Are you curious about a dropshipping business and want to start it in India, today we will discuss every possible way to start a profitable dropshipping store in India. Many ads are running these days where Gurus are trying to make you an overnight millionaire from dropshipping.
So let’s learn How to Start a Profitable Dropshipping Business In India step by step and see if it is even profitable to start dropshipping in India. From Product research, and RTO to profit and loss calculation we will discuss everything.
What is Dropshipping?
Dropshipping is an e-commerce business model in which you sell a product through your online store, directly from a supplier with some commission. You don’t have to manage an inventory and delivery of the products, the supplier will do the inventory and shipping on your behalf.
How does Dropshipping Work?
Dropshipping has a simple working business model:
- Find a Winning Product and Supplier
- Creating a beautiful Shopify store
- Add products to your Shopify store
- Create meta ads to generate leads
- Once customers start buying your products, you will start making money.
Minimum Requirement to Start Dropshipping
A few things that you will need to start dropshipping are:
- A leptop: You need to create an online store so having a leptop is a must, this is not something that you can do with your mobile phone.
- A stable Internet Connection: Everything we are going to do is online so having a stable Internet connection is a must.
- Capital Investment: You need some capital investment to start a dropshipping store, dropshipping business is not free of cost.
How to Start a Profitable Dropshipping Business In India?
Dropshipping in India is different from the US for two reasons first is the limited availability of suppliers and second high RTO, we will discuss RTO and suppliers later, let’s understand the process to start dropshipping as a beginner from scratch.
1. A Winning Product
The very first step of starting a dropshipping business is product research like what kind of product is trending nowadays and what are its profit margins. You can use the Facebook ad library to see what products are currently running ads for how long.
The longer the ad is running means the product is doing good, and you can search for the product supplier for your store, the second trick is to like some ads from your category and it will start showing more ads similar to that, in this way, you can find more winning products from your competitors.
The third method of finding a winning product is testing on your own, and testing it for a few weeks, it is generating profit, and you can keep going with that product, testing the product will cost you money So only use this method when you are already doing good in the market.
2. Find Supplier
Finding Supplier is the main problem in the Indian market, there are suppliers on IndiaMart but hardly any of them would agree to ship on your behalf.
The First Method: Roposo Clout
The popular platform that Indian drop shippers are using today is Roposo Cout, which is a mini version of Alidropship, you can start by adding your Shopify store by clicking on the link new Shopify store. The reason why I’m calling this mini version is because there are very limited products available on Roposo Clout.
After your Shopify store is added you can search for the product on Roposo Clout and add it to your Shopify store directly. Here Roposo will take care of the supplier, you don’t have to scratch your head.
The second method: Meesho(Not Recommended)
Meesho is a very popular Indian e-commerce platform that allows manufacturers and individuals to sell their products with minimum charges. Meesho also provides reselling opportunities which means the sellers and ship to any location that you send them on your behalf.
Here is what you need to do, Create a Shopify website add products, description everything that is required. When someone places an order on your site, you have to copy their information like name, contact, and Address, and place the order on Meesho the supplier will ship the product on your behalf to the customer.
Now why I’m not recommending this method is a simple reason, when Meesho suppliers ship the product on your behalf they usually send a Meesho business card with the product to offer discounts and rate the product on Meesho.
When the buyer checks the Meesho app he will feel cheated because of the price difference and he might cancel the order which would be your loss again.
The Third Method: Individual Suppliers
The third method of finding suppliers is quite difficult because you will need to find them manually from platforms like IndiaMart or go to the manufacturers directly in the market. I’m not saying that it’s impossible to find one, I’m just saying that it would be difficult and time-consuming.
You can visit the seller and explain the model yourself and he might be convinced. Another problem in this model is that you need to manage your logistics yourself.
So if we see overall Roposo Clout is the best option for the time being.
3. Create an Attractive Website
Now we have managed to get a supplier, we need to create a website, To create a website we first need a domain name for our website. Choose the domain name carefully that matches your product.
Usually for dropshipping people use Shopify because it’s cheap and provides a lot of premium themes to set up your store with drag and drop and you don’t need to spend extra money on buying hosting. You can start your first month with just only Rs. 20.
You can create a single or multiple-product website depending on the type of product you are selling. If you use platforms like Roposo Clout, you can add your products to your Shopify store in one click.
If you are using suppliers from other platforms that are not integrated with Shopify, you will need to add your products manually and when someone places an order you can forward that order to your supplier.
4. Start Running Ads
You have a product listed on the website and the supplier is ready to ship the product but there are no orders, Well you need to spend money here to get orders. I told you earlier without money you can’t start a business.
So it’s time to run ads and generate leads on our website, In India most popular platform for running dropshipping ads is Meta.
Here is a detailed video on running Facebook ads for beginners.
In India, if you are just testing your first ad, you need to have a minimum of Rupees 1000 so you can set a daily budget of 100-200, also running ads doesn’t mean guaranteed leads. You need to create eye-catching ads to generate leads.
