“Dropshipping! Drop Shipping! Take a step forward! Enjoy your liberty as an business owner . take a break near the ocean and manage your entire business remotely with minimal effort!” This is likely to be the way a snake oil salesman could be like if they ever advocate drops delivery…
While putting the preaching aside is something else you need to be aware of before you plunge into drop-shipping to build your entire business around drop shipping.
In this comprehensive guide, we’ll discuss all aspects as well as of dropping shipping in a model for business that you must know about should you be considering it as a option for you.
Dropshipping Guide: Table of Contents:
- Chapter 1: What’s drop shipping? (dropshipping definition) (overview)
- Chapter 2 Pros and Cons of drop-shipping
- Chapter 3 Does drop shipping work suitable for you?
- Chapter 4: Choosing your market, niche, and locating suppliers
- Chapter 5 Don’t focus on products, think about ways you can create value
- Chapter 6: Setting up a website created for drop-shipping
- Chapter 7 The Marketing of your Store
- Chapter #8 How to manage returns and shipping
If you’re searching for Dropshipping Companies you should check out our article on Top Dropshipping Companies.
Chapter 1: What exactly does drop-shipping mean (dropshipping meaning)? (overview)
Drop shipping may sound straightforward at first glance. It involves creating your own online store and then contacting companies that will accept your orders and then ship the items to the customers. It’s not exactly the same as fulfillment for online stores.
It’s made so that you don’t need to store any inventory and you don’t need to worry about logistics or shipping costs.
Sounds good, right? But, wait a minute.
Here’s the exact way to do it:
Drop shipping scenarios:
- (1) The client is the one who pays for the product.
- (2) After you receive the payment from the customer, make payment to the vendor in order to complete the order.
- (3) 3. The seller then delivers the finished product directly to the buyer.
In the classical model of commerce:
- (1) The materials or elements in the final product through the seller Plus at this point, you have to pay the supplier.
- (2) The client buys the item from you.
- (3) You deliver the product to the buyer.
As you can see, the main important distinction from drop shipping and traditional method of operation is that you don’t have any inventory of the product. Instead, you make payments after the client has provided you with the funds for the purchase.
Drop shipping is one of the only business models that don’t have to pay before the client actually pays you and this reduces the amount of your risk.
Chapter 2: Pros and cons of Dropshipping
|Drop-shipping Pros and pros and|
|Potential for earning with an entry barrier that is low.||You outsource a large portion of your satisfaction with customers. A different company builds and delivers the product. This is only a small component of the overall experience. If anything goes wrong at your vendor, your customer will blame you for it. In general, you’ll have less control over quality because you aren’t able to see or utilize the product before it is delivered to the buyer.|
|Location-independent (for the vast majority). For small-scale, one-person companies generally, you will need just access to the Internet.||It’s more likely that you encounter copycats, people who are trying to replicate exactly the same thing as you do.|
|A smaller amount of capital is required to begin the investment. Drop shipping means that you aren’t manufacturing anything on your own and don’t have to purchase inventory equipment, materials or anything else that is that is required to get a product made.||Returns can be a challenge. Based on the contract that you’ve made with suppliers clients may be required to return the items to you, and you will have to manage the return or complaint process on your own. During this time, keeping the customer content can be difficult.|
|You purchase from your suppliers after you’ve earned your purchase.||You lose control over shipping quality/speed. If you are in a business that requires you to take care of every aspect from start to finish, you have control over (nearly) every aspect. This includes everything that is connected to shipping. When you operate a drop shipping company in essence it is shipping is a part of the business that’s out of your control. shipping aspect is out of your control.|
|It’s much easier to expand your business. Simply put for a drop-shipping company, increasing your sales volume isn’t as much a factor in boosting your operating or product costs. Your suppliers are doing the heavy lifting for you in that area … but with one caveat. More on that in the cell >>>||As you expand, more sales mean more support for your customers. This is one aspect you’ll never be able to avoid. If fulfillment is managed by your suppliers customer service still falls on your side. It’s just math. Although selling 100 items versus 10 products won’t be more expensive for you, the support of 100 customers instead of 10 is.|
|Lower overhead. There’s:
|It’s easier to pivot or change direction. If your current drop-shipping business model isn’t working so well, it’s much easier to switch directions and start offering something different. Compare this with the conventional method … in which case you’ll need to purchase new tools such as materials, equipment, processes and so on.|
Action Tip 1:
Take a look at the list of cons and pros above and then think about what you think about each of them. Are any of them an eye-opener or game-changer for you? It is important to understand some things about your personality and how you work to the drop shipping business model. Making your mind up and an understanding of what the significance of the pros and cons can help you determine if drop shipping is the right choice suitable for you. This will be the subject of in the following chapter.
