Dropshipping has exploded in popularity in recent years. However, simply setting up a dropshipping store is no longer a route to guaranteed success. This is especially true since competition fiercens over time.
In this article, we offer you insight into the best ways to improve your competitiveness in dropshipping and generate more profit in the process.
So, give our tips on dropshipping a read and get ready to grow.
Dropshipping might sound like the name of a really bad and careless delivery company – but it’s actually an approach to ecommerce shipping which has grown in popularity because of the huge number of benefits it brings to the table.
Traditionally, ecommerce stores work by maintaining their own storage facilities, then packing and shipping products each time they make a sale. Dropshipping takes a different approach by outsourcing the storage, packaging, and shipping elements of ecommerce.
Typically, a dropshipping partner will be a wholesaler or manufacturer who allows an ecommerce business to purchase inventory as needed. They then deliver those products on behalf of an ecommerce store.
Dropshipping repositions ecommerce businesses from isolated entities to becoming the ‘middle man’. This allows a business to focus on the sales and marketing aspects of ecommerce.
Dropshipping might seem like an unusual approach. After all, you’re giving up control of a very important part of your ecommerce business. So, before we dive into our dropshipping tips, in this section, we outline why businesses should consider dropshipping.
- Free up time and focus
- Businesses that leverage dropshipping free up time to double down on other areas of ecommerce, such as sales. This approach means they can become specialists, rather than generalists, in their market – helping them to generate much better results.
- Save money in the long run
- Dropshipping costs money – the manufacturer or wholesaler you work with will need to generate profit on top of paying for storage, labor, and shipping costs. However, dropshippers can also cut costs on these elements due to the scale of their operations and by developing efficiencies. These savings can be passed on to you.
- Better customer service
- Using dropshipping will help you offer a better service to your customers, such as super quick delivery and efficient return processes.
- Offer new products
- Unlock the potential to offer new and exciting products when using dropshipping. For example, an ecommerce business that takes a traditional approach to storing and shipping products is limited by the space and processes they have in place. Dropshipping, however, allows businesses to offer more products with limits dependent on the supplier chosen.
- Scale your business
- Dropshipping allows businesses to scale more easily without having to constantly consider how to manage the growth of their own logistical operations.
We’ve already mentioned how one of the biggest benefits of using dropshipping is the ability to grow the scope of products your store offers. Although this is true, this can lead to stores becoming more generalist in nature.
In theory, a generalist approach isn’t an issue. However, it does make it difficult to really market your store in a direct and specific way. Defining your niche and focusing on serving that audience can help you:
- Better understand your customers
- Source better products
- Charge high prices for your products
- Drive better brand awareness and value
Focusing on niche merchandise is simple – just decide on what niche you want to serve and then spend time understanding your audience before finding the best products to sell them.
It’s easy for a business that uses a dropshipping model to simply not think about inventory levels. Of course, this makes sense because you’re leaving it up to your dropshipping supplier to deal with that aspect of business.
However, carefully managing your inventory levels will help you in three key ways:
- Ensures you don’t go out of stock unknowingly
- Makes it easy to identify your best-performing products
- Allows you to identify old stock that may benefit from discounts or promotions
With countless tools at your disposal, it’s now easier than ever to manage your inventory levels when dropshipping. For example, platforms such as Shopify offer dedicated apps that will allow you to seamlessly manage inventory with some of the best dropshipping suppliers.
Profitable dropshipping typically relies on selling high volumes of products, with lower profits being made on each product sold. To do this, most dropshipping stores will focus on the sales and marketing aspects of business.
However, offering amazing customer service is a great way to keep your customers coming back to buy from you again and again.
Doing this can be time-consuming. However, creating a comprehensive and easy to navigate FAQ page will help customers quickly find what they’re looking for and save you time in offering 1:1 advice.
We’ve already mentioned (more than once) how important marketing is to dropshipping businesses. This is why creating a great website that’s easy to navigate and inspires visitors to buy is so important.
With ecommerce platforms offering fantastic sales tools and features, such as Wix and Shopify, it’s easier than ever to create a simple, yet powerful ecommerce website for your business.
So, you’ve built a winning website that helps you convert visitors to buyers. Next, you’ll want to focus on getting more ready-to-buy visitors to your site. This is where great marketing comes in.
In truth, it doesn’t really matter how great your products, website, or customer service is if nobody knows about you. This is why marketing is so important.
