How to start a dropshipping business in 2025

How do I start dropshipping?

Starting a dropshipping business requires careful planning and execution. Follow these steps to set yourself up for success:

1. Choose a niche
   • Focus on a specific product category that interests you and has market potential. A well-chosen niche helps you stand out and target a dedicated audience. Examples include eco-friendly products, tech gadgets, or pet accessories.
   • Avoid overly saturated niches by researching trends and competition. Tools like Google Trends, Keyword Planner, and niche forums can provide valuable insights.
2. Conduct market research
   • Research your target audience's preferences, buying behaviour, and pain points. Understand what drives their purchasing decisions.
   • Use competitor analysis to identify gaps in the market. Look at successful dropshipping stores and note their product selection, pricing, and marketing strategies.
3. Find a reliable supplier
   • Look for suppliers who offer quality products, competitive prices, and dependable shipping. Reliable suppliers ensure customer satisfaction and reduce the risk of disputes.
   • Platforms like AliExpress, SaleHoo, and Oberlo are excellent starting points. Additionally, consider contacting suppliers directly for better terms and customisation options.
4. Set up an online store
   • Choose an e-commerce platform that suits your needs. Shopify is beginner-friendly, while WooCommerce offers more customisation. BigCommerce is ideal for larger-scale operations.
   • Design a user-friendly and visually appealing store. Ensure it is mobile-optimised, as most customers shop on their phones.
   • Add essential pages, such as About Us, Contact Us, Shipping Policy, and Refund Policy. These build trust and provide transparency.
5. Market your store
   • Use social media platforms like Facebook, Instagram, and TikTok to advertise your products. Paid ads can quickly drive traffic to your store.
   • Implement SEO techniques to rank higher in search engine results. Blog posts, product descriptions, and meta tags can help improve visibility.
   • Build an email list to engage with potential customers. Offer discounts or free resources to encourage sign-ups.
6. Handle customer service
   • Provide prompt and helpful responses to customer inquiries. Good communication builds trust and loyalty.
   • Manage returns and refunds efficiently. Clear policies and proactive support can turn negative experiences into positive ones.

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When did dropshipping become popular?

Dropshipping started gaining traction in the early 2000s but truly exploded in popularity during the 2010s. The rise of platforms like Shopify and the widespread availability of suppliers through marketplaces like AliExpress made it easier for anyone to start an online business.

Social media advertising also played a significant role, as entrepreneurs could target specific audiences with minimal costs. Success stories of individuals earning significant income through dropshipping further fuelled its growth. By 2025, dropshipping remains a popular e-commerce model, driven by advancements in technology and consumer demand for unique, convenient products.

What budget is required to start dropshipping?

The budget to start a dropshipping business depends on your goals, but a small initial investment can get you started. Here's a breakdown of common expenses:

• E-commerce platform: Platforms like Shopify cost around $29 per month for basic plans. Alternatives like WooCommerce may have lower upfront costs but require hosting fees.
• Domain name: Expect to pay around $10–20 annually for a professional domain.
• Marketing: Allocate at least $200–500 for initial advertising campaigns. Social media ads and influencer collaborations are effective ways to reach your target audience.
• Apps and tools: Depending on your needs, budgeting $50–100 monthly for tools like email marketing, SEO plugins, and analytics is reasonable.

In total, you can start with as little as $300–500. However, scaling your business will require reinvesting profits into marketing, product sourcing, and additional tools.

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Can dropshipping be a full-time job?

Yes, dropshipping can become a full-time job. Initially, many treat it as a side hustle, working evenings or weekends to set up and run their store. However, with dedication, smart marketing, and consistent sales, dropshipping can replace a traditional income.

Building a sustainable full-time business requires:

• Consistency: Regularly update your store with new products and fresh marketing campaigns.
• Customer focus: Prioritise excellent customer service to build a loyal customer base.
• Scaling strategies: Invest in tools, hire virtual assistants, or outsource tasks to focus on growth.

I’ve seen individuals build thriving businesses generating six-figure revenues. The key lies in understanding your audience, optimising your store, and continually testing new products and marketing strategies.

Can you start dropshipping for free?

