time to time in targeted neighborhoods
• Distribute our fliers and handbills in target areas
• Contact wholesalers, manufacturers, third party retailers and other online retailers by calling them up and informing them of Golden Bird® Drop – Shipping Company and the products we sale
• List our drop – shipping company in local directories / yellow pages
• Advertise our drop – shipping company in our official website and employ strategies that will help us pull traffic to the site.
• Ensure that all our staff members wear our branded shirts and all our trucks / vans are well branded with our company logo et al.

12. Our Pricing Strategy

Pricing is one of the key factors that gives leverage to drop – shipping companies / online retail stores, it is normal for consumers to go to places (retail outlets) where they can goods at cheaper price which is why big player in the online retail industry like Alibaba and Amazon will attract loads of consumers. Products in their store are tagged with the cheapest price you can get anywhere in the United States.

We know we don’t have the capacity to compete with Alibaba, Amazon or any other big retail store, but we will ensure that the prices of all the products that are available in our store are competitive with what is obtainable amongst drop – shipping / online retail stores within our level.

• Payment Options

The payment policy adopted by Golden Bird® Drop – Shipping Company is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Golden Bird® Drop – Shipping Company will make available to her clients;

• Payment via bank transfer
• Payment via credit cards / Point of Sale Machines (POS Machines)
• Payment via online bank transfer
• Payment via mobile money transfer

In view of the above, we have chosen banking platforms that will enable our client make payment for the purchase of goods listed on our website without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for products listed on our website.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business. The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked.

As for the detailed cost analysis for starting a drop – shipping company / online stores business; it might differ in other countries due to the value of their money. However, this is what it would cost us to setup Golden Bird® Drop – Shipping Company in the United of America;

• The Total Fee for Registering the Business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits – $1,500.
• Marketing promotion expenses for the grand opening of Golden Bird® Drop – Shipping Company in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The cost for hiring business consultant – $2,500.
• The cost for payment of rent for 12 month at $1.76 per square feet in the total amount of $105,600.
• The cost for Computer Software (Accounting Software, Payroll Software, CRM Software, Microsoft Office, and QuickBooks Pro et al) – $7,000
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $3,400.
• Other start-up expenses including stationery ( $500 ) and phone and utility deposits ( $2,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
• Cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, fax machine, cabins, tables and chairs et al): $4,000.
• The cost of launching a website / online store: $1,500
• The cost for branding: $5,000
• The cost for our opening party: $7,000
• Miscellaneous: $10,000

We would need an estimate of one hundred thousand dollars ( $100,000 ) to successfully set up our drop – shipping company in the United States of America. Please note that this amount includes the salaries of all the staff for the first month of operation.

Please note that you can successfully launch this type of business from any part of the world in your bedroom with just a functional laptop, internet facility and the required software applications. But if you choose to build a business with structure, a business that does not revolve around one man or woman, a business that has a robust network with wholesalers, and manufacturing giants, then you should follow the above business structure.

Generating Funds / Startup Capital for Golden Bird® Drop – Shipping Company

Golden Bird® Drop – Shipping Company is a family business that is owned and financed by Mrs. Clara Davidson and her immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the start – up capital to 3 major sources.

These are the areas we intend generating our start – up capital;

• Generate part of the start – up capital from personal savings and sell of stocks
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $20,000 ( Personal savings $15,000 and soft loan from family members $5,000 ) and we are at the final stages of obtaining a loan facility of $80,000 from our bank. All the papers and document have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the numbers of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.

One of our major goals of starting Golden Bird® Drop – Shipping Company is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to sell products listed under our online stores a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Golden Bird® Drop – Shipping Company will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner of our business strategy.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more as determined by the board of the organization. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List / Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of office facility and remodeling the facility: In Progress
• Conducting Feasibility Studies: Completed
• Generating start – up capital from partners: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs, branding and Printing of Marketing / Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the Needed furniture, racks, shelves, computers, electronic appliances, office appliances, delivery vans and delivery bikes: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party / launching party planning: In Progress
• Establishing business relationship with third party retailers and other manufacturers and wholesale suppliers of products we intend retailing: In Progress

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• eCommerce Business Plan [Sample Template]
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Drop Shipping Business Plan Sample

Published May.18, 2018

Updated Apr.22, 2024

By: Jakub Babkins

Average rating 4.5 / 5. Vote count: 2

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Table of Content

Do you want to start drop shipping business?

Are you thinking about starting a drop shipping business ? The biggest benefit of starting this business is that you don’t need to keep products in stock. You can easily partner with wholesale suppliers who will stock their own inventory and ship the goods directly to customers. All you have to do is transfer the customer orders as well as the shipment details to the suppliers. You can even start this drop shipping business plan part-time and it will still be profitable provided that you invest one of out of the following two things: time or money. In any case, you will have to prepare a comprehensive dropshipping business plan that will serve as the foundation of your startup. If you are wondering how to write one then here we are providing you the business plan for a drop shipping business startup named ‘Zee Online’.

Executive Summary

2.1 the business.

Zee Online will be a drop ship business plan  which will be solely owned by Jennifer Kates, a business graduate and an entrepreneur. The company’s office will be located in Texas city while the company will provide its services across the United States.

2.2 Management

The main management of the company will comprise of sales executives, managing assistants and customer representatives. The management is dedicated to make the dream drop shipping business model a reality by providing excellent service and adding value to the customers.

