The dropshipping business model is great. I love the control that I have over my life as a dropshipper. The freedom to experiment and the work-life balance are second to none.
In recent years I have become a serial entrepreneur trying out new ventures. I have drop shipped all manner of products and tried different sectors with varying success.
The journey has been one hell of a ride, however.
All that said, I have definitely picked up some valuable experience during my time in the school of hard knocks.
Some of the essential ones I am going to share with you today. Here are the dropshipping tips that I wish I had known at the start.
1. Don’t Sell What Everyone Else is Selling
I was very much guilty of this in the beginning. Half the reason I have forayed into various sectors is that I was attempting to chase the latest hot product.
Because I was following the crowd (and using the highest selling products to influence my own dropshipping decisions), I was always one step and more behind.
I would argue that one of the quickest ways to fail in eCommerce is to sell the same trending products as everyone else.
Doing this makes it very difficult to stand out against the competition. It also makes it hard to compete in terms of pricing, especially if the “big-boys” are in the same market.
A packed marketplace of retailers selling hot products sees a rush to the bottom in terms of price points.
Profit margins are squeezed and only the largest retailers can afford to compete.
2. Don’t Try to Compete on Price Alone
This leads to competing based solely on price. Don’t do it. In the example above, competing on price will see you slash profits until it is not even worthwhile selling the product.
Even if you are in a product niche with little competition, avoid making price the only differentiating factor. If someone does come in and undercut you, you need something else in your armory to compete.
Make efforts to offer more so that your higher price is justified. This could be package deals or proven quality customer service. More generous returns and warranty or free shipping.
If you cannot provide anything extra, you will be forced into a price war setting off another rush to the bottom.
3. Obsess Over The Customer
They say that Jeff Bezos is obsessed with the customer. At the forefront of his decision-making throughout the 25+ year history of Amazon has been implementing new features to make life better for the customer.
How can you follow suit?
A better experience on your website, easier ways to make an order, more payment options, faster, more reliable delivery, live chat on your site so that a customer can have a query answered straight away.
All of these things make life easier for the customer. Implementing some may even affect your bottom line negatively. But only in the beginning stages.
If you conduct your business in a way that genuinely puts the customer first, you and your business will benefit as a result.
- Related Content: Dropshipping in Europe – The Ultimate Guide
4. Product Bundles – The Dropshippers Friend
Bundling related products together and offering them as a package deal is a great way to increase sales, while also adhering to the point above.
You are giving your customers deals on stuff that they might not have realized they needed until you put them within an easy-to-purchase package.
Furthermore, because product bundles save on shipping (assuming they are coming from the same supplier); both you and your customer can benefit from the lower cost.
This simple strategy also gives you a price advantage over the competition.
It is also a good way of helping to shift products that are not selling as fast as you would like.
Bundle them with “hotter” products to see if you gain traction.
The extra margin from the add-on products can also be used to offset what can sometimes be a low margin on the big product.
The important takeaway here is to not think of your products as isolated items. Customers are not averse to buying multiple products at the same time, help them by combining items that are relevant.
5. Sell What You Know (or at the Very Least, Interested in)
Being an expert on the products you sell will always put you in good stead.
It will make everything from your product descriptions, customer support, and overall reputation so much better if the person at the helm knows what they are talking about.
It will also help give you the drive when the going gets tough (because believe me, it does at times).
If you have a real passion for the niche you are working in, it is easier to work hard to make your dropship business succeed.
Don’t get me wrong, it is still possible to enjoy great profits selling products that you don’t really give a damn about, but at the end of the day, it is not as fun.
All that aside, spending time to become knowledgeable about what you are selling should be a priority.
6. Spend Time Getting Your Product Descriptions Right
I touched on this above. Product descriptions are important. This includes the words and images you use, the user reviews you include, and other details you have on the sales page.
The quality of these will make a big difference in your sales, so they are worth getting right.
All too often, dropshippers simply cut and paste from the manufacturer (or use dropshipping software) to populate their sales pages with exactly the same information that is displayed in a million other places online.
This is the quickest way to fail in a crowded marketplace.
By all means, use these quick-step methods to get the initial information on your website (I have reviewed several apps that make this process very easy).
However, this should only be your starting point. If you have owned or tested the product via a sample from the supplier, take photographs and include some of your own personal thoughts in the description.
Provide pros and cons and other opinions. Providing more detail in this manner now only puts the customer first, it also adds legitimacy to the sales page. It will certainly make you stand out from other retailers selling the same product using faceless, copy & paste.
7. Leverage A & B testing
I wish someone had spent time explaining to me the benefits of A&B testing when I started dropshipping.
In summary, this just means that you have slightly different versions of the same thing. It could be a product sales page, Facebook ad, or email campaign.
You then utilize software to automatically display these different versions to your audience.
The software will then track vital user response data such as conversion and click-through rates, time on a page even heat maps to show where a visitor has clicked so that you can ascertain which version performs better.
Using A&B testing it is possible to fine-tune the various elements of your business so that you make more sales and have more satisfied customers.
At the end of the day, who doesn’t want that?
8. Experiment with Different Marketplaces
The beginner will often pigeon-hole themselves into one marketplace for too long.
I understand the need to concentrate on one area first (selling on Amazon for example); but to stay in one marketplace without exploring others is a mistake.
You may find less competition on eBay and do a lot better there.
Setting up your own Shopify store with dropshipping themes such as Debutify is very easy these days. I highly recommend that you experiment there.
You’ll have greater control and it will give you the chance to ramp up your marketing efforts too.
There are also opportunities to use a Facebook storefront. Each marketplace will have its pros and cons and varying demographics, seeing where your products have the best fit, is a big step to increasing sales.
9. Try Different Shipping Rates
Customers love a deal on shipping (that’s why the bundle point above works so well).
If you can balance the economics so that it is viable to offer free shipping, great, you’re on to a winner.
A study by NRF (National Retail Federation) showed that 75% of customers expert free shipping on orders over $50.
The point is, it is important to understand the psychological barriers that shipping costs (and times) might be having on your customers and therefore sales.
Where it is possible, you should build the shipping cost into the price you charge and then advertise the shipping as free.
If this is not possible, find ways to offer as competitive shipping prices as you can.
- Related Content: Private Label or Standard Dropshipping: Which is Best?
10. Never Dismiss Seasonal Products
For a long time, I failed to leverage the seasonal aspect of my products and niches.
I felt that the effort involved in reshaping marketing campaigns, offers, and other aspects of a sale just to fit into a fleeting calendar season, was not worth it.
I was a believer in steady, reliable sales over the long haul.
This was a mistake. Of course, your bread and butter business should be consistent.
However, being prepared for relevant holiday merchandise (Christmas, Easter, Thanksgiving, etc), back-to-school items, or new sports seasons, is definitely worth targeting, (if it is relevant to your niche of course).
The beauty of dropshipping is that you do not need to worry about purchasing inventory for these short sales bursts. You will only sell to the demand.
By ensuring that you have your product listings updated to take advantage of these seasonal changes is extremely important.
And there you have it, the top 10 tips I wish I knew about dropshipping before I began.
Whatever stage you are at with your dropshipping journey, I hope that these have been of help.