Thinking about starting an e-commerce business, but having trouble deciding which profitable business model to use?
Dropshipping is one of the most popular methods. Research shows that the global dropshipping market is expected to achieve a compound annual growth rate of 28% until 2025.
If you want to know more about being a dropshipper, you’ve come to the right place. In this guide, we’ll cover everything from what it is to how the business model works, if it’s right for you and how to succeed with it.
Dropshipping is an e-commerce business model that eliminates the need to stock inventory and manage shipping. Instead, when a customer places an order on your website or Amazon, a third-party supplier packs and ships the order directly to them.
Is dropshipping legal?
Yes, dropshipping is legal. It is important, however, to do your research. Using fraudulent suppliers can lead to a number of problems. For example, if you partner with an unlicensed merchandise supplier, you could find yourself in trouble with the licensee.
That said, as long as you’re not building a dropshipping business by reselling products that infringe someone else’s copyright, you’re safe.
Is dropshipping really worth it?
Honestly, the answer depends on your needs and motivations. If you’re looking to start a side hustle, you can generate a good income over time, then dropshipping might be worth it for you. If, however, you need to make a lot of money in a short time, you may find that dropshipping isn’t worth it.
To succeed with a dropshipping business, you need to devote time, money and effort. You’re in charge of finding products and suppliers, marketing and customer service. The only aspect of your journey as an entrepreneur that suppliers manage is inventory and fulfillment. This means that everything to do with customer acquisition and retention depends on you.
Several factors can hinder your company’s growth, including
- Long shipping times
- High cost of goods sold (COGS)
- Time-consuming refunds
- Poor product quality
- Poor customer service
- Unprofessional seller
Is Dropshipping right for you?
Ultimately, it depends on the resources you have available. If you don’t have the time or money to invest in sourcing and marketing your store, you may need to find another model to work with. Many niches are saturated, so it’s crucial to take the time to think about dropshipping business ideas and research competitors.
How to become a Dropshipper
Becoming a dropshipper is easy. All you have to do is choose a product or niche, find at least one dropshipping supplier to provide the products and create your website.
Depending on the state you live in and the products you sell, you may or may not need a business license to start dropshipping… When you use an e-commerce platform like Shopify, you’re not required to have a business license. However, investing in one can make you feel more legitimate with customers and suppliers. Some dropshipping providers won’t work with businesses that don’t have a business license.
How to achieve successful drop-shipment
Because you don’t need to stock inventory and manage fulfillment, you can start a dropshipping business with around $500 or less. That’s much more affordable than many other business models.
Create a drop-ship business plan
A dropshipping business is a business like any other – and to get off on the right foot, draw up a business plan.
This means taking the time to think about the product or products you’re going to sell. It’s never a good idea to enter the market with a product you’ve chosen because you “like it”. Often, this approach wastes time and effort because it doesn’t translate into sales and revenue.
We’ll explain in more detail how to find your niche and products below in our step-by-step breakdown.
In addition to the products you’ll be selling, you’ll also want to include information about:
- Market research with competitor analysis
- Potential suppliers
- Your website plan
- A marketing plan to help you attract customers
Conducting market research
Market research validates your ideas. It also ensures that you’re not entering a market where it will be almost impossible to compete. The key is to find a product or niche that’s not saturated enough for you to make a name for yourself… but something that’s in demand enough for you to actually make a sale.
Start small and grow
It’s always a good idea to start your dropshipping business with a few products. That way, you can see how well your marketing efforts are working and determine whether you need to make any adjustments before continuing. You can also use the income you earn to reinvest in your business, adding products as you see fit to help grow your business.
Step-by-step direct delivery for beginners
1. Understanding how dropshipping companies work
The drop-ship model involves three key players:
- You – the online retailer
- the consumer
- The supplier or manufacturer
You determine the products you want to sell, find drop-ship suppliers who provide those products and create a website. You list the products for sale on your e-commerce site and market the site to your target customers.
Each time a customer purchases a product, your drop-ship supplier receives the order, then ships the product to the customer on your behalf. Many suppliers offer customized branding so that your company’s name and return address appear on the packaging. Packages are sent in unbranded boxes so that your customers don’t even realize that a third party is involved.
