Dropshipping as a way of doing commerce has exploded in popularity in the recent years. The ability to sell without stocking a large inventory and set up a store with minimal funds has attracted hundreds of thousands of budding entrepreneurs. However, many of them are still struggling to make their dropshipping business profitable.
Just like any other type of business endeavor, it takes quite a lot of courage, perseverance and good luck. However, there are some general dropshipping tips that can help you greatly in making your store wildly profitable. Here’s how you can do it too.
Table of Contents
1. Know Your Pricing
One of the main reasons why most dropshipping businesses fail is because they haven’t done their homework when it comes to pricing. You are free to choose your own prices for your stock, but how can you know if you’re overcharging or charging too little?
Most dropshippers get their stock from sites such as Salehoo, Oberlo or AliExpress and other wholesale dropship companies, where prices are as close to wholesale as it gets. This allows you to sell at market value and make a decent profit.
Say that you want to sell a flashlight that you get for $5 from AliExpress. In order to figure out how much you’re going to sell for, do some math first. Find out how much you need to spend on advertising, handling and store and administrative expenses. Once you’ve added this up, you’ll come to a ballpark figure of how much you should effectively charge. For a $5 item, you should be charging around $20 to be profitable.
Once you’ve done your own research, take a look at the competition. They could be undercutting you, as there are lots of dropshippers happier with lower margins. Do not worry – as long as you’re charging a fair price that is close to market value, you should be safe.
Finally, you could drop your margins on some products and increase them elsewhere, looking to increase your overall profit. It takes a bit of time to figure out the ideal pricing for your products, but the only way you can learn is by testing out your ideas in practice.
2. Know the Items You’re Selling
One of the first pitfalls of dropshipping is selling the wrong items. Many store owners simply pick products from their niche that they find interesting, instead of focusing on what sells and makes a profit. It’s best to snoop around on AliExpress (or your preferred platform) and see how many reviews an item has and whether there’s an actual market for it.
The second mistake is selling something that you haven’t tried out yourself. Selling something in your store that you haven’t tried out yourself is a huge leap of faith and it’s downright dangerous. You’re relying on the dropship supplier to be honest with their description and product images.
While you may want to save time and money by selling outright, consider buying a sample as a necessary development cost. You will get the necessary feedback and you’ll know if the product is represented well and if it’s good quality.
You can also save some time by looking at reviews. Once you’re at a supplier’s website, sift through the products and their reviews. First ensure that there are plenty of them – at least 100. Then ensure that the average score is as close to 5 stars as possible. By spending time here, you’ll ensure that later on you don’t have to wade through numerous customer complaints.
Finally, get creative. Find items to sell that aren’t easily found in local stores. You need to offer something unique for a given niche that will convince visitors to buy. If it’s a widely available item, even at a lower price point, they won’t be as motivated to buy as they can simply buy it locally instead of your store.
3. Don’t Cling to Suppliers
Suppliers are the lifeblood of any dropshipping business and hiring the right one can make or break your ecommerce shop. Once dropshippers find a supplier that works responsibly, delivers consistently and provides great communication. Sometimes, they may favor a supplier because they rely on a single item that brings in a lot of profit.
However, it’s important to have insurance and backups. Today’s markets are unpredictable and a reputable supplier could simply drop off the map in a short time period. On the other hand, they could just stop selling the items that are hugely profitable for your store. Either way, it’s good to have more than one option if things go awry.
You could have a different problem altogether – a supplier that is consistently missing the mark. They could be shipping items that are damaged or simply different from what the customer ordered. They may use different shipping methods than promised, postpone the delivery etc.
If something like this happens, drop the supplier from your store as soon as possible, before they do irreparable damage. It’s easy to refund a customer, but bad reviews are a bit harder to handle.
4. Have a Great Looking Website
Once you walk into a brick and mortar store, the first thing you notice is how the store looks. Whether the goods are organized, the space is clean, the salesperson is friendly and helpful. The same applies to your ecommerce store. If it’s not presentable, not even the best goods at the lowest prices will help you make sales.
First, make sure that the overall website design is presentable. There are many WordPress and Shopify theme combinations that could give you a decent looking presentation. However, to get it right on the first try, it’s best to hire a designer to take care of the work for you. Take a glance at the competition and see what works and what could be improved, and then use that to build a better website yourself.