2.3 Customers

Our customers will be the men, women and the businesses located across the United States.

2.4 Business Target

The company’s three-year targets are outlined as follows:

Company Summary

3.1 company owner.

Zee Online will be owned by Jennifer Kates, a business graduate from the University of Illinois.

3.2 Why the Business is being started

The dropshipping business plan is being started with the aim of making profits in the online retail industry while also adding value to the customers through excellent drop shopping services.

3.3 How the Business will be started

The business will be located in a small office located in Texas but will operate across the United States. In addition to the usual inventory, the company will procure drop ship business plan internet connection along with computers, servers, peripherals and other office furniture. The startup summary is as follows:

The detailed start-up requirements are given below:

Services for customers

You must decide what products will you provide to your customers before thinking about how to set up drop shipping business because the planning of other subsequent components (such as finding relevant suppliers) depends on your products. Zee Online will provide following products to its customers:

• Phones, Computers & Accessories: This category includes smartphones, laptops, tablets and other related accessories such as chargers, earphones, data devices etc.
• Men’s Fashion: This category includes men clothing, shoes, wrist watches and other wearables.
• Women’s Fashion: This category includes women clothing, shoes, handbags, cosmetics, artificial jewelry and other wearables.
• Home & Living: This category includes household items.
• Baby, Toys & Kids: This category includes all kinds of baby products and toys.

Marketing Analysis of dropshipping business

The most important component of an effective is its accurate marketing analysis. If you are starting this venture on small scale, you can take help from this drop shipping business plan template and carry out a marketing analysis yourself. Marketing analysis is extremely important because it gives you an idea of your position in the market therefore, it must be considered before you think about how to start a  dropshipping business plan.

If you are going to start a dropshipping business plan  on a larger scale, it is better to seek the help of marketing experts since they will help you organize all your dropshipping business ideas and will according create a marketing strategic plans for you.

5.1 Market Trends

Drop shipping or ecommerce industry business is one of the largest industries in the United States as well as in the rest of the world. In United States, the Ecommerce sales were estimated to be $353.7 billion for 2017. The industry is growing at the forecasted rate of 17% and is estimated to become a $485.3 billion industry by 2021. As of 2016, there are 211 million digital shoppers in the United States and this figure will increase to 224 million by 2019. To be more specific, eight out of ten Americans are now online shoppers. Considering these statistics, one can imagine how big this industry is. In d ropshipping business plan  can be profitable provided that it has some competitive aspect so as to survive the environment shared by Ecommerce giants such as Amazon and Alibaba.

5.2 Marketing Segmentation

We will target all people living in the United States. Our experts have identified the following type of target audience which can become our future consumers:

The detailed marketing segmentation of our target audience is as follows:

5.2.1 Women:

The biggest consumer of our services will be the women in the United States. It has been established by various surveys and studies that women are more likely to make online purchases than men. That’s why, American women will be the biggest contributor to our revenue. Except for the Men’s Fashion category offered by us, women will buy more products as compared to men in the remaining four categories.

The second biggest consumer of our products will be men. Although their contribution to our revenue will be less than women but still it will be of significant value.

5.2.3 Businesses:

We also hope to target the corporate sector for buying the products from our first category, computers and accessories. The detailed market analysis of our potential customers is given in the following table:

5.3 Business Target

• To achieve the net profit margin of $10k/month by first year, $15k by second year, and $25k by third year
• To add 3 more categories of electronic appliances, sports products and furniture by the end of the first year

5.4 Product Pricing

Considering the competition in Ecommerce industry, we have priced all our products in the similar ranges as of our competitors. However, the delivery changes are kept slightly less as compared to our competitors.

Like marketing analysis, sales strategy is also an important component of a drop shipping business plan so it must be planned before you think about how to start dropshipping business plan .

6.1 Competitive Analysis

The biggest problem you will face while starting this venture is the intense competitive environment created by giants like Amazon, eBay, Alibaba etc. In addition to that there are tons of other drop ship business plans with ranging magnitudes. That’s why, if you are thinking how to start a successful drop shipping business , the only answer is find a competitive advantage. Carry out an in-depth analysis of what your competitors are missing and how can you add vale to your customers. Zee Online will achieve its competitive advantage by providing fastest shipping, minimal shipping charges and excellent customer service. As per the price of products, they are in same ranges as of our competitors since cutting them will impact the profitability of the dropshipping business plan .

6.2 Sales Strategy

• We will carry out a large scale paid social media advertisement campaign.
• We will use digital marketing strategies, SEO and SEM practices for promoting our website and achieving higher search results in Google rankings.
• We will offer various discounts on women’s fashion products during the first month of launch.

6.3 Sales Monthly

6.4 Sales Yearly

6.5 Sales Forecast

Personnel plan

You must also decide what staff will you need to run your company before you start your own drop shipping business because it will help you in estimating the accurate financial expenses.

7.1 Company Staff

Jennifer will act as the General Manager of the company and will initially hire following people:

• 1 Accountant to maintain financial and other records
• 2 Sales Executives responsible to market and discover new ventures
• 3 Call Center Agents to receive complaints of customers and answering queries
• 2 Managing Assistants to manage the company’s official website and social media pages
• 6 Customer Representatives to record and place the orders with suppliers

7.2 Average Salary of Employees

Financial Plan

The success of a business heavily depends on its accurate financial analysis so make sure to pay special attention to your financial plan before you start drop shipping business . The financial plan of Zee Online is as follows.

