Dos and Don’ts of Dropshipping
Now that you understand the basics of dropshipping, let’s look at how to start an excellent dropshipping company from the ground up.
Dropshipping’s effectiveness is measured by the items you want to sell. It affects the size of your market, profit margins, and shipping costs. You want to make the best decision possible.
Do: Choose a particular product niche with solid demand. Once you’ve settled on a few products, look into them:
Demand – Are there enough customers out there looking for this product? Is this a commodity that consumers want to purchase online because it’s hard to find locally?
Shipping costs – Size, material, and storage life all affect shipping costs. Keep in mind that higher shipping costs mean lower profit margins for you.
Price points – Are the price points appropriate for eCommerce? Will you need to have pre-sales assistance before anyone is ready to purchase?
Marketing Potential – How can you reach out to consumers online? Is this a commodity that people are already looking for on the internet?
Don’t: Instead, choose a product for which you are passionate. It’s crucial to consider whether a product can fulfill your business objectives and produce a profit. Extensive, heavy equipment that is difficult to transport, for example, should be avoided.
Supplier Due Diligence
Across product categories such as clothing, electronics, shoes, handbags, and jewelry, many manufacturers choose from. Scanning through them and avoiding those who are just posing as wholesalers is the challenge. These vendors search for new companies that don’t know any better and will pay full retail for their goods.
Do: Make a point to vet your suppliers before working with them. Your supplier should have a strong reputation, a stable company (with few returns), and the ability to supply the goods you need.
It’s also a good idea to think about collaborating with different vendors. This means that you still have in-stock goods, choose the best prices for other products, and ship to customers from the closest venue. More information on locating suppliers can be found here.
Don’t: List goods or take orders before confirming that a supplier can meet them. Don’t get caught up in a situation where you have orders but no goods.
Drop delivery from stores like Walmart, Target, Bed Bath and beyond, and others is not a good idea. It’s a quick workaround that can lead to significant issues. You aren’t establishing a genuine drop shipping relationship. Who is responsible for shipping damage? What happens if they discontinue carrying that item? Bear in mind that Walmart has no idea (or cares) that you are. They don’t consider you a dropshipper and have no business dealings with you. As a result, they won’t assist you with defective goods or refunds, and they won’t alert you if inventory is running low or if a product you’re selling is being phased out.
If you don’t know who can meet your orders, don’t mention them on a marketplace or your website. It’s a surefire way to end up with unfilled orders, disgruntled buyers, and revoked sale rights.
Consider Financial Processes
Although dropshipping simplifies fulfillment, it also adds a layer of complexity to your accounting. How do you know the supplier issued the purchase order? How do you know the supplier sent the correct item in the right quantity? What’s more, how can you be sure the supplier paid you the correct amount?
Dropshipping necessitates the use of an accounting principle known as the “three-way match.” You must be able to (1) reconcile your purchase order to your supplier with (2) the supplier’s shipping details and (3) the payment invoice your provider gives you. Those three artifacts reflect the entire product lifecycle, from sourcing to shipping.
Do: Consider the manual steps involved in reconciling your dropship orders’ three-way match. Consider what level of order visibility and contact you’ll need to know exactly what your supplier ships, delivers, and invoices. When your company expands, you should think about using software to help automate and manage this process.
Don’t: Monitor your orders with suppliers solely by email and phone calls. If you don’t correctly reconcile the three-way match, you risk overpaying or underpaying for your inventory. If you don’t know what your customers are getting and getting it, your customer experience will suffer.
Be Strategic about Dropshipping
Many online sellers see dropshipping as a fast and sure way to make money. A profitable dropshipping business necessitates a significant amount of effort, particularly given the low-profit margins.
Do: Think of dropshipping as a long-term market practise. It’s a perfect way to round out the online brand’s overall vision. You can use it to quickly go to market, test new goods, or break into a new market. Dropshipping can be a part of your strategy as you create an online brand with high-quality goods and a rich customer experience.
Don’t: Rely on dropshipping as your whole, long-term business. This fulfilment method has its benefits, but it’s challenging to maintain a thriving company on low margins in a highly competitive online space.
Dos and Don’ts of Dropshipping That you need to Know
For the average entrepreneur, dropshipping fills the gap between the internet and conventional industry. This eCommerce marketing technique appeals to a wide variety of businesspeople because it eliminates the need for warehouse storage, a retail location, or store employees. However, just like any other company, if you want to be competitive, you must know what you’re doing – it’s not a walk in the park! Although you should conduct extensive research before opening a new shop, we’ve compiled a list of the most relevant dropshipping dos and don’ts for WooCommerce. Please keep reading to learn more about making the most of your dropshipping company, whether you’re a new business or want to make sure you’re doing it correctly.
Sell high-ticket items
This is a crucial part that I cannot emphasize enough. This is why you shouldn’t waste your time on items that cost $100, $200, $300, or more.
