Many people turn away from starting an online store because of the initial startup costs. But imagine if someone offered to pay your upfront inventory costs on thousands of items and manage all your shipping and fulfillment operations for you. Well, it’d be much easier to get started and you could run your business from anywhere in the world. Sound too good to be true? Well, it’s not. If you know about drop shipping business.
In this blog post, I’m going to explain exactly how dropshipping works. Show you how to find drop shippers for your products and give solutions to some common problems associated with drop shipping. All right, let’s dive in.
What Is Dropshipping?
Dropshipping is a retail method in which you don’t keep your own products in stock. Instead, you partner with a wholesale supplier that stocks its own inventory. You transfer customer orders and shipment details to them and they ship the goods directly to the customer.
The biggest benefit of drop shipping business model is you don’t have to worry about fulfillment or inventory issues. Also, most customers don’t know your dropshipping. Since private label shipping lets you ship from the wholesaler with a return address and invoice customized to your eCommerce store.
Here are the four main benefits of choosing to start a dropshipping business.
- You Don’t Need Buckets Of Money – Dropshipping business makes it amazingly easy to get started selling online. You don’t need to invest heavily in inventory yet. , ou can offer thousands of items to your customers.
- Convenience And Efficiency – Successfully launching and growing an eCommerce business takes a lot of work, especially with limited resources. Not Having to worry about fulfillment is incredibly convenient and frees up your time to focus on marketing, customer service, and operations.
- Mobility Of The Business – With all the physical fulfillment issues handled, you’re free to run your business anywhere you can get an internet connection.
- It’s A Trusted Model – You might be thinking that this sounds like some sketchy fly by night model, but it’s not. Plenty of online stores and even major retailers use drop shipping as a way to offer a wider variety of products to their customers without having to deal with increased inventory hassles.
How to Find Dropshipping Suppliers
Well, first off in the United States, most suppliers will ask you for Your Business EIN number and a copy of your state sales tax or resale certificate. So you may want to consider having your legal documents in a row before contacting suppliers. However, this isn’t always the case, so there’s no reason why you can’t start contacting drop shipping business suppliers immediately.
Now, if you already know what products you’d like to drop ship, contacting the original manufacturer is the easiest way to find qualified distributors. Unfortunately, the market is littered with scams and low-quality information.
If you do decide to invest in a directory, we recommend the paid directory worldwide brands as a reputable source to find dropshipping wholesalers. However, it’s still very important to exercise caution. Additionally, if you’re using Shopify, you can access a variety of apps in their app store, which will connect you directly with reputable drop shippers.
Finding Dropshipping Suppliers Through Google Search
Google can also be an effective tool to find drop shippers, but you need to keep a few things in mind. Here are a few tips you can use to find a wholesaler through Google.
The first thing you’ll want to do is search extensively. Wholesalers and drop shippers are notoriously bad at SEO and marketing and usually aren’t going to pop up on the first page of Google for a term like a handbag wholesaler.
Instead, you’ll need to dig deep into the search results, often going through 10 or 20 pages of listings. Additionally, you should use lots of modifiers as you hunt for suppliers. Don’t stop with a search for wholesale. Make sure to use other terms including distributor, reseller, bulk warehouse, and supplier.
It’s also important to note that suppliers also tend to have outdated late nineties era websites, so don’t be scared away by abysmal design and layout. While a sleek modern site could signal a great supplier. A low-quality one doesn’t necessarily indicate a bad one.
Challenges & Disadvantages Of Dropshipping Business
Now, despite our glowing recommendation, dropshipping isn’t e-commerce nirvana. Like all models, it has its challenges and downsides, which we’ll quickly go over.
1. There’ll Be Lots Of Competition And Weaker Margins.
Its true, products that can be drop-shipped will often spawn a lot of competition. Usually, this leads to cut-throat pricing and diminishing profit margins. Making it hard to build a viable business to be successful, you typically can’t compete on price.
Instead, you’ll have to offer value in a different way. Usually through top-notch product education, service or selection.
2. Sinking Inventory Is Difficult And Leads To Out Of Stock Items
The best way to mitigate this problem is by working with multiple suppliers with overlapping product lines. It’s inherently dangerous to rely on a single supplier. Having two suppliers doubles the likelihood that you’ll have an item in stock and available for shipment.
Many sophisticated suppliers offer realtime product feed and you can use services like e-com hub to easily sync your Shopify website with the warehouse. Eventually, you’ll sell a customer and out of stock item. Instead of canceling the order, offer the customer an upgraded product or discount.
You might not make much if any money on the order, but you’ll likely build a loyal brand advocate.
3. It’s Hard To Sell Products You Never See
It’s hard to sell products you never see, however, in today’s world, it’s possible to become an expert in just about everything through information. Online. Selling products from manufacturers with detailed websites will allow you to become intimately familiar with the product line, without ever having touched a physical item.