8.1 Important Assumptions

8.2 Brake-even Analysis

8.3 Projected Profit and Loss

8.3.1 Profit Monthly

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

8.5 Projected Balance Sheet

8.6 Business Ratios

Download Drop Shipping Business Plan Sample in pdf

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Writing A Drop Shipping Business Plan: Most Important Questions To Answer

Writing a drop shipping business plan is an absolutely necessary thing to do if you want your store to succeed. But what do you need to make it right? Let’s figure it out!

What does it take you to write a proper drop shipping business plan? If you’re a newcomer to eCommerce, this task might seem a bit too complicated to you.

Don’t worry – we are here to help you out!

What makes a proper drop shipping plan?

As our friends from AliDropship explain in their detailed guide on writing a drop shipping plan , the crucial components of this document are your ideas on:

• Your brand identity
• The problems that your business solves for the customers
• Your target audience and its characteristics
• Main competitors and their activity
• Marketing channels that will let you reach target audience
• The sources of revenue
• Your business expenses

But how can you come to these ideas?

As we can tell from our own experience in the drop shipping industry, to get a general understanding of these business plan items, it’s enough to answer 3 important questions. Here they are!

#1 What will you sell?

Well, without any doubt, as a drop shipping owner, you will sell physical products. Maybe, later on, as your business grows and progresses, you will sell digital products like eBooks or courses, or services like consulting as well.

But, while you are a newcomer to this industry, you will solely concentrate on actual, really existing products like home decor items , bags , lifestyle accessories , etc.

So, what you need to decide at this point is the following:

• What product niche will you take?

A niche is a set of products unified by a specific topic or area of use. For example, you can choose a niche of fitness products for women, or pet accessories and supplies for cats, or educational toys for toddlers, or anything else.

As you can see from this explanation, a niche can include diverse items, but its overall idea needs to be defined very clearly. Otherwise, it will be hard for you to select a matching keyword, come up with an efficient marketing strategy, and find a big enough audience of buyers.

Previously, we have already talked about a correct drop shipping niche choice –  check out this article to learn more about it!

• What niche products will you include into your store offer?

Let’s take the niche of women’s fitness products as an example again. Operating within this niche, you can think of numerous relevant product types. Water bottles, leggings, yoga mats, exercise balls – there are plenty of items you can add to your store offer.

How to make the right choice and focus on the niche items that are guaranteed to bring you healthy profits?

We’ve created a whole database of absolutely winning AliExpress products that have a sufficient amount of orders and prove to be demanded by customers. You can start using this database right now as the first 50 product imports are available for free! And what is more, product info for each of these items is already pre-edited, so you won’t have to spend extra time bringing your product pages to perfection. Just take a look at this detailed explanation to find out more!

• What will make your product offer competitive?

That’s probably the most important thing you need to decide on.

Just think about it: thousands of people all over the globe will use nearly the same best-selling AliExpress products for their drop shipping stores.

How will you compete with them? What will be so special about your store that buyers will choose you over all these numerous competitors? That’s what you need to determine.

The following questions might help you out with this task.

#3 How do you plan on reaching your customers?

Thinking of the promotional efforts required for your customer segments, you first of all need to consider their attitude towards advertising in general.

What should you appeal to if you want to get their emotional response? What statements do they find trustworthy? Which product features would they want to see demonstrated in the ads?

Another major factor here is the ads distribution. While some users visit discussion boards and forums to learn from real-life buyers’ experience, others look out for trends showcased on social media, etc. So, for you, it’s highly important to determine the right promotional channel that is likely to convert ads viewers into loyal customers.

Does any of these parts of a drop shipping business plan make you confused? Check out our selection of the best marketing services for eCommerce , and get ready answers to your drop shipping questions! Here’s the best part: these services come with an individual action plan for your business 😉

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What Is A Dropshipping Business Plan?

• Why Do I Need A Business Plan?
• What Needs To Be Included?

Business Identity

• Problem & Solution

Customer Demographics

Market competition.

• Selling & Marketing Channels 
• Revenue & Expenses
• Steps To Create A Plan
• Executive Summary
• Mission & Overview
• Market Analysis
• Product Offerings
• Marketing Plan
• Operations & Processes
• Financial Plan
• Scale Your Business

Crafting A Winning Dropshipping Business Plan: A How-To Guide

If we want to generate income from home, then dropshipping is the answer! However, if we want to start dropshipping, we need a comprehensive dropshipping business plan . As dropshipping allows us to sell products without holding inventory, it is a low-risk business model that anyone can start.

However, even though dropshipping is an easy way to make money from home, this business model requires a business structure and proper organization.

Therefore, in this article, we will cover how to create a dropshipping business plan step-by-step. Moreover, we will also explore how to scale our profits with a successful dropshipping business.

Essentially, a dropshipping business plan is a written document that includes information about your product, marketing strategies, and finances of the business. This document functions as an action plan to help us achieve our dropshipping business’s key objectives and goals.

Writing an effective business plan is the first step to establishing a dropshipping business. With a business plan, we will have concrete steps to follow that lead to the success of our business.

Why Do I Need A Dropshipping Business Plan?

