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How To Write A Drop Shipping Business Plan?

by Alexandra B. Marketing tips
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Oct 30, 2018 8 minute read
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How to write a drop shipping business plan

Every newcomer needs a drop shipping business plan. In a way, it is your roadmap to success: here, you set your goals and decide how to reach them. Our today’s article will explain how to make a solid business plan and stick to it throughout your journey!

If you’re just starting out, you need to draw up a plan you could keep to. Traditionally, writing a business plan is considered something useless, extra or something that is not needed because it is completely divorced from reality.  

However, planning is a prerequisite for success. It allows you to find the holes in your thinking and therefore save lots of money.

Table Of Contents

What is a business plan?

A business plan is a roadmap for your business that describes in detail what steps you have to take in order to achieve your business goals. Its main purpose is to help entrepreneurs form a full picture of their business performance and analyze the potential advantages and disadvantages of making certain decisions.

A business plan is not something you create once and then keep it in your bottom drawer. You should regularly update it because your business is growing and the market conditions are changing.

The length of the business plan varies greatly from business to business. As a rule, most business plans cover the first years of the company life and fit into a 10 or 20-page document.

Why do you need a drop shipping business plan?

Developing a business plan takes much time and energy, but it is worth it.

First, it allows you to set direction and priorities. Let’s say, you have already created a drop shipping store and even made some sales. What’s next? What will you focus on? Will you start promoting your store on Facebook or on Instagram? Why? Why not?    

I guess, without a clear strategy, it will be difficult to answer all these questions. Having a business plan allows you to see a complete picture of your business and chart a strategic course for future growth.

Secondly, it helps you identify potential pitfalls in your business and avoid a lot of mistakes most ecommerce entrepreneurs make.  

Lastly, it lets you save your money and energy. If you have a plan, it will be easy to ignore unnecessary things that hinder your business development.

How to write a drop shipping business plan?

When writing a business plan for your drop shipping business, you have 2 options: create a traditional business plan or focus on a lean startup format.

The traditional business plan is very detailed and time-consuming. It is about 30 to 40 pages in length and describes every detail that can contribute to the business success. This type of business plans is a must for people who are going to attract investors or get money from different financial institutions such as banks.  

The lean startup plan, in turn, requires less time and contains the key elements only. This one is perfect for self-employed entrepreneurs who are just starting out or who have no previous experience in writing any business plans. As for drop shipping, we recommend you to use the lean planning because of its simplicity and convenience. In addition, you can easily and quickly adapt and change it as you want.   

Key components of an effective drop shipping business plan


The elements of a good business plan can vary from business to business. However, there are some mandatory parts for any ecommerce business. Let’s look at them.

#1 Identity

To start with, you should clearly understand who you are, what you do and who you do it for. As you create a lean startup business plan, it’s enough to write some words about your shop, your audience and the products you’re going to dropship.

If you have some difficulties, imagine that you need to answer the question “What do you do?” briefly and plainly.

For example: “I run a drop shipping store called SuperEduToys that offers high-quality educational toys for children aged 3-10”.

#2 Problems and solutions

List here the most important problems that will be solved with your offer. In other words, write why your products will be popular with your customers and what aspects will stimulate them to buy from you.

For example: “The average toys don’t help kids develop their skills. Educational toys allow them to improve the fundamental abilities such as critical thinking or problem solving”.

#3 Customers

Research your target audience and describe your potential customers. Try to find the answers to the following questions:

–  Who are they?

–  Where do they live?

–  What is their income level?

Of course, this list can include much more questions, but try to concentrate only on the most important things that really affect your drop shipping business.

For example: “The target audience is adults from middle-income countries who wish to buy high quality educational toys for their children or grandchildren”.

#4 Competitors

Make a short list of your top competitors, try to determine their strengths and weaknesses and write a few sentences about why you are better than they are. As in the previous example, take care only to write down what’s important.

For example: “Company A offers a wide range of products, but they are very expensive. My price is much lower”.

#5 Channels

Describe how you will reach your potential customers. What channels will you use to attract your website visitors?

If you have some problems in making this list, feel free to read our articles where we describe the most efficient ways to attract new customers.   

For example: “The main channels to reach my customers are Facebook, Google ads and YouTube videos”.   

#6 Revenue Streams

Describe how your company will actually make money. Will you make a profit only by selling product online, or will you also focus on the revenue streams such as affiliate programs or Google advertising?

You can start with a couple of the most effective revenue streams and add some after a while.

For example: “The main revenue streams: drop shipping store, YouTube Ads. Additional sources: Google Ads”.  

#7 Expenses

Try to think of every potential cost and write about how much money you’re ready to spend on it. Will you build a WordPress website on your own or will you order a ready custom store? How much money can you afford to spend on your advertising campaign?

Think about it very carefully!

For example: “The AliDropship plugin is $89. Monthly costs for advertising – $30. Other expenses …”

That’s it. Your drop shipping business plan is ready to use! It was easy, wasn’t it?

If you have done everything right, your drop shipping business plan will fit completely onto one page.  Now it’s high time to test it and see if your ideas work. Good luck!

By Alexandra B.
Alexandra is a content creator and a huge fan of blogging. She strongly believes in the power of words and likes writing in the casual and friendly tone.
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2 Comments
Kaleem November 5, 2018 9:13:10

Hi,
Kindly let me know about dropshipping store charges and procedure to get it..

Regards,

Kaleem

Darryl McKitchens November 9, 2018 3:47:56

This is my first reading and getting interested in the subject of Drop Shipping. I’m not yet in full understanding of Alidrop ship but so far this part of a Business Plan is very understanding, clear and I downloaded the free guide.
Thanks for the good startup information….. Darryl

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