Wondering How to Make Money with Drop-Shipping?
Drop-shipping is the preferred business model for many new entrepreneurs, the low cost of entry and ease of set-up are very appealing, and it seems like a great low-risk opportunity to test the waters. However, there are also a few pitfalls that you should be aware of before you begin your eCommerce journey as a drop-shipper.
5 Essential Strategies to Succeed with Drop-Shipping in 2022
While the benefits of drop-shipping are very obvious, the downsides are also plenty, the most serious being lack of control over the quality of the products that you sell (in many cases even lack of knowledge), the fact that low barriers to entry mean anyone can start a drop-shipping business, just like you, and then there is also the possibility of things going wrong during the buying process, shipping, and after sales. Of course, there is still plenty of opportunity to make money with drop-shipping, you just have to do it right and be fully aware of the challenges you will inevitably face.
So how do you compete in a marketplace where hundreds, if not thousands of sellers are selling the exact same product as you are. Here we cover the following strategies that you can use to increase your chances of success with the drop-shipping model.
1. Differentiate Your Products
2. Impress Buyers with Stunning Presentation
3. Inspire Confidence and Boost Customer Retention with Great Customer Service
4. Make Returns Simple and Easy
5. Stand Behind the Quality of Products You Sell
1. Differentiate Your Products
Make some small changes to the product you sell. Maybe you sell play-dough for kids, why not include a free inflatable mini play-pool, free cutting and molding tools in your set, or something else that the customers would love and that is cheap but otherwise can be a hassle to buy separately.
Even if your price is a few dollars more than competitors, customers will have an incentive to choose you just to get that useful extra thing that you include in your offer.
2. Impress Buyers with Stunning Presentation
A lot of new drop-shippers make the mistake of using the packaging and photographs of the manufacturer to market their products. While it is understandable that they want to decrease their costs, this approach can really hurt sales. It is one thing to sell a product that is the same as other companies, even very large companies do that, but it is a whole other thing to see hundreds of sellers that sell the exact same thing with the exact same photos.
Not only does the buyer get confused by the different prices for what looks like identical products, buyers will also become cautious because they can't decide which seller is selling the actual product in the photos and wonder who the real manufacturer is and whether that manufacturer is reliable. You have probably experienced it yourself, you search for something on Amazon and in the result you see the same products with same photos sold by many sellers with gibberish names.
The best ways to avoid this is to create your unique product photos and packaging. Dropshipping photography is easy and cost-effective, for less than a $100 you can get a set of photos that will make your product stand out from competitor listings, and you can get a few hundred of boxes with your logo for around $200.
A drop shipping photo service can help you get product photos for your listing, lifestyle photos for your social media posts, and can also help you see what the product is like. The cost of a few photos is a little more than buying a sample to send to yourself, and will help you see what the product is really like. We offer drop shipping photo services, and many times the samples we receive are slightly different from what the client expects because manufacturers sometimes make small changes to products but don't change their photos. Creating your own product photos can help you avoid grief from buyers for misrepresenting your products in listings.
3. Inspire Confidence and Boost Customer Retention with Great Customer Service
Use the large amount of competition to your advantage. As mentioned in our previous point, buyers can and do get overwhelmed by the huge amount of very similar listings online, and while it is true that most people will choose a price that is comparatively low, the decision is never made alone on price, and in fact the lowest priced listing may not be the best seller if buyers think it may be a potential scam. This presents another opportunity to stand out, offer great customer service to show that your business is reliable.
Customer service can be promptly answering a question a buyer asks, but it isn't only that. You can do plenty of customer service without a buyer asking you anything by answering all their questions in the listing itself. For example add dimension comparison, so buyers can see how big the product is next to a hand, a person, or a coin. If your product has sizing, include a clear size guide. If you sell a stroller that can be brought on a plane as carry-on, include that in the listing. Provide as much useful information as possible, and customers will appreciate it and be more inclined to buy from you than from lazy listings with minimum information.
4. Make Returns Simple and Easy
When you drop-ship, you don't have to deal with shipping the product yourself, the supplier or drop-shipping service company will take care of that. However, this doesn't mean that you will not get returns, virtually all product categories receive some returns. For some categories like clothing, returns can be as much as 15% of all purchases, so you need a good system to receive, quality check, and re-stock or throw away any returned items. In most cases your supplier and drop-shipping company will not manage returns, especially if they ship directly from China.
The good news is that there are many service providers that specialize in returns management, some have subscription fees, while others have a per item fee, so you can contact a few and select the one that is most suitable for your business and market location. Be sure to post your return process along with your listing, because buyers will be looking for this, as no one wants to buy something only to find out they are stuck with it if they are not completely satisfied.
5. Stand Behind the Quality of the Products You Sell
Last, but not least, offer some type of quality guarantee to let buyers know what happens if the product they receive isn't exactly like advertised online. Items can arrive broken, suppliers may send the wrong product, they may send a defective product my accident, and many more things can go wrong. Give buyers peace of mind and more reasons to buy from you by creating a quality guarantee. This can be difficult to do, especially when you are not sure about the quality of the products yourself, but it is essential. Be more selective about where you get your products from, hire a quality control company, and get custom product photos to learn more about the quality of the products you drop-ship.
If you follow the 5 strategies outlined above, you chances of success will be higher compared to drop-shippers that only do the very basics steps of finding a product and listing it in a pre-made website template or Amazon.
Have a furniture brand? Check out our Drop Shipping Photography Services
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