Are you a drop shipper but certain irregularities have been barring your way from reaching profitabilty in dropshipping?
Do you have an interest in e-commerce, and drop shipping always comes to mind?
You’re in the right place because here, you’ll learn some important details on dropshipping and why drop shipping is so lucrative. Most importantly, you’ll learn about mistakes that can bar your way to being a successful drop shipper, and how you can avoid them.
To anyone trying to start out an e-commerce business model, dropshipping is one that always comes to mind. As opposed to a physical shop, dropshipping requires no upfront cost. That said, dropshipping removes one of the greatest hurdles in the path of any business starter.
The bulk of your work is to market and then sell your products. But most importantly, you can easily keep track of consumer behavior. While it is very hard to do so in the real business world, with e-commerce, everything seems possible. You can successfully carry out online surveys to find out about your customer’s behavior, preference of goods, their opinion on your products, how they feel about your customer service, and so on.
All these help a drop shipper to stay on top of their game, thereby making dropshipping a very lucrative business model. While it may seem very easy, there are certain things you need to know. As a beginner, if you would take heed to these instructions, and avoid the mistakes I’m about to share with you, then you would become a successful drop shipper in no time.
This is one mistake that can easily take you out of business. You cannot sell trademark goods without permission. To mention a few, copyrighted goods include characters (e.g., Marvel and D.C), logos (e.g., Adidas and Nike), sports teams (e.g., NBA teams) and even phrases (e.g., “Super Bowl”). You need a license to sell these items.
License for these goods ranges from a few hundred dollars to millions of dollars. Instead of risking the legal hassles that accompany selling copyrighted goods, sell goods that have a genuine brand instead. They are also known as “white-label goods”.
Shipping from China can be generally frustrating. You might never know the exact date your shipment would arrive especially if you can’t track your order. The Suppliers themselves don’t know as they only give you estimates.
That said, being truthful to your customers as regards shipping is very important. For example, if your supplier says your shipment would arrive in 20-40 days, it is better to give your customers this exact time frame than saying it’ll only take two weeks.
Offering too optimistic shipping dates builds distrust if it eventually falls through, and distrust is bad for business. Be open, and make them realize why it’s worth the wait and you’ll do just fine.
Promotions and advert campaigns are important for your business growth. Before you get started, ensure you have a Facebook page, and other social media handles. You can organize a simple competition on any of these platforms in which participants would be required to like your page.
Liking your page builds trust, and trust is good for business. On the other hand, you can also go for paid ads on Facebook, Google, and other social media platforms. Be careful not to spend too much on ads though. Prepare your budget and stick to it.
In an already saturated market, what’s your best bet as a newbie? Its customer service. Customer service is a good way to keep customers from going to other stores. Customers need information on products from time to time. Providing this information round the clock is very crucial if you want them to stick with you.
If you’re always there, they wouldn’t need to go elsewhere. More so, your appealing customer service would force them to tell their friends and families about your store. This strategy markets and grows your brand faster than ads.
Your website is your storefront on the internet. A good website structure attracts customers, while a poorly structured one would only confuse prospective customers. If you are experienced in coding and HTML, you can easily create your store using WordPress.
On the other hand, you can simply buy a store on Shopify. Though it is a paid option, it is easier for you if you don’t have coding and HTML knowledge. It doesn’t matter its Shopify or WordPress, the most important thing is to create a simple and easy-to-use store.
This is a very common practice among newbies. They surf through a major dropshipping website and suddenly, they want to drop ship every item they see. It's true that selling all types of goods opens you to more audience. But, are you prepared to attend to the needs of an audience that large?
The narrower your target market and audience, the easier it is to satisfy the needs of the group. More so, you’ll also have the full trust of your customers as they would see you as a specialist in the product you sell.
Before picking a niche, it’s important to research, and understand the basics of that niche. Be sure the niche you choose adds value. Customers would only part with their money if you offer them value. Beware of niches that lacks value and are overrated. To ascertain the viability of a niche, look around you, engage people, or even use a quick Google search. Check out things in vogue.
