Dropshipping is one of the best ways to start a business online. It is profitable, easy and passive. But, it involves a lot of risks if you don’t know what you are doing.
A question a lot of people ask is “Is dropshipping profitable in India?”. Yes, of course, it is profitable like in every other country.
If you are a person who wants to start a dropshipping business in India, then you are in the right place. So, Let’s begin.
Disclaimer – This page may contain links to affiliate websites, and we receive an affiliate commission for any purchase made by you on the affiliate website using such links.
How To Start a Dropshipping Business in India
What is Dropshipping?
Dropshipping is a supply chain management method in which the retailer, (that is You!) does not keep goods in stock but instead transfers the customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler, who then ships the goods directly to the customer.
Which primarily means that you just act as a middle man.
Best Dropshipping Platform – Shopify
There are primarily 2 things that you need in order to start this business. One, An eCommerce platform, and two, a product supplier.
An eCommerce platform helps your customers choose their products and order them. A supplier is the one who ships the products directly to the customers. We will discuss different product suppliers later.
Shopify is right now the best eCommerce platform to start a dropshipping business. There are other alternatives like WooCommerce, Ecwid, BigCommerce, etc. But none of these can be compared with the likes of Shopify.
Shopify even offers a 14-day free trial which helps you launch your business without any upfront cash. During this period, you can easily make some money that can pay the monthly subscription fee of Shopify.
Related Article – How to Start Dropshipping Without Shopify (The Ultimate Guide)
How Much Money do I Need to Start this Business?
Dropshipping in India requires a very little amount of money when compared with International dropshipping. This is because running ads in India is very much cheaper and affordable.
Here’s how much you would need:-
Shopify Store – $29/month = Rs.2000-2300/month (Free 14-day Trial available)
Facebook ads – Rs.1000 – 8000
On an average, you would need around Rs.10000 to start this business.
But, this is not always necessary. You can start this business even if you have a budget less than 2000 or even 1000. The only problem that you will face would be the inability to test more products using Facebook ads.
When I started indian dropshipping, my very first product was a winner and the money that I spent on ads was the profit that I got from my product sales. See for yourself –
So, my point is, even if you have a small budget, don’t take it up as a reason to give up dropshipping!
General Store or Niche-Specific Store
After you sign up on Shopify, you need to decide whether you should start a general store or a niche-specific store.
A general store can contain different products while a niche-specific store may contain products in the same category.
If you are a beginner to dropshipping, it’s always better to start with a general store. This is because you won’t know which product works and which all doesn’t.
Only start a niche store when you find a winning product that generates a lot of sales.
Related article :- Are Shopify Stores Profitable? Can You Still Make Money in 2020?
Website or eCommerce Store Setup
The most important thing for this business is an online store. You can build one quite easily using Shopify.
The first thing to do is to go Shopify and sign up for the free trial. Once you sign up, you will reach your dashboard.
You will now need to install a theme, setup payment gateway, legal pages, domain, etc.
Naming Your Store and Buying the Domain Name.
Naming is a crucial step when building a business. People should be able to remember and read it properly.
Names like Amazon, Flipkart, eBay, etc are all famous eCommerce stores. Just look at their names. They are just about 4-8 letters and are easy to read.
If you can’t think of any brandable names. You could just go to namelix.com. They can help you.
After you select your store name, you can go and buy a matching domain name from Namecheap.
After buying the domain, connect it with Shopify. You can use this guide if you have any trouble connecting them.
Setting up your theme
There are 6 free themes in the Shopify store as of now. You can choose any one of them or choose any paid theme if you can afford any.
I would recommend you stick with the free ones as of now. Debutify is the theme I recommend. It’s very clean and does have a free version.
Payment gateway needs to be set up on your website so that you can accept prepaid payments from customers.
Enter all the details that Razorpay asks. Once your account is setup you will receive an API key which can be pasted on to the Shopify payment gateway settings. (If you encounter any problems here, please comment down below.)
However, most of your orders will be cash on delivery (Almost 80%-90%). This is one of the most painful things about dropshipping in India. You won’t have this problem if you start an International dropshipping store.
There are legal pages that every online store needs to have. In order to set these pages, go to settings, and then select legal.
You will see 4 types of legal pages there. Just click on “Create from template” on each one of them. Once clicked, you will get pre-generated pages for each one of them. Just read through them and add or delete anything that you like.
Researching for products is one of the most daunting tasks that dropshippers face. It may take a lot of time and effort in finding a winning product.
A winning product is when you see the following characteristics on the product:-
- A product that solves a problem.
- A unique product that isn’t available on Flipkart and Amazon. (This may not be the case every time.)
- Wow factor – It’s just a term that dropshippers use when they find a product that just blows your mind because of its capabilities and uniqueness.
This is how I search for winning products:-
- Go to facebook.com.
- Search for keywords like “Order now”, “Free Shipping”, “50% off”, “Buy now”, “Made in India”, “Order here”, etc…
- After you search, click on the videos tab and sort them by “recent” or “most viewed”
- You will see that most of these videos are marketing videos of different dropshipping products but these might be oversaturated and may be sold by many people.
- Then click on one of those videos and go to the page who posted it. Scroll down and you will see “Page transparency” somewhere. Click on that.
- It will open a window and you can now see whether this page is currently running ads or not. If it is running ads, click on “Go to Ads Library”.
- You will be redirected to a page where it shows you all the ads that the particular page is running.
- If you see an ad that has been running for more than 4-5 days, it may be because the product would obviously be working for them.
- So, what you do is write that product down on a notepad.