The second most important part – content. Now that your website is up, it’s time to fill it up. There’s nothing worse than landing on a page with placeholder text and images. Ensure that you have product photos from the very first day. You can ask your supplier to use their photos, but it’s always a good idea to order a product first to test it out and take some quality photos of your own.
Second, all products should have relevant, accurate and unique descriptions. Not only will this help make more sales, it will also be extremely useful for SEO purposes.
Besides the standard pages such as home and product pages, make sure to include others such as Shipping, About Us, FAQ, Contact and others.
5. Be Present
For many dropship store owners, the primary reason for getting into the business is having as much freedom as possible and getting away from a 9-5 job. However, running any business is an ongoing effort and sometimes takes more than 8 hours of work per day.
Even with a well-oiled and functioning system, you need to be active on your store at least one hour per day. You need to process your orders and alert your suppliers. Customers will have questions that need to be addressed as soon as possible, so ensure that you take less than a day to respond to all inquiries.
Finally, you need to be online to market your store. You can automate social media activity using various tools, and the same can be done with ads. However, it’s always a good idea to be present and check what your fans and followers are saying and how they’re interacting with you across channels.
At the same time, you need to follow your competition closely. You don’t need to devote hours to this on a daily basis, but it’s a great idea to check out their website and social media platforms. You’ll get a glimpse into what works (and doesn’t) and what you can do better.
6. Learn Marketing
As we’ve already mentioned, there are great ways to automate your store. From processing orders to publishing new social media posts, tech has got you covered. With that in mind, you can spend time on some more urgent matters.
Visitors and buyers won’t come to your website on their own and it’s up to you to find ways to attract an audience. One of the easiest (but most expensive) ways of drawing a crowd is by using paid ads. Whether it’s through PPC advertising or paid social media ads, you’ll be able to get exactly to those people who are in the market for your products.
There are advanced targeting options for reaching your desired audiences – but you need to know who your audience is in the first place.
However, running paid ads is not a viable long-term strategy, as you’ll need to set aside significant amounts of money for advertising. Bear in mind that even though ads can get plenty of visitors, you still need a solid grasp of marketing to know which kind of ads to run and how.
On the other end of the spectrum there is SEO and content marketing. This is a long-term strategy that can yield amazing results, but it requires quite a lot of time and effort. By optimizing your store products for appropriate keywords, you will ensure that you are channeling the right traffic from search engines to your site.
At the same time, writing quality and informative content will retain old visitors and draw new customers. In terms of return on investment, there are very few strategies that bring in more benefits than a good SEO and content strategy.
Ads can only get you short-term benefits, as those who land on your site may not visit your store again. SEO helps you in the long run as quality content can rank in search engines months and even years after it’s originally published.
At the same time, there’s one more important thing to note. The average conversion rate for ecommerce stores is about 2%. In layman terms, that means that for every 1000 people who visit your site, 20 will make a purchase. That also means that if you’re getting less than a 100 visits to your site per day, you’ll hardly be making any profit.
There are numerous ways to optimize your conversion rates, and they require extensive knowledge of marketing skills and tools. In the end, there’s two main goals: getting lots of visitors and getting lots of them to purchase.
7. Use Some Classic Sales Tricks
If someone were to offer you a camera for $300, you may not be that much interested – even if you’re in the market for one. However, throw in a nice lens, a camera bag and a couple of SD cards, and the deal seems much sweeter.
With your dropshipping store, you can follow the tactics of large merchandisers and create amazing offers that your customers won’t be able to resist. Whenever possible, create bundles and sales to entice shoppers to take a second look. Many people won’t commit to a purchase but change their mind if they see an item on sale – even if it’s realistically not that cheap.
8. Set up Your Own Dropshipping Store
Are you ready to put your entrepreneurship dreams into reality? We’re here to help you out! At ADSpirine, we know the recipe for success with dropshipping. We can set up a functional, beautifully designed and profitable dropshipping store for you. With our Growth Hero packages, your store will attract visits and sales, thanks to our experienced development and marketing team. Reach out to us today to get started!