How To Start A Dropshipping Business
eCommerce is one of the most competitive marketing landscapes for any small business to enter. It can be overwhelming trying to decide the right inventory, purchasing platform, and website design that will all work for your target audience. On top of the ‘online’ considerations, there are also many ‘offline’ considerations- such as where to store your inventory, how much stock to hold at any one time, how to deliver products and more. Dropshipping – a way to take some of the logistics burdens off of your in-house staff – reduces (and even removes) some of these common barriers to entry into the eCommerce field. Sounds pretty great, right? Read on to see if dropshipping could be right for your business, and how to avoid any potential pitfalls with your chosen provider.
What is Dropshipping?
Dropshipping is a retail fulfillment method whereby goods are shipped directly to your customers by a third-party supplier/vendor. This means you, as the online store owner, do not need to hold the products physically in your shop or warehouse. Instead, the dropshipping supplier stores all of your products offsite, and is responsible for them while they are in their possession, and for packing them and getting them to their intended destinations. The vendor also doesn’t pay for the item until a customer buys it, which is a big perk for new businesses or businesses trying out new products because it cuts down on upfront costs and risk. But dropshipping isn’t necessarily a foolproof system, it is important to weigh up the pros and cons to decide if this shipping method is right for your online store and business model.
What are the Pros and Cons of Dropshipping?
Having your items drop-shipped and, therefore, not in your storage space, can be extremely beneficial. You don’t need to maintain the real estate or the stock, and it can also help you get time-sensitive or large objects to your customers without worry. Best of all, the dropshipper handles the packaging and actual transportation of the items, which can be a huge time and money saver for lots of merchants. And because the seller doesn’t pay for the item until a customer orders it, it’s a great way to eliminate spending a ton up front on things that may or may not sell.
On the flip side, not being in control of storing, shipping, and logistics means just that – it’s out of your control. The cost can also be fairly steep because they are managing a lot of work on your behalf. Dropshippers are often overseas, which means shipping to your local customers may require a longer wait time than they’re anticipating, and communication may be difficult. The dropshipper may also choose to skimp on materials or packaging to reduce their costs, resulting in lesser-quality products or products damaged in transit. If there are customer service-related issues because of the dropshipper, you’ll also lose the benefit of saving your business time and money by having to repair broken trust among your buyers.
Okay, I’m interested. Now what?
After weighing up the pros and cons, it is evident one of the main factors of success is finding a reliable dropshipping supplier. Of course you can Google “dropshippers” and get a huge list, but if you want to be more strategic about it, try searching for dropshippers that specialize in the kinds of items you’re selling or wish to sell. This way, you will find a more precise fit for your needs. A great way to decide which dropshipper is right for you is to check out side-by-side comparison lists that help you see how top potential vendors address your business’ unique needs.
It’s also worth considering which dropshippers work with your online store platform. Or, if you are starting out from scratch, take a look at the top eCommerce platforms with dropshipping integrations built-in. These platforms partner with the most reputable dropshipping suppliers to ensure your customers’ satisfaction. And when using these integrations, the entire dropshipping process can be set up seamlessly from within your chosen eCommerce platform.
Another option is to go straight to the source — you can contact your product manufacturer directly and see if they can recommend a dropshipper that carries their product and you can benefit from a setup that’s already in place. Sometimes the manufacturer may even offer to ship the products themselves! Most importantly, dropshipping is truly an extension of your business, so take your time in researching. How many years they’ve been in business, what types of clients they cater to, and customized shipping offerings are all things to consider.
How Do I Set Up a Dropshipping Store?
Once you’ve selected your dropshipper, it should be simple to get things off and running. Some platforms give you the option of either setting up standard dropshipping, which requires you to create a purchase order to get an item to a particular recipient, or auto dropshipping, where the destination information is sent automatically to the dropshipper and they handle it from there. eCommerce platform Volusion offers both dropshipping methods through its built-in integration with dropshipping vendor Inventory Source and enables you to manage your dropshipping setup and transactions from within the Volusion interface.
How Do I Maximize My Success?
Getting dropshipping set up can be a huge help for your business, allowing you to focus on your areas of expertise and leave the logistics to the pros. However, you shouldn’t just set it up and expect everything to go smoothly. You are still responsible for your customer’s experience, and even though your product may be the same as the one someone else is selling, the experience by which they order and receive the product can make or break your audience’s trust.
Many successful businesses also use dropshipping selectively, streamlining the logistics for their most popular or low-maintenance products and keeping things that require more individual detail in-house. It’s also a good idea to stay in communication with your dropshipping vendor to find out any concerns they have so that you can avoid any customer-facing issues before they happen. Regardless of which avenue you choose to take, be sure to take as much care with your shipping as you do with your products and customer care, because it’s the entire experience that makes a difference and keeps your loyal customers coming back.