- If you do not see any ads running or if the ad has just started around 2-3 days then find another product by repeating this entire process.
When you finally have a product, you will need to find a supplier and then advertise on Facebook.
Finding The Best Supplier for Your Business
Since you do not keep any products on your warehouse or anywhere. You need a supplier to help you ship the products to your customers.
Aliexpress is one of the best, reliable supplier. But in India, Aliexpress is not possible because it takes a lot of time for arrival and also there can be some import tax associated with it.
So, we use other alternatives like India Mart, Meesho, Shop101 and Glowroad.
When you first start, look for the product on Meesho, Shop101, and Glowroad. If it’s available there, then you can start the testing process by advertising on Facebook.
If it’s not available there, India Mart will most probably have that product. But the problem with India Mart is that they are wholesale suppliers.
So, if you find the product on India Mart, call the supplier in the number provided and ask about the minimum order quantity. If it’s 10 or 15 then say that your willing to buy 10 or 15 of them on wholesale. After you buy them, you will need a service like Shiprocket so that you can store the products and ship them to your customers. More on Shiprocket later.
Facebook ads are one of the most preferred ways to sell dropshipping products. You will need to signup on Business.facebook.com and create an ad account in order to advertise on Facebook.
You will also need an ad creative to test on Facebook. I usually download the existing ads that you get while researching for products and then slightly edit them.
You could use a free software like Canva to create a photo ad and for video ads, you could use something like Powerdirector or Kinemaster. However, if you know Adobe Premiere or Final Cut Pro, then that would be the best.
Finally, you will need a Facebook page created. This will be used to advertise your ads through them. So, make sure that the page has the same name as your online store.
Once everything is set up, you can log into your ad account and start the rest of the process.
Facebook Ad copy and Video
Before we look into the Facebook Ad strategy we will need to write a very good ad copy and create a new video for the ad.
It’s always better to film and edit these videos yourself but since we are just in the testing phase, you could go on to google or youtube and look for videos related to your product. Find as many as you can and download them all.
Once you have the videos downloaded, you can use a software like Vidnami to create the video. But if you already know Adobe Premiere Pro or any other editing software, you can choose those.
However, if you are beginner to editing videos, Vidnami would be great!
For the ad copy, you will have to come with something on your own. You can take inspirations from other Facebook ads in the Facebook ad library.
With this article, I can’t really explain everything. But I will give an overview of how I test and scale products with ads. If you are completely new to Facebook ads, I suggest you watch some videos on Facebook before reading this.
The testing phase will consist of 3 days. This is absolutely needed so that we know if a product is working or not.
- A campaign is created with CBO turned on.
- The budget is Rs.400 per day per campaign.
- 4 adsets each with one interest.
- After the first day of running ads, you may or may not get sales. Even if you do not get any, please do keep running them.
- On the 3rd day, Check if all the adsets have some ‘Add to carts’ or ‘Checkout initiated’. If there isn’t even 1 of these, then turn off that adset and create a new adset with a new interest.
- If you got 0 sales on all 3 days, turn off the entire campaign and start testing a new product.
- if you got 1 or 2 sales till the last day, turn off unprofitable adsets and create new adsets with new interests.
- If you got more than 3-4 sales every single day, move to the scaling part.
Before you move to the scaling phase. Delete the adsets which are underperforming. That is if any adsets haven’t given you any sales, delete that adset.
- Duplicate the above campaign and do not delete the old one. Let it run.
- CBO is turned on.
- Increase the budget by Rs.200.
- If you start seeing an increase in sales every single day, start adding Rs.200 every day.
- But, if there’s isn’t an increase in sales, stick to your original budget and do not increase. Then, try testing adsets with different interests and find profitable ones using the testing strategy that I discussed above.
Fulfilling Orders and Managing your store.
Once you start running your ads, you will start to receive orders in your store. If you are using services like Meesho, Glowroad, Shop101, then you just need to order the product to your customer’s address through the app.
But if you have a supplier from Indiamart, you will need to use services like Shiprocket or Nimbuspost in order to deliver the products to your customers.
Shiprocket allows you to store your products and ship them to your customers. You just need to send them your products to their warehouse and then connect your store.
Then, when a customer orders from your store, you can fulfill your orders through your Shopify orders tab.
Some Cons and Pros of Dropshipping
Like every other business, you do have some problems and some good with this business too. I’ll start with the good things about this business.
- Dropshipping is fairly new in the Indian Ecommerce Industry. So, it’s a perfect time to start.
- You do not need to handle any of the goods on your own.
- Work from Anywhere.
- RTO and Fake orders are a big problem here. Most of your COD orders are going to return or get canceled. This is something you would have to deal with which doesn’t happen in any other country.
- Customer service would be a big problem. Once you start scaling, it’s best you hire an assistant to handle this.
- COD orders need to be verified by calling them in order to reduce RTO.
Tips to reduce RTO
Returns and cancelations occur mostly on COD orders. RTO can cause some losses for your business because Shiprocket does charge for the returns and cancellations. However, Here are some tips to reduce RTO.
- Verify every COD orders. To do that, you need to call them and ask them if you can verify their order, and also please do verify their address.
- Give discounts to prepaid orders only. Charge Rs.50 or 100 less. You can do this by following this guide. That way you will start getting more prepaid orders which inturn reduces RTO.
Dropshipping is surely a great online business to start. It has its own downsides like every other business. But, if you can overcome and handle them, it’s surely a profitable business.
So, I believe I have helped you to start a dropshipping business in India. If you found this useful, feel free to share it with your friends and family.
Also please do comment down below if you have any doubts.