My goal price is $500. Anything higher is better.
Selling these high-end items is a smart move. You’ll make more on every sale.
You’ll spend hours working on your website and running ads. The profits must be worth it. You won’t get this done with expensive items.
I would rather spend my time on something that makes me $100 per sale than $5-10. I would be willing to wager that you feel the same.
Do: Pick a broad domain name.
A domain name that isn’t too specific about you is the second major “do”.
You limit what you can do in the future by choosing a product that is very specific and a domain name that reflects it. You are limiting your potential.
This is critical in the event of the worst. A narrow domain name will likely limit your options for expanding, making it more difficult to expand.
A larger domain name, on the other hand allows you to grow and breathe. If something isn’t working, you can get other suppliers to add it.
This mistake was made several times by us. We began in industries that weren’t right for us and had to change to find new suppliers to make it work.
Based on my personal experience, this is a major reason we have never seen a dropshipping website fail. Domain names allow us to pivot and bring new suppliers into the store.
Do: Form a legitimate business.
Dropshipping is not something I recommend without creating a business entity. This is important for both tax and business relations.
Dropshipping expensive products can be made easier by having the legitimacy of a business entity. You should consider forming an LLC. For more information, see (5 easy steps) or dropshipping basics article link.
This is not a requirement to set up your website or any other site, but it’s something I recommend doing as soon as possible so you can focus on other things.
Dropshipping is a popular online income method that many people consider because they are easy and quick. Dropshipping can be a great way to make money, but I recommend reading the book.
This means that you need to start a business in order to support your efforts.
Hire a virtual assistant.
Virtual assistants can be hired as soon as you have made your first sale.
As I mentioned earlier, your time is precious and a VA can free up a lot of it. A VA can be hired for $3 per hour and can answer your emails and take calls.
Although you might not need to make many phone calls at first, it is nice to have your back up. Grasshopper is a great virtual phone system that doesn’t require you to use your cell phone number. For a free trial, click
Your VA will handle the little things, but your job should focus on the most important tasks. It’s impossible to do everything if you are trying too hard.
Outsourcing is a great way to solve this problem. Our podcast even has an episode where we discuss High-Ticket Dropshipping Shopify eCommerce Stores.
Start yourself with Google Ads.
Although there are many platforms you can advertise on, Google is the one that I have had the best results.
Facebook ads are not something I use. They don’t work long-term, and people don’t visit Facebook to see ads. You’re probably scrolling through your Facebook feed looking for funny videos. This is not the audience that will buy what you are selling.
The flip side is that people searching Google for your product are more likely to purchase it. These are the people to reach.
DO – Set Yourself Apart with Exceptional Service
Customer support is essential to the success of your eCommerce platform, regardless of your business model. Due to the apprehension that comes with buying from new online retailers, gaining your new potential customers’ confidence will go a long way toward growing conversions. After all, if they don’t believe you’re a legitimate company, your great offers won’t matter because they’ll pay more elsewhere.
Live chat or fast email support will show that you’re ready, willing, and able to assist at any time. A live chat means that if any questions arise during the purchase process, you have a chance to save the conversion before they move on. Fast responses add to your store’s professionalism, which is another way to build confidence.
Do not worry about SEO.
This may sound a bit counterintuitive. SEO is a must if you want people searching for your store.
But not at the beginning. You can use suppliers’ descriptions if you are working with them. Advertising will also cost you money.
Once you are established, SEO can be a part of your future work.
Do not: Be tempted by other business models.
If you don’t see any money coming into your bank account immediately, it’s easy to become discouraged. Dropshipping is something I recommend, so if you are committed, keep at it.
If you do it right, there are very few chances of failure. Do not spend too much time looking at other business models than you do working on yours.
Dropshipping has taught me one thing over the years: It is the only way to really learn about a business model.
It’s possible to spend your entire day reading articles and theories about business models, but you won’t gain a deep understanding if you don’t actually do it.
We’ve made some useful comparisons to help you understand other business models and how they compare to dropshipping. We offer guides on dropshipping and retail arbitrage.
Do not: Use Facebook ads.
This issue was something I touched on a little earlier, when I suggested that you use Google ads. Because I believe it’s so crucial, I’m repeating it here: Don’t use Facebook ads, at least not initially.
Your ads are not seen by the majority of Facebook users. They are either scrolling through their newsfeed looking for entertainment or drinking. Your ads won’t fulfill this need. We discuss it in more detail.
Once you have traffic to your website, I believe Facebook ads can be used for retargeting. However, that’s the only reason I recommend them.
Stop thinking about strange niches.
Keep your eyes wide open. You can remove any blinders and look for niches you might be interested in.
It is amazing how many options there are, even for expensive items. It’s amazing to see how many people are willing to spend so much money on hobbies and interests that you have never heard of.
