The US, with its vast population of over 336 million and a high GDP per capita of $73,330 as of 2022, presents a promising market for drop shipping.
This significant population’s purchasing power, the country’s advanced infrastructure, and trusted payment gateways set the stage for your dropshipping business to thrive.
Other reasons for the US being a great place to start your dropshipping business include high-speed internet, a multicultural environment, and trusted payment gateways.
All these factors propel your dropshipping business toward success.
But what does starting a dropshipping in the US entail? Is it complex or straightforward?
This article helps us uncover all that. It explores all the essential steps of starting dropshipping in the US.
However, first things first,
Table of Contents
What Is Dropshipping?
Dropshipping is a business model that doesn’t require stocking the products you are selling. It is an order fulfillment business model in which the shop owner links the supplier and the customer.
However, the products sold represent the dropshipping brand.
For example, while you don’t own the products as the drop shipper, any mistakes or great work reflect your shop or brand.
You are the one to be blamed for mistakes or applauded for excellent service, as the suppliers work behind the scenes.
Understanding this dynamic is crucial for the success of your dropshipping business.
Dropshipping is a simple business model and one of the most capital-friendly options for starting an online business.
With minimal upfront costs and the ability to focus on marketing and sales, you can confidently embark on your dropshipping journey.
Once you have your e-commerce store up and running, the only other thing you need to do is properly market the products when a customer places an order, the supplier or manufacturer packages and ships the item to the customer.
Starting Dropshipping in the US: Main Steps
Is your dream or goal to start a dropshipping business in the US? This comprehensive guide gives you everything you need to get it done. The vital steps to follow here include:
Product Research
Product Research: How to Identify Profitable Products and Niches
There are a myriad of business ideas you can pick for your dropshipping business. However, you need to choose the most profitable ones.
So, don’t rush it. Take your sweet time and conduct thorough research.
You can find the most trending products to sell online in the US through simple Google searches, social media platforms, and tools like Keywords Everywhere or the DSers product volume tool.
Platforms like Shopify, Alibaba, and Amazon can also be excellent sources of such information.
Once you have a list of the best products to sell, you should also study your target audience.
This way, you must offer the right product to the right audience. The right combination helps you to tailor your marketing activities to best suit your target customers.
Do Competitor Analysis
Identifying the trendiest products to sell in your dropshipping store is excellent. However, it would help if you also studied your competitors. Learn who they are and how they operate.
This is known as competitor analysis, a crucial part of any business strategy.
The truth is that some of your competitors have been in the market before you. Therefore, understanding how they operate can help you start and run a successful business.
While it’s impossible to research every competitor in the market, focusing on 3 to 5 major ones can provide valuable insights.
Understanding their products, marketing strategies, target audience, and customer service can help you identify gaps in the market and position your business for success.
This research allows you to identify possible gaps you can bridge to outshine the competition.
You conduct your research through simple Google searches, browsing social media, or employing spy tools like Alexa and Similarweb.
Choose a US Dropshipping Supplier: How to Find and vet them. Choosing the right supplier is as crucial as identifying the right product to sell.
Only reliable suppliers mean efficient order fulfillment. It is one remedy for failure in a dropshipping business.
Take your time to identify the suppliers you can rely on.
Remember, any failure on the supplier’s side is a failure on your shop.
To identify the best supplier for your dropshipping business, ensure that they check all the following boxes:
- High-quality products
- Wide range of products
- Excellent customer service
- Local warehouses
- Practical shipping, payment, and return policies
- Minimum order quantity
- Fast or reasonable shipping timelines
Also, remember to look for what people say about the supplier. Positive reviews are a good sign.
Avoid relying on just one supplier. Have multiple suppliers for your shop. This ensures that you always have products to offer your customers and can always compare prices to get the best deals.
One way to locate worthy dropshipping suppliers is to integrate the DSers app into your store, especially if you have a Shopify one. The app helps you find products and suppliers worldwide.
Choose your Selling Channel: Open a Dropshipping Store
At this stage, you have a product, understand the competitors, and have some suitable suppliers.
What you need next is an e-commerce shop. Setting up an e-commerce store involves several steps, including choosing a domain name, designing your website, and setting up payment and shipping methods. This guide will walk you through the process, making it easy to get your store up and running.
From here, you can market your products to your audience, and customers can also order and pay for products.
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Choose your Selling Channel
Open a Dropshipping Store or Sell on a Marketplace
A marketplace is a platform or website where different sellers list their products. An e-commerce store, on the other hand, is a website that lists products from a single seller.
A marketplace is ideal when you want to leverage the platform’s popularity and huge customer base. However, an e-commerce store allows you to customize and grow your brand.
The best marketplaces for dropshipping include Facebook Shops, Etsy, Facebook Marketplaces, etc.
As for the e-commerce websites, you can go for shops like Shopify, Woocommerce, or Wix. Each platform has its benefits and drawbacks, so it’s essential to consider your specific needs and goals.
Choosing an e-commerce platform like Shopify makes launching your online shop easy, even for beginners.
It streamlines the entire process, from finding a great domain name to integrating the best marketing and sales tools like EcommerceBot.
Pick a Business Structure
Registering your business is one way to gain customers’ trust in you and your brand. It also makes taxation easier for you and the authorities.
You have several options when picking a business structure in the US. Register your business as a sole proprietorship, partnership, limited liability company, or corporation.
The sole proprietor business model is the simplest one to register. It has minimum filing requirements, and the taxes are filed at a personal level.
However, the structure doesn’t distinguish between personal and business assets or liabilities. This means that if your business gets into trouble financially, your assets are also at risk.
