Hello E-commerce Friends,
With the advancement in the E-commerce industry, dropshipping is rising as a successful business model for new and budding entrepreneurs. It is a low-cost, low maintenance, and low-risk business that helps you earn revenue without even maintaining an inventory.
With this article, we will walk you through what exactly is dropshipping, how it works and the dos and don’ts of dropshipping to avoid any pitfalls.
What is Dropshipping?
Dropshipping allows online sellers to sell products without owning an inventory. Instead, the shipping is also handled by a third-party supplier or wholesaler. You need not worry about storing, packaging, and shipping products.
How Dropshipping Works?
- You build a relationship with any third-party supplier like a wholesaler or manufacturer who bears products that you want to sell.
- You can sell these products on your online store or marketplace.
- When a customer places an order, you send a notification to the supplier.
- You have to pay the wholesale price of that product to the supplier.
- The supplier then ships the product to the customer.
The best thing about dropshipping is, the supplier is invisible to the customer and it seems you have shipped the product to the customer.
Why Dropshipping?
Dropshipping is a business model that is low cost, easy to set up, and automated. Here are a few key ways to get a clear idea about the importance of dropshipping.
- Low Risk: You only have to pay for the product that too, wholesale value. There is no risk of managing inventory and shipping of products.
- Low Cost: No cost for inventory and shipping. You just pay the wholesale price of the product and charge the market price, thus running a profitable business.
- Easy to Launch: As there is no requirement for inventory and shipping, it can be started quickly without any hassle.
- Sell from Anywhere: You can sell products with drop shipping anywhere. You just need a laptop and internet connection with which you can manage your online store and connect with the supplier.
Best 7 Tips For Dropshipping Entrepreneurs Need to Know (With Do’s & Don’ts)
Product Search
The success of dropshipping depends on the product you choose for selling. It affects the market size, shipping costs, and profit margin.
Do – Select products that are high in demand. Research about the products customers are looking for. Examine the marketing of products you will be selling.
Don’t – Do not just pick a product that you like. It is important to research the profitability and whether the product will meet your business goals.
Supplier Audit
There are plenty of suppliers available to choose from in the category of apparel, shoes, electronics, jewelry, and more. The challenge is to find the right supplier who is attentive and not just fake as a wholesaler.
Do – Make sure you examine your supplier before choosing them. They must have a healthy business, positive reviews, and can fulfill your demands. You can also work with multiple suppliers to never short the product supply.
Don’t – Be sure about the availability of the product from the supplier before marketing them or putting it up on your online store. Don’t be with plenty of orders but no product. This will lead to loss of sales, poor customer experience, and unfulfilled orders.
Financial Process
You need to keep an eye on whether the supplier received the order, whether the product is shipped and whether the amount charged is correct.
Do – Consider how you will coordinate with the supplier for orders and shipping. And as your business grows you should consider using software to automate the process.
Don’t – You must not just rely only on email and phone calls for the fulfillment of orders. Your customers will even suffer if orders are not completed by suppliers.
Various Marketplace
Most of the successful dropshipping merchants are because they are multichannel merchants. Selling at more than one location can help you achieve your business goals.
Do – Sell your products at more than one place in order to widen your sales. A product may be sold with more price at one website compared to another.
Don’t – Limiting yourself to one venue results in missing customers who are searching for the same product you sell but at a different marketplace.
Customer Service
Customers are always anxious about placing orders, especially with the less popular sites. So building the trust of customers is very necessary.
Do – Let the customers be informed about what’s going on with their orders. Answer customer calls and queries promptly.
Don’t – You must not ignore the customer feedback and needs. Even if your competitor has lesser-priced products than yours, you must not miss the opportunity to build the trust of customers for you.
Product Details
The product descriptions and photographs matter a lot for the quality of your product listings. Unique photos and descriptions draw attention.
Do – Ask for a sample of a product from the manufacturer. Take the photographs yourself and write unique descriptions about the product.
Don’t – Do not simply copy the photo and description of the manufacturers. This is what everyone does and gets lost in the crowd.
Product Awareness
Being aware of the product you sell is very important. Being an expert in the product you sell, helps in high-profit margins, write appealing product descriptions, and know more about what the customer wants. When it comes to a dropshipping business, you should choose something that sells.
Do – Consider your personal experiences here. From that find out what you learn from them that most sellers are not aware of.
Don’t – Never sell products that are out of your knowledge. Lack of awareness about the product will result in bad offerings and reduced sales.
Final Words:
Dropshipping is like golf and fishing, you get success after several trials and errors. There may be missteps and disappointments on the way. But with these Dos and Don’ts the chance of successful dropshipping increases.
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