Starting a dropshipping business without any upfront investment is challenging but not impossible. Here are some cost-saving strategies:

• Use free trials: Platforms like Shopify offer free trials, allowing you to set up your store without an initial payment.
• Leverage free marketing: Organic social media strategies, such as engaging content and hashtags, can drive traffic without paid ads.
• DIY design and branding: Use free tools like Canva to create logos and marketing materials.

However, investing in advertising and professional tools significantly improves your chances of success. Free methods can help you start, but scaling your business requires capital.

Where do you buy dropshipping products?

Sourcing products is one of the most critical steps in dropshipping. Popular platforms to buy products include:

• AliExpress: A well-known marketplace with a vast range of products at low prices. It’s ideal for beginners but may have longer shipping times.
• SaleHoo: A directory of vetted suppliers offering quality goods. This platform reduces the risk of unreliable suppliers.
• Oberlo: A Shopify app that simplifies sourcing and listing products. It’s user-friendly and integrates seamlessly with your store.
• CJDropshipping: Offers faster shipping times and custom branding options. It’s a great choice for those focusing on customer satisfaction.
• Local suppliers: Consider Australian suppliers for faster shipping and support. This can enhance the customer experience and build trust.

What websites make it easy to do dropshipping?

The following websites and platforms simplify the process of setting up and running a dropshipping business:

• Shopify: Offers an intuitive interface and integration with apps like Oberlo and Spocket. It’s ideal for beginners and experienced sellers alike.
• WooCommerce: A free WordPress plugin that’s highly customisable. It’s great for those comfortable with more technical setups.
• BigCommerce: Designed for scaling businesses. It provides robust tools for larger operations.
• eBay and Amazon: Established marketplaces with built-in traffic. These platforms reduce the need for external marketing.
• Etsy: Perfect for unique, handmade, or niche products. It’s ideal for creative entrepreneurs.

Each platform has its strengths, so choose one that aligns with your business goals and technical expertise.

How profitable is dropshipping?

Dropshipping profitability depends on your niche, marketing efforts, and pricing strategy. Here’s what affects your bottom line:

• Profit margins: Margins typically range from 10% to 50%, depending on the product. High-ticket items or unique, in-demand products tend to yield better profits.
• Operational efficiency: Streamline your processes to reduce costs and improve customer satisfaction.
• Upselling and cross-selling: Offer complementary products to increase the average order value.

While dropshipping isn’t a get-rich-quick scheme, consistent effort and smart decisions can result in significant earnings over time. Keeping expenses low and reinvesting profits into advertising and product research helps scale your business effectively.

Is dropshipping legal in Australia?

Yes, dropshipping is legal in Australia, provided you comply with local laws and regulations. Here are some key considerations:

• Business registration: Register for an Australian Business Number (ABN) to operate legally.
• Taxes: Ensure you comply with Goods and Services Tax (GST) requirements. Keep detailed records of sales and expenses for accurate reporting.
• Consumer laws: Familiarise yourself with the Australian Consumer Law (ACL) to ensure transparency and fair practices. Provide clear information about shipping times, returns, and refunds.
• Trademark compliance: Avoid selling counterfeit or trademarked products without proper authorisation. Research your suppliers thoroughly to avoid legal issues.

Staying informed about legal requirements not only ensures compliance but also builds trust with your customers. Working with Australian suppliers can simplify legal and tax obligations while improving delivery times.

Why Thriday is perfect for dropshipping businesses

Thriday is an ideal tool for managing a dropshipping business, thanks to its comprehensive financial automation features. It simplifies accounting, bookkeeping, and tax reporting, freeing up time to focus on growing your store. With Thriday, tracking sales and expenses becomes seamless, helping you maintain accurate records for tax compliance and profitability analysis. Its intuitive platform ensures you stay on top of your finances without the need for extensive accounting knowledge. Whether you're scaling your dropshipping business or just starting out, Thriday's automation tools make managing finances efficient and hassle-free.

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Final thoughts

Starting a dropshipping business in 2025 can be a rewarding venture with the right approach. Focus on research, choose a reliable supplier, and invest time and resources into building a strong brand. Whether you’re looking for a side hustle or aiming to turn it into a full-time job, dropshipping offers a flexible path to entrepreneurship. With careful planning and execution, you can achieve your business goals while adapting to the evolving e-commerce landscape.