Also, it is important you pick a niche you’re already a customer for, that is products you know so much about. This would give you an insight on how to market the products to your target audience. You’ll also have more persistence if you’re selling a product you love.
It is quite tempting to copy policies from another site since you feel you’re in the same line of business. It doesn’t matter if you offer the same product, or you’re writing for the same niche. Their policies may be vague, and not fit what you’re trying to achieve with your site.
Another issue is, the policy you’re trying to copy might not be legally sound. You need a policy that can stand a lawyer or a judge’s scrutiny. Research about your niche, write privacy, shipping, and return policies that fits your store.
Then, ask an attorney to help you rewrite those policies in accordance with existing laws. It might not seem a problem now, but your policy is the only thing that can protect you and your site in the case of chargebacks. That said, it is important to have one without loopholes.
You might want to undercut your competition by offering the lowest prices on your site. After all, lower prices mean more customers, right? As many drop shippers had to learn the hard way, price as a competitive advantage cannot be sustained in the long run. Profit margin reduces every day with more competition.
You can only be successful using this tactic if you are a very big retailer. That is, your product catalog exceeds tens of thousands. Anything else, you would lose money in the long run. Instead, sell high priced items for an increased profit margin. Then, make up for the price difference by offering top-notch customer service, easy-to-use website, and valuable information about your products via your site.
Holidays, such as The Lunar Year in China is one to consider as a drop shipper. During this period, the entire Chinese population goes on holiday for a week. It's safe to say that no business transaction would take place for an entire week.
If you work with China-based suppliers, then this is one holiday you’ve got to put into consideration. You should contact your suppliers in advance to know about their schedule. Once you’re informed, you can either list the products affected as “in stock” but at a longer delivery time or buy a lot of these items several weeks before.
By so doing, you can deliver to customers who order during those periods. You can also temporarily delist the items to avoid disappointments and negative feedback.
Your success as a drop shipper depends largely on the services of your supplier. After all, they control the inventory and shipment of your customer's orders. If you deal with a supplier that delivers goods at a later time or even sends defective products on a regular basis. Then the odds are high that your dropshipping business would soon come to a standstill.
Your supplier may have good products, but how often do they answer your inquiries? Do they have good customer service? Do they have a good site rating? Working with a reliable supplier is crucial to the success of a dropshipping business.
When you eventually get a supplier that fits, you might probably think you don’t need a new one. But what would you do if the supplier suddenly decides to stop working with you? Or even goes out of business? Meanwhile, your customers are patiently waiting for the fulfillment of their orders. Your options are to either cancel the orders or find a new supplier.
Both options are quite difficult if you’re unprepared. Either way, your customers would be dissatisfied. You can successfully prevent this by having a backup supplier. That is, asides from your go-to supplier, you should have another option if things go sideways with your go-to supplier.
A good relationship with your suppliers sets you up for numerous benefits such as discounts and priority service. Don’t act as you own them, they can easily decide to discontinue working with you at any time. So how do you foster that relationship?
Never think you have control over their time and products. Respect them, always pay early, it is better to work together to solve issues than blaming your supplier. Suppliers would do more on their end to help your business succeed if you maintain a good relationship.
If an item is listed as “in stock”, customers expect it to be so. Since you don’t control the inventory, the onus is on you to ensure your supplier keeps you updated at all times. Problems may arise if you list an item as “in stock” when actually, your supplier is out of stock.
In case this happens, canceling the order and offering an apology would do. You can appease them by offering a discount when the item finally comes back in stock. But it’s better to prevent this from happening at all.
Always request for inventory count from your suppliers on a regular basis. Good inventory management is a criterion to choose a supplier in the first place.
The fact that dropshipping is lucrative doesn’t mean you’ll earn six figures in a month. Dropshipping takes time and a lot of learning to successfully make a profit. The most successful drop shippers faced a lot of difficulties before they made a living off drop shipping. If you aren’t fully prepared mentally, you could find yourself demotivated and even give up in a short while.
