So, you’re thinking about starting up a dropshipping business?
Good idea. The dropshipping market – which, in 2019, was already valued at over $162 billion–is projected to be worth more than a gargantuan $591 billion by 2027.
Dropshipping is a type of eCommerce business model whereby a store sells a product offered by a third-party supplier. However, what sets dropshipping apart is that the business doesn’t actually store any of the inventory they’re selling in their own warehouses or locations. They simply take the order and relay it straight to the supplier, who take care of the picking, packing, and shipping responsibilities themselves.
Sounds… simple, right?
Well, not exactly. Like most business models, dropshipping comes with a unique set of its own pitfalls and potholes. Don’t stress, though – we’ve recruited five established dropshipping experts to help you navigate all the barriers to starting a dropshipping business yourself.
These entrepreneurs have grown their dropshipping businesses from the ground up, and now they want to help you do the same. Here are their top six tips.
1. Buck the Trend
Avoid trend-led items with short-shelf lives
When you’re just starting out on your dropshipping journey, it’s tempting to ‘jump on the bandwagon’, and gravitate towards selling cheap products from China.
However – according to English entrepreneur Lewis Smith, at least – that would be a mistake.
“Opting for cheap products from China – with lengthy delivery times to boot – isn’t the kind of business model that will sustain you in the long run, and you can expect to do plenty of experimenting when you start out. For example, I toyed with the sale of poor quality men’s fashion accessories from AliExpress for my first dropshipping business.”
You’d think opting to capitalize on the popularity of men’s accessories would lead to success–so what did Lewis do wrong?
“Trend-led items have a short shelf-life – so that was my first mistake! Without having the resources to compete with big suppliers like Amazon when it comes to delivery times, I was always going to end up letting my customers down. When my stock got to the home of my customer up to 30 days later, they’d already asked for a refund because of the delay, or complained about the lack of quality of the goods.”
Fortunately, the solution was clear – and much closer to home than Lewis first expected.
“The main dropshipping tip that I learned early in my journey was that by utilizing reputable UK-based suppliers (domestic dropshipping), and trading in goods with higher prices (high-ticket dropshipping), I was able to ship faster, and ended up with more satisfied customers.
“Eventually, I chose to close my first store down and go back to square one, operating with a simplified business model that enabled me to create valuable stores and brands that I could be proud of.”
These days, Lewis takes a hands-off approach to running his uber-successful dropshipping business – from a beach in Mexico! And who knows – by avoiding trend-led items with a short-shelf life and lengthy delivery times, you could be following in his sandy footsteps sooner than you think!
2. Drop Beyond Borders
Expand into international markets – again and again!
While utilizing international suppliers may not necessarily be the right option, opening your burgeoning dropshipping business up to more international customers can offer big benefits.
So says Raitis Purins, who’s directed the marketing operations of Printful – one of the world’s largest and most wildly successful print on-demand businesses – since 2016. Their secret? Internationalization.
“Our main focus right now is firmly on the US market”, says Raitis, “[but] we’re always looking to expand our operations to Europe. Compared to the previous year, the Western European market grew by 150% in 2018 – so it certainly represents some excellent opportunities for dropshippers.”
According to Raitis, however, some of the most lucrative opportunities for international dropshipping businesses may lie even further East.
“We’re also starting to look more closely at Japan, and are currently evaluating the market’s potential. Our number of Japanese-speaking customers has increased 73-fold since we began our first marketing campaigns there, so I’m excited about the potential this new base of customers has to offer!”
Of course, Japan may not be the first market your fresh-faced dropshipping business will look to explore. But as you expand, and your budget is able to meet the additional costs of translation and marketing, it could be a profitable, less well-trodden route to attaining dropshipping scalability.
3. Iterate and Optimize
Reflect, evaluate, and don’t neglect to make the small changes
It’s one of the uncomfortable, but honest, truths about dropshipping…
…that just because your store looks good and is selling products now, doesn’t mean things will stay that way forever. To keep on top of the competition – and continue to give your customers what they want – you’ll need to continually evaluate, test, and improve your dropshipping business’ online presence.
Take it from Emma Reid – founder of emmareid.com – who scaled a single product to $560,000 revenue, in just eight months.
“Maintaining a successful dropshipping business is a fully iterative process. My first website? Terrible! But looking back, I can see that – which means I’ve progressed a ton since I first started out.”
As Emma explains, spotting small issues or areas for improvement early – and acting on them with speed – is a key tool when it comes to growth, and fuelling long-term dropshipping success.