Chapter 3: Do you think drop shipping is right an option for you?
The first real answer you must provide yourself is whether drop-shipping can be something that you ought to actually consider doing but not so much when it’s something you are able to accomplish. It is important to think about every aspect of the advantages and disadvantages and then determine if the business model aligns with your goals, vision and market/niche.
For help with this, let’s begin with the most frequently-repeated myths that are prevalent in the world of drop shipping … which is most likely the root cause of the failure of a lot of drop-shipping businesses.
What is drop shipping?
Let’s get this straight. Contrary to what the fictional snake oil salesman has told you drop shipping is not about doing nothing when you’re sitting at the shore. Not at all!
“Drop shipping = easy money” is a completely wrong perspective.
Consider it in this in this way:
Drop shipping is mostly concerned with outsourcing the most awkward aspects of manufacturing and selling the product.
In a case like this you’re letting the pros deal with what you’re not a pro at, or aren’t able to do yourself with a reasonable price.
To provide an example and it’s one of the frequent examples in this tutorial since it’s easy to understand If you’re looking to market designer t-shirts however, you’re not sure what to do, there are two choices:
- (a) Learn to sew or find someone who is able to.
- (b) outsource the entire process of production to someone who has mastered the process and manage other aspects of your business.
The business remains yours and you’re the one who runs everything. The only change is that instead of managing everything in-house, you’re outsourcing product development/assembly as well as delivery of orders.
Drop shipping may seem like an amazing idea when you think about it but to fully benefit from it, you need to find your place on the market, and select a niche will be a great fit.
This may not be so simple as you’d think.
Action Tip 2:
What do you think could be your most difficult issues with regard to the difficulties of drop shipping? List your top five concerns. The list of concerns will allow you to determine whether they’re significant enough to keep you from experimenting with drop-shipping within your business.
Chapter 4: Selecting your market, niche and finding suppliers
Another misconception regarding Drop shipping, is the notion that you could begin in any field you can think of, and be able to become profitable, regardless of previous experiences.
Remember that regardless of the market you enter you will encounter several competitors. Competitors who have more experience than you, who could have been operating in this industry for some time and may have an understanding of their customers’ demands.
Even though your initial costs aren’t too high because of drop shipping does not mean you’ll have the ability to compete against them successfully.
This is the reason why you should choose an area that you are familiar with and are knowledgeable about. This gives you additional advantages over your others who may not have done as much effort in research or personal experience.
But don’t be fooled, you don’t need to have the seller’s expertise in the field however, the following information could be helpful:
- you’re a customer in that market – you’ve bought many products within this niche, and know what’s good and bad about them, and the best way to improve them;
- You have academic or professional experience – you’ve received training in this specific field that allows you to work on it at an elevated level
- You’ve already conducted research in this niche, even if it’s just with your family and friends it’s important that you’ve got an initial knowledge of the group;
- You’ve seen other companies that are in this industry fluctuate and decline, you’ve seen the mistakes made and how to avoid them.
- and so on.
A basic understanding of the market can help you stand out and meet the needs of the needs of your clients better but is crucial when working with suppliers who deliver items directly to customers.
If you don’t have any understanding of the field, you will not be able to spot any flaws in the product’s quality and the procedure, the price, or anything else related (read that you’ll be unable to succeed).
How do you locate drop shippers / suppliers?
This is the case for all industries, but more so with drop shipping. Finding reliable suppliers is essential for your business’s success.
I’ll repeat it again … the finding of reliable suppliers is essential for your business’s success.
