Tips for Starting your Dropshipping Journey – Complete Beginner’s Guide
Because of the startup costs and fulfillment hassles, many people are hesitant to open an online store. Consider what it would be like if someone offered to cover your upfront inventory expenditures for thousands of items as well as manage your fulfilment operations. It would be a lot easier to get started, and you could work from anywhere on the globe.
The aim of the article is to explain the benefits and advantages of drop shipping, why it’s a good business model, and drop shipping platform MyDepot is the best option because they have inventory direct in the US for faster shipping.
The benefits of a dropshipping business model
You should consider drop shipping as an online business for a variety of reasons. A few of the more compelling is as follows: To get started, you don’t need any money. Dropshipping makes it quite simple to begin selling online. You don’t need to spend a lot of money on inventory to offer thousands of things to your clients.
Convenience and effectiveness are two words that come to mind when thinking about this product. It takes a lot of effort to begin and grow an eCommerce business, especially if you have limited resources.
You save time and money by not having to worry about fulfillment, allowing you to focus on your marketing strategy, customer service, and operations. Mobility. You’re free to run your business wherever you can get an internet connection now that all of the physical fulfillment difficulties have been resolved. It’s a tried and true model.
Must-know drop shipping principles
Many of these dropshipping techniques are based on two essential concepts for running a successful dropshipping business: Accept that things may get out of hand. Dropshipping’s ease comes at a cost, and having an unseen third party engaged in each sale might make things more complicated. You’ll have to cope with fulfillment issues ranging from failed orders to out-of-stock items. You’ll be less likely to give up due to frustration if you accept this ahead of time. Given the inherent complexity of dropshipping—multiple suppliers, shipments from diverse places, etc.—it’s easy to believe that you need to set up your system to track your costs and inventories in exact detail at all times.
But if you try, you’ll probably go insane, spend thousands of dollars on bespoke development, and never open a business. Focusing on the most simple-to-implement solutions, even if they aren’t “perfect,” is usually the preferable option, especially when you’re just getting started. Any dropshipping store owner will tell you the same thing. Let’s talk about drop shipping strategies that can help you build your business operationally and make things work as smoothly as possible with these two notions in mind.
What is the operation of the dropshipping business model?
The order-fulfilment technique known as drop shipping enables store operators to sell straight to customers without maintaining any inventory. A third-party provider sends a customer’s order of a product from a dropshipping company directly. The retail price you decide on is paid by the consumer; you pay the suppliers’ wholesale price, and the remaining amount is profit. Never deal with goods or spend money on stock.
There are three typical methods to locate a supplier for your dropshipping business:
- through a supplier database, such as AliExpress or Alibaba.
- utilising a back-end supplier directory that is integrated, such as DSers.
- use a print-on-demand programme like Printify.
For Shopify business owners, using DSers to drop ship products is the simplest option. Through AliExpress, you may purchase millions of items from the DSers marketplace and import them instantly into your store.
When a consumer makes a purchase in your store, DSers automatically complete the order. Simply double-check the accuracy of the order details before clicking the Order button. The product is subsequently delivered to the buyer, wherever they may be in the globe, by the AliExpress dropshipping provider.
You are in charge of creating your website, and your own brand, selecting the products you wish to sell and marketing them when you use the dropshipping business model. Your company is also in charge of setting prices that generate a healthy profit margin and covering transportation costs.
Tips for Starting your Dropshipping Journey
1. When suppliers botch an order
Even the best vendors make mistakes, and delivery failures are unavoidable from time to time. So, what happens if your supplier sends the wrong item or none at all? Here are three choices to consider: Accept responsibility for your blunder. You should never hold your drop shipper responsible for a mistake. It will simply confuse them and make you appear inept.
The customer is completely unaware that the drop shipper exists. Instead, take responsibility for the situation, apologize, and explain what you’re doing to remedy it. Make amends with the client. Depending on the severity of the problem, you may want to compensate the consumer ahead of time. This could include a refund of the delivery price or an upgrade if the customer needs a new item to be supplied. Make the supplier pay for the repairs. Although you must accept responsibility for the error, this does not mean you must reduce your profit margin.
Any reputable supplier will pay to correct its own mistakes, including return shipment charges. It will, however, most likely not cover any freebies or upgrades you provided to the customer. You must factor in the costs of public relations and brand development. Even the greatest drop shipping providers will make mistakes now and then, but be wary of a supplier who consistently botches your orders and fails to properly deliver them. Your company’s reputation will suffer unless you can persuade the supplier to change (which is unlikely). If this is the case, you should start looking for a new supplier right away.
2. Managing inventory and multiple suppliers
The largest issue you’ll encounter running a dropshipping business, according to most experienced dropshippers, is monitoring inventory status across various suppliers. If you don’t do a good job at this, you’ll be frequently alerting clients that their order is out of stock, which isn’t a great way to get repeat customers and brand lovers.
It’s a complicated procedure to properly manage inventory across your suppliers and distributors, as well as to restrict the amount of out-of-stock items you sell. The following are some inventory management best practices that should help you dramatically reduce the number of out-of-stock items you sell:
- Use a variety of vendors.
