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Intro to Dropshipping

- with expert advice from Dropified


What is dropshipping?

Dropshipping is a rapidly growing business model that has captured the attention of new entrepreneurs. Dropshipping is when a store does not house the products it sells. Instead, the store purchases the product from a third-party, or fulfillment house, which ships the product directly to the customer. This way, the seller doesn’t deal with the product directly - their only job is to sell! A typical retail store keeps all its products on hand and it’s up to the business owner to keep this product both safe and secure.

How does the seller make money?

When pricing your products in your store you should add additional costs to make a profit. For example, if your third party is selling you an item for $8.00 you should upcharge the item in your store. That additional price is essentially the money that the seller makes on the item. Understanding margins is how a seller will make their profit. Considering other factors like shipping and marketing costs you’ll want to price your items high enough to make a profit. That $8.00 item should sell in your store for about $12.00 - $14.00 depending on the item. The $4.00 - $6.00 difference will be your profit per item sold. Each dropshipper should formulate the right pricing formula to complement their store.

How can a dropshipping store stand out from the rest?

Logan Thompson, marketing director at Dropified, said that if you really want to stand out, treat your dropshipping store like a real business. “For example, most people trying out dropshipping just use the same images and descriptions the suppliers give them,” Logan said. “If you want to stand out, pay to have some professional photos taken and work hard at learning copywriting that will get your customers eager to buy from you.”

In addition, creating your own recognizable brand can help your business make a statement. This is the perfect way to leave a memorable impression on your customers to keep them coming back. Sometimes suppliers will even give you the option to add your brand to your products using a white label option. This can give you a real edge over your competition! Dropified has options for private labeling where you only pay for what you sell. This means that you aren’t required to pay for inventory ahead of time with no minimums or labeling costs. Added features like this can help you grow a recognizable brand with a faithful customer base!


What are the benefits of dropshipping?

Dropshipping has quickly grown in popularity due to the fact that any aspiring business owner can open a store. This business model allows you to sell different items from all over the world without any prior knowledge of inventory. Dropshipping gives its sellers the ability to constantly change their product lists depending on what sells and what doesn’t. Another perk is that you hardly need any capital to start dropshipping. It’s a type of business that anyone can start. You're able to be located anywhere since you aren’t responsible for shipping products and now there are more products to sell than ever before!

What to avoid:

Selling personal favorites - It’s great to be passionate about what you’re selling and if you’re trying to start a store that specializes in a specific niche certain products are necessary. Nevertheless, you want to sell items that customers want to buy. This may stray from what you enjoy yourself. If an item isn’t selling - remove it. Don’t risk pulling your entire store down because you want to keep items you enjoy, but your customers don’t.

Expecting to make a profit overnight - Dropshipping is a great business model that allows sellers to easily set up a full online store fast. This doesn’t necessarily mean that your business will be immediately successful. Like any other business, you will need to market your store and products to stand out amongst your competition. Do some research and develop a strategy to help make your products more appealing.

Return Complications - Early on you will want to establish a return policy. Customers take returns very seriously and most of the time they want their inquiries serviced quickly. You should establish a return policy with your vendor to keep your customer's confidence in your business. Sometimes customers may order an item by mistake or they might change their mind. Once this happens you will want to make sure that the customer has been refunded properly. Keep your vendor informed too because they might mistakenly ship an item that was supposed to be canceled. Keeping your vendor in the loop will prevent confusion and help your store run smoothly.

Expert advice for a dropshipping beginner -

“When starting out [in dropshipping] don't overcomplicate things.” Logan Thompson said. “Over and over again we see new dropshippers try to build the next Amazon, only to fail after spending weeks/months working on their stores. Start off with a simple one-product store as chances are you'll have more success working on your messaging. Really focus on delivering how that product is going to solve a problem for your potential customers.”


In Conclusion


Dropshipping gives you the flexibility to test products in real-time and if a certain product doesn't sell all you have to do is remove it. This business model gives you the ability to experiment and create the store you've always wanted with little cost. Play around with different products and listen to the market. If you do this, you could have a successful store that keeps customers coming back!



Related Blog: How to: Simplify Your Shopping Cart Checkout


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