And when you do need to answer a specific question about a product, a quick call to your manufacturer or supplier, we’ll give you just the answer you need. You can also buy your most popular items to get acquainted with them and then resell them as used or refurbished. Often recouping most of your investment.
4. Third-Party Heirs
Involving a third party will result in more fulfillment, errors, mistakes, and logistical problems. Even the best drop shippers make occasional mistakes and mediocre ones will make a lot of them. Suppliers are fairly good about paying to remedy problems, but when they’re not, you need to be willing to spend what’s necessary to resolve the issue for your customer.
If you try to blame your supplier for the fulfillment, you’ll come off as amateurish and unprofessional. Similarly, if you’re unwilling to ship out a cheap replacement part to a customer because the supplier won’t cover the cost, your reputation is going to suffer.
One of the costs of drop shipping convenience is the expense of remedying logistical problems. If you accept it as a cost of doing business and remember to put your customer first, it shouldn’t be a longterm issue.
Is Drop Shipping The Path To Overnight eCommerce Success?
Of course, not like any successful online store, you’ll need to invest over time in an equality website, marketing, and customer service. But drop shipping does provide an easy way to get started and the ability to leverage other people’s capital without having to invest thousands of your own. When managed correctly, it can form the foundation of your own successful online store.
How To Build A Store For Dropshipping Business
The best eCommerce platform you can use to build your own dropshipping business store is Shopify. It’s the most popular eCom platform that almost every drop shipper is using.
Watch the video below for the complete detailed tutorial on how you can build your own dropshipping store. It’s not my video, but I think it’s the best tutorial that I found on the internet. The video is from WholesaleTed.
Dropshipping Tips For Beginners
Dropshipping business is a great business model. It’s low risk, low cost, easy to start up and highly automated. But if you’re brand new to entrepreneurship, there’s still quite a bit to learn. Here the 14 different tips for when you’re brand new to dropshipping.
1. Focus On Mastering Marketing
With so many aspects of dropshipping is automated, you’ll have more time to focus on marketing. Sure, tweaking your website, designing logos and creating graphics is a lot of fun. But if you’re not actively working on getting the right products in front of the right people at the right time, all that time spent making the perfect website, we’ll go to waste.
A beautiful website with no visitors is like a tree falls in the woods scenario where if nobody really sees it, does it really even exist? Don’t get me wrong. Design is important, but if you’re also not focused on getting your beautiful website in front of the right people, you’re never gonna make any sales. That’s why you also need to invest in driving traffic.
That could mean through paid ads, SEO, social media, video marketing, or partnering with influencers. Honestly, there are a ton of different marketing strategies and tactics you can try, but I always advise to new marketers to focus on a small handful of techniques that come the most naturally to you.
2. Create Compelling Offers
Do you know what I love about online shopping? Sales. Do you know what I like even better? Bundled deals on complimentary products. Because dropshipping business can be highly competitive, really think about how you can make buying from you and building a relationship with you even more enticing.
This could mean anything from selectively offering, buy one, get one half off deals, bundling multiple complementary items at a discounted rate to offering significant discounts to your visitors first purchase if they register for an account.
Look at your offer from your visitor’s perspective and ask what’s in it for me? If the offer is objectively good or amazing, you should really try to rethink it. By making offers that are difficult to ignore, you stand a much better chance of converting more of the traffic your driving.
3. Avoid Underpricing Your Products
Now I know this might sound counter to the previous tip, but avoid bracing to the bottom on price just to remain competitive. Offering a lower overall cost on bundle products or through “buy one get one half off deals” is not the same as selling your entire inventory at just above costs.
This is a massive mistake I see new eCommerce entrepreneurs make all the time where they’re not making any sales and suddenly everything in their store is severely discounted. Offering everything at rock bottom prices can have a massive negative impact on your brand and can make the brand field cheap.
If you’re not making sales, don’t jump to assuming it’s your prices that are holding you back. Instead, reevaluate how you’re driving traffic and the offers you’re making. It’s better to find new ways to drive traffic than it is to slash prices because first, it’s hard to raise them again and second, you still have to pay the bills.
4. Remove Bad Suppliers Quickly
While most Aliexpress suppliers are easy to work with, reliable and offer good products, sometimes a bad apple or two can slip through. With thousands of Alieexpress suppliers, you can easily replace a bad supplier.
Many suppliers will sell similar products, allowing you to sometimes even sell the exact same product, but from another manufacturer. If you notice suppliers don’t use the shipping delivery method you’ve chosen or consistently shipped faulty products, then you can easily remove their products from your store.
Again, though this isn’t very common, suppliers know that by offering quality service, you’ll continue bringing them more sales. Also if you want to minimize your chances of partnering with a bad supplier, checkout Oberlo supply, which is a network of pre-screened suppliers they work with that are consistent with their quality support and service.
5. Automate As Much Of Your Business As Possible
With drop shipping tools like Oberlo, many aspects of your dropshipping business will already be automated for you. But there is always room to take more off your plate, tools like kit can help you automate tasks like advertising, retargeting emails, and more.