You earn money every time you sell a product because you keep the difference between your selling price and the wholesale price. For example, if you start a print-on-demand dropshipping business and pay the supplier $11 for a t-shirt and shipping, then sell it for $25, you earn a profit of $14 per shirt.
We are not lawyers, accountants or tax experts, so it will be up to you to research what is required in your state and region. However, if you wish to use a business name other than your own, you will need to register your business name and a “Doing Business As” or DBA.
Depending on the business structure you choose, you may need to hire an attorney to help you file the paperwork with your state government.
You’ll also need to acquire an Employer Identification Number (EIN) from the IRS for U.S. tax purposes.
Depending on where you do business (not just where your company is based) and what you sell, you may also need a business license, as well as permits from your state, county and local governments.
You may need a vendor’s license if you sell products that may be taxed. Some states may also require a sales tax license. And in some areas, you may need a home business license if you want to start a dropshipping business from home.
2 . Find a good dropshipping niche
Here’s where the fun begins. With the dropshipping business model, you and your competitors all have access to the same products. Many of you will be working with the same suppliers. Even if you have different suppliers, many of them offer the same levels of service. This means that to differentiate your business from the competition, your marketing efforts are the essential difference.
For your marketing efforts to be successful, you need to find a target market and sell a product or products that speak to them – often solving a problem for them.
Start with what you know
Think of the things you know and love as a starting point. It’s always easier to sell something you know. However, just because you’re interested in something doesn’t mean others will be too, so make sure you have a few ideas on hand to work with. That way, if you find that your main idea isn’t likely to be the success you thought, you can test something else.
Find a specific target audience
The idea that the bigger the market, the more potential you have can be misleading. The bigger the market, the more companies you’ll be competing with. And if you’re up against a huge company that’s been around for many years, it’s going to be hard to convince people to come to you as a brand-new, unknown player.
When starting a dropshipping business, it’s best to focus on a smaller part of a market that you can customize to meet their needs. For example, you could sell to parents of children with cerebral palsy, or to tattoo artists. What’s important is that you try to find a market and a product that already interest you.
Conduct keyword research
To help you identify your niche or validate your idea of what might be a valuable niche, do some keyword research. You can use Google Trends, Google AdWords or other keyword tools to find out if there’s any search volume around the particular products you want to sell. The higher the search volume, the greater the demand for the product.
See what’s selling online
Another way to find trendy products is now to look at various listings online already. You can check marketplaces like Amazon and eBay for their best-selling items.
You can also refer to the keyword research you carried out in the previous step to determine whether something is popular or not.
Look at engagement trends on social networks
Research your niche on a variety of social media platforms. Start with the platforms that are most popular with your target audience. Pay particular attention to patterns in things that get the most engagement.
You can also use social listening tools to search for a particular niche to see what’s popular and engaging right now. These tools make it easier to align your message with their behavior and language, so you can create a truly personalized approach as you build your brand.
Research your competition
Once you’ve chosen a potential niche to enter, turn to Google, Amazon, eBay, etc. to see what the competition looks like. After all, chances are many of them sell the same products you do.
You want some competition because it shows buyer demand. But too much competition, and you won’t be able to stand out in the sea of noise.
Determining profitability
You need to know your market and your product… but that doesn’t mean you’re ready to sell. You need to make sure your idea is profitable before you devote all your resources to making it a reality.
Dropshipping margins are low, so you need to be sure you can actually make money. SaleHoo recommends selling non-seasonal products that you don’t see dominating the big brands. They shouldn’t be expensive to ship and ideally sell for at least $15. Many higher-priced items also meet these criteria.
Don’t be discouraged if you spend a lot of time on this step. It will take time, especially if you have to repeat the process several times because you find a market that’s too specialized or too saturated. Or you find a product that doesn’t have the profitability you need. But it’s this step that sets the tone for the rest of your dropshipping business, so it’s important not to be so excited as you jump ahead.
3 . Find quality dropshipping suppliers
It’s time to find suppliers who can provide you with the product you want to dropship. Figuring out where to find your products will take time, but shouldn’t be as time-consuming as finding a niche. Not sure where to start?
Okay, so with a list of products in hand, what’s the next step? How can you be sure that the supplier you have in mind is the best for your business? What should be a priority when evaluating a supplier? After all, your supplier is an essential business partner. Here’s what to look for:
Expertise and experience
We understand that every business has to start somewhere, but for dropshipping, you need suppliers with a reputation for providing quality products and customer service. Before contacting a supplier, research them on the Better Business Bureau (BBB) and other authoritative review sites like Trustpilot. If you notice that they don’t rate well on these platforms, remove them from your shortlist.
