Dropshipping is undoubtedly one of the best business models for new online store owners who are breaking into the eCommerce game. This is because dropship stores are easy to start, are low cost, are highly automated and offer a lower risk.
Google Trends reveals that over the last couple of years, the Search Interest points in dropshipping has risen to 89 and with it the rise of dropshipping companies that include the likes of Doba and Dropship Direct.
Not to mention dropshipping apps such as Orbelo that allow you to further streamline the dropshipping process, or Printful, which lets you dropship unique self-designed products. It is no wonder you want to get in on the dropshipping action.
But what do you need to know before you launch your first store? We’ve put together 9 dropshipping tips every new entrepreneur should know before they dive into the dropshipping game.
Dropshipping Tip 1: Always Go Niche
Think back to the beginning of Amazon. Amazon started in the very narrow niche of online books – adding to their store as their brand grew and with it their niche – which, as we know, now includes everything and anything.
The point is, when they started, they were selling in a narrow niche.
Unless you are just opening up a broad store to test the waters before you choose your niche, narrowing your focus is the key to success. Having a dropshipping store that is too general will not enable you to hone in on your potential shopper audience easily or make brand building – the key to site trust – possible.
To choose the right niche, you’ll want to look where you passions are, research industry trends, and think about your target shopper. Then, you will want to analyze and evaluate the demand, the competition and the market to see how you could fit in.
Dropshipping Tip 2: Choose the Right Supplier
Ultimately the products you choose directly reflect your brand and therefore it is important to be picky about your products. There are 2 steps to choosing the right supplier:
Step 1: Supplier Audit
Here is where you will check all the details of suppliers, the range of products they sell and their reviews, to ensure their credibility and quality.
Step 2: Narrow Down Your List
You can do this by comparing the product prices, guarantees, and whether they include epacket service.
Pro Tip: Quickly Get Rid of Bad Suppliers
If, after all your research, a bad supplier manages to slip through the cracks, do not procrastinate with replacing them. There are plenty of other suppliers who are reliable and sell similar products.
Dropshipping Tip 3: Put Effort into Your Website
Yes, it is true, dropshipping allows you to cut corners and cost, but that doesn’t mean you should be doing the same with your website. Customer experience goes a long way to building trust, so make sure you put thought and effort into your home page, that your store is correctly optimized for the user and SEO, your product descriptions have substance and are error free, your product photos are good quality and your shipping and returns policies are clear.
Take a look at competitive, successful online stores in your niche for inspiration, consult eCommerce-friendly Facebook groups for great tips, and of course, make sure your store is optimized for conversions.
Bonus Tip: Add Trust Seals
Adding trust badges to your site and/or checkout can go a long way to improving the impression of your brand and build the trust you need as a newer entrepreneur to make those sales. Visit our Quick Guide to Trust Badges post for a step-by-step guide to getting trust badged on your dropship store.
Dropshipping Tip 4: Look at the Numbers
When choosing a specific product, you will want to ensure that it’s at the right price point for the service you will be getting, that is has marketing potential, its profit capabilities, and that it is something not easily found in the areas you are selling in. To do that you’ll want to look at these two calculations
- Sales Revenue – Cost of Goods = Gross Profit
- (Gross Profit – Expenses) / Revenue = Profit Margin
The thing to remember, though, is not to underprice your products. Dropshipping allows you to get products at almost wholesale cost, meaning you should be pricing at or just below market value (depending on competition) in order to make a profit.
Dropshipping Tip 5: Rev Up Your Customer Service
As we learned in last week’s eCommerce marketing trends post, conversational commerce is so hot right now. It should be no surprise that customer service is a dropshipper’s best friend. It allows you to successfully beat eCommerce competition in your niche, including big guys like Amazon.
Making customers feel valued, respected and important not only pushes sales but grows your lifetime customer base. When it comes to customer service for dropshipping stores, it is important that they understand that you are responsible, that your customers’ wants and needs are important and that their happiness is your number-one priority.
Dropshipping Tip 6: How to Handle Returns
Return handling is a customer service complication that can arise with dropshipping that can have a big impact on overall customer satisfaction. As a dropshipper, you have a few more logistics to iron out here, such as whether customers return items to you or your vendor. The advantages of receiving returns yourself is that this will allow you to offer better customer service. The disadvantages include the logistics of receiving, storing and then reselling returned items.
Suppliers that allow you have returns go directly to them means you don’t need to storage space and it takes the ‘work’ out of it. However, having returns sent to a third party could have the following risks:
- They could reject returns if the items and packaging are not in perfect condition.
- They may charge restocking fees.
- They may have complicated return instructions that are not easy for your customers to understand.
Dropshipping Tip 7: Automate
Automate your dropshipping business as much as possible. Sure, some dropshipping apps will handle a lot of the automation for you, but there are still cracks you will need to cover such as your PPC campaigns, Google, social media, marketing, blog content, etc. By automating what you can when you can, you will be able to live your entrepreneur dreams and start your business before you “screw your 9-5 job.” Here are some top dropshipping automation apps worth considering:
AdWords Automation with Traffic Booster
Take all the hassle out of pulling AdWords traffic with Traffic Booster.
Inventory Management Automation with Orbelo
Orbelo allows you to easily add hundreds of products to your Shopify store and never worry about packaging or shipping.
Social Media Automation with Social Autopilot
Social Autopilot will save you time by automatically posting new products to Twitter and Pinterest as well as generating tons of great content for your social media followers.
Dropshipping Tip 8: Be a Marketing Expert
The big advantage of dropshipping is that it frees up a lot of time. Time that should be used in upping your marketing game and becoming a master at using advertising to drive traffic to your store. The marketing channels you will want to study up on for max success include:
- Google AdWords
- Facebook and Instagram Ads
- Pinterest Ads
It is just not just ads that you should be working on; every part of your sales funnel is a marketing opportunity that could be missed. Things such as using your checkout to upsell or your confirmation emails to elicit brand trust, all have a place in your marketing strategy.
Pro Tip: Run Awesome Promotions
Offers and promotions are a great marketing tick. From bundle deals to VIP sign-up discounts, promotions go a long way in improving your marketing ROIs and increase motivation to buy on your site.
Dropshipping Tip 9: Keep an Eye on the Competition
As you venture into your new enterprise, keep an eye on your current and emerging competition for fresh ideas, to see where they are advertising, or their social media messaging. The bottom line: You can learn a bucketload from your competition. Following your competition can help you with future product ideas, positioning, branding and pricing. It will also give you key insights into your potential audience and what they respond to, and turn you into an even better seller and marketer.
Now it’s time to get selling. Don’t forget to check out our 31 Dropshipping Resources to Grow Your Business Faster for some great growth hacks. If you have questions, need advice or have something to offer fellow dropship entrepreneurs, post them in the comments below.
Author : Nicole Blanckenberg
eCommerce strategist and content Guru, Nicole is a content writer at StoreYa and other leading eCommerce blogs with over 15 years experience. She runs on a healthy dose of caffeine and enthusiasm. When she’s not researching the next content trend, consulting on blogs or creating informative small business content, she’s an avid beach goer and coffee shop junkie. Visit her Facebook Group: eCommerce Entrepreneurs.