It was just by running across it in real-life that I discovered a new niche. When you’re out and about take a moment to look around and pay attention.
You never know what you might discover.
Do not: Neglect all types of markets.
I will explain what “types” means to you if you are unsure.
Today, there are two main market types: B2B or B2C. B2C is “business-to-consumer” and B2B is “business-to business.”
Dropshipping stores could offer either one or both. You don’t have to limit yourself.
Don’t Give Up Until You’ve Made at Least One Sale
It doesn’t matter how difficult it is, I promise you that no matter how much you struggle, you will never give up. Wait until at least one sale has been made. Do not let the negative voice in your head convince you that this isn’t right for you.
Many people succumb to the pressure too quickly, often distracted by their personal lives and other business models.
Consistency is the best way to persevere through difficult times. Instead of working hard one day, and then slacking the next, be consistent.
You may define consistency differently than I do. You might be able to make your first sale within two weeks if you work ten hours per day on your business.
Even if you are unable to work for half an hour per day, you should accept that it’s possible and continue doing what you can. As I mentioned before, once you have made your first sale, consider investing in a virtual assistant.
Now you can focus your time on the most important aspects of your business. Even if you can only work a half-hour per day, the VA you hired for $3 an hour will now work eight hours a days for your business.
You will also make a profit from your first sale. A few monthly sales of high-ticket items can often recover your losses.
You could also consider selling your Shopify dropshipping shop. A case study has been done to determine whether buying existing Shopify shops is worthwhile.
DON’T – Stretch Yourself Too Thin
When it comes to online companies, the term “do what you know” is underappreciated. It may seem appealing to diversify your company as much as possible to draw more clients, but the more niches you introduce, the less expert you and your store become. Stick to your favourite place and become an expert in the industry to find success when dropshipping with WooCommerce. There’s already an Amazon marketplace that offers just about anything – stick to your favorite niche and become an authority in the industry to find success when dropshipping with WooCommerce.
Stick to outdoor gear if you’re an outdoor enthusiast so you can provide product knowledge, helpful information and help your customers create confidence. You’ll be another shop if you want to sell beauty products.
DO – Vet Your Suppliers
One of the most critical aspects of your company as a dropshipper is your suppliers. You don’t work for a manufacturer or a shipping company; your job is to sell the goods. The supplier does the bulk of the hands-on assignments, making, stocking, and delivering the commodity to consumers to gain passive income. They will ruin your company if they aren’t up to scratch!
You will guarantee that you’re dealing with a specialist by vetting your suppliers. When you use AliExpress as a plugin for your catalogue, you’ll have access to a wide variety of suppliers. You must contact them to learn about their business, assurances, and other policies, ensuring that they are in line with your objectives so that you can work with them comfortably to satisfy your customers.
DON’T – Price Yourself Out of Profit
Dropshipping is a highly competitive business. You’ll still be vying for sales even though you pick a tiny, narrow niche to focus on. Since many stores source their goods from supplier directories and catalogues, inventory duplication is expected, so the price is one of the most important factors consumers consider.
Although it can be tempting to beat a competitor’s price, doing so consistently can be risky. If you keep dropping rates, you’ll find yourself slashing your profit margins unnecessarily. Instead, differentiate yourself in other respects, such as service quality and market competitiveness, to ensure that the margins are still maintained.
DO – Maximize Your Website Conversions
Your ads will only take you so far. Although most people spend all of their money to attract tourists to their website, you’ll be wasting money if those visitors don’t become paying customers! That’s why, before you spend money on ads, you can optimize your site for conversions.
Of course, you’ll want to make sure that your website runs properly, is easy to navigate, and is accessible to all types of users (did you know that mobile devices account for around 40% of all sales?). Other conversion rate optimization (CRO) techniques may boost SEO, conversions, and overall sales.
While you’re optimizing your website, don’t forget about the process’s final phase: checkout. It’s arguably the most critical move in the sales funnel, with 76 per cent of carts abandoned at checkout. You want a checkout that lets you gain more revenue while still making it easy to take the customer’s money.
Handsome Cart for WooCommerce excels at customizing your checkout operation. It’s one of the simplest ways to increase your conversions, with features like embeddable checkout types, high-converting models, and order bumps that increase your average sale.
DON’T – Expect Dropshipping to Make You Rich Overnight
You’ve already seen ads all over the internet on how to make a lot of money online through Amazon Affiliates and dropshipping. Although this business model has the potential to be incredibly lucrative, it is not the type of business where you can become wealthy rapidly. Building a website on Google and inside your niche can take days, months, or even years. To remain on top of your game, you’ll need to focus on marketing, conversion optimization, supplier hiring, business research, and more regularly. Although the passive income from WooCommerce dropshipping is fantastic, it isn’t free!