Dropshipping is an order fulfillment option that allows e-commerce businesses to outsource the processes of procuring, storing, and shipping products to a third party—typically a supplier.
This fulfillment model commonly appeals to entrepreneurs seeking efficiency and low overhead, but it can come at a cost—especially when it comes to customer experience. This guide will cover what drop shipping is and explore how this fulfillment method can work. We’ll also look at a few dropshipping alternatives that can potentially save you time, lower your overhead, or simplify your business.
What is a Drop Shipper?
A drop shipper is a business or an individual that uses the drop ship model to source inventory, fulfill, and ship the orders from a 3rd party instead of warehousing the products and then fulfilling and shipping the orders themselves.
How to Become a Drop Shipper?
Dropshipping can help retailers compete with the “Amazon effect.” That is, customers have come to expect fast delivery, free or low-cost shipping, and endless options — just what they get when they shop at Amazon.
Step 1: Find Dropshipping Products that are in Demand
Finding the right products to sell in your online store can be a tedious process, especially if you are new to the e-commerce business. In order to be successful as a dropshipping e-commerce business, you will need to ensure that your e-commerce store merchandises inventory with products that are in high demand.
Finding the correct products involves in-depth research to understand what products trending are; additionally, targeting a niche market with your dropshipping store can be a great way to generate revenue.
Step 2: Choose a supplier that is right for you
A dropshipping supplier is vital to every dropshipping e-commerce business.
Without the right mix of suppliers, your dropshipping business will have a difficult time sustaining itself. That’s why it’s important that you know how to find dropshipping providers that will help your business to succeed without bottlenecks.
Step 3: Select a Channel to Sell Your Products
You have conducted research on products that are ideal for your dropshipping business, and you have also identified the supplier that is right for you – the next step is to select the channels where you can marketplace and sell your products.
The sales channels are not all equal, and as a result, many selling channels may not be suitable for you. For example, if you’re selling a very niche product that’s relevant to a specific demographic, then you should probably choose a platform that’s dominated by the particular demographic you are targeting with your niche product.
Step 4: Create your Dropshipping Website
A dropshipping website is an online commerce platform where you sell your products. This is where your suppliers connect with your business, your customers find your products, and the technology in the forum manages all of the business processes for you.
One such platform is eBay, where you can create a free seller account and customize your storefront according to your business needs. Similarly, Facebook Marketplace is another venue where you can create a free seller profile, but it lacks the storefront customization that eBay offers. Although Facebook Marketplace provides a feature called Facebook Shops, which is an eCommerce stage that lets businesses effortlessly sell their products on Facebook and Instagram.
Step 5: Advertise and Sell Your Product(s) Online
Now that you have your dropshipping website, you need to drive traffic to the store. You can not just create a website and expect your customers to find it. You need to promote your dropshipping store, and since your business is set up online, you’ll need to employ tactics beyond just word-of-mouth with your friends, family, or your immediate community.
Hopefully, you were thorough in conducting your research earlier in the process – the time you’ve invested in conducting research on your dropshipping products and its target audience will play a significant role in your decision-making on the right channel, tactics, and suitable levels of investment needed to drive traffic to your website.
Step 6: Prioritize Customer Service and Support
Customers who receive admirable customer service are more likely to do repeat business with your brand, even when other companies have similar offerings at lower prices. But on the flip side, lousy service experiences can stop the relationship in its tracks.
Customer service has many moving parts to it, besides customers have myriad ways to communicate with you – for example, phone, email, messaging apps, chat, and social media. Make sure to streamline your communication with customers in a personalized and proactive manner. Your “Contact Us” page should be visible and easily accessible by offering customers multiple ways to reach you. Response times to customer service requests are vital to exceptional customer experience. Test out your customer service experience as your customer would; identify the bottlenecks in the process that need special attention.
The Biggest Benefits of Dropshipping
- Dropshipping is a low-cost model: You can sell thousands of items, but you don’t have to spend any money until you receive customer payment. In addition to saving money on purchasing inventory, drop shippers do not need to invest in storage or rent.
- It’s easy to get started: Since products are handled by outside suppliers, it’s easy to go from zero to 60 with a dropshipping model. No product development, no storing inventory, just selling.
- Flexible expansion: Expanding an online store is as simple as adding new brands, sizes, and color options to the website. Testing new products is also a snap; if one product doesn’t sell, it can be removed and replaced with another.
Top Dropshipping Challenges
- Loss of control: While a dropshipping business doesn’t keep inventory on hand, it’s entirely dependent on third-party distributors or wholesalers following through on orders. If not, customers will complain to the business they ordered from.
- Building a brand and product website can be time-consuming: Dropshipping doesn’t mean selling is a snooze. Creating a successful business means building an attractive online store brand and all the landing pages, product descriptions, taglines, and links that make a professional e-commerce site stand out.
- Competition is fierce: Dropshipping may have low overhead, but competition is also sky-high. Dropshippers don’t have exclusive contracts with suppliers, so it can be tough to keep prices low while choosing the right product niche can be a challenge.
Brands and retailers can win new customers and retain current ones by considering what a great customer experience involves when it comes to ordering online – adding models like dropshipping should be strategically developed, thinking of each aspect of the customer journey.