Dropshipping is a business model wherein retail shops fulfill product demands from a third-party seller and have the items shipped directly to the customers. This model allows any retail business to cut costs in terms of inventory storage since all orders are fulfilled by a third party, which is generally a manufacturer or a wholesaler. The dropshipping business model allows a merchant to purchase items from the manufacturer as and when required, to fulfill orders.
However, there are several misconceptions among the younger generation regarding the dropshipping business idea. People think that dropshipping is an easy way to earn money fast, but they don’t understand and evaluate the underlying risk factor or do the necessary research required to maintain the dropshipping business. Through intensive exploration and analysis, we have put together the list of things that will make or break your dropshipping business.
1. Product Research
If a merchant isn’t confident about the product, it’s unlikely that customers will find it attractive. To be successful in any trade, it is a prerequisite to do the necessary market research to evaluate what kinds of products or niches are in demand. It is always beneficial to select a niche that is interesting to you, too. Another thing to keep a check on is market fluctuations. Since you don’t need to manage the products or inventory, dropshipping grants the freedom to change the type of products you sell, and this advantage should be utilized optimally.
2. Platform
The platform on which you choose to market your products defines the number of orders you receive at the end of the day. If you have a newly constructed website, the traffic and footfalls are bound to be very low at the start, unless you spend a lot of time marketing and analyzing the keywords that potential clients search for on SERPs. If you are new to the dropshipping business, it is advised to launch your products on big e-commerce sites like Amazon or eBay.
3. Advertising
Simply building an e-commerce website or listing your products on Amazon isn’t enough. You need to actively advertise your products and reach out to as many customers as possible. Being aware of Search Engine Marketing and Optimization goes a long way in building brand awareness and popularity. If you’re on top of your marketing game, you’ll bypass most of the competition by giving your brand a lot of credibilities.
4. Suppliers
To sustain your dropshipping business, it is absolutely necessary to partner up with the right suppliers. When looking for a supplier, approach the manufacturers or wholesalers directly in order to source products. Before you finalize your dropshipping suppliers, evaluate their reliability, check if their location is feasible for your business, find out about their purchase system, and make sure they have good support staff.
5. Shipping system
Low shipping cost is absolutely necessary for good customer retention. If your suppliers are located in a place where shipping items costs are high, it might repel potential buyers. Look for items that are inexpensive to ship, because it can be useful to attract more customers by providing free shipping. You can then cover the shipping costs as part of your business expenses.
6. Customers
The prime responsibility of a merchant in a dropshipping business model is undoubtedly the acquisition, management, and communication with the customers. Acquiring customers initially is not an easy task but through ads on search engines and social media platforms, customers can be targeted as per your business needs. Through in-depth targeting, reaching out to potential buyers becomes so much easier. And finally, always heed your consumer’s feedback.
7. Patience and Persistence
Finally, the main factor that determines whether you can successfully run a dropshipping business is having patience and persistence. The business of dropshipping requires a lot of time and effort to scale successfully, so your interests will keep you encouraged and motivated. The primary earnings in dropshipping business models are calculated by subtracting what your supplier charges and what your customers pay. You need to stay dedicated and persistent if you really want to make it your main trade.
Keep in mind that big markets have greater competition. So think wisely about the products you’re selling and where you’d like to display them; the lesser the competition, the greater the profit. Remember that selling items that aren’t readily available in the market can help you outdo the competition and make your appeal to impulsive buyers. Give our guide a thorough read and follow our tips to the T if you want to make your dropshipping business grow organically and in no time.