And why you really need to take notice

Dropshipping – one of the biggest buzzwords in e-commerce – is selling products you don’t have in stock. Instead, you have a manufacturer or distributor on stand-by to produce and send out the product once you get an order in.

You can see why people are excited about it. With its low risk and barrier to entry, a dropshipping model can work well for most businesses, but beware – there’s a lot of bad advice floating around the internet.

Consider this kind of ad that I get bombarded with daily:

“You too can have a 6 figure dropshipping store after you take my $49 training seminar!”

Too many of these ‘experts’ are actually for fly-by-night dropshipping courses, sharing some pretty questionable information. So, in response, here’s a guide for what you actually need to know before launching your dropshipping business.

1: It’s important to stick to a niche

One of the most common mistakes I see is people trying to sell everything under the sun. A recent example: a kitchen gadget store that also sold phone cases. When I asked the entrepreneurs why they opted to go this route, they told me that baking was their passion, but they heard phone cases sell well, so they figured they should do both. The result? It’s confusing for the customers and undermines their faith in both the kitchen gadgets and phone cases.

2: Find something unique

You may be tempted to find what products are trending, but this is a sure-fire way to end up as a small fish in a massive pond. Phone cases, for example, are extremely popular items to dropship. This market is saturated, especially when the average consumer is likely to buy only one phone case every few years – if that. Instead focus on a niche that interests you, carve out your special spot on the net, and put real power behind your marketing.

3: Vet your supplier carefully

Too many dropshipping stores sell products they’ve never actually seen or touched. Try Googling “Online Shopping Fails” – very entertaining, and proves my point brilliantly. So, before you invest time and money in building a site and running ads, order the product yourself. It’s a small investment to make to avoid dealing with a million refunds. Also, take this time to note how long shipping takes and what state the packaging arrives in. These are all things your future customers will be judging you on.

4: Take your own product photos

Taking product photos for your website is a bit of extra work but will ensure you have consistent image quality and brand styling across your product range. This sets you apart from any sites dropshipping similar products. It also prevents tech-savvy individuals from doing a very simple Google reverse image search to find your supplier and bypass you entirely. (Pro tip: I do this before making any purchase with a store I don’t already know. I never pay $80 for a cute sweater that in three clicks I can find on Aliexpress for $16.)

5: Branding and layout are important

You’ve picked a great handful of products, you know your suppliers are good and you have great product photos ready to go – don’t ruin it now with a website that has a vibrant purple background and bright red text. A logo made from MS Word Art is not going to cut it either. You may think I’m joking, but I have seen this.

It doesn’t matter how great your product planning is, when you’re a new business with no brand awareness, a bad first impression can derail your conversion rate. It’s a point at which expert help is necessary, even if it’s just a pair of fresh eyes to make sure the design and the usability are up to scratch. In setting up e-commerce, the goals are to get customers to checkout as smoothly as possible and make updating the website easy. At the very least, ask your most truthful friends for feedback before you press publish.

6: Advertise, advertise, advertise

No one is going to find your brand-new website if you don’t tell people you’re open for business. If you have a product that’s likely to be researched and actively searched for by customers, you should consider pull marketing, like Google Adwords or content marketing on other websites. If you have a product that’s more of an impulse purchase, then you may want to consider push marketing like social media ads.

7: Communicate with your customers

A very typical pitfall for dropshipping is when customers face long shipping times. If you’re not transparent about shipping times you’ll have grumpy customers requesting refunds or issuing chargebacks, which is when a customer reports you for fraud to their credit card company. The refund is forced and you have to pay a penalty fee.

8: Set your expectations

People often expect their dropshipping business will require very little work with lots of return. Unless you’re freakishly lucky, dropshipping requires a lot of trial and error to find the right products and ad sets. There is work in communicating with your clients and maintaining your supply chain. Like any business, there are no guarantees but if you can get everything set up and running smoothly, it can become a viable business with a lot of automation.

Dropship and prosper

I spoke with hundreds if not thousands of dropshipping store owners when I worked with Shopify. A lot of the problems they ran into could have been avoided if they’d been given a more practical framework. I hope this article has helped shed a more realistic light on dropshipping and what it takes to be successful.

If you’d like any more advice on how to set up your dropshipping business right from word go, get in touch.