Let’s go back for a moment. If you are working in the traditional way – in which you keep inventory – and mess some thing up, then at the very least, you’re able to rectify the issue and offer things right for your clients. In the end, you are in control of the whole procedure.
In the drop shipping model, if the products that you send to your customers are not up to par, then it’s all over for you. Since everything is dependent on your suppliers, you can’t simply fix the problem. The only option is locate new suppliers. But, it’s not always feasible in a hurry and your brand’s image could suffer as a result.
This is why working with the most reliable suppliers is crucial.
Okay, now how do I locate those suppliers:
Thinking locally is my first suggestion, simply because it’s the most feasible solution and in most instances it helps keep contact with the vendor simpler.
Specialized drop-shopping companies that are available on the internet are great for finding vendors with lower rates or to discover specific products that do not be found in your region We’ll get more information about them in less than one minute. However, they may not be the best selection for the market you’re in.
Infrequently, but often you will discover local vendors who are willing to deliver their products to your customers, if you engage them in a conversation and give them a fair price.
There’s a bakery located in my area, which has over time has evolved into the function of a drop-shipping supplier. They started by making amazing cakes and selling the cakes to local cafes in which they sold them per piece (standard method).
The cafes realized that their customers were raving about the cakes so much, they began asking how they could get the whole cakes. Thus, the cafes began taking orders from their customers and then sending them for the bakery.
In that scenario cafes take the order, receive the payment from the client Then, they purchase cakes from bakeries and the bakery then delivers the cake to the customer’s doorstep. Drop shipping is a classic method of delivery.
This is only one example that may not be appropriate for your specific circumstances however I hope that you’ll be able to realize how the options are limitless for local businesses.
The best way to start is to think about the best way to arrange an arrangement with a local company and let them sell their product to a larger market through the online shop.
Try online vendors
Another option to consider after you have exhausted all options local to you are the various online retailers.
The good news is that there are more than you could scratch a stick at. Aliexpress is the leader worldwide. Aliexpress provides one of the largest catalogs of Chinese suppliers. Similarly, platforms such as Salehoo or Oberlo do more than connect you to suppliers, but also offer additional benefits.
Salehoo offers great training tools, a support forum, and market research tools to assist in estimating profit margins as well as identify trends. Oberlo is on the other the other hand, is Shopify’s incorporated drop-shipping platform.
This is where you can discover some of our top drop shipping firms (suppliers along with software) which operate on the internet. However, don’t consider this to be the sole source of information, but instead make your own investigation. It’s a good place to start but it’s not the only way to go.
What to look out for when selecting suppliers
Wherever you are in search of suppliers, you must be aware of indicators that a company isn’t the best:
- Review online reviews and websites like Trustpilot , or Google. Check for negative reviews or comments regarding your suppliers.
- Be cautious of ongoing fees. Businesses that demand regular fees in exchange for the chance to work with them could be scams.
- Be sure to calculate your costs when it comes to minimal orders. You might find with larger suppliers.
Action Tip 3:
Create two lists:
- The first is for local businesses that could drop ship your products for you. There aren’t any requirements in this listing. Just 1-3 entries are enough.
- Another list is for drop shippers online that offer the products you require. Three entries would be amazing.
Check each list over and determine how you’re going reach out to these businesses.
Now that you have your suppliers in place you can begin thinking about what products you could provide. You may have an idea in mind … This is when the following step becomes important. Be sure to hold your seat.
Chapter 5: Stop thinking about of products, think about ways to increase value
Sorry to bring you bad news, but believing you can become a basic middle man isn’t going to work.
If you don’t bring value, you’ll fail.
“Wait, wait! Doesn’t this whole drop-shipping thing about finding someone else to complete the order once I have received the amount of payment? There’s no need to add anything more value to it is it? !” – You’re asking.
In actual of fact, there’s plenty of space.
Here are 4 approaches:
Method 1: “The Teenager Method”
One of the things teens want – as far as I can tell – is to be different from their peers or at the very least, be perceived as different (in positive terms but not necessarily in a positive way).
Translate this into drop-shipping … You should place the particular product that you’re selling in a way that is different from the rest of the market.
The objective is to make a mark and stand out even if it happens that another competitor begins employing the drop shipper.