A dropshipping business plan helps to have a clear idea of what our goals are before we start. This way, we can prepare for any issues or prevent costly mistakes. Furthermore, there are several reasons why we need a business plan when dropshipping:

• To set achievable objectives and milestones
• To help in decision making
• To prepare and organize our business venture 
• To create a growth strategy 
• To control finances
• To minimize our risks

Since every business needs an objective or an end goal, a dropshipping business plan helps to define what our dropshipping business is seeking to achieve. This gives us a clear idea of what to work on and how to achieve that goal. Consequently, this helps us make the best decisions to achieve business success .

Additionally, a dropshipping business plan allows us to plan and organize our operations . As such, we get a chance to prepare our course of action beforehand, resulting in efficient operations.

Like every other business, the dropshipping business can be scaled further to increase our profit margins. Thus, dropshipping business plans enable us to define a road map to scale our business in the future.

While the dropshipping model doesn’t require a significant investment, it requires some finances to get the business up and running. So, we’ll need to analyze the amount of capital we need and how we will utilize the budget. This will help us control our finances and minimize the risks of loss . 

What Needs To Be Included In A Dropshipping Business Plan?

Now that we know a dropshipping business plan is vital for the success of our business, let’s look at its composition. So, here is what a dropshipping business plan consists of:

• Problem & Solution  

Selling & Marketing Channels 

Revenue & expenses.

Below, we’ll learn what they are.

Before we start our dropshipping business, we need to have an accurate vision of our business’s identity . Every successful business has its own identity, distinguishing it from the vast competition.

To elaborate, unique business names and logos separate our business from competitors. However, an effective business identity is more than building brand awareness through a catchy name, logo, and website theme.

In fact, our business identity is defined by different factors, such as how we market products , deal with our customers , and more. With that in mind, staying true to our business identity will benefit us in the long term.

Problem & Solution

Next, we need to mention what problems are prevalent in the market and what solutions we offer to overcome them. For instance, problems can include an unfulfilled demand, poor customer service, and more.

In such cases, our focus should be on offering unique solutions like in-demand and trending products for our customers. Therefore, we can use the AutoDS product research tool to find such products to benefit from. In general, when we determine a gap in the market, we can create a plan to fill it and achieve financial success.

When selling products, we need to identify our target audience to market and sell our products. As such, we should mention customer demographics in our dropshipping business plan.

In essence, the more defined our customer demographics are, the more in-depth understanding we have of our customers. This means there is less risk of our products not selling well.  

With that in mind, here are some key demographics we should include:

• Income Range

For instance, if we are interested in dropshipping beauty products, then we should focus on marketing our products to females. Additionally, we should also target the age group 15-50 and those who have an interest in beauty products.

One of the best ways to beat our dropshipping competition is by adequately researching them. Thus, we should curate a list of top competitors and identify their strengths and weaknesses. This way, we can adopt their successful strategies and learn from their weaknesses.

When we monitor and learn from several top competitors, we can find out what they are doing right and what they are doing wrong. For instance, we may notice a competitor’s website using a specific app that increases their conversion rate. On the other hand, we can also offer features that the top competitors lack. Ultimately, this allows us to gain a competitive advantage . 

After we analyze our competition, we should mention which selling channels we plan on using and the reasons for choosing them. For instance, we can use Shopify and Wix if we want a customizable eCommerce website with custom domains. On the other hand, if we want to take advantage of the vast user base, we can use selling channels like eBay and Facebook Marketplace.

Similarly, we will also list our marketing strategies to promote our products. In general, marketing efforts can skyrocket our dropshipping store’s sales, and there are various marketing methods according to the selling channels we use. But don’t worry, we’ll discuss this in detail later on.

When dropshipping, our business will generate revenue and incur expenses. Therefore, a dropshipping business plan should mention how our business will generate revenue .

In the same way, we should also write down our expenses . For instance, we can incur subscription fees, shipping, and marketing expenses. Having a clear understanding of the incomings and outgoings will help us determine if our dropshipping business is profitable.

7 Steps To Create A Dropshipping Business Plan

So, how do we create a dropshipping business plan? We can create a dropshipping business plan by following these seven simple steps :

• Mission & Overview
• Operations & Processes

Let’s understand each of these steps in detail.

1. Executive Summary

Beginning with the first step, we need to formulate an executive summary . To clarify, an executive summary is a brief overview of our entire dropshipping business plan.

It states the company’s business type while summarizing the necessary information and growth-supporting strategies. In general, an executive summary should include a brief introduction to our business concept, products, target audience, financial information, and our action plan to run the business.

2. Mission & Overview

Next,  we need to set our mission & overview . To elaborate, the mission & overview is a short statement of our dropshipping businesses’ core purpose and objectives . It includes a concise description of what our business does and its key goals.

Here, we can also include our business structure, background, and previous experiences. Overall, this section should highlight our businesses’ strengths and future potential.

3. Market Analysis

When running a business, different factors affect our business negatively and positively. So, we need to analyze the market and consider these factors.

Generally, most businesses perform a SWOT analysis to understand the market. To elaborate, SWOT stands for strengths, weaknesses, opportunities, and threats. In simpler words, we need to define these four factors in our business plan.

For instance, our strengths are a positive feature of our business within our control, like knowledge, background, existing customers, or patents. On the other hand, our weaknesses include negative factors that put us at a competitive disadvantage, such as limited resources, geographical barriers, or insufficient expertise.

