Dropshipping has always been heralded as a way to start a business with significantly less overhead than a traditional company. Considering how resource-intensive a traditional business can be, this isn’t surprising. People starting new businesses soon find themselves inundated with overhead costs and a myriad of other concerns. Rent, inventory and employee costs such as wages and health insurance all increase the price of doing business. Dropshipping offers individuals a way to sidestep many of these operating costs, giving individuals the ability to do business without incurring crippling debt.
Yet, you still do need money to start a dropshipping business, even if it’s comparably less. For example, getting started in this industry may necessitate purchasing a domain name and web hosting. You will also need to get settled on payment processing. In addition to this, some dropshipping companies try to increase profits by stocking some quick-selling items. These various costs mean that you need to start thinking about the best way to fund your enterprise.
Here are 6 smart ways you can fund your dropshipping business.
1. Apply for a microloan
A small loan, well used, can go a long way towards helping you fund your dropshipping store. However, even before applying for the loan, know exactly how the loan will be used. You will also need to know how those business decisions will help you grow your company. This is where having a solid business plan comes in. For lenders like Dropshipping , your business plan is an absolute necessity. It will help convince potential lenders that you are worth the risk.
Therefore, creating this business plan means outlining the management of your business, your objectives, marketing plans, financial projections and how you plan to compete in your space.
2. Start freelancing
This isn’t just about getting a job. Working as a freelancer also means being able to work at home. This way, you can earn money while learning about dropshipping and getting acclimated to dropshipping order management software, an important tool in the industry. Becoming a freelancer is easy when you’re already in possession of a marketable skill. However, don’t limit yourself either.
There are scores of marketable skills out there, some you may not even know you have. In the beginning, finding clients to work for may be difficult, but not impossible. It’s important that when you do begin working as a freelancer, you divide your time appropriately between earning money and devoting yourself to your business. When done right, you will find that working from home offers you the best advantages towards starting a dropshipping business.
3. Get a part-time job
If working from home isn’t quite your style or if you believe that you don’t have a marketable skill, consider applying for a part-time job. Needless to say, getting a part time job may be easier than trying to establish yourself as a freelancer on the internet. Part time work gives you the flexibility you need to invest time and energy into your dropshipping business, while still earning a steady income.
With this in mind, make sure that your part time job doesn’t require you to work too many hours per week as this may put a strain on your ability to put quality hours into your endeavour.
4. Help with someone else’s dropshipping business
As with any new venture, learning the ropes can be an uphill battle. What better way to get a knack for dropshipping than to help out with someone else’s store? While earning some capital, you’ll also gain valuable experience about what it takes to make dropshipping profitable. It can also help you pick up the dos and don’ts of dropshipping. You will appreciate the role good marketing plays in making your venture successful. Skills such as running good social media ads and conducting product research cannot be underestimated.
However, it’s important to remember that working this closely with another dropshipping company comes with its own set of rules. Under no circumstance should you copy your client’s store or products. Also, even if your employer never requests confidentiality, never disclose trade secrets to anyone.
5. Use a credit card
If you have difficulty funding your dropshipping business, saddling yourself with credit card debt should be your last plan of action, not your first. Considering that they often carry high interest rates and can leave users mired in debt, credit cards are mostly frowned upon. However if your back is against the wall, it may be a worthwhile option. Relying on credit cards can harm your business more than it can help it.
However, when used smartly, a credit card can be a great help. This is especially true if you find yourself in a bind and need some cash to tide you over. While not the best option, using a credit card smartly can be a benefit to your business.
Dropshipping doesn’t require loads of upfront cash. This makes it a perfect candidate for crowdfunding among your friends, family and even some strangers. Sites like Indegogo and GoFundMe are easy to get started with and you can start accepting donations in no time. Each little contribution can help you reach your goals and you don’t have to pay it back in the end. Since entrepreneurs often underestimate how much funds they will need, make sure your campaign goal is slightly above budget.
Remember also that crowdfunding attempts aren’t always successful and many efforts end up going unfunded. If your campaign is at first unsuccessful, don’t despair. Examine your efforts and identify areas that need polishing and try again.
There is no single “correct” way for you to fund your dropshipping business. You may choose one of these methods, more than one, or you may choose none at all. Regardless of the path you choose, keep in mind that the method that works is the one you stick with. In the mean time, your business still needs you to make a hundred other wise decisions. So pick the best method that works for you and focus on making it a success.