This is a lengthy process that involves, making ad creatives which can be banner ads, Video ads, or post ads, targeting audience, and testing ads.
5. Shipping the Product
After the order is placed supplier will ship the order to the customer directly, logistics will be managed by the supplier but if the customer cancels an order for no reason, you will have to pay the logistics charges which would be around 60-70 rupees.
Calculating Profit and Loss
Profit and Loss are an essential part of the business so let’s understand how you can make a profit in this competitive market.
| Product Cost | ₹500 |
| Sale Price | ₹899 |
| Total Sales | 20 |
| Revenue Ganerated | 20*899=₹17980 |
| Ad Cost | ₹2000 |
| RTO | 40%=8 |
| Net Revenue After RTO | 17980-7192=₹10788 |
| Revenue after ads | 10788-2000=₹8788 |
| Delivery Charges for Cancelled Orders | 8*60=480 |
| Net Profit | 8788-480=₹8308 |
You have to note that this is a very ideal dropshipping calculation, which means 40% RTO is the minimum, and sometimes it can go up to 60%-70% in that case you are doomed to take a loss.
Also, I have considered rupees 100 per order spent on an ad which is also an ideal situation sometimes, the ad would cost you 200-250 per order, in that case, your profit would be minimized.
Is Dropshipping Profitable In India?
Yes, dropshipping is profitable in India no matter how much people rant about market saturation and return orders people are still making money from dropshipping, So if you are planning to start dropshipping in India you just need to find a winning product, and scale it.
Another reason for profitability in dropshipping is because of the low cost of running ads.
Also Read: 45+ Profitable Business Ideas You Can Start Today
How to Find a Winning Product For Dropshipping?
There are many ways to find a winning product for dropshipping
1. Facebook Ad Library
Facebook ad library will provide you with information about currently running ads for a product like how long it has been running, and interactions. The longer as is running means the seller is getting good results for that product.
2. Mannually Testing Products
The second way to find a winning product is by simply testing it for yourself, you find a trending product according to season or festivals, find the supplier, and start running the product ads. If you are getting good results you can scale it.
How Much Money Can You Expect To Make From Dropshipping?
It depends on, how much money can you make from dropshipping, some people are making millions from dropshipping while some are losing millions in dropshipping so it depends on the person and how he is doing this business.
We have already discussed that the dropshipping business is profitable in India which simply means people are already making money from this business.
How much can you make from dropshipping depends upon how many products are you selling, RTO, how many orders are getting fulfilled and what are your profit margins.
This is a business so there is no exact or average amount people are making from dropshipping.
What is RTO in Dropshipping?
RTO stands for Return to Origin, these are the orders that the customer refuses to accept because of several reasons the product is not up to expectations, the product is damaged during transportation, the customer is out of station and cannot accept the orders in these types of situation seller lose the money per order.
In India RTO rate is very high even the best sellers are getting 40-60% orders RTO.
There are two types of RTOs
- When the customer refuses to accept an order because of a damaged product, size difference, or wrong product the case supplier will take responsibility and send the right order bearing the whole cost on his own.
- When the customer refuses to accept an order simply because he doesn’t want it for now, in this case, the drop shipper has to pay for the shipping charges.
How to Minimise RTO?
RTO is not something that you can reduce to zero overnight, you will need to experiment and analyze the condition why you are getting RTO, sometimes it would be a defect in the product or sometimes there would be delivery problems.
The most common method people use to minimize RTO is to avoid selling products in areas where there are high chances of getting RTO.
Why Most People Lose Money In Dropshipping?
There are many reasons why people lose money in dropshipping we will discuss them one by one.
1. Quick Money Scheme
Most of the time people jump in dropshipping after seeing some people’s dropshipping dashboard that he is making millions so can I and they just start doing everything without proper research and knowledge, which leads to their capital loss.
Dropshipping is not a quick money scheme, it takes months to get a winning product after spending thousands of rupees on ads.
2. Having No Skills
YouTube gurus often promote dropshipping as a no-skill business that anyone can start, but that’s not the case, To start dropshipping you need some basic skills like online store designing, testing and running meta ads, making ad creatives, and much more, there are times when Facebook block your ad account.
You need to have skills to manage those things too. So before starting a dropshipping business, you need to develop your basic skills in these things.
3. Not Managing the risks properly
Business is all about managing risks, in dropshipping there are times when drop shippers fail to manage expenses like the high cost of running ads, high RTO, and low to no sales even after running ads. Not doing product research properly.
These things lead to failure in dropshipping, you have to treat this like a full-time job, not some side income that you can manage side by side.
Conclusion
Dropshipping is a lucrative business that can make you a lot of money if you do it properly. People are already in this business for years and still this business is booming in India. If you put your skills to good use you can easily start making a profit in dropshipping.
And Don’t listen to YouTube gurus who are promising you to make an overnight millionaire.