Moving on to the opportunities , they are external positive factors that are not in our control but help our business. They can include a rise in product demand or multiple suppliers’ availability. Finally, threats are external negative factors that can slow the growth of our business, such as shifts in government regulations, price fluctuations on the supplier’s side, or an unfavorable trend.

Once we prepare a SWOT analysis, we can focus our strategies around our strengths and opportunities, work on our weaknesses, and avoid threats. 

4. Product Offerings

After performing a market analysis, we need to mention what kind of products we will be offering in our stores. Since the main idea of our dropshipping business is to sell products, we need to clarify the type of products we will provide to our customers.

If we do not know what kind of products to sell, the AutoDS product research tool will come in handy as a tremendous product-finding method. To clarify, the AutoDS product research tool allows us to find trending and in-demand products from US suppliers. With this tool, we can spot winning products using various search filters like category, review, price, rating, and more.

Besides product research tools, many other methods can help us find products for our store. Some of them are:

Google Trends

• Spying on the Competition 
• Search Supplier’s best seller sections
• AutoDS Blog & YouTube playlist

First, we have Google Trends, a research tool that displays trending search queries. With the help of trending search keywords, we can determine which products are in-demand. After we spot products with high search volumes , we can find the same products on different suppliers’ websites. 

Spying On The Competition

Next, we can spy on our competition to find products to sell. Moreover, spying on our competitors helps us find out what products are selling well in their stores. And one such spying tool to spy on Shopify stores is the Koala Inspector . With the Koala Inspector, we can gain insight into what works best for our competitors and find successful products for our store.

Additionally, we can also discover the total number of products in their store and the average price. Plus, we can also learn about their marketing strategy since many Shopify stores use marketing to promote their products.

Besides that, we can filter products by price, category, and sold if we want to find product information from eBay . By filtering products with “sold,” we are searching for products that have already been sold on eBay by another seller. Hence, we can find winning products for our dropshipping stores by keeping an eye on our competitors.

Search Supplier’s Best Seller Sections

When searching for products, supplier websites are one of the best places to explore. To determine what products to sell, we can always go to the supplier’s website to see what products are trending in the market and make good sales online. For example, Amazon has Amazon Best Sellers , where best-selling products from every category are updated every hour.

On the other hand, AliExpress has the AliExpress Dropship Center , which enables us to find trending products. Plus, the Dropship Center includes various search filters , which allow us to filter out products and find winning items for our stores. 

AutoDS Blog & YouTube Playlist

Besides being a product research tool, AutoDS also has plenty of resources that offer us different in-demand product ideas . For example, AutoDS has a blog page to assist dropshippers in finding suitable products to sell in their stores.

Furthermore, AutoDS’ “ Sell These Now ” YouTube playlist is updated with trending products every month. With these resources, we have an endless supply of best-sellers from different categories to sell in our stores.

Once we have a list of in-demand products to sell, we should maximize our profit potential by choosing the best products from our research list. Therefore, we can use the product research spreadsheet to help narrow our products , ensuring we only list high-potential products.

5. Marketing Plan

Once our store has products to sell, we must determine which marketing methods we will use to promote our products. That’s because marketing helps us gain more customers by enabling our stores to remain visible in front of customers. In a nutshell, marketing is vital to the success of our dropshipping business.

In general, there are various marketing strategies according to the selling channels we are using. Let’s look at the best marketing strategies to promote our products on eBay, Facebook Marketplace, and Shopify & Wix.

eBay Marketing

On eBay , we can promote our products with promoted listings. To clarify, promoted listings are one of the leading marketing methods for our products listed on eBay. It enhances the visibility of our products in front of the massive number of eBay users.

Furthermore, promoted listings allow us to be prominently featured on eBay search results. With that in mind, here are the two types of promoted listings:

• Promoted Listings Standard
• Promoted Listings Advanced

To elaborate, Promoted Listings Standard is a marketing tool for our products that allows us to gain more visibility across eBay. To use this method, we have to pay a small fee to eBay after our products are sold.

In contrast, Promoted Listings Advanced (eBay-PPC) is another marketing tool that enables dropshippers to run ad campaigns on the eBay platform. In simpler words, Advanced Promoted Listings enables us to target specific keywords that customers are searching for. As a result, our products rank at the top of the eBay search results page. As for its cost, we pay a certain fee to eBay every time a customer clicks on our ad.

Facebook Marketplace Marketing

Moving on to Facebook Marketplace , we can market our products in two different ways:

• Boosted Listings
• Buy & Sell Groups

As Facebook Marketplace is an eCommerce marketplace, boosted listings functions much like eBay promoted listings standard. In simpler words, this tool helps sellers promote their products in front of Facebook Marketplace buyers.

Aside from that, we can also utilize different buying and selling groups on the Facebook platform. To elaborate, the buy and sell Facebook groups connect buyers and sellers of specific products or categories.

When listing our products on the buy and sell groups, we can optimize the product titles and descriptions with Search Engine Optimized keywords . This helps our products rank higher whenever a customer searches for related products.

Shopify/Wix Marketing

Finally, we have Shopify & Wix , two of the popular selling channels that enable us to customize our stores. Here are some ways to promote our products on Shopify & Wix:

• Influencer marketing
• Email marketing

As Shopify and Wix are fully customizable platforms, we can enjoy more flexibility in marketing our products. For instance, we can use Pay Per Click (PPC ads) on platforms such as Google, Facebook, Youtube, and more. In short, Pay Per Click is a marketing method that drives traffic to our store . In return, we only pay for the ad when users click on it.