Charges, fees and shipping costs
Charges and fees are a major source of revenue for some businesses. In dropshipping, high shipping costs can be catastrophic. Bigger and heavier items cost more to ship. To reduce costs and maximize your profit margin, try to spend less than $5 per item on storage, packaging and shipping. Be aware that some suppliers may also charge a small monthly fee for working with them.
Fast delivery times
Unless you’re dealing with overseas suppliers, the general expectation is that your product will reach the end customer within a week or two. Longer than that? Your customers are likely to be upset.
Without samples to look at first, you run the risk of selling poor quality products. When your customers realize they’ve bought something that will break or not perform as advertised or expected, you’ll earn a bad reputation.
Before signing any kind of supplier contract, ask for dropshipping samples of the products you want to sell. Test them yourself beforehand so you know exactly what your customers are getting.
Ordering samples also allows you to experience the shipping process from the customer’s point of view.
References
Reputable dropshipping suppliers will give you references to other companies they’ve worked with if you ask. If the supplier doesn’t provide this information, it’s a sign to avoid them.
Ways to find dropshipping suppliers
Need help finding dropshipping suppliers? We have a list of the best dropshipping companies for each niche to help you get started.
You can use dropshipping marketplaces like AliExpress, Doba, Wholsale2B and Dropship Direct to help you find suppliers too. These marketplaces list vendors in a variety of niches, but don’t necessarily handle your due diligence for you. This AliExpress dropshipping guide may be useful.
When you find a supplier or wholesaler in one of these markets, take the time to do your own research before contacting them. The right dropshipping supplier does more than just offer the products you’re looking to sell. They must also be a reliable business partner.
Apart from dropshipping markets, you can also contact importers and manufacturers directly. This approach takes more time and effort, but the payoff is usually worth it. You end up with higher profit margins because you cut out the middleman and buy in bulk directly from the manufacturer.
There are a few caveats to this approach:
- Most manufacturers have minimum order volumes. For a beginner, minimum order volumes are not a viable approach. Sometimes you can strike a deal with the manufacturer, but this is difficult to do as a brand-new business. It could end up costing you more money up front, and is riskier if you don’t have previous sales data to guide you.
- You may not be able to integrate your e-commerce platform. Dropshipping marketplaces are much more likely to connect easily to your own online store, making it easier to automate the order fulfillment process. Without integration, it’s a lot more work for you to add and manage inventory.
For most people, it makes sense to wait until they have some experience of dropshipping before working directly with manufacturers to source products.
4 .Create your e-commerce website
You can’t have a dropshipping business without an online store. With so many e-commerce platforms on the market today, choosing which one to build your store with is another important factor.
Which one to choose? How do you choose? Ask yourself these questions. The answers will help you find the right platform for your needs.
Are you comfortable with technology?
Many of today’s website platforms are designed for people with little or no technical knowledge or experience. You can effectively create a professional-quality website with no coding skills required. That said, you exchange a lot of control over the small details as the platform takes care of things for you.
Can you afford to hire experts to help you? What’s your budget?
Let’s say you opt for a platform that gives you more control over things, but you need help customizing something. Do you have the budget to hire a freelancer or agency to work with you? If not, you’ll need to switch to something you can run yourself.
If you have a limited budget, you may end up with limited options. Free options like WordPress still require you to invest in your domain name and hosting.
Shopify is a great choice for a dropshipping e-commerce store because it’s easy to use. Affordably priced and easily integrated with a variety of direct shippers, Shopify users can set up their small business website in a matter of hours. A 14-day free trial is available to help you decide whether to pay for ongoing use.
How much control do you want?
For the entrepreneur who wants more control over the technology that powers their online business, an alternative like WooCommerce may be the way to go. It’s a WordPress plugin that’s free to use.
This approach gives you control not only over the design, but also over the software itself. You’ll choose web hosting, which gives you more control over site speed and other elements that you can’t really influence with a platform like Shopify.
If it’s easier for you to pay a monthly fee to have it all taken care of for you, opting for a hosted option like Shopify or BigCommerce may be the best option.
How many products do you sell?
