Even if you’ve done eCommerce before, you’ll always need a business plan to get started and run your business well. In other words, it shows you how to get where you want to go. Let’s look at how to make a good dropshipping business plan in this post.
What is a business plan for dropshipping?
A dropshipping business plan is a document that describes the structure, finances, operations, and competitive advantages of your dropshipping business. The business strategy is like a road map that helps you make decisions and grow your dropshipping business and profit margin.
Why do you need a well-thought-out plan for your drop-shipping business?
Making a dropshipping business plan takes a lot of time and work, but it is well worth it. A well-thought-out business plan for dropshipping will help you:
Have a clear plan: It gives you direction and helps you set priorities. Let’s say you already have a dropshipping store up and running and have made a few sales. Then:
What’s the next step? What will you pay attention to? Will you start to promote your store on social media? Which one are you going to use? Why? So what? If you don’t have a simple plan, it will be hard to answer all of these questions.
- Think about your dropshipping business as a whole: A dropshipping business plan helps you see the big picture of your business and plan for its future growth.
- Reduce mistakes: It helps you figure out what might be wrong with your dropshipping business and avoid many of the common mistakes that eCommerce business owners make.
- Save money: You can save money, time, and effort this way. If you have a plan, it will be easy to overlook things that slow the growth of your business.
How to make a good business plan for dropshipping
Now that you know why you need a dropshipping business plan, we can move on to writing it. You’ll have a complete, professional business plan that will help you start, run, and grow your dropshipping business. Here are the 9 steps to making a good business plan for dropshipping:
Write a business summary.
Even though it should come first in your plan, you should write your executive summary last. It is an overview. So, it’s meant to bring attention to what you’ll talk about in the rest of your plan.
It also serves as a summary of the mission and goals of your company. So, in this part, you should focus on the most important things you learned while writing your dropshipping business plan.
Write a short summary of your business and why it will do well. In other words, describe your company’s idea, mission, goals, target market, product, marketing strategy, and current and projected financial situation.
Write an outline of your business.
The business description is the second most important part of your dropping business plan. Here, you should give a lot of information about your business. In simple terms, this part of your dropshipping business plan should have information about:
- Structure of a business: Talk to a lawyer to find out what the best legal form of ownership is for your business. You can choose to be a sole proprietor, a partner, or a limited liability corporation.
- Business model: If you want to start a dropshipping business, then dropshipping will be your business model.
- Industry: Choose the business sector where you will sell your products.
- Business goals for the short and long term: Set both short-term and long-term goals. This could help you stay on track and keep your online business from getting stuck.
Pick the items you’d like to sell.
In this part of your dropshipping business plan, you should expect to describe in detail the products you will sell through your dropshipping store. Also, describe what will make your products different from those of your competitors. In this section, you might also want to list the prices of your products.
In short, you should highlight the good things about your products. Keep in mind that the features and benefits of a product are not the same thing. The benefits are what your products will do for your customers, and the features are what they are made of.
Just make sure you don’t get stuck in too many details and descriptions. A numbered or bulleted list is a good way to show important information quickly and clearly.
Look at the market and your rivals
The market and competitors analysis section of your plan is very important because it must give a full description of your business and market. This means that you need to do a lot of market research before writing this piece.
In this part of your dropshipping business plan, you should talk about everything from the expected size of the market to who you want to sell to. That is, you have to give full statistics and explain terms like:
- Your business: Now that you know what industry you’ll be selling in, find out more about the size, trends, growth rate, and future of the market.
- Your target market: Clearly define who you want to sell to. Find out how many people want or need your products. Find out about their age, gender, where they live, how they like to live, and how much money they can spend, among other things. Just give your customers as much information as you can.
- Who you’re up against: Carefully look at your industry and the strengths and weaknesses of your competitors.
- In this part of your dropshipping business plan, you decide if your business idea is a good one or not.
