How to Start a Dropshipping Business: The 6 Step Dropshipping Business Plan

Step 1: Choosing a Dropshipping Business Idea

Truth is, what you sell matters. You should take some time to find the best dropshipping business ideas. Most people tell you to pick a niche you’re passionate about. But that’s only a half truth. It’s about a combination of profit and passion, skewed towards profit. The reality is the best dropshipping business ideas are usually the profitable ones. It’s a lot easier to be passionate when you’re actually making money.


The most profitable dropshipping business ideas aren’t trends. Instead, they have trends within them. For example, denim apparel is a trend within the fashion niche. Artificial eyelashes is a trend within the beauty niche. Marble phone cases is a trend within the phone case niche. You’ll want to have the trends as products but not as the entire store, especially if you’re building a long-term business. So keep that in mind when you’re working on your dropshipping business plan.

Step 2: Competitor Analysis


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. There are many ways to do this.

  • Enter the name of one of the products you want to sell into Google and do a quick search to see who shows up on top. The top ten results on Google or any other search engine will give you a good indication of your competition in a certain location. If you are selling products in a location different from where you are based you can use third party tools to gather data. Use tools like SEM Rush or Ahref to get information about search results in different locations across the world.
  • Search through Alexa or SimilarWeb to find niche competitors that might not show up high in general search results. These websites will give a summary of the websites you are searching for including their social media profiles, any advertising they are doing, audience and traffic information for their website, and a list of competitors for that business.
  • Hunt around on social media. I’ve come up with dropshipping business ideas by doing competitor analysis. I’ll browse Facebook ads within a niche and social media pages for top brands. How many followers do they have? How do they market their brand? How much engagement does their brand get? What can I do differently to stand out against them? What are they doing right that I should copy?
  • Know your competitors content and what performs better for them through the use of BuzzSumo so you can replicate. This tool will give you insight into what content gets the most social shares so you can find inspiration for new blog ideas. Signing up to a competitor’s newsletters can also keep you on top of their content if they share their blog content this way.

Step 3: Find a Supplier

  • It can be easy to find a good supplier with Oberlo. Once you are on the platform you can search for products, and choose suppliers from the list of results. On the Oberlo platform you can see reviews, ratings and how long the supplier has been on the platform, for each supplier and this should sway your decision on which supplier to choose.
  • When you have a list of five or six potential suppliers to choose from you can move onto the next step which is contacting these suppliers to ask important questions like minimum order quantities and shipping times.
  • By now you probably have reduced possible suppliers from a list of 5 suppliers to 2-3. The best way to make the decision now is to place a sample order with them for a product and compare the results. Compare delivery time, product quality, and packaging while making a decision, keeping your customer in mind and what they will expect from you when placing an order.

Step 4: Building a Dropshipping Business Store


There are a few components to building a dropshipping ecommerce business the right way. Here are a few:

  • Domain Name – Your domain name matters, especially if building a long-term brand. You can use free business name generators to help you simplify the process. Always get a .com domain, no matter what. If you want your niche as a keyword in the domain make sure it’s broad like beauty, jewelry, fashion rather than very specific so you don’t need to change your domain name down the road. Also, avoid using your name as the domain for your store. If you ever sell your business, you could legally use the rights to your own name.
  • Sign up for Shopify – Shopify is the most comprehensive ecommerce platform on the market. With new features, tools, resources and apps being added regularly, you’ll find that it’s easy to use and run a business on the platform. Plus, if you get stuck you can reach out to a Shopify guru who will personally walk you through any steps for free.
  • Shopify Themes – Personally, my go to free theme is Minimal Vintage it’s easy to navigate, clean and overall a great starter theme for those on a tight budget. Themes can be changed overtime. In the beginning while you’re just testing out free themes do get the job done. Once you’ve started making some money, you can invest it into buying a new theme for a better store design.

Step 5: Marketing Your Dropshipping Business with Everything You’ve Got


So at this point, you’ve found your product and built your store, now’s the time to market your dropshipping business like there’s no tomorrow. This is a crucial step in your dropshipping business plan. So don’t keep making tweaks to your store designand pretend like you’re making improvements. You don’t need to be scared of putting yourself out there. Getting your first sale is one of the best feelings!

If you’re just starting out, you’re probably on that super tight budget. Some of my best marketing ideas have come from those super frugal moments. Here’s a few to get you started:

  • Facebook Advertising: I know it can be tempting to blow $500 on Facebook ads. Many new entrepreneurs think you’ll make it rain money on your first try – you won’t. My first ad I spent $20 and lost all of it to no conversions. I actually cried from a failed ad. But truth is, I didn’t risk much. So I bounced back quickly and created a second ad which converted at five cents a click. You need to keep your budget low at the beginning to be able to afford experimentation. You don’t even know what your best selling product will be at this point. Create several ads to figure out which product sells best. When it comes to targeting, create a World ad but remove Canada, Australia, United States and U.K. this will keep your ad costs lower. As your business grows, or if you have a bigger budget, you can create separate ads for those four countries. So the United States will have its own ad, as will the remaining three.
  • Retargeting Ads: If you’re really tight on budget, I really like retargeting ads because they keep the cost low. This ad works great if you have a store with tons of traffic. Maybe you’re marketing for free on Pinterest and getting a lot of traffic from there. Maybe you wrote a blog post on your website, featured influencers and now influencers are sharing your blog for free. With a retargeting ad, you take that free traffic and it’s a lot more likely to convert into a paying customer. Even better than a standard Facebook ad. Plus, it’s a lot cheaper. It’s actually how I got my first sale in only two days.
  • Influencer Marketing: Starting a dropshipping business will require you be a bit scrappy in the beginning. If you can’t afford to pay influencers their rates, trust me this is a good thing, you can offer them an affiliate commission instead. Why is this a good thing? I learned the hard way that sometimes even a niche specific influencer doesn’t actually convert. It’s almost like a shot in the dark. If you pay an affiliate fee for every sale, you lower the risk for your dropshipping business and it’s up to the influencer to convert the sale. Plus, you’ll get some pictures which will help increase your social proof for your brand. If the influencer has real followers, they could potentially make a lot more money as an affiliate than they would’ve if they were paid a flat rate. Thus, giving them a chance to make even more money.
  • Get free media coverage: Using the free HARO tool you can subscribe to a three times a day email list where reporters reach out to you to get stories for their article. Some may be looking for influencers in a specific niche others may be looking for product recommendations. Either way, if you’ve got that retargeting ad running, that free traffic back to your website could result in some sales. Instead of adding a link to your homepage ‘’ send it to a product collection or a specific product to create a more targeted focus. You can still add your brand’s name as the name for the hyperlink.

Step 6: Optimize

Once you have 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 are not so much. Or you can look at your pricing against competitors and see if you could change things up a bit to make things more competitive.

You can use tools like Google Search Console or Analytics to evaluate your online traffic to make sure that traffic is increasing, not decreasing. If you are using third-party tools for email marketing or social media reporting, set up weekly or monthly automatic reports so that you will be reminded 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 in order to increase the revenue that you generate online. This makes sure that your website will not fall behind best practices and keeps you ahead of your competitors too.


There you go! We’ve got you covered on how to start a dropshipping business. By applying some of the advice from this article into your own online store, you work towards building an online empire of your own.And remember, the best way to learn how to start a dropshipping business is by taking that first step to build it.