Some hosted e-commerce platforms impose limits on the number of products you can offer for sale in your store. You may need to pay for a higher-level plan to access the number of products you need, or to unlock the ability to offer unlimited products.
If you have a large inventory or range of products, you’ll need an e-commerce platform that can handle the volume. You’ll also want to avoid platforms with fee structures based on product volume.
When you first start a dropshipping business, you may not have many products, and that’s okay. This may steer you towards a more basic e-commerce platform, and that’s fine too. However, if you plan to add more products than something can handle, you may need to change platforms.
Planning reduces the need to migrate from one platform to another. It’s a costly hassle that can mean inconveniencing customers and losing money as you move from one to the other.
Is it optimized for search engine optimization?
Search engine optimization, or SEO, is an important element in the marketing of any online business. Many business owners underestimate its influence on customer acquisition. Potential customers search online for the products you sell, but if you’re not in the search results, they won’t come to you. They’ll go to your competition instead.
SEO-optimized features include elements such as:
- Integrated blog
- Product trial
- The ability to use your own domain
- Customizable URLs
- Independent headings
- Independent ALT tags
- 301 redirects
Does it offer the applications, plugins or integrations you need?
Applications or plugins and integrations extend the features and functionality of your website. If you use a dropshipping marketplace like Spocket, or a print-on-demand company like Printful, to fulfill customer orders, you need to make sure that your chosen e-commerce platform integrates with it.
Not having an app or integration means it will be harder to ensure that orders are sent to the dropship supplier after your customer has checked out on your website. There’s plenty of room for error, which could lead to customer satisfaction issues.
If your platform has integration, you connect your website to your account. From there, every time a customer places an order on your website, it will be automatically transferred to the supplier for fulfillment. This makes inventory and order management much simpler.
What kind of marketing features are integrated?
Building your site is just the beginning. If you don’t build up a stable customer base, you won’t get any sales, and without sales, you won’t have any income. You can have the best products on the market today, but if people don’t know about them, it won’t make any difference.
What kind of marketing features should you be looking for?
- Promo codes and discounts
- Gift card support
- Abandoned recovery
- Support for customer loyalty programs
- Newsletter and e-mail marketing integration
- Support for social networks
If these features are not automatically included in your package, can you get them if you pay extra for the applications? Is paying extra for these applications within your budget? Or is it better to choose a platform at a price with these features already included?
Choosing the right e-commerce platform is only part of the battle. You’ll need to create content and offer dropshipping products for sale.
5 . Market your products on the Internet
Once your website is up and running, it’s time to bring in the customers. In your dropshipping business plan, you should have at least a few basic ideas about how you’ll market your business. These ideas are intended to guide you as you get started.
To set yourself apart from your competitors, focus on building a brand. Think about things like your logo and color scheme. If you can’t afford to hire a graphic designer, use free tools like canva or Crello to help you. Creating a brand guide will help you when creating content for social networks and advertising campaigns.
Social networks (Facebook, Instagram, Tiktok)
Social media platforms are ideal for reaching your target audience. To succeed and make the most of your time, focus on creating a solid presence on the two main platforms where your customers are most likely to be. Trying to be everywhere at once makes it harder to establish authentic links with your subscribers.
Research where your customers spend most of their time. What age group are you targeting? The majority of Facebook users are male (57%), and most users are between 18 and 54. Only a small percentage of users fall into the 13-17, 55-64 and 65+ demographic groups.
TikTok, on the other hand, has a 60% female audience, with 80% of users aged between 16 and 34. If you’re trying to reach young women, TikTok is definitely worth considering.
Whatever networks you choose to invest in, take the time to ensure that your social media profiles are optimized as much as possible. This means making sure you have at least :
- Your logo as profile photo
- Profile cover graphics, if any
- Biography with company information, including website link
Invest time in creating a social media content calendar. This outlines what you’ll publish and when. Create content in advance and plan its publication according to your calendar so that your audience always has fresh content from your brand.
It’s up to you to determine the frequency of publication and the content that works. If you didn’t look at social media profiles when conducting competitive research, now’s the time to do so. Note the types of content they publish, when they publish and the engagement they get. Don’t copy them exactly, but imitate what they do well and experiment with other things.
Social media is not the place to constantly promote your own brand and its products. If you’re just a constant sales pitch, you’ll quickly fade into the noise of the Internet. You’ll be ignored and risk losing your followers.
