Understanding Drop shipping Business and 8 Ways to Become a Successful Drop shipper

Drop shipping business is one of the best business models for those of you who want to start a business or new online store owners who are entering the eCommerce game. This is because drop shipping systems can be started very easily, are low-cost, fully automated, and offer lower risk. But have you known the meaning of dropship itself?


1 Definition of Drop shipping Business
2 8 Ways to Be a Successful Dropshipper
2.1 1. Start with Segmentation
2.2 2. Choose the Right Supplier
2.3 3. Boost Traffic to Your Website
2.4 4. Always Use Numbers
2.5 5. Pay Attention to Your Customer Service
2.6 6. Pay Attention to How to Handle Returns
2.7 7. Be a Marketing Expert
2.8 8. Pay Attention to Competitors

Understanding Drop shipping Business

Dropshipping is a retail fulfillment method in which a store does not keep the products it sells in stock. In contrast, when a store sells products using the drop shipping model, it buys goods from a third party and ships them directly to the customer. As a result, the seller does not have to handle the product directly.

The biggest difference between drop shipping and a standard retail business is that the merchant who sells doesn’t have inventory or has inventory. Instead, the seller purchases stock as needed from a third party who is usually a wholesaler or manufacturer to fulfill the order.

8 Ways to Be a Successful Drop shipper

Although the drop shipping business is a great and easy business model for aspiring entrepreneurs, but you need to know-how before you launch your first store? We’ve rounded up 8 ways and tips for starting a drop shipping business that every new entrepreneur should know before they jump into the drop shipping game.

1. Start with Segmentation

Let’s take the example of a successful drop shipping giant, Amazon.com. Amazon started selling a very narrow product segment of online books – adding to their store as their brand grew. And that as we know, now Amazon has covered everything and sells anything.
he points out, when they start, they have to start from clear segmentation.

Unless you are building a business and looking for a broad segment to test the market on before you choose your segment, narrowing your focus is the key to success. Having a drop shipping shop that’s too generic won’t allow you to easily hone your potential buyer audience or make brand development.

To choose the right segment, you have to look at your passion or hobby, research industry trends, and think about your target audience. Then, you will analyze and evaluate demand, competition and the market to see how you can make a big profit.

2. Choose the Right Supplier

Ultimately the product you choose reflects your brand directly and therefore it is important to be picky about your products. There are 2 steps to choosing the right supplier:

  • Step 1: Supplier Audit

This is where you will check all the details of the suppliers, the various products they sell and their reviews, to ensure credibility and quality.

  • Step 2: Narrow Your List

You can do this by comparing product prices, warranties, and whether shipping costs are included.

If you are done with your research and have found a bad supplier in your opinion, don’t delay in replacing it. There are many other reliable suppliers who sell similar products.

3. Boost Traffic to Your Website

Yes, it’s true, a drop shipping business allows you to be cost-efficient, but that doesn’t mean you have to do the same with your website.

The customer experience really helps build trust, so make sure you put interesting thoughts and content on your website.

Also, make sure your website is properly optimized for users and does SEO, your product descriptions have substance and are error-free, your product photos are of good quality and your shipping and return policies are clear.

Check out competitive and successful online stores, make them your competitors and your inspiration for ideas, consult with experts (if any) for great tips, and make sure your store is optimized for sales conversions.

Adding testimonials from your customers and/or achievements you’ve made can help increase brand awareness and build the trust you need as a new entrepreneur to generate those sales.

4. Always Use Numbers

When choosing a particular product, you will make sure that you buy the product at the right price according to the service you will get, that is, it has marketing potential, profit, and it is something that has its own selling points and advantages. To do that, perform these two calculations:

  • Sales Revenue – Cost of Goods = Gross Profit
  • (Gross Profit – Cost) / Revenue = Profit Margin

The thing to remember, it’s not to belittle the product you’re selling. A drop shipping business allows you to get products at wholesale prices, meaning you have to price them at or just below market value depending on the competition to make a profit.

5. Pay Attention to Your Customer Service

In all businesses, this is important, including if you are building a drop shipping business. This allows you to stay ahead of the eCommerce competition in your segment, including big marketplaces like Tokopedia, Shopee, or Bukalapak.

Making customers feel valued, and respected, is very important and not only drives sales but grows a customer base loyal to your business.

When you are thinking about what customer service is right for your drop shipping business, it is important that you understand that you are responsible and that the wants and needs of your customers are important and that their happiness is your number one priority. This is the best way for you to become a reliable drop shipper.

6. Pay Attention to How to Handle Returns

Handling returns is a customer service complication that can arise from a drop shipping business that can have a major impact on overall customer satisfaction, and it is common.

As a drop shipper, you have some more logistics to check here, such as whether the customer is returning goods to you or your vendor. The advantage of accepting returns yourself is that it will allow you to offer better customer service. The downside is that you will need something extra including shipping, storage, and resale costs of returned items.

However, most suppliers do direct returns to them meaning you don’t need storage space and it takes the ‘work’ away. However, returns sent to third parties may have the following risks:

  • They can refuse returns if the goods and packaging are not in perfect condition.
  • They may charge a restocking fee.
  • They may have complex return instructions that are not easy for your customers to understand.

7. Be a Marketing Expert

The big advantage of a drop shipping business is that you have plenty of time. Time to spend on improving your marketing skills and becoming an expert at using advertising to drive traffic to your store. The marketing channels you will want to study for maximum success include:

  • Google AdWords
  • Facebook and Instagram Ads
  • Pinterest Ads

However, it’s not just advertising that you have to work with; every part of your sales pipeline is a marketing opportunity not to be missed. Things like using content marketing to increase sales or subscribing to interesting articles sent to their email will give your business a good brand awareness for your business.

8. Pay Attention to Competitors

As you explore and start your new venture, keep an eye on your current competition and fresh ideas will emerge, to see where they advertise, or their social media messages. Bottom line: You can learn the bucketloads of your competitors.

Following your competitors can help you with future product ideas, positioning, branding, and pricing. It will also give you key insights into your potential audience and what they are responding to, and turn you into a better seller and marketer.

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