If you don’t contribute value in any way, it’s impossible.
Let’s use Teespring as an illustration.
(Some might say the idea that Teespring is an affiliate-based business in which you’re simply marketing other people’s products however the distinction between drop shipping and affiliate isn’t always clear therefore let’s go to it for the sake of this article.)
Teespring is a website that people can go to if they need to buy cool T-shirts. The interesting thing is that it is driven by the community. Everyone is welcome to make their own t-shirts and then sell them. If someone buys Teespring, it’s Teespring that is responsible for taking care of the purchase.
If you are looking to make a sale using them the things you bring to the stage is your distinctive designs. Those unique designs are your added value. This is what makes you different and distinguishes one company from the other, even though they’re both using Teespring.
The most important thing is to present your product as unique and/or customizable. A lot of drop shipping companies permit these kinds of items.
Additionally, you must consider profits margins. The more personalization you add to your product – the greater of your effort you put into it is the greater your margins are likely to be. It’s not just the basic t-shirt example. The drop shipping of white T-shirts won’t leave much room for margins. However, t-shirts featuring original designs are available for 3x-10x what you’d pay of a plain t-shirt.
Method 2: “The Angle Grinder Method”
Offers should be focus on angles, not products-driven.
Let me give you an additional example to show what I am talking about.
It’s also going to be an extremely boring case that involves selling car insurance.
Today, any kind that of insurance could be classified as a virtual item which means that the consumer isn’t given a product they can keep. They simply receive an assurance. But, it’s an individual product by itself.
If you’re selling insurance for cars using a simple product-driven approach then you’re likely to promote your offer just like everybody elsewhere … “cheap, safe, reliable, no payout shenanigans, etc.” In essence, you’re focused solely on what you sell.
Another approach is to take this product as a generic one and attempt to identify an angle to use in promoting it.
For instance, you can examine all insurance plans, examine them thoroughly, and then make the plans which are best for performance cars that are tuned or car mod enthusiasts. The plans that you provide by your company would be tailored to a specific client those who love to speed and customize their vehicle.
In providing them with custom-made plans, you’re establishing an approach to a particular specialization. In the end, at all times, you’re offering similar products to those you compete with however, you’ve taken the time in determining what is most suitable for your clientele.
It is possible to do the same in a variety of areas.
Method 3: “The Cleanex Method”
The third option is to just clear all the confusion to help make things more clear in general.
A lot of sellers sell products which don’t have a clear objective or target market. Others have confusing user manuals and even unclear marketing materials, meaning that buyers don’t know what to do with the product, or even the reason to purchase.
It’s easy to make that easy to understand.
A few possibilities include:
- Promote the product using your own customized descriptions and other promotional materials.
- Create an “Getting Started Guide” for the product.
- Create an “Best Setup” package where you inform the client what is the most efficient method of setting up the product (while using technological tools like machinery, equipment, or vehicles, for instance).
- Provide additional support and service packages.
Method 4: “The Supplemental Offer”
This is applicable to you who already have an online store and are looking for ways to increase the range of products you sell.
Drop shipping is regarded as a viable option to increase the value of your offer.
An excellent place to start is to study the types of products your customers are most likely to purchase often. Then, find drop shippers who could offer products that are supplementary (products that complement what you sell).
So you can include more products in your inventory while at the same time do not need to make these products yourself.
Example: Selling customized exercise clothes? What about adding home exercise equipment.
Action Tip 4:
Which of these methods appear most effective for you?
Sort them from most likely to the least likely.
Review the entry #1 and think about specific suggestions on how you can bring it to life. What are you going to do? What will you do to add value? What do you plan to customize? Etc.
Final thoughts on the products
The end result is that your product is the primary component and is the key to distinguishing factor. Without quality products, you’ll never be able to get anywhere.
However, the message I’d like to leave with you is to not expect that you’ll win in the first go. All businesses – even drop shipping – requires many trials and trial and.
If you’ve got some ideas for particular product, you can simply implement. Place it on the market. Watch how the market reacts. Then improve. Then , repeat.