When you start a dropshipping business, it’s hard to build a following. That’s where paid advertising can come in handy. Facebook ads can help you accomplish many things, including:
- Increase the number of followers/fans
- Offer your subscribers an exclusive deal
- Send people to your website
- Target people who have visited certain pages on your website
- Target your subscribers by e-mail
In addition, influencer marketing can be a useful resource. Pay influencers in your niche so they can showcase your product to their loyal followers.
Each social media platform has its own advertising platform that you can use to advertise your business.
Search Engine Optimization (SEO)
SEO is the process of creating content that is optimized for search engines. By producing content around certain keywords that your audience is likely to search for, you can rank higher in search results. When you rank well for the keywords that bring your target audience to your website, you can create a steady stream of new customers. It’s not an overnight thing – effective SEO takes time. It could take six months before you see any real gains.
That said, SEO isn’t just about pasting keywords into your website’s content. As Google becomes more sophisticated and seeks to deliver a better user experience to Internet users, Google ranks sites based on several factors, including:
Domain age and authority
The older your domain, the better your ranking. Although domain age doesn’t have a major impact, it does make a difference. Ahrefs data shows that nearly 6 of Google’s top 10 results come from sites that are at least three years old.
But don’t let that stop you from creating a quality site. The bottom line is that everyone has to start somewhere.
How can you gain authority even if you’re a young site? Focus on creating quality content that people can use. If you fill your site with content containing spam and keywords, you’ll never be able to rank above sites that focus on adding value for readers.
Website security and accessibility
You need a website that Google’s robots can reach and crawl. If they can’t crawl it, it will never rank. In e-commerce, you need SSL (the technology that creates an HTTPS site) to make your site secure enough to transfer financial information. If you use a hosted solution, security is taken care of for you.
Links
The whole Internet is connected by links – so it’s not surprising that they’re important when it comes to SEO. Your site needs inbound links (links to it from other websites), outbound links (links from your site to other relevant resources) and internal links (links to other relevant pages and blog posts within your own site) to help users and Google.
User experience
User experience makes a big difference to the traffic generated by your website. Google uses artificial intelligence to better rank websites based on the signals they get from the way users interact with a page’s content. These signals include, but are not limited to:
- Click-through rate (CTR): The percentage of visitors who click to visit a website after it appears in search results.
- Bounce rate: The number of people who visit your page and quickly return to the search results. Google assumes they do this because they didn’t find what they were looking for on your site. If enough people do this regularly, Google may adjust your ranking because they don’t consider your site relevant for that keyword. If you write to the keyword, but the content still has a high bounce rate, it probably doesn’t match the searcher’s intent and needs a bit of reworking.
- Dwell time: How long visitors stay on your website after their visit.
Mobile convenience
More people use mobile devices than desktop computers to connect to the Internet. For this reason, Google is focusing its efforts on ensuring that mobile users enjoy an exceptional experience. A few years ago, Google switched to a mobile-focused index, so mobile versions of a website are served first. If your website isn’t designed for smartphones and tablets, your rankings will suffer.
The easiest way to ensure your website is mobile-friendly is to make sure you use a responsive website design. The design will automatically adjust the elements of your site to suit the visitor’s screen.
PageSpeed
The speed at which your pages load is an essential element of the user experience. If your pages take too long to load, users will become impatient and leave. When this happens too often, Google will negatively adjust your ranking.
Technical SEO
Technical SEO is all about getting the right coding elements to optimize your website. But you don’t have to be a developer to master it. Technical SEO also involves:
- Keywords in page titles
- Header tags, where appropriate, to break up content and make it more readable
- Meta descriptions
- Keyword phrases in image ALT tags
- Use schema to tell Google more about the content you produce
Pay-per-click (PPC) ads
When you launch a Facebook Ads campaign, you’re using PPC ads. That’s how most social network advertising works. But as you step up your SEO efforts, you can also use PPC ads to reach people on Google.
Depending on the keyword you’re trying to display in the search results, you may pay a higher cost per click. Commercial keywords cost more than informative ones.
If you’re not experienced in running PPC ads, it’s easy to spend a lot of money for little return. It’s a good idea to hire an expert to help you. If it’s not in your budget, do some research to help you learn more about the options and start small.
