Dropshiping has been a profitable business module, for medium and big firms and young entrepreneurs because of low investment and conventional management. Having the third party supplier who helps you handle the item you are selling, you can start your own dropshipping even with a limited budget.
If you are about to do business online with dropshipping, the following are six must-know tips to find success in the field. Although dropping business does not require too much funds to be launched, an immense amount of effort spent on marketing, selling strategies, etc., is worth investing.
What is dropshipping?
Dropshipping refers to an online business module in which you can directly ship one product from the wholesaler’s warehouse to the customer without handling logistics and management. You work as intermediaries between suppliers and customers and earn commission by selling products of suppliers for a markup.
This not only cuts operational costs but also frees up your time to focus on customer acquisition.
Awesome Benefits of dropshipping
Dropshiping offers a promising opportunity for young entrepreneurs. It’s low risk, low cost, easy to start up, easy to automate, and convenient for anyone who wants to start their eCommerce store in 2020. Here are significant benefits of dropshipping:
Low barrier to entry
With drop shipping, you only need to pay for the hosting and domain. Therefore, you can eliminate the hardness of paying upfront for the products.
Besides, as suppliers take care of the shipping process, you can be based anywhere in the world without worry about shipping. For example, items that would typically be impossible to ship due to your location’s limitations, like extremely large or perishable goods, can be shipped to customers in good condition.
Dropshiping is an ideal module for growing business as anyone can start their store just for free. Importantly, as you do not own actual inventory, your business is less vulnerable to the loss of sales. Even if you lose store and can not make profits from it, you can back out with no risk.
Bring benefits for both dropshipper and supplier
Dropshipping is a win-win solution for both dropshipper and suppliers. Dropshipper essentially outsources that complicated part of the business to suppliers and effectively focuses on the selling side. Additionally, they can partner with multiple wholesalers at the same time to maximize revenue. Meanwhile, suppliers can save a considerable amount of time and resources from marketing and product promotion activities as they already have it appropriately handled by dropshipper.
Be able to scale and test new ideas
Another advantage we want to mention is the ability to scale and remodel. Because dropshipping is almost complete on online platforms, it is easy to expand the business scale and cooperate with multiple suppliers.
Dropshipping gives you an opportunity to do the market-testing in real-time without testing in the market pre-launch. If one niche or product doesn’t sell well, dropshipping stores owners can quickly move to a better selling product.
6 Essential dropshipping tips for a successful business
Pick a profitable niche
The first and useful tip is to select a profitable niche among millions of options out there. Sometimes, diversifying products is a good way to go. However, if you just start growing your business, stick to a niche that will help you stay focused and bring attractive profits.
When you are operating a drop shipping business model, your investment on low-priced items and high-priced items require the same amount of work. Therefore, make sure that a niche that you are going to sell on will help you earn more on whatever investment in marketing and customer acquisition costs.
A profitable niche also should be the one that appeals to impulse buyers with disposable income. If you want to experience the highest conversion rate, think about a niche that triggers impulse buys and attracts clients who can afford to purchase the spot.
There are many ways to find a profitable niche. There are certain items that are actively searched, and of course, you will not want to sell a product that nobody needs. Now, Use Google Trends, Pinterest, or any dropshipping research tools for common search terms related to your potential niche.
Work with good suppliers
The products you choose directly reflect your brand; therefore, it is essential to choose the right supplier. If the supplier partner provides poor quality products or fails to deliver well-packaged goods promptly, it can ruin your business reputation and turn off your customer. Here are two steps that help you find the right supplier:
- Step 1: Supplier Audit
Check all the supplier’s details, products they sell, review from customers, credibility and quality, etc.
- Step 2: Compare and pick up
Based on the information you have collected, you can compare potential suppliers’ pros and cons. If you are not confident in a potential supplier’s communication abilities, move on, and continue your search.
Build and optimize your website
Because your website works as the face of your business, it is important to build and optimize your site. A well-designed, engaging website helps to gain the trust of your customers. As product inventory management, order fulfillment, or shipping will be controlled by your suppliers, it is your website that you have full control and design. We would say that theme is what makes customers fall in love with your website for the first time. Do some research and make your website a better place to shop with beautiful themes for dropship.
Besides, to grow more traffic, your website needs to be SEO-optimized. It is not a must, but a website containing well-written intro pages, product pages, high-quality product images will save a great amount of your time and resource from retaining existing customers and attracting new ones.
Focus on marketing
The most significant benefit of dropshipping is that it gives you nearly 100% ability to focus on marketing to drive traffic to your store. You can take advantage of any part of your sales funnel to promote your products. For example, offering promotions at the checkout page or bundle deals to VIP sign-up discounts will improve marketing ROIs and encourage customers to buy more on your website.
Automate your dropshipping business
Once your business reaches certain heights, automating different tasks is required for the convenience of management. By automating your dropshipping business, you can improve your productivity as much as possible. You will have more time to focus on other aspects, including customer service improvement, better communication with suppliers, and more effort to improve your website.
Here are some apps we highly recommend to use:
- AdWords Automation with Traffic Booster
- Inventory Management Automation with Orbelo
- Social Media Automation with Social Autopilot
Deal with cancellations and returns
Return and refund is a nightmare for any business. Preparing to handle cancellations and return is a good lesson to learn no matter how big your business is. We have to say that return handling with dropshipping is a service complication that has a profound impact on overall customer satisfaction.
You can choose to handle return yourself or let it controlled by your supplier. However, both of these ways have pros and cons.
Dealing with cancellation yourself means you can offer better customer service but have to manage a whole host of logistics tasks, storing and then reselling returned items.
If suppliers take off the return process for you, you do not need storage space and logistic tasks will not bother you anymore. However, restocking fees, complicated processes, and rejection of unreturnable products will be the cons that may affect your business as customers’ shopping experiences.
Each supplier on different platforms has its own rules for return and refund. If your business is based in Aliexpress, get more advice about canceled orders on Aliexpress from our blog.
Dropshipping is all about maximizing profits, providing better products and experience to your customers, and most importantly, minimizing the cost.
Now you have six critical elements for dropshipping businesses. Manage them properly, and you will have a chance to be successful.
We hope that our tips bring good value so that you can achieve the best business results. Thank you so much for your reading time.
Check out my guide on how to start your business right with tons of useful tips I learned by successfully starting, building, and selling multiple companies.