The Ultimate Guide of Dropshipping

EBUYSOURCING

03/05/2022

The Ultimate Guide of Dropshipping

What is dropshipping?

Dropshipping is a new type of retail method that doesn’t require you to have a warehouse. Instead, you sell products on an ecommerce website, and a third-party supplier will send the products directly to your customers. It cuts off the intermediary step and saves tons of time and energy, so you can focus on marketing and customer service.

Dropshipping is great because it won’t cost you a penny until customers pay for your products. Beginners who don’t like big investments and risks can start their own business with a tight budget.

Through this guide, you will learn the pros and cons of dropshipping, how to begin, how to maximize your chances of success.

Dropshipping is great because it won’t cost you a penny until customers pay for your products. Beginners who don’t like big investments and risks can start their own business with a tight budget.

Through this guide, you will learn the pros and cons of dropshipping, how to begin, how to maximize your chances of success.

The Pros and Cons

Due to its low cost and convenience, it is fairly easy to start a dropshipping business compared to other retail methods. In fact, you can even set up your own business and get it going in just 2 or 3 days. Packing, shipping, fulfillment, and all the other things that give you a huge headache, you can leave them to your supplier.

When your business scales up, you don’t have to make a big change on your working procedures. To boost your sales, all you need to do is dive into marketing and customer service. If you need to expand the variety of your products, there are thousands of qualified suppliers for you to choose from.

Dropshipping provides a lot of flexibility. At the beginning stage, an office is no longer necessary. You can work from home with a laptop. You are your own boss. Keep the scale of your business or boost it, that all depends on you. Besides that, it also gives you a great opportunity to test your new products. Simply list them on your website, so you can do the market testing. And you can easily switch to another product, if you find one of them doesn’t sell as you expected.

One of the greatest challenges of dropshipping is slim margins. Most of the profit goes into your suppliers’ pockets since most of your services are subcontracted to them. As a result, your price will be fairly high to be profitable. If you choose a highly competitive niche, your price might not be very attractive compared to others.

Another great challenge is that it doesn’t give you full control. Although most of the time, it goes well. There are still some problems that happen occasionally in every aspect of dropshipping. Your suppliers might have different shipping solutions. Shipments might be delayed from time to time. Products’ defective rates might be high.

To avoid these tricky issues, here are several quick techniques for you.

Identify the niche

First, you should ask yourself, “What are you good at and what is your interest?” It is a great idea to choose a niche based on these factors. Because they are the areas that you have invested a lot of time in. You certainly know what customers care about most and what the most frequently mentioned problems are. Then, do research on the competition in the niche. Find out how many competitors there are, their prices, and the features of their products.

Once you have fully analyzed the data, you might notice some gaps in the niche. In another way, some customers might want certain features, but your competitors fail to meet their demands. Based on these features, it is a great opportunity to develop your own products.

In addition, the price of your products should be competitive enough compared to others.

Find your suppliers

There are two major ways to find the qualified suppliers. If you prefer to purchase directly from the manufacturers, B2B platforms such as AliExpress, Made in China, and DHgate are highly recommended. There are thousands of unique products with cheap prices out there. Rather than worrying about scams, you should only focus on top sellers, most of them are certified and trust-worthy.

Or you can hire a professional dropshipping agent who provides a variety of services, including looking for manufacturers for your niche, QC inspections, and logistics. They may even serve as your representatives to pay a visit to factories. With their many years of experience, you’re reasonably likely to avoid problems that could hurt your business.

If you are considering whether you should hire an agent, keep in mind that it won’t be economical until you achieve 40 or 50 orders per day.

Test your products

To avoid wasting too much time and resources on your new product, I recommend that you place a test order first. You can create a new page and advertise your new product to attract as many customers as possible. Or you can give out a few free samples to your former customers and collect their reviews. You might learn the pros and cons from different angles and keep improving your products until they are widely praised and trusted by your customers.

Monitor customer experiences

Once you have set up your own website and listed your products, you can’t only focus on your products. Customer experiences also play an important role in dropshipping.

As online purchases usually take only a few minutes, nobody likes the experience of going through a lot of steps to find a specific product. Make sure your website structure is straightforward and simple so that customers are able to find what they want in a fast and convenient way.

Don’t forget to send order confirmation and tracking emails to your customers. Personalize every email by putting customers’ names and locations in. You can even give them suggestions based on what they’ve done on the internet or what they’ve said.

Online support is also crucial, since many customers might have a few questions about your products. They are more likely to place an order if professional support can be provided to clear up their doubts.

Last but not least, ensure that your mobile experience is smooth. Over 70% of customers use mobile as their first choice for e-commerce, so you need to make your websites accommodate to mobile and tablet devices.