E-mail campaigns
E-mail marketing is an essential part of many online businesses, not just e-commerce. It’s a great way to connect with potential and existing customers to let them know about any new products, sales or discounts you may have. But more than that, it’s about engaging with your prospects.
For e-commerce e-mail marketing, there are a few types of e-mail to incorporate into your sequences:
- Welcome e-mail: This is what someone receives when joining your list and confirming opt-in. It’s crucial to make a good first impression here, so that subscribers are more likely to open your e-mails again in the future.
- Selected e-mail: This e-mail organizes a collection of your best assets – whether it’s a collection of the best blog content you’ve published in the last month or the promotion of your best-selling products. When you organize the best of what you have to offer, subscribers can choose what they want to learn more about. Ultimately, this gives you more control over your marketing efforts because you can segment your recipients according to their interests.
- Engagement emails: Most people e-mail a lot every day. If you want to grab your subscribers’ attention, you need more than a good subject line. Encourage engagement by offering free delivery, exclusive subscriber-only discounts and so on. Whatever you do, give people a reason to engage and make it a memorable experience.
- Discount e-mails: noticed a lot of abandoned shopping carts lately? An effective way to win back these customers is to send a discount e-mail. Offering a discount is a great way to get people to complete the checkout process. However, discount e-mails require a balance. If you send them too often, people will wait until they can get a discount code to make their purchase. You’ll lose profit. But, if you’re stingy with discounts, you could send your customers to the competition.
- Cart abandonment sequence: It’s more common than you think – with the fast pace of today’s world, you might buy something online, then get distracted by the door, a phone call or someone in your house who needs your attention. Before you know it, days have passed and you receive an e-mail about the things you’d left in your shopping cart. These e-mails are essential for capturing the sale of people who walk away before completing the checkout process. They won’t work on everyone all the time, but a good cart abandonment sequence can make a big difference to your bottom line.
- Order confirmation e-mails: You should always send order confirmation and follow-up e-mails so that customers can track what they’ve bought from you and know when they can expect to receive it.
- Upselling e-mails: It’s no secret that regular customers make you more money in the long run. Upselling e-mails are designed to sell additional products to existing customers. After receiving an order, some brands will e-mail new customers with recommended items. Depending on your dropshipping niche, however, selling watercress may not be an option. If this is the case, you can use tiered pricing.
- Referral e-mails: To develop your leads with little effort, encourage your subscribers to refer their friends and family to your company. Offer a discount to reach the person they refer who becomes a customer. At the very least, send them a thank-you e-mail for each successful referral.
- Win-back e-mails: Eventually, you’ll come across subscribers who were very active, but who stop reading your e-mails. These people stay on your list (which costs you money) but don’t read or process your e-mails. That’s where the win-back e-mail comes in – it’s a chance to get these people back or remove them from your list. You can send them a discount to bring them back and see what happens. Sometimes it works, sometimes it doesn’t. But at least you know you tried.
- Survey/comment e-mails: Wouldn’t it be cool if you were a mind reader and could always give your subscribers what they want? It would make things easier, but until we get mind-reading powers, survey/comment e-mail is the next best thing. From time to time, e-mail your list and ask them to share their thoughts with you. You can do this with a survey or just a quick message asking for feedback. Use the information you get from your subscribers to make adjustments that suit you. To increase participation, offer the chance to win a gift card or offer a discount at the end.
- Thank-you e-mails: Showing your appreciation is important. Of course, thank your subscribers for joining your list and making purchases. More than that, however, take the time to thank them for being who they are – because, without them, you wouldn’t be in business.
6 . Track orders and manage inventory
Since dropshipping means you won’t have inventory on hand, this makes operations easier. But you’ll still need to track the supplier’s inventory and make sure it syncs up correctly with your store. As a rule, this is done with a product data feed, which can take many forms. It’s easiest to think of it as a spreadsheet containing the information you need to work with your supplier.
When choosing a supplier (or suppliers) to work with, ask for their product flow. At a minimum, it should include:
- A product identifier such as SKU, UPC or MPN
- quantities
- Your costs
Make sure you know how often the supplier updates its product data feed and how you will receive these updates. The most tech-savvy suppliers provide this information online with hourly updates, but some may choose to send you an e-mail every day.