While other tools like buffer can help you schedule your social media postings. Tools like Zapier can help you connect your Shopify store to other tools like QuickBooks for bookkeeping, Google sheets for order backups and Hubspot for customer relationship management.
6. Make Sure Your Website Is Presentable
You would be shocked to see how many entrepreneurs launched their drop shipping website with missing images, placeholder texts, and no discernible categorization to their products. Unfortunately, when you’re sending traffic to a website that can’t be navigated or just looks bad, it reeks of unprofessionalism in immediately diminishes the trust and credibility of your brand.
Before launching your store, take a look at other websites in your niche. What does their homepage look like? What is the format of the copy on their product pages? Do their images include logos on them? What types of pages does their website have? Which features or apps does the store include on their website?
After taking notes on the look and layout of different stores in your niche, browse to the Shopify app store to find the apps that will mimic the most common functionalities you found in your research. Product reviews rating in email capture is among the most common features of any e-commerce store. You can also add pages to feature your refund policies, FAQ, shipping information, and more.
7. General Store Versus Niche Store
While a lot of advice out there, we’ll tell you to start with a niche store. The truth is sometimes you don’t want to sell just one type of thing. In reality, general stores, while they can be a lot more work between keeping products organized and categorized and marketing to different demographics are great starter stores as they force you to think more broadly.
On the other hand, if you want to put more work into researching and validating a niche, a niche store can allow you to narrow in and finding marketing to the right audience. The running niche would be a great example of a niche within the fitness vertical.
While there’s still a ton of competition for running gear and assessors, it’s not nearly as broad as if you were to sell a wide variety of fitness gear. This really all boils down to one question. What do you have the tolerance for? If you can answer that honestly and are confident you can drive traffic, you’ll be all set.
8. Be Prepared To Pivot Fast
There are all sorts of unexpected challenges and adversity that will come up, because, at the end of the day, you’re running a business.
A supplier may stop carrying a product, a new treadmill emerge suddenly your customers may hate a product you’ve added to the store or one of your ads may be scaling really well and you’ll need to take out a loan to continue supporting that growth.
It’s aren’t really good or bad, but they do require you to be flexible and decisive when the moment is necessary.
9. Offer Exceptional Customer Service
There are ways to stand out when you’re selling similar products to other companies. While you may think that offering refunds and responding to inquiries is the role of customer service, that’s really just where the job begins.
Tell jokes, write thank you cards, send surprises and go out of your way to make them feel special. Like the poet Maya Angelou said, people will forget what you said, people will forget what you did, but people will never forget how you made them feel.
10. Use Data To Inform Your Inventory
Be picky about the products you add to your store. Don’t just add products because they look nice or you’d like it for yourself. Look at the data, are these products getting positive sales and feedback.
When evaluating products from your supplier, check the order volume reviews, customer photos, and seller ratings to ensure you are partnering with a trustworthy supplier.
11. Always Choose ePacket Shipping Carrier
As a drop shipper, you’re free to sort products based on each package shipping. Since ePacket shipping is the fastest affordable shipping method. You’ll be able to ensure quick delivery to your customers without breaking the bank.
On average, ePacket shipping costs under $5 for most products and will make sure your customers get your products between seven to 20 business days and often much faster.
12. Be Active Daily
Dropshipping business isn’t an automated business and there is no overnight success. While you likely won’t need to put in eight hours a day, you do need to spend at least one hour a day to grow your online business.
Each day you’ll need to process orders, respond to customer inquiries properly, drive traffic in. Generally, just make sure everything’s running smoothly.
This is not a build it and they will come scenario and it requires work every single day to make sure the business is running well.
13. Import 10 To 25 Product Items To Start
Here’s the problem for you, in your excitement you start a dropshipping business and you’ve imported 600 items to your store. What a great selection you have now, right?
But then once you look at your store, you realize that 600 product descriptions, you need to write, 600 titles you need to rewrite, a billion tags you need to add and 3000 photos at least you need to call them through to see which ones you’ll have to crop supplier logos out of.
What do you do? Most people, just give up. Nevermind, this wasn’t for me this is too much work, I quit. It’s much easier to start with a collection of 10 to 25 products. That way you can more easily manage the workload, especially if you’re doing this on your own and after a day at your nine to five job.
14. Monitor Your Competition
Here’s a suggestion for you, start a spreadsheet and include links to all of your primary competitors, websites, social media accounts, and wherever else they’re selling online. Sign up for their email list and heck maybe even by some of their products.
Once a week check in on how they’re positioning their products, what they’re in their emails, and what kinds of sales they’re running and how they’re retargeting their ads.
This kind of low-level competition monitoring, we’ll provide you with some insight into how they’re running their business and can help expose holes in their strategies. It may also teach you some very valuable lessons along the way.
I think that’s all I have for you guys today, I hope you got something on this blog post right here.
Also just wanna let you know that I’m actually offering services, like building websites for your businesses or build your Shopify store for a very minimal amount of charge, in case you need.