Chapter 6: Setting up a website created for drop-shipping
Okay, so all of the above was just something I would call preparation for launching an online drop-shipping business. Now comes the technical and website-related aspects.
The first thing you need is a website that can do the work. The website will assist you in a number of ways:
- This is where your customers can are able to see your products and purchase them.
- This is where you collect the payment from customers.
- It’s where you handle the orders.
- It’s where you configure the pipeline to send the orders to your suppliers.
- This is where your suppliers will contact you back, and inform you that your order has been completed.
In a nutshell it is that the website will drive the entire drop shipping industry.
And, before I start to scare you creating a top-quality site for this exact goal isn’t a problem anymore especially in the year of 2016.
It is not necessary to hire an architect or a “website pro.” You are able to do the majority of the work by yourself.
For example, Shopify has a excellent guide on drop shipping in addition, they’ve made evident that they’ve created an application that is designed to cater to people who drop-ship items. This means that you are able to join Shopify as a hosted site service. They can help you create and launch your drop-shipping website from beginning to end and without any technical difficulties.
To learn more about Shopify generally I’ll send you for our Shopify Review (updated in the year 2016).
Action Tip 5:
Chapter 7: Marketing Your Online Store
Making a successful online business using dropshipping isn’t only about finding the best suppliers and then listing your items on the internet. Most of the time you’re not able to list your item and expect that people will come across you, as they do on Amazon and eBay.
Dropshipping is best in the event that you know how to market the items that you sell on the internet. When you’ve discovered your perfect product and have created an online store that is a reflection of your brand, you’re now ready to market all the resources you have.
If you’re beginning with a modest budget and you don’t have lots of money to invest in making your business stand out, don’t be frightened. There are many ways to advertise your business which don’t cost a lot. Here are some suggestions to help you get started:
- Social media ads It is possible to spend thousands of dollars on social media ads however, you don’t have to do this. You can promote your dropshipping business through platforms such as Facebook with a costs small and focusing only on the people you are confident will be interested in your products. It’s recommended to concentrate on a narrow market for your store at first. If you are able to deliver internationally, it’s going cost less to partner with a dropshipping service within the country you and the company are located in. The smaller the area you want to target is, the less money you’ll invest in marketing and shipping.
- Retargeting advertisements If you’re operating having a tough time balancing your budget, retargeting advertisements are great for keeping expenses low, while in bringing customers to your business. Retargeting ads are effective in re-engaging people who have already seen your online store and your products. There are many tools that will help with retargeting as you set up the e-commerce platform you’re using. The idea is to advertise the same products your customers have seen before, thereby encouraging them to revisit the cart to purchase.
- Marketers with Influencers Dropshipping business is going to require lots of work at first. But, setting up an influencer marketing campaign up is an effective method to give your business an extra boost. Influencers are great for promoting your products to the right customers. Keep in mind that you should stay with smaller influencers at first because they are generally cheaper. The best micro influencers will be able to help you transform your retail business and also gaining more customer orders, but.
- Content marketing Content marketing could be expensive method to market your dropshipping products in certain instances. If you’re paying a professional to create your content then you’re likely to get out of cash quickly. If you are familiar with your e-commerce website and brand sufficiently it could be possible to create your own content and then begin. Although it may not allow you to reap the benefits of dropshipping in the beginning, it can increase your credibility with search engines. This means you’ll receive higher organic traffic in the long run.
- reviews and testimonials Also, if you run a dropshipping service that delivers products in the same time as traditional retailers request your customers to provide you with some feedback. Testimonials and reviews from satisfied customers are great for creating positive social evidence for your business and allowing you to find new ways to reach out to your target audience. It is also possible to request your clients to leave reviews on the most popular websites.
When you begin to master the art of marketing your small-scale company, ensure that you also optimize your site. Similar to content marketing, enhancing your site with the meta description, links as well as other important SEO-related signals is essential. While SEO can be described as a strategy for the long term instead of a method to acquire increased dropshipping customers in a short time it is essential if wish to establish a strong brand for the long haul.
A lot of the top online retailers put in a considerable amount of their time and energy in ensuring that they are able to connect directly with middlemen from search engines to connect with customers.