Many companies prefer to work with suppliers who provide more than the bare minimum of information in their product data feeds. Larger, more experienced suppliers also tend to include:
- Product titles
- Product descriptions
- Product categories
- Product images
You’ll always need order tracking so that you can provide customer service to the people who place orders with you. Typically, you’ll have some sort of portal with the supplier that allows you to easily track orders and provide tracking information to your customers when an order is shipped.
Automate the fulfillment process
Your e-commerce platform should make it fairly simple to automate the fulfillment process. If you use Shopify, for example, your dropshipper may have an app that you can add to your store. This ensures that once a customer places an order in your store, the supplier automatically receives the order so that it can be fulfilled.
If you can’t automate this process, it will make operations more difficult. At first, it may be easy to manually send orders from your dropshipping store to the supplier yourself. But as you grow and your order volume increases, submitting orders manually takes time. And the more you do, the more room there is for error.
7. Provide customer service
Since your end customer won’t know that the dropshipper has already been involved, all customer service efforts are your responsibility. At first, this may be as simple as creating a dedicated support e-mail address. However, as you grow, it may be unrealistic to manage everything yourself via e-mail.
However, research shows most consumers today prefer self-service options for customer service. This means you need to ensure that your website includes features such as :
Include frequently asked questions (FAQ)
Include a FAQ page on your website. Create a link to it in your site’s main navigation. This can help customers find answers to their most common questions before ordering, and help them solve problems while they’re waiting for their order. It can also be useful if a customer encounters a problem after receiving their order.
Live chat and chatbots
For more complex or urgent problems, live chat is useful. It gives people a way to contact customer service live, without having to phone. You don’t need to have someone available 24/7, XNUMX days on XNUMX, but you can use chatbots to help pick up the slack.
Chatbots are pre-programmed to converse with users based on certain keywords and phrases that the user can enter. For example, if someone asks about returns, the chatbot can direct them to the returns processing help article, or ask for the order number, then generate a returns label.
Delete shipping policies
Your website must have a shipping policy. Your shipping policy must include :
- Delivery charges
- Delivery methods
- Shipping times
- Any shipping restrictions
- International shipping information
- What to do if a customer has a lost or missing parcel
- Return and exchange information
Update your shipping policy regularly; a good rule of thumb is every six months. Update your policy every time you change your shipping methods. If you change suppliers, this could affect your shipping methods and lead times. Update the policy to reflect these changes.
Clear return policies
As much as you’d like packages to arrive at your customer’s home or office and stay there, this won’t be the case for 100% of your customers’ orders. Sometimes the customer returns the product because it’s not what they expected. Sometimes the packaging doesn’t contain the right product. And sometimes the product is damaged in transit.
Whatever the reason, your dropshipping business needs to have a clear returns policy posted on the website. Here are some things to consider when drawing up your returns policy:
- What is the supplier’s return policy? Are you stuck with something if a customer returns it to you?
- Can you afford to offer customers free return delivery?
- How long will it take to process the return and refund?
- How long is your return window? Will you extend it for the vacations?
- Does the return have to be in its original packaging?
Your returns policy should clearly define the terms and conditions under which you will accept returns from buyers. Indicate how long a customer has to return the product. Include return instructions and a return address. If you provide return shipping labels, make it clear where customers can go to obtain them.
Have a plan in place for how you will expand support efforts as your online business grows. This could include things like hiring a virtual assistant to handle customer service emails, or investing in a platform that makes it easy for customers to create support tickets.
Returns processing
Since the dropshipper includes your return address on the products, there’s a good chance that customer returns will reach you. This could cause you a lot of problems if you don’t have a good place to store the products or a plan to get your money back.
That’s why some direct shippers offer no-return refunds. If you want to make sure you’re providing great customer service, but don’t want to deal with returns, you can ask your customer if they’d like a brand new product instead of a refund. You can also let them know that they can also keep the existing product.
If they accept this resolution, they’ll be happy with the extra product you send them, and if you have large enough margins, you can still get a positive net from the customer.
This approach works best when a customer receives a damaged product. Ask for photos to validate the claim before agreeing to send a new product.
Get started with Dropshipping today
Here’s our step-by-step guide to dropshipping – in a nutshell. Starting a dropshipping business is not for the faint of heart. Like any new business, it takes time and constant effort. You’ll spend a lot of time in the early stages setting things up for success.