Additionally, we can also utilize influencer marketing to market our products. Essentially, influencers are individuals with a massive following on social media platforms. Therefore, we can pay the influencers to review and promote our products on their social media page. This persuades the followers to buy the products and increases our dropshipping store’s sales.

Besides influencer marketing, email marketing is another marketing technique for dropshippers. An effective email campaign generates sales while helping us build a loyal customer base. One way to collect customers’ email addresses is by providing promotional discounts in exchange for customers’ email addresses.

Finally, we can also use blogs for marketing our store. To elaborate, we can include relevant keywords related to products in our Search Engine Optimized (SEO) blogs. When customers search for those words, the search engine ranks our website better and helps us remain visible. Therefore, blogs help us generate organic traffic on our dropshipping websites and are a great marketing tool.

6. Operations & Processes

As dropshippers, we need to handle our dropshipping operations and processes efficiently . Typically, our dropshipping operations include finding, buying, selling, and fulfilling orders.

With that said, we can source products from AutoDS-supported suppliers and benefit from automated order fulfillment. All we have to do is to import and sell products to customers as the middleman. 

But how will we know that a supplier is reliable? To determine whether a supplier is credible or not, we should analyze the following factors:

• Product range
• Positive reviews
• Quality of products
• International warehouses
• Excellent customer service
• Clear business policies

When selling products, the more options we provide to our customers, the more likely they are to buy from us. So, we should look for suppliers with a massive product variety .

Plus, we should work with suppliers with positive reviews and feedback . To clarify, customer reviews and feedback give valuable insight into the suppliers. Therefore, high ratings and reviews translate into a trustworthy supplier.

On top of that, when dropshipping, we should search for suppliers with warehouses in major regions such as the US, UK, Europe, and Australia. In general, suppliers with international warehouses have quick shipping times, which increases customers’ trust and loyalty . Furthermore, we can also optimize global audience targeting.

Besides that, one of the crucial steps in verifying a supplier is to look at the support they provide. As a supplier’s customer support is what we extend to our customers, we need to look for top-level customer support to ensure our business operates efficiently.

Furthermore, we need a supplier that has clear business policies. As dropshippers, we extend the same services to our customers that our suppliers offer us. Therefore, we should ensure that our supplier provides clear business policies such as fast shipping and an easy return policy.

7. Financial Plan

And last but not least, we need to prepare a financial plan to control our finances. Generally, businesses include financial statements like income statements, balance sheets, and cash-flow statements. Like any other business venture, preparing financial statements helps determine if our dropshipping business is viable.

Furthermore, although dropshipping businesses operate online, we still have to abide by eCommerce regulations and fulfill our tax obligations . With that in mind, we can either prepare these financial statements ourselves or hire an accountant to help us.

Overall, fulfilling these steps will make our dropshipping business very effective. Also, we can start and run our dropshipping money-making business .

How To Scale Your Dropshipping Business & Multiply Profits

Great, once our business plan is ready, we’re well on our way to setting up our dropshipping business. But with business automation , we can take our business to greater heights and earn even more money.

In general, we can perform dropshipping operations in two different ways: manual and automatic. To clarify, the manual method of dropshipping requires a lot of time and effort . For instance, if we are importing products, we have to import products one at a time and manually fill in product details such as images, variations, colors, and more.

On the other hand, business automation saves us time and manual labor. Furthermore, the automatic method utilizes business automation software to help us avoid time-consuming manual processes . As such, we can automatically import single or bulk products in seconds with all the necessary information!

And one of the best scaling tools in the market is the AutoDS dropshipping platform, an all-in-one solution for dropshippers. While we saw some benefits above, here are more excellent tools we can take advantage of:

• Price/Stock Monitoring
• Automatic Price Optimization
• Complete Order Fulfillment
• Automatic Tracking Updates
• One-screen Inventory Management
• Multiple Integrations (Wix, Shopify, FBMP, eBay) 
• Advanced Image Editor
• And so much more!

All in all, with these features, the AutoDS automation software enables us to scale our dropshipping business . Moreover, we can achieve complete freedom along with higher profits with dropshipping automation.

Frequently Asked Questions

Is dropshipping profitable .

Absolutely! As dropshipping doesn’t require us to buy inventory in advance, dropshipping is a low-risk and high-reward business model. 

Can I Start Dropshipping On My Own? 

Of course! We can quickly start dropshipping on our own. All we need is excellent products to sell, reliable suppliers to source products, and a suitable selling channel to sell on.

Do You Need A Business Plan For Dropshipping?

Yes. Like every other business, we need a business plan for dropshipping. If we prepare an excellent business plan, we have a higher chance of achieving dropshipping success. 

How Do I Write A Dropshipping Business Plan? 

We can start writing a dropshipping business plan by creating an executive summary, mission & overview, market analysis, and product offerings. Moreover, we also need a concrete plan for marketing, operations & processes, and a financial plan.

Great! Now, we know how to create a dropshipping business plan . Additionally, with the step-by-step guide, we have a roadmap to start a dropshipping business today.

After we start, we can start earning from dropshipping business within seven days . With dropshipping automation tools , we can keep multiplying our profits while making our tasks more efficient.