- Choose your products carefully.
- Make the most of generics.
- Make sure the item is still available.
- Dealing with orders that are out of stock
3. Order fulfillment for dropshipping
As we’ve already indicated, using multiple providers has a number of advantages: The Order fulfillment increases the likelihood of items being in stock, provides regional diversity for faster delivery, and keeps you from becoming too reliant on a single supplier for your products—a good fallback strategy if your favorite provider runs out of stock over the Black Friday Cyber Monday weekend
But how do you know which provider to choose when there are so many possibilities for satisfying an order? There are a few different approaches to think about: Route all orders to a preferred supplier Route orders based on location Route orders based on availability Route orders based on price
4. Security and fraud issues
Storing credit card numbers Keeping your clients’ credit card information on file might make reordering easier and potentially enhance sales. However, if you’re hosting your own website, the security risks and responsibilities are usually not worth it. To hold credit card data, you must follow all PCI (payment card industry) compliance regulations and undergo security assessments.
This is a costly and time-consuming process, especially for non-technical business owners. Furthermore, if your system is hacked or infiltrated, you may be held liable for stolen credit card information. The best strategy is to avoid storing credit card information. Consider accepting payment via Shop or PayPal, which helps speed up the checkout process and prevent cart abandonment. Payment gateways allow you to concentrate your resources on marketing and customer service rather than security checks. Taking care of phony orders The system for verifying addresses
5. Understanding chargebacks
You’ll earn a “chargeback” if a customer calls his or her bank or credit card provider to dispute a charge you made. Your payment processor will deduct the amount of the disputed charge from your account for a short period of time while you show that you supplied the products or services to the customer. If you can’t produce proof, you’ll be charged a $25 chargeback processing fee plus the amount in question.
You could lose your merchant account if you have too many chargebacks compared to the volume of orders you’re processing. Fraud is the most common reason for chargebacks, but customers may also challenge a charge if they don’t recognize your company, forget about the transaction, or don’t like the product they received. We’ve seen everything. When you get a chargeback, you usually just have a few days to answer, so act promptly! You’ll need to give proof of your initial transaction, delivery tracking information, and, most likely, a wholesale packing slip showing the items you ordered and sent to be eligible for a refund. You’ll have a strong chance of recovering the funds if the contested charge was for a genuine purchase and you didn’t make any false statements or promises throughout the transaction.
You’re almost likely not going to win if the chargeback is tied to purchases with distinct billing and shipping addresses. Most payment processors will only reimburse you for fraudulent orders sent to the cardholder’s billing address. We don’t even bother responding to chargebacks in our businesses since we know it’s a waste of time.
6. Dealing with returns in dropshipping
Before you write your own return policy, be sure you know and understand how all of your vendors handle returns. You may afford to be lenient with your terms if they offer a lax 45-day return policy. One supplier’s severe return policy may compel you to reconsider the terms you can afford to put in place. When a consumer wants to return an item, the procedure is as follows:
- The customer contacts you to request a return.
- Your supplier issues you an RMA (return merchandise authorization) number.
- The consumer returns the product to your supplier, noting the RMA number on the return address.
- The wholesale price of the product is refunded to your account by the supplier.
- You provide the consumer with a complete refund for the merchandise.
However, things aren’t always so simple. Returns can be complicated by the following factors:
Some providers will levy a restocking fee, which is essentially a penalty for returning an item. Even if your supplier levies these costs, we highly advise against including them in your return policy. They appear to be out of date and unfriendly to your clientele. Even if you have to pay a price now and again, you’ll more than make up for it in the number of clients who choose to do business with you.
The only thing that makes receiving a damaged item worse is having to pay extra shipping to return it. The majority of dropshipping vendors will not pay for return shipping for damaged items. They believe that because they did not produce the item, they are not accountable for any flaws. They simply see it as a danger of selling low-quality goods in a retail environment. If you want to create a respected firm, however, you should always pay your consumers for return shipping fees for defective items.
This is a fee you won’t be able to pass on to anyone, but it’s a necessary component of running a successful dropshipping company. It can be impossible to print a prepaid mailing label for consumers unless you have your own UPS or FedEx account, therefore you may need to provide a return shipping refund to recompense them for their out-of-pocket price. Make sure you pay them in some way, whatever you go about it. If the defective item is affordable, it’s typically more cost-effective to simply ship the buyer a new one instead of requiring them to return the old one.
When compared to forcing people to return the old item, this provides a variety of advantages, including It has the potential to be cost-effective. It doesn’t make sense to spend $10 to return an item that your distributor only charges you $12 for. You’ll earn a $2 net credit, but the hassle to your customer, supplier, and staff isn’t worth it.
The customer is completely taken aback. How frequently do corporations simply mail a new product without requiring the return of an old one? Nearly never! You’ll get significant points and possibly a lifelong customer. Furthermore, the consumer will receive the new product much faster than if the old one must be returned to the warehouse before the new item can be dispatched. It’s conceivable that your vendor will cover the delivery costs. A defective product’s return postage is not covered by the supplier, but most will cover the cost of sending a replacement to the client.
