What is dropshipping I hear you ask? It’s a term that we have used in many of our guides and even though some of you might be skilled veterans in the ecommerce world, there’s also a lot of newbies and beginners that we’re here to help too.
What is dropshipping?
Dropshipping is back-to-back ordering of an item from a supplier who then sends it to your customer, rather than doing it yourself. It can be an on-the-shelf item or a custom-made product such as printed clothing or bags. It’s not very costly which is why a lot of people like the concept, however you never see the product so you are essentially placing a hell of a lot of trust in the supplier. Getting started with it is easy, but the hard part is trying to rake in the visitors to your site.
NOTE: the discussion of overseas dropshipping isn’t happening today because the negatives of doing so would use up every pixel of my screen. However, most of the same principles apply so you can still continue reading should you be enticed into committing to overseas dropshipping by the lures of social media.
Below is an excerpt from a company who wants to sell you a website with an overseas dropshipper plugged in.
“A lot of dropshipping niche stores have launched very well on social media. They’ve got tons of sales and were able to get back 150% ROI in less than a month. Then, sales start to dry out. What could they have done wrong?
A lot of things could go wrong in running any business. Even more so when running an online dropshipping store. We’re not going to talk about the wrong things, but we’re going to lay out a plan to start your dropshipping niche store business the right way.”
I wonder why they don’t want to talk about the “wrong things”?
I personally am happy to do so because I wouldn’t be very good at mentoring without giving all the information that you need to be successful, would I? I’ve done dropshipping for over 20 years but it’s never been the whole business, it’s been a part of the overall business. This is the best way to utilise the fulfilment method and for me, I used it to sell expensive machinery which I really didn’t want to hold in stock or manage delivery for (it was way too big and way too heavy).
- No stock to buy
- Minimum funding required to start
- Very wide stock portfolio from day one
- Ultra-fast set up
- You can literally run it from a sun lounger in Bali
- There will be a lot of competition
- You’re fully relying on someone else to match your prestigious customer service and product quality standards
- Your store will require marketing, which will probably cost a lot of money
- Technically, eBay and Amazon don’t allow dropshipping but thousands still continue to do it
- Customer services will be an issue as chasing a carrier or explaining a feature on the product again relies on a third party or your own research
Shopify analytics vs Google analytics: which one is better for online shop?
Now let’s paint a picture. You have a shiny new website which is stacked with products and you can set the profit percentage as high as you like. You look at the store analytics by clicking refresh over and over to see if you’ve had any visitors. Suddenly, it dawns on you – am I supposed to market my products?
Today’s not the day where I go into detail of marketing strategies, however I will list some methods which are open to you…
- Google Adwords (pricey)
- Google Shopping (pricier)
- Bing (if people use Bing?)
- Influencer (hmm would Kim Kardashian mention my candles?)
- Affiliate (or would a popular blogger mention my candles?)
- YouTube (would anyone watch my candle videos?)
- TikTok (same as above but somehow easier as Tik-Tokkers surprisingly love candles)
These methods will cost time and money as the products that you are marketing are also being marketed by others, but the chances are they probably think 1% is a good gross margin (it’s not). So, it’s definitely worth taking time out of your day to delve deeper into the logistics behind these methods.
Now let’s imagine you smash a YouTube video; it drives the entire population of Manchester to your website to buy your drop-shipped scarf just like Liam Gallagher wore on TV that time. Life’s great and you’re planning that first executive purchase, but then an email pings into your inbox – “sorry stock low on this scarf, no restock for three to four weeks due to Covid/Brexit/Containers” etc etc.
You could actually cry as that video took you days to create, promote and that doesn’t include finding the product in the first place. But this is just one product! The key is don’t promote just one item. You should be looking at a niche within a niche – so, target “scarf lovers” for the site maybe. It will most likely come up with about 21,900,000 results but the reality is that finding your customers, gaining visibility and getting sales are typical issues which every business has and that’s the hardest part – that’s just how it is.
Remember, with your dropshipping model, you are delivering a common product so whilst you have all the hard work of completing orders covered, you’re also running the risk of someone else holding your brand’s reputation in their hands, so think wisely.