All in all, dropshipping is a highly profitable eCommerce model. But success only comes with consistent learning and improvement. With that in mind, here are three articles to help us expand our dropshipping knowledge:

• How To Start A Dropshipping Business In 2022: A Complete Guide
• A Step By Step Guide To Dropshipping On eBay In 2022 
• The Ultimate Guide To Starting A Shopify Dropshipping Business

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Dropshipping Business Plan Sample PDF Example | Free Download Presented by BizMove

Watch This Video Before Starting Your Dropshipping Business Plan PDF!

Checklist for Starting a Dropshipping Business: Essential Ingredients for Success

If you are thinking about going into business, it is imperative that you watch this video first! it will take you by the hand and walk you through each and every phase of starting a business. It features all the essential aspects you must consider BEFORE you start a Dropshipping business. This will allow you to predict problems before they happen and keep you from losing your shirt on dog business ideas. Ignore it at your own peril!

For more insightful videos visit our Small Business and Management Skills YouTube Chanel .

Here’s Your Free Dropshipping Business Plan DOC

Free book for you: how to start a business from scratch (pdf).

Copy the following link to your browser and save the file to your PC:

https://www.bizmove.com/free-pdf-download/how-to-start-a-business.pdf

How Much Shall I Charge? Four main factors will help you decide what to charge for your product or service: 1) your direct and indirect costs; 2) the profit you want to make; 3) your market research data on competitors' prices; and 4) the urgency of the market demand. There is rarely an exact "right" price but rather an acceptable price range within which you will want to fall. Avoid the common mistakes made by many new business owners--charging too much or too little. Use several approaches to arrive at a cost and "test" the price. If your ego is too involved, your price may be too high. On the other hand, if you have the attitude that "this is just a little something I do in my spare time" or "anybody could do this," then your price may be too low. Here is a formula for setting a fair price. Calculate your price using other approaches, too, before you make a final decision on price: Typical Pricing Formula 1. Direct Material Costs--Figure the total cost of the raw materials you have to use to make up your item. Figure the cost of a group of items and then divide by the number of items to find the cost per item. If you can easily and immediately determine the material cost of a single item, fine. Some items are produced in batches, however, and it is easier to get an item cost by dividing the cost of a batch by the number of items eventually produced. 2. Direct Labor Costs--Figure what you pay to employees to produce the item (whether or not you have employees now). You must assign a wage figure, even if you are the only one producing the item. Take the weekly salary you pay someone to produce the necessary number of items and divide it by the number of items. Add this figure to the Direct Material Costs total. Materials + Labor = $__________. 3. Overhead Expenses--These expenses include rent, gas and electricity, business telephone calls, packing and shipping supplies, delivery and freight charges, cleaning, insurance, office supplies, postage, payroll taxes, repairs, and maintenance. The accuracy of your costing depends on estimating logical amounts for all categories of expenses. If you are working at home, figure a portion of your total rent or mortgage payment (in proportion to your work space and storage areas), or assign a reasonable, competitive rent figure for the same amount and type of space. List all overhead expense items and total them. Divide the total overhead figure by the number of items per month (or time period you used above). The answer is your overhead per item Overhead + Materials + Labor = Total Cost/Item 4. Profit--Include an amount added to the cost of each item so you won't end up just breaking even or making the employees' wages. Check your competition and see what they are charging. (Retailers generally double the wholesale price.) If your product is a little better than the competition, charge a little more. If your product is comparable, price it similarly. Remember, you will get the profit from each sale, in addition to the salary figure. Add the profit figure you have chosen to the total cost per item to get your total price per item. Profit + Total Cost/Item = Total Price/Item Remember, the main purpose in operating a business is to make a profit. Don't undersell your product or service just because "I'd be baking cakes anyway" or "I'm just starting out" or" I work out of my home." If you have a new, rare, handmade product or personalized service, the demand may be so high that customers are willing to pay a little more. Promotion Promotion is an overall, long-range plan designed to inform potential customers about what you have to sell. Advertising is usually thought of as the paid communication part of the promotion program. To develop a total promotional campaign you must answer these questions: 1) What image or message do I want to promote? 2) What are the best media and activities for reaching my potential customers? 3) How much time and money can I spend on the effort? Develop a long-range, consistent program for building image and reaching customers. Your image should be reflected in your business card, logo, stationery, brochure, newsletter, telephone answering service, signs, paid ads, and promotional activities. Word-of-mouth recommendations from satisfied customers are the very best promotion any business can have. Consider which promotional tactics will build the confidence and image you are looking for--giving speeches and interviews (often good for counselors, teachers, lawyers, consultants), having an open house or holiday home sale (for craftspeople), holiday recitals or shows (for music and dance teachers or day-care operators), free demonstrations and samples (for retailers, decorators, caterers). Several small ads may have more impact than one large, splashy ad. Conduct a campaign rather than having a one-shot ad or event. If you hire a public relations firm, look for one that can give you personal attention and develop a total marketing plan for you, not just a couple of ads. The plan should include market research, a profile of your target audience, a clear description of the image they recommend you project, the written copy, and a list of media (including cost and scheduling calendars) that are best for your type of product or service. As a new small business owner, you will probably decide to set aside a certain dollar amount per year or a percentage of past, current, or projected sales for paid advertising.