Chapter 8: Shipping and Returns
There’s one more thing to discuss in this guide to dropshipping and it’s an crucial one. Be aware that you must ensure that you’re handling returns and shipping in a proper manner, even with dropshipping suppliers. Although it’s true that dropshipping company will ship products to your target audience however, you are the one to ensure they’re providing the best customer experience.
Select the wrong dropshipping provider to supply your chain and you may have products that don’t arrive at their customers. It’s then up to you to manage the complex refund procedure.
Start with a supplier of dropshipping not just on the wholesale cost of their merchandise as well as the quality of customer service and speedy delivery that they are able to provide. Choose a company that provides different shipping options, including expedited shipping, for instance, is an excellent start.
Once you’ve identified the shipping providers you can be confident with, the next step is to figure out how to deal with dropshipping returns.
Returns aren’t fun in any industry However, if a customer decides they don’t like your product or service in a dropshipping scenario and you decide to ensure that you receive your payment back from your supplier. In addition, you’ll have to deliver the products. This is among the many negatives of droppingshipping. Here are some steps to help you get started.
Be aware of the policy on returns
If you’re looking for dropshipping providers be sure to read the conditions and terms that they offer on their website. What is the procedure they use to accept returns. Are they able to immediately reimburse your credit card or do they have other concerns to take into consideration?
- What is the time frame you need to return the item after an order?
- Do customers have to cover the return shipping charges?
- Are orders made in error exchanged without charge?
- How will the return experience be dealt with?
Set up your return policy
If you understand the way your suppliers handle returns, you’ll be able to ensure that you have a return policy that corresponds to theirs. It is recommended to use the return policy of your supplier to serve as an outline, and be sure you don’t give your customers any guarantees that you aren’t able to respect. For example when your supplier provides 30 days to return the item Don’t offer clients 40 days.
Ideally, you should offer your customers more time before they return their item for you to ensure that that you can deliver the item to the vendor to take into account any delays or issues with shipping. If you are dealing with multiple suppliers, you should try to meet all the requirements within your policies. For return dates, choose the one with the longest return time as your standard. So, you’ll be sure that you receive every item back within a reasonable amount of time.
Another great idea is to ensure that you don’t include an address for returning items on your terms and condition and contact webpages. Tell your clients that if they wish to return their order to you, they should contact you. This allows you to provide your client with the contact details of the dropshipping company and save the time and cost of shipping costs. It isn’t a good idea for your customers to send their packages to you first, since it is a waste of time.
Make sure that you accept returns with a an tracking number as well. The final thing you’d like to avoid is for your client to claim they sent the item however, it was “lost in the post” without evidence. It is essential to ensure that there’s a tracking code provided to keep track of the product at throughout the process.
Return process handling:
Once you have your return policy defined The only thing you have to think about is ensure you know how to manage returns from beginning to end. The typical return policy would appear like this:
- Your client sends you an email or text message asking for an exchange. You discover the reason the customer has decided to send the item back, and then you call your supplier and ask for a return authorization number. You’ll have apologize to the client and be accountable for dissatisfied with the product you sell if you wish to have to have a chance at getting the customer to return for a second time.
- Your supplier will most likely be able to approve the return. They’ll give you the address for return and the number you asked for to allow your customer to ship the item to them directly. Based on the policy for returning products of your supplier it is possible include your return address in the label for shipping instead of the shipping box. The tracking number can be necessary so that you can be sure that the customer actually receives the item.
- Once the package arrives you’re left with a couple of choices. If your client sends your package, examine the package and take photos so that you can see exactly what you’ll be returning to the seller. If the supplier receives the item, keep in contact with them to determine when the package is delivered. You may be able to seek a refund in the event of a problem.
- When you receive your refund and all is settled, you can deal with helping your client. This could mean you either send a refund to your customer or request an item replacement to be delivered, should the customer request it.
You know precisely what drop shipping is and what you can do to make it successful by creating your own drop shipping website. To summarize:
- (1) All begins by identifying a market that is largely untapped, and confirm it.
- (2) After that you’ll need to find suppliers who are reliable and helpful during the drop shipping process.
- (3) Determine ways to create value by the services that you offer.
- (4) Launch a website to link all the dots.