There are countless ways to market your online dropshipping store, but here are some of the best methods:
- Paid social media ads
- Paid search engine ads
- Organic social media growth
- Search engine optimization
- Influencer marketing
- Email marketing
One downside to dropshipping is that it can disconnect store owners from the products they sell. This can make it tricky to ensure product quality as well as making it harder to market your product effectively.
The easy way to overcome this is to order product samples before you decide to offer a dropshipping product on your website. Use these samples to get a feel for the products you are offering, ask yourself:
- Would my customers buy this product?
- Is this product worth what I would need to charge for it?
- Is this product as good or better than other options?
With dropshipping drastically rising in popularity in recent years, we’ve seen a predictable increase in the number of wholesalers and manufacturers who offer order fulfillment as a regular service.
This means that those that leverage dropshipping as part of their ecommerce business have more options to choose from. It also means that you aren’t bound to one supplier, which opens up the range of products you can access and therefore sell to your customers.
When you start your dropshipping business, or you’re looking to increase your product range, it’s worth considering multiple suppliers because each will offer you something different. When seeking out suppliers ask yourself:
- How much do their products cost?
- What technology do they leverage to make my life easier?
- How reliable are they?
- How fast can they ship products?
- Are they easy to communicate with?
Finding suppliers is usually pretty easy. Just visit your favorite search engine and type in ‘[product]’ and ‘dropshipping supplier’.
Returns are often overlooked, but they can have a huge impact on the success of your ecommerce store. Customers that find it difficult to make a return can build negative feelings toward a brand, especially when they are already dissatisfied with the product they’ve purchased.
Creating an easy-to-follow returns policy makes the process of returning goods less stressful for your customers. This can turn a potentially negative situation into a positive one, often helping you build greater brand value.
Businesses that use dropshipping can optimize their fulfillment by building a better understanding of how their products are stored, packed, and delivered. Taking the time to optimize your fulfillment processes will help reduce the time it takes to fulfill each order and therefore reduce costs, all while increasing customer satisfaction.
Take the time to carefully plot out your fulfillment process from the order coming in, through to customer delivery and feedback. This will allow you to identify potential areas for optimization. Even if optimization opportunities are within the remit of your dropshipping supplier – as a customer of their services, you have the power to ask them to make improvements on your behalf. Otherwise, you may decide to move suppliers!
Security is often a crucial consideration for online shoppers. After all, they’re giving away a considerable amount of their personal information which could be exploited if they fall into the wrong hands.
Consider this – have you ever found yourself on a website that just ‘doesn’t seem right’ to you? Did you put your personal and credit card details on that website?
… Of course not.
Ensure that you follow best practices when setting up your online store security, such as gaining the best possible security certification and using a reputable provider for processing payments.
Although dropshipping can allow you to offer multiple different shipping options, that doesn’t necessarily mean you should.
Complex options at checkout can confuse customers and put them off buying. For example, when you offer different options on shipping companies, delivery time, and cost, it can make customers worry about whether they’re picking the best option for them.
Instead, simplify your shipping by offering just a handful of the most popular options.
No matter how good your business is, if your competition is providing your customers with better options you’ll struggle to see great success. This is why it’s crucial to keep an eye on what your competition is doing.
Carefully monitor your competitors’:
- Customer service
As well as spotting where your competitors are doing well, monitoring them will help you identify gaps in the market that aren’t currently being served – helping you to tap into those opportunities.
Seasonal selling has always been a highly profitable approach to ecommerce since it allows online stores to tap into the buzz around a specific season.
‘Seasonal items’ may include products focused on specific days, such as Christmas or Thanksgiving. Alternatively, you could sell products that are tailored to a given time of year, including fall homeware or winter coats.
Some online stores focus entirely on a given season. One example of this may be an online store dedicated to Christmas decorations. However, most stores will find products that match their usual niche but also appeal to seasonal shoppers. For example, a store that sells candles all year could sell Christmas scents during the Christmas shipping period.
Advice from the Experts
Top Tip: It’s important to source your seasonal dropshipping products well ahead of time.
It’s clear that dropshipping can be a smart way to drive ecommerce profitability. There are many benefits to this approach, ranging from being able to focus on sales and marketing to offering your customers a more diverse range of products.
Use the tips for dropshipping we have outlined in this article to ensure dropshipping success for your store.