If you Operate a factory, wholesale outlet, retail store, Service store, or are a builder, you will need to sell. No matter how good your product is, regardless of what customers think of this, you must sell to endure. Direct selling approaches are through personal sales efforts, Advertising and, for many companies, exhibit - including the packaging and styling of the item itself - in windows, at the institution, or even both. Establishing a good reputation with the general public through anyhow and distinctive services is a direct method of selling. While the latter shouldn't be neglected, this brief discussion will be confined to direct selling methods. To establish Your Company on a business footing requires a Whole Lot Of aggressive personal selling. You may have established competition to overcome. Or, if your idea is new with little or no competition, you've got the extra problem of convincing people of the value of this new thought. Personal selling work is almost always essential to accomplish this. If you are not a fantastic salesperson, seek an employee or asociate who's. A second way to build sales is by advertising. This may be achieved Through newspapers, shopping newspapers, the yellow pages section of the telephone directory, along with other printed periodicals; radio and tv; handbills, and direct mail. The media you choose, in addition to the message and kind of presentation, will depend upon the particular customers you would like to reach. Plan and prepare advertisements carefully, or it will be unsuccessful. Most media are going to have the ability to describe the characteristics of their viewers (readers, listeners, etc.). Since your initial planning described the qualities of your potential customers, you need to match these characteristics with the media audience. If you are selling expensive jewelry, then don't market in high school papers. If you repair bicycles, you probably should. Advertising can be very costly. It is wise to place a limitation upon An amount to spend, then remain within that limit. To help you in determining how much to invest, study the working ratios of similar companies. Media advertising salespeople can allow you to plan and also prepare advertisements for you. Be sure to tell them your budget limits. A third method of stimulating sales is effective displays both in Your place of business and outside it. If you have had no previous experience in screen function, you will want to study the topic or turn the task over to somebody else. Observe displays of other companies and read novels, trade magazines, and the literature provided by equipment manufacturers. It may be smart to hire a screen expert for your opening screen and unique events, or you may get the help of one on a part-time basis. Much depends upon your kind of business and what it takes. The proper number and types of selling effort to use change from business to business and from owner to owner. Some companies prosper with low-key revenue attempts. Others, such as the used-car lots, thrive on aggressive, hoop-la promotions. In any event, the importance of successful selling cannot be over-emphasized. On the other hand, do not lose sight of your major goal - to Earn a profit. Anyone can generate a large sales volume selling dollar bills for ninety bucks. But that won't last long. So keep control of your own costs, and cost your merchandise carefully. Record Keeping. 1 essential element of business management is the keeping of adequate records. Study after study shows that many manager failures could be attributed to insufficient records or the owner's failure to use what information was available to him. Without records, the businessperson can't see in advance that way the company is going. Up-to-date records may forecast impending tragedy, forewarning you to take action to avoid it. While additional work must maintain a decent set of documents, you will be more than paid for the effort and cost. If You Aren't prepared to keep adequate records - or have somebody Keep them for you - you should not try and run a small business. At a minimum, records are Required to substantiate: 1. Your yields under tax laws, such as income tax and social Safety legislation; 2. Your request for credit from equipment makers or a loan From a lender; 3. Your claims about the company, in case you would like to market it. However, most important, you need them to run your business successfully And to raise your profits. Having an adequate. Yet easy, bookkeeping system you may answer such questions as: How much business I doing? What are my costs? Which seem to be too high? What's my gross Profit margin? My net gain? How much am I collecting in my charge business? What's the state of my operating capital? How much cash do I have available? Just how much in your bank? How much do I owe my Providers? What is my net worth? That is, what is the value of my ownership of The enterprise? What are the tendencies in my Receipts, expenses, profits, and net value? Is my financial situation improving Or growing worse? How do my resources compare with what I owe? What is the Percentage of return on my investment? How many cents out of each dollar of Sales are net gain? Answer these and other questions by preparing and studying balance sheets and profit-and-loss statements. To do this, it is Important to record information regarding transactions as they happen. Maintain This information in a detailed and organized fashion and you will have the ability to answer the above questions. You will also possess the answers to these other vital questions About your business as: What services or products do my clients enjoy best? Next best? Not at all? Do I take the product most often requested? Am I Qualified to render the professional services they need most? How a Lot of my charge Clients are slow payers? Shall I switch to money only, or use a credit card Bill plan?

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The Ultimate Guide to Dropshipping

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15+ Dropshipping Books for Free! [PDF]

Do you want to know more about e-commerce ? There is a modality that for some time now has been causing a sensation among online business lovers.

Internet advances have served to reach the masses interested in buying products without the need to go to a physical store. In this sense, online stores have solved a 21st century need.

The intermediary opens a virtual store, has the task of offering the products and promoting them so that a large number of people buy them, obtaining good profits from sales.

Here we present our complete selection of Dropshipping Books:

Drop Ship Lifestyle

Ted & Sarah

Anwar Hawlader

Orderhive Inc.

Francisco J. Sánchez Vellvé, Sara Lorena Milla Burgos

Volusion: Ecommerce Website Store & Shopping Cart Software

Corey Ferreira

Perzonalization

Fredrika Haskel and Liridona Mulolli

Drop Shipping eBook - What’s the Deal with Drop Shipping? (Article)

Faiza Renaldi, Rival Muhamad Saepuloh, Agya Java Maulidin

Haslinda Binti Musa, Mohd Syafiq Bin Md. Taib, Shirly Chung Hsian Li

Khalil Israfilzade

If you found this list useful, do not forget to share it on your social networks. Remember that “Sharing is Caring” .

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