On the other hand, set realistic goals and ask questions from other drop shippers. Join a dropshipping forum, this way you would be able to interact and learn from the veterans in business.
Many drop shippers invest little or nothing into proper optimization of their stores. Probably because it requires more time and money than traditional advert models. However, in the long run, SEO provides an incredible return on investment.
Ideally, you should start SEO before you launch your store. Find out the keywords that are most relevant, and construct your website content in line with these keywords. If your site is properly optimized for conversions, your products have a good chance of appearing on the first couple of pages on google if searched for.
SEO is a way to gain an advantage over your competition even before you start to dropship. While ads would only last as long as you’re paying, SEO may last months depending on the level of optimization, and the quality of your content.
Returned goods or canceled orders are unavoidable in dropshipping. Your customers might have ordered a wrong product, or your supplier may send a deformed product. Either way, if you aren’t already prepared for this, it’ll be quite difficult for you to handle when it finally happens.
Whenever this happens, you should always give your customers a refund. Make arrangements with your suppliers on how returns would be managed. You should make sure all returns are handled as quickly as possible.
Customers would always make a mistake when placing their order. Some may order the wrong size, while another may order the wrong quantity, or even decide not to buy anymore. The way you handle situations like this defines your business.
It is better to cancel the order and refund any customer that files a complaint. If you decide to ship, you can end up with a negative review which would drag your store in the mud. Remember, customers are always right.
If you’re promising a smooth dropship experience for your customers, they would certainly want to see proofs. Set up a channel in which order status is displayed on your store. Also, constantly communicate with your supplier so as to keep you updated. In case of any delay, you’ll already have your heads up.
Customers want to know as much information about a product before placing their order. They want to know the pros and cons of each product. Research on your products, and add a piece of content to each of them on your store. But be careful not to exaggerate the product. Customer may object if the product doesn’t fit the description upon delivery.
Multiple shipping rates can be confusing to your customers. Although shipping rates differ from one location to another, setting a flat rate would help you a great deal. It may reduce your profit margin at the moment, but not for long. It makes things easier and straightforward for you and your customers alike.
As a newbie, you probably think adding as much random product to your store sets you up for great sales. This is wrong and must be avoided. If you want to stay relevant in the long term, it's important to brand your store, and stick to your brand.
Creating a fan page on Facebook and other social media platforms is a good way to start your brand. With few incentives, you are sure to get people to like your page on a regular basis. Get your fans to participate in a competition to win your product.
These baby steps put your brand on track for a lengthy stay in the minds of people. And it’s these people that’ll buy, or refer people to buy your products.
Don’t overthink your steps to becoming a successful drop shipper. There’s a high chance you’ll get stuck and probably do nothing. Instead, pick a niche you think is best suited to you and run it. At the initial stages, you have little or nothing to lose so it's okay if you fail. Instead of overthinking, get started and learn from your mistakes. It's best to figure out the basics of drop shipping early when the stakes aren’t high.
After launching your store, you still need to sell products. That explains why you need to promote your store. While you can choose any of the advert options mentioned above, it is better you do a little of both. Focusing solely on one is risky, and may leave you short of money very soon.
It's okay to make mistakes, but the most important thing is to learn from them. Dropshippers who make thousands of dollars in profit also made mistakes. With patience and hard work, you’ll be ahead of your competition in no time.
People who set unrealistic goals don’t last long in the business. Set goals you can achieve in a short while. Then set another. Make sure you’re strategically placed to be seen if your competition eventually decides to give up.
Don’t beat yourself up if you’re already making these mistakes. Now that you know, taking advantage of this list would save you time, money and a lot of frustrations. The most successful drop shippers are those that learn from their mistakes, and never repeats them.
Note that your customer service is your greatest asset. It either makes or mars your dropship business. And at the same time, always ensure your suppliers keep things running smoothly on their end. If you can do all these successfully, then you’ll be at the top of the dropshipping food chain in no time.
By Lisa W.
Lisa is an integral part of the Sell The Trend Family. She has a keen eye for spotting products right before they become big winners!
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