Table of Contents
- 1 Product Search
- 2 Supplier Due Diligence
- 3 Consider Financial Processes
- 4 Be Strategic about Dropshipping
- 5 DO – Set Yourself Apart with Exceptional Service
- 6 DON’T – Stretch Yourself Too Thin
- 7 DO – Vet Your Suppliers
- 8 DON’T – Price Yourself Out of Profit
- 9 DO – Maximize Your Website Conversions
- 10 DON’T – Expect Dropshipping to Make You Rich Overnight
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.
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.
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!