Write down the plan for logistics and operations
In this part of your dropshipping business plan, you should explain how you plan to make your idea come to life. In this section, you must describe the steps you will take to reach your business goal. Think about these things:
- Wholesale suppliers: Figure out how you’ll get your items and work with a trusted, licensed vendor.
- E-commerce platform: List the e-commerce platform, such as Shopify, WooCommerce, BigCommerce, etc., that you’ll use to make selling online easier.
- Dropshipping store: Give a short description of the online store where you’ll sell the products you’ll be dropshipping.
- Tools for dropshipping: Choose a dropshipping tool that has all the features you need.
- Think about whether your dropshipping provider will take care of shipping and fulfillment, especially fulfillment.
Read about the best alternatives to Oberlo for both Shopify and WooCommerce stores.
Prepare a Marketing Plan
In the world of drop shipping, there is a lot of competition. Without a practical way to market your business, people won’t know about it. As a result, having a well-thought-out marketing plan as part of your dropshipping business plan is crucial to the success of your company.
So, you should put the following words and phrases in your marketing plan:
- Your products: Pay attention to your products once more.
- Your pricing plan: Write down your pricing plan. Keep prices low while still making enough money to stay in business.
- Your sales plan: Figure out which sales methods will work best for the people you want to sell to.
- Your plan to market and advertise: Explain how you plan to get customers and keep them, such as through social media, email, content marketing, Google ads, and so on.
- The easiest way to make a marketing plan is to list the marketing activities your business will do for a year. Make a list of your marketing plan, advertising, and other ways to promote your business during that time.
Put your people to good use.
This part of your business plan should talk about the two most important parts of your business:
- This is the group: Figure out how your drop-shipping business will work and who will be involved.
- The management: If you have information about team members, include it.
- This section should be in your dropshipping business plan if you want to start a multi-member LLC or a partnership with other people. On the other hand, you can skip it if you want to run your business on your own.
Make a detailed plan for your money.
In this part of your dropshipping business plan, you should talk about how much your business will cost. This is why you should look at the start-up costs of your dropshipping business.
You will start a drop-shipping business. So, make a budget for website development, e-commerce platforms, dropshipping automation tools, marketing, and advertising, among other costs. Don’t forget to give projections for the first year’s finances as well.
Don’t forget that good financial estimates can help your dropshipping business do well.
Don’t Forget About Extra Paperwork
After you’ve written the main parts of your dropshipping business plan, you might want to add a section with all the documents that back up your ideas, statements, and plans.
This could mean:
- A report based on your research and analysis of the market, your competitors, and other factors;
- Proof that you have a legal right to be there;
- Permissions and licenses for your business;
- Credit history;
- Details about your providers;
At the end of the dropshipping business plan, add any papers that will help your business plan.
How Does a Dropshipping Business Plan Work?
Different businesses may have different ideas about what makes a good business plan. But a dropshipping business plan needs to have certain parts for it to work. As an example:
It’s very important to know who you are, what you do, and who you do it for. Remember that there may be a lot of other online businesses that sell the same products. That’s why you need to come up with ways to make your company stand out. People who are looking for a store to buy from will choose to buy from you.
- Problems that are hard to solve and answers that look good: What makes a customer happy more than the biggest problems that your offer will solve? Get potential customers to want to buy the things or services you offer. Find some problems that people are likely to have and come up with a way to fix them!
- Channels that work: What marketing channels and methods would you use to get people to visit your website? Will you think about using social media websites? In fact, marketing channels are a very important part of being successful. A list of effective channels will be part of a good dropshipping business plan.
- Reasonable budget: There are more costs than just the cost of delivery. Think about all the costs your online business could have and write down how much you are willing to spend. Remember that all of your advertising, automation, and other costs will quickly pay off if you do everything right. So, a good dropshipping business plan will have a budget that makes sense.
Making a good, well-thought-out plan for your dropshipping business will do a lot to help you succeed. Do your research, buy the right people and tools, and change your business plan as you go.
These tips can help you build a business that will be around for a long time and make good money. Get your dropshipping business going right away! Visit dropship-empire Blog for more helpful articles about doing business online.