Dropshipping is a unique form of retail that allows retailers (dropshippers) commence or conduct commerce without buying stock or keeping inventory.
The drop shipper is simply a facilitator, middle-man, go-between, marketer who does on-demand retail.
Are you entrepreneurial, innovative? Then this business model MAY just be right for you.
The Dropshipping Triangle below explains dropshipping from a unique angle.
The Dropshipping Triangle
Customers (1) place orders with Drop shipper (2), Drop shipper places Customers orders with Supplier (3), Supplier delivers products to Customers.
According to recent Google Trends result, interest in dropshipping has more than tripled in the last 5 years.
The 5-Year Google Trend Of Dropshipping
Source: Google Trends
This means more and more people are getting on board dropshipping for some of the following reasons.
Benefits Of Dropshipping
There are businesses one can start with zero investment but dropshipping has the following advantages.
- Freedom to work from wherever, whenever
- Low or no startup capital
- You pay supplier when shoppers pay you
- You’re not investing your own money
- You don’t need storage or warehouse facilities
- Don’t need a showroom or rent store
- Wide variety of products
- Wide variety of merchants
- Wide variety of customers
- Global exposure
Dropshipping is an attractive business model due to low/no startup cost, but before you jump in there are key things to note.
In this article you will learn how to stand out and program your dropshipping business for success.
Key Areas Of Dropshipping
Platform, marketplace, storefront, supply chain, order fulfillment and customer service are some key areas of dropshipping. Problems arising in one or more of these areas can grossly impact margin.
Shopify, BigCommerce, Magento are popular eCommerce platforms on which to build and run your online store. Things to consider when choosing platform include:
- Free trial period
- Duration of contract
- Apps and Plugins
- Payment gateways
- Customer reviews etc
The other option is to self-host your web store on CMS like WordPress. This gives you more freedom and customizations but leaves all the crucial work platforms do for you in your hands e.g. auto-updates, backups.
Amazon, eBay, AliExpress are known marketplaces that allow drop shippers and sellers open store and list products. Each has its advantages and limitations. When choosing consider:
- Setup fees
- Listing fees
- Monthly fees
- Any hidden charges
- Payment options
- Shipping destinations
- Level of competition
- Customer reviews etc
Self-hosted stores offer unlimited customization and branding, zero on-site competition, less distraction and more opportunity for customer engagement with site content.
Your dropshipping website is your digital storefront. Product display, photography, distribution, description, landing pages, menu, calls to action, forms etc, are key areas. Your storefront doubles as your retail associate, it convinces shoppers to either buy or fly.
Watch out for:
- Number of themes
- Cost of themes
- Updates for themes
- Obtrusive landing pages
- Lengthy forms with several repeat-input fields
- Hidden menus
- Integration with shopping cart
- Payment gateways
- Ensure your site is secured with https capabilities
- Display trust marks if you have them
- Display of social share buttons, contact information
- Customer review of themes
- Supply Chain
A dropshippers supply chain is handled by dropshipping suppliers and/or manufacturers. This is a critical component of the business. The wrong supplier may deliver wrong or defective items that will return to hurt your reputation and revenue.
- Product research
- Seller reputation
- Duration of selling
- Number of products sold
- Customer ratings and reviews
- Communication channels
- Price flexibility for large orders
- Average delivery timeline
- Free shipping
- Returns and refund policy etc
- Order Fullfilment
Poor order fulfillment can hurt your dropshipping business. If customers keep getting disappointed with your products, your ratings and revenue will plummet. Can you trust your suppliers to delight your hard won customers?
- Seller reputation
- Seller reviews
- 24/7 Support for drop shippers
- Order tracking
- Speed of delivery
- Personalized greeting cards
- Return process
- Customer feedback about delivery experience etc
- Customer Service
Customer experience can either boost or bust your brand perception and acceptance. If they have a bad experience and bad mouth you on social media, the negative effects will be far reaching.
To ace customer service, do the following:
- Choose only the best suppliers
- Choose only the best products with good verified ratings
- Choose products with warranty
- Speedily transfer orders to your suppliers
- Track orders
- Ensure you get their shipping addresses right
- Find out if they received their orders
- Find out if they’re satisfied
- Be available to offer speedy response
- Display buyer protection policy
- Include customer reviews on your site
- Return Policy should be displayed on invoice
- Returns policy should be robust
Other Things To Pay Attention To
- Website Load Speed
Slow loading sites are a big turn off for online shoppers. Akamai and Gomez found that nearly half of web users expect sites to load within 2s, they abandon sites that take longer than 3 seconds to load.
- Responsive Website Design
Reports indicate that 4 out of 5 US shoppers research retail content on smartphones and 40% will bounce from non-responsive sites. Many shoppers browse products on mobile and buy on desktop. If your site doesn’t display well on mobile devices you’ll miss out on this demographic.
- Social Commerce
Social media marketing is a major means of creating engagement, awareness and driving conversion for your dropshipping business. 30% of online shoppers say they’ll likely purchase on Facebook, Pinterest, Instagram, Twitter or Snapchat.
- Mobile Marketing
Recent reports suggest that 91% of Americans own text-ready phones and 98% of text messages are opened within 2 minutes. Similarly, 19% of all US retail sales occur on mobile. SMS marketing should be part of your strategy.
- Push Notifications
Push notifications are becoming more relevant as a marketing method. If you have an app for your webstore, direct open rates for a rich push notification could increase by up to 56%. Don’t push push notifications aside.
- Content Marketing
Content marketing has huge benefits ranging from SEO to customer satisfaction. The following statistics show benefits of regular blogging as a content marketing strategy:
- Companies who blog receive 97% more links to their website (Source: Hubspot)
- 72% of Marketers say relevant content creation was the most effective SEO tactic (Ascend2, 2015)
- 53% of marketers say blog content creation is their top inbound marketing priority (Hubspot, 2017)
- Companies that published 16+ blog posts per month got about 4.5X as many leads than companies that published 0-4 monthly posts (Hubspot, 2015)
- Inbound sources provide 59% of the highest quality leads for sales teams (Hubspot, 2017)
- Drop Shipping Automation
Perhaps, the best thing you can do for your dropshipping business is to automate it.
Oberlo and some other apps do an amazing job of dropshipping automation.
Automation takes care of product importation, description, price rules, real time price and inventory updates; all the very important facets of your dropshipping business including order fulfillment.
Amos Onwukwe is an AWAI trained eCommerce B2B/B2C Copywriter featured in eCommerce Nation, eCommerce Insights, Understanding Ecommerce, Floship, Huffington Post, Dumb Little Man among others. You can connect with him on Twitter @amos_onwukwe.