Most vendors can be persuaded to cover the shipping on a replacement product that you simply purchase separately because they’ll be paying for return shipping anyhow. Furthermore, many people are relieved to save the headache of processing the return. Most companies will require the buyer to pay for the return freight if a client wants to return a non-defective product for a refund. This is a policy that is fairly reasonable. You’ll undoubtedly stand out if you’re prepared to give free returns on everything. However, it can be costly, and most customers would realize that you shouldn’t have to pay for return postage simply because they ordered something they didn’t want in the end.
7. Shipping issues
For dropshipping business owners, calculating shipping charges can be a nightmare. It’s tough to compute shipping charges for orders with so many different products shipping from several locations.
You can choose from three different shipping rates:
Rates are updated in real-time. With this method, your shopping cart will calculate an actual real-time quote based on the total weight of all items purchased and the delivery destination. This is quite precise, however, it can be difficult to calculate for shipments originating from multiple warehouses. Rates for each category. You’ll determine flat shipping prices based on the types of products ordered if you choose the per-type method. As a result, all tiny widgets would be $5 to ship, while all large widgets would be $10 to ship.
Shipping is charged at a fixed fee. You’d charge one flat amount for all shipments, regardless of type, as the name implies. You might even consider providing free shipping on all orders. This is the simplest option to use, however it is the least accurate in terms of representing actual shipping costs. It’s vital to remember the overall dropshipping guidelines we stated at the beginning of this chapter when it comes to shipping.
We’re searching for a dropshipping solution that favors simplicity above excellence, especially if we’re just getting started. Some business owners will struggle with shipping standards for an ecommerce store that has failed to produce a sale for days—or weeks. Instead, they should concentrate their optimization efforts on search engine marketing, social media, and customer service, as well as fast implementing a shipping strategy that makes sense on a broad scale. They can then invest in a more precise system as their business grows. It’s typically advisable to estimate an average shipping price and use it as your overall flat pricing when following this strategy. You’ll most likely lose money on certain orders while making money on others.
Would you really want to implement a system that passed on extra shipping fees based on supplier location, even if you could? Excessive shipping rates irritate most customers, especially when they believe their product is coming from a single location. Instead, choose suppliers with overlapping inventory and be judicious about the things you sell to limit duplicate shipments. Long-term, this is a far more practical and straightforward answer.
Although international shipping has gotten more convenient, it is still not as simple as domestic shipping. When shipping overseas, you must consider and/or deal with the following:
- Varying countries have different weight and length restrictions.
- Suppliers may charge additional fees for processing foreign orders.
- Expenses associated with addressing problematic purchases as a result of higher delivery prices.
- Excessive delivery expenses for large and/or heavy items.
Is the trouble really worth it? It all depends on the market and the margins you make. If you sell small things with large margins, the added market reach may make the bother and expense of overseas shipping worthwhile. Others, particularly small business owners that sell larger or heavier items, may not find the increased value worth the cost and trouble.
Picking a carrier
It’s critical to choose the correct carrier because it can save you a lot of money. In the United States, the most important decision you’ll have to make is whether to use UPS/FedEx or the US Postal Service. UPS/FedEx. These privately owned behemoths are ideal for transporting massive, heavy cargo within the United States. They will charge much lower rates for large shipments than the USPS. Postal Service of the United States of America You can’t match the rates offered by the USPS if you’re mailing tiny, lightweight things.
Following dropshipping expenses, the cheapest UPS shipping fee you’re likely to see is approximately $10, although you can frequently mail products for $5 or less at the post office. Sending foreign packages, especially smaller ones, through the post office is usually a preferable option. Consider categorizing your shipping options by shipping time (“Within 5 Days” or “Within 3 Days”), as this allows you to choose the carrier that is most cost-effective for each order and delivery period
Conclusion – Tips for Starting your Dropshipping Journey
You deserve a pat on the back for getting this far. It demonstrates your commitment to starting a successful company. Act now and launch your dropshipping businesses are the only remaining steps.
Dropshipping is generally a low-risk and simple business to operate. Dropshipping, though, is not an immediate success. We must acquire the necessary information and utilise the relevant resources if we want to succeed in this sector.
Our dropshipping stores’ establishment is just the beginning. By investigating more product ideas and increasing our income, we can grow our dropshipping company.
FAQ: Tips for Starting your Dropshipping Journey
What exactly is a dropshipping company?
You can operate an online business without keeping inventory by using the dropshipping business model. Your suppliers will send the order from their warehouse to the consumer after you complete a transaction. There is no need for you to be concerned about product storage, packing, or delivery.
What advantages come with launching a dropshipping company?
less money is needed now
simple to begin
numerous products to choose from
simple to scale
How can I launch a dropshipping company?
Pick a specialisation
Perform market research on rival products.
Find a trustworthy dropshipping vendor.
Create your online shop
Promote your dropshipping company
Examine and enhance your store
How can I locate the top goods for dropshipping?
The popularity of your niche will determine how successful your dropshipping business is. Your dropshipping business ideas’ profitability may depend on the niche you select. The best products for dropshipping can be found in a market with little competition and lots of demand.