You can choose a general partnership structure or a limited liability one in partnerships. The former is similar to a sole proprietorship. There is no separation between personal and business assets.
The second option, however, offers some protection in that the partners are only liable up to the amount they contributed as an investment.
The third option is registering as an LLC (limited liability company). Here, the owners’ and business assets are separated by law.
This means that business liabilities remain business liabilities. Your assets are not used to settle any liabilities that the business incurs. However, it has more filing requirements and also attracts incorporation fees.
Lastly, you can go the corporation way. Most businesses choosing this option follow the C corporation route. It offers more liability protection for your assets, especially when done correctly.
However, since the income doesn’t go directly to the shareholders, these business structures are prone to double taxation.
You should apply for a Federal EIN (Employer Identification Number), also called an FTIN (Federal Tax Identification Number).
This nine-digit number, which you get from the IRS (Internal Revenue Service), is necessary for taxation and opening a business bank account. You can apply on the IRS website.
Read Also:
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- How To Find Wholesale Suppliers For Ecommerce
- 8 Dropshipping Risks And How To Avoid Them
Open a Business Bank Account
It’s never wise to mix your business and personal finances. It not only makes accounting confusing and challenging, but it can also get pretty tricky if you get an IRS audit.
Therefore, before you start making sales, open a bank account for your business. This helps to separate your personal and business finances. That way, you stop paying for business expenses with personal finances and vice versa.
Opening a business account allows you to account for every coin used on business expenses and earned from your sales. Subsequently, you can quickly tell if you are making profits or just joking around.
Import the Trending Products in the US to your Dropshipping Store
Now, nothing should hinder you from starting your dropshipping business. And the next step here is to import the products you choose to your online shop.
You can do this manually by copying product information from the supplier’s site and pasting it into your site. This process can be exhausting and time-consuming as you must do this for every product.
Luckily, you can automate this process with DSers. Integrate it into your Shopify account and import products from the seller’s website to yours. DSers is especially useful if you are importing your products from AliExpress.
Market your Dropshipping Store
Like any other business, you must market your online store to make it known to your target audience. Marketing activities help companies to create interest in their products in customers’ eyes, which may eventually turn into sales.
You can try several ways to market your new store. For example, you can explore social media platforms, paid ads, influencer marketing, affiliate marketing, email marketing, or content marketing. All these methods have benefits and drawbacks, and you should choose one that best suits your business and customers.
Automating your marketing activities is one way of ensuring high ROI. And with the emergence of so many e-commerce automation AI tools, you can streamline almost every operation in your online store. For instance, integrating EcommerceBot into your Shopify store helps automate all your marketing efforts.
You can use its ads automation feature to create compelling ad messages and schedule them to be posted at the desired times.
On the other hand, its social media manager allows you to create and post targeted social media posts on Facebook and Instagram. All this promotes the visibility of your brand and products.
Fulfill Orders
Now, on to the most crucial step – order fulfillment. Generally, everything else done or listed above is meant to bring in orders. Subsequently, assuming you’ve done everything right and the orders have started trickling in, how do you handle them?
Well, in dropshipping, someone else fulfills the orders. Your main task was to get the orders and ensure the suppliers received them. From there, the suppliers handle the order fulfillment process.
They will pick the products, package them, and ship them to the customers. You should only get the order tracking codes and send them to the customers. This way, they can track their orders from when they leave the warehouse to when they receive them.
Offer Customer Support
Making a sale is not enough. You must ensure the customers are satisfied with the product and the entire sales process. That’s where customer support comes in.
Engaging your customers and offering support where needed is crucial. It helps to maintain customers, get referrals, and build a loyal customer base. With it, you’ll have satisfied customers who need to know where to direct their complaints, leading to one-time purchases.
With that in mind, you can explore various options for excellent customer support, such as live chat, email, or phone support.
Luckily, there are excellent AI tools to automate this process. Take EcommerceBot, for instance. It offers an omnichannel chatbot that instantly caters to all customers’ queries, even when you are not there. And when a customer needs a human agent, this feature seamlessly transfers the chat without losing any data.
You can try Ecommercebot for free; no credit card is required. You agree to turn your E-commerce business into a success story by clicking the image below.
With such a feature, you can rest assured that your customers’ queries are answered in the best way possible. Sign up here to unlock the full potential of this tool.
Is Dropshipping in the US Worth It?
Absolutely yes. Dropshipping opens up so many doors that a brick-and-mortar business wouldn’t.
For instance, it significantly reduces the capital required to start a business. This is because shop owners don’t have to own or buy stock upfront. They only make a purchase when a customer orders and pays for it.
Additionally, it opens up the global market for you. This only means more sales if you do your marketing well.
The US market offers excellent opportunities for dropshipping. The population is large, has enough purchasing power, and includes a multicultural environment that provides a market for various products. In fact, on average, US drop shippers make up to $100,000 a year.
FAQs
Do you need an LLC for dropshipping in the US?
No, you don’t. While protecting your assets is a good idea, it is optional. You can register your dropshipping business as a sole proprietorship or partnership and still do business.
How old do you have to be to dropship?
Usually, drop shipping doesn’t have age limits. However, you must be over 18 to make payments or sign up for a platform like Shopify.
Can I dropship on Facebook Marketplace?
Yes, you can. However, the US is the only country currently getting the best features of the Facebook Marketplace for dropshipping. Your current location determines the dropshipping features available for you on the marketplace.
Can I dropship on my phone?
Yes, it’s possible to drop ship on the go. You can build your store using the Shopify app, search for products using the Aliexpress app, and market your products through the Facebook Ads app.