“Take a moment to reflect on where you were last month, or this time last year. Keep ensuring that you’re always running a magnifying glass over your store, always looking for ways to improve it. Over time, these incremental changes will add up to something big – trust me!”
4. Build your Brand
People don’t buy what you do; they buy why you do it
When you’ve just started out in dropshipping, it’s unlikely you’ll have the cash to splash on expensive paid marketing campaigns, or high-flying advertising. So how do you get your name out there, and inspire trust in your company’s products and ethos?
According to Ricky Hayes – seasoned dropshipping expert, and co-founder of Shopify theme Debutify – the answer to that question boils down to just one word: brand.
“Success in the dropshipping industry is tied to how well you can build a brand around your business. What that involves is acquiring loyal customers, who will buy your goods again, again, and again.”
That means developing and disseminating your brand across multiple channels and platforms, without necessarily having to pay for it – something Ricky’s own YouTube channel goes into more detail about. Other tips for building your dropshipping brand include:
• Developing an iron-clad vision and mission, and shouting about them at every opportunity.
• Picking a memorable name, logo, and color palette, that all reflect your business’ values.
• Ensuring the design of your online store matches these, too.
• Coming up with a catchy slogan.
• Providing tip-top customer service.
• Leveraging rewards for repeat customers, and fostering consumer loyalty.
• Producing value-adding content that’s optimized for search engines.
• Getting active on Facebook, Instagram, and Twitter, and using social listening tools to keep tabs on what people are saying about your brand and industry.
Of course, in order to build a successful brand, you’ll need to understand who you’re pitching it at, first. As Ricky puts it, “picture your product’s audience: how old are they? Are they men or women? How often will they use the product? Does it really have mass appeal?”.
5. Get Your Marketing Right
Serve the existing demand, rather than creating new demand
As we’ve just seen, paid advertising won’t be for everyone – and blossoming your brand should always be your first priority. However, if you do want to kickstart your dropshipping marketing efforts with paid campaigns, don’t go in blind – it’s something Lewis Smith has seen far too many times before:
“One of the most common pitfalls new dropshipping businesses fall into is attempting to drive ‘cold’ traffic to their store via Instagram and Facebook advertising. If you’re dealing in higher-value stock, it’s far easier to cater to a pre-existing demand, rather than to create a new one from scratch. It’s for this reason that researching and validating your niche is so vital.”
As Lewis further explains, an ‘interruption-based’ approach – a form of aggressive marketing, whereupon products invade your Facebook or Instagram home screen – may not be the best route for new dropshipping businesses. Lewis’s business Dropship Unlocked, for instance, recommends an alternative, more innovative method:
“At Dropship Unlocked, we practice a more targeted method of finding customers, called ‘Search-Intent Marketing’. This approach involves only targeting ads at customers that have already expressed some form of active interest in the product you’re selling, meaning there’s a higher chance of them converting.”
“What this form of marketing does is focus your advertising dollars only on the customers that are most ‘ready-to-buy’. Following this, it’s a good idea to run retargeting campaigns, which help lure customers back to your site if they’ve taken off without buying. Social media channels are an excellent way of doing this.”
The bottom line? If you’re ready to pay to market your product, do it smartly. Don’t just target regular customers, but the right customers – then re-engage and re-target them, again and again and again.
6. Be Persistent!
If at first you don’t succeed, try, try, and try again
Successful dropshipping businesses don’t spring up overnight. Nope – like many of the best things in life, they’re a product not only of a bright mind and a brighter idea, but a series of failures, missteps, and crushing disappointments, too.
But should any of that deter you? Absolutely not!
“I only began seeing any kind of consistency in my sales after five previous failed store attempts”, says Chris Wane, dropshipping pro and founder of Advanced Dropshipping Academy. “When I eventually struck upon the winning formula, I generated £10,000 within six weeks of launching my sixth store”.
Likewise, it took Ricky Hayes a while before his own dropshipping business graduated from pipe dream territory to real-world success:
“I had been dropshipping for 18 months before I had reached a place I was comfortable with. Only after all that time did I regain my financial freedom, and with it the sense that I had control over my own life!”
So, is dropshipping easy? Not particularly. Are you guaranteed success? Rarely. But, with a combination of stickability, ambition, optimization, and fresh-thinking, are you able to follow in the wake of our established experts, and build a business and brand to rival the best dropshipping companies in the industry?
Absolutely. Why not start now?