5 Clever Dropshipping Tips for Online Sellers
Dropshipping as a business model has gained popularity in recent years as a cost-effective approach where aspiring sellers can concentrate more on their website and marketing instead of worrying about the hassles of inventory management and order fulfillment.
Dropshipping allows retailers to sell products without having to hold a single piece of inventory. Here, the customer places an order on the seller’s store. The order details are sent to the supplier who is then responsible for picking, packing and shipping the order to the customer’s doorstep. During the entire process, the seller does not come in contact with the products at all.
Don’t be misled by this simple definition. Dropshipping requires more work than it seems and it can be an intimidating endeavor for aspiring retailers. So here are some tips to succeed in establishing a dropshipping business.
1. Find your Niche
If you’re just venturing into the world of e-commerce, then narrowing your focus is a good move. Most importantly, select a niche that you’re passionate about. Sell products that actually interest you on a personal level. Dropshippers who genuinely care about what they are selling are more likely to be successful. On the other hand, if you’re simply out there trying to test a few products then a general store would be a more practical choice. There are factors that you can take into consideration when selecting your niche-
- Sell something that isn’t available easily- make sure your products are exclusive and customers don’t find them at any or many shops. That way you become attractive to customers who are looking for that particular product
- Low shipping cost- if shipping costs are too high, you are more likely to drive customers away. Although the supplier will handle the shipping, finding products with low shipping costs are better since you can even offer free shipping to customers to draw more sales.
- People should reach your product- here you will need to do a good amount of social media and keyword analysis to make sure your audience actually able to reach you on searching for your product.
2. Supplier Support
The relationship you have with your supplier can make or break your business. For dropshippers who are located overseas or operating distantly, communication with suppliers becomes extremely important. You and your supplier must understand each other and response time should be swift between both parties.
Before you select your supplier, do a thorough background check on the suppliers, their credibility, reviews and type of products they sell. Ask for product samples, pricing strategy, shipping policies and finalize.
On the other hand, don’t depend only on a single supplier completely. Due to the ever-changing demands of e-commerce, sometimes reliable and established suppliers are forced to go out of business, which will leave you hanging in the balance. Other times, they could stop selling the products you need.
Whatever the reason may be, if you aren’t absolutely sure about your suppliers, then continue with your search, but don’t compromise.
You might even try to look for exclusive suppliers, who could be a manufacturer or retailer on their own but supply only for you. It is a tough task, though doable. This will add more exclusivity to your offering.
3. Establish Yourself as a Brand
Almost 90% of dropshippers don’t have their own brand identity. They seem all the same and don’t give customers any special reason to buy from them. Brand building is a challenging process, an area where most dropshippers fail.
To be successful at dropshipping, creating a brand is important as that is what will set retailers apart from each other.
Branding for dropshipping basically entails how sellers present themselves. Write relevant product descriptions that reflect the tone, look, and feel of your niche. Create branding collaterals- logos, badges, pictures, packing materials & bags etc. Provide these to the supplier to use when shipping orders. Build trust and loyalty among customers and increase brand awareness through regular social media posts. Send ‘thank you’ brand emails to your customers. Take feedback.
4. Automate Dropshipping Tasks
The more you automate your dropshipping business, the easier and profitable it will become. Since your supplier must be dealing with other retailers or dropshippers too, just the same way you have multiple suppliers, you will need a unified platform where you can store all supplier-related data which allows a smooth and transparent exchange of data between all the parties involved. For this, you need a reliable inventory management software so you can raise purchases with your supplier in just a few clicks, and they too can receive order details in a hassle-free way. Not just that, you also need a system to be able to sync and update your stock in real-time between your suppliers, your website as well as selling channels. Actual stock is ‘M’, but it is still showing ’N’ on your website — It doesn’t work this way. Beware. An inventory management system brings in discipline into your business.
5. Return management
Just like any other business, dropshipping also poses a few problems such as managing returns and refunds. However, these issues can be slightly more tricky in a dropshipping business as compared to simple e-commerce selling model. One of the major drawbacks is that sellers don’t have direct control over their inventory. Now the customer does not know the seller is drop-shipping, so any delayed deliveries, out-of-stock situations or customer complaints are solely the seller’s responsibility.
Nevertheless, planning for such emergencies in advance is possible. There should be a strict return policy between the retailer and the suppliers he/she is working with. As each supplier is different, know their policies individually and try to formulate a return policy fair to both sides. A few things to keep in mind-
- Don’t go beyond their time-frame for returns- For example, if your supplier has a 14-day return policy, you give customer 10 days. This is to ensure both you and the customer get some extra time in case of delayed shipments or either of you forgetting to return the item.
- For multiple suppliers, try to include all their policies under your policy- If you have different suppliers for different products, and both give different returns, you can give them both the same number of days for returns.
- Don’t mention a return address- You can share a contact number or email id and ask the customer to contact you directly. You can also decide whether you want to give the supplier’s address as your own on the store.
Summing up
Dropshipping has a high-profit potential with less or no inventory investment for the seller. This could also be an ideal business model for retailers who are just looking to try their hand at online selling initially. Or could be a long-term volume business model too. Or it also works amazingly when you want to reach a larger audience across the sea, sitting on your armchair.
