After you’ve decided to start dropshipping, you need to make sure you’ve got a solid strategy in place from the get-go. And that means avoiding these common mistakes.
As mentioned above, dropshipping automatically puts you in a competitive space, because others are selling exactly the same thing that you are. It’s all too easy to think that you’ll be able to set up dropshipping for your store and then have an instant money-maker on your hands.
The opposite is true — when you’re dropshipping, you need to put all of the time that you save on shipping and fulfillment into marketing and SEO. Those are the elements that will drive traffic to your store and make you sales when you’re a dropshipper. Since you can’t control the fulfillment or packaging with dropshipping, you always want to put a priority focus on quality customer service and giving customers a positive experience with the parts of the buying process that you can control.
If you rely on one supplier without having a back-up, you’re setting yourself up for logistical issues down the line. What if they raise their prices to a point you can’t afford? Or go out of business? Or simply decide not to work with you any more? Even on the less drastic end of scenarios, they could be out of stock on a product and have no idea when they’ll get it back in stock. Always have a backup supplier that you can turn to if your go-to supplier doesn’t work out for a particular order.
Every time you start working with a new supplier, you should make sure that they cut the mustard by placing test orders. When you get the order, examine it closely, considering the packaging, shipment time and so on, and make sure that everything is top-quality. It’s a good idea to continue placing test orders on a somewhat regular basis. Fulfillment is critically important to any online business, and you want to catch any slips in quality before they become an issue.
Dealing with shipping rates can be a hassle, even if you ship all your orders from one location.
If you ship from more than one warehouse, or dropship through multiple suppliers, it can be a nightmare. What if an order draws on two different warehouses, or three different suppliers?
Instead of stressing about multi-location shipping on every single order, take a step back and look at the big picture. What are you trying to achieve? Accurate shipping rates? Or more sales, happy customers, and repeat business? If you’re burning energy over shipping prices on every single order, that’s energy you’re not spending on creating a better shopping experience, growing your store, marketing and so on.
So what should you do instead? Take a look at past orders and use them to work out a flat shipping rate. Or perhaps a tiered rate based on cart value. Will it cut into your profit margins? Yes, on some orders. But you’ll come out ahead on others, and if you’ve set your flat rate properly, shipping costs will even out over time. There’s also the fact that flat rate and free shipping has been shown to increase conversion rates—one of the main reasons customers abandon their shopping carts is because of shipping costs. A flat shipping fee removes confusion and seemingly “hidden” fees that show up at checkout.
As you can see, dropshipping isn’t a one-size-fits-all solution, but it can be a great way to start or scale an ecommerce store. At every stage of your business, you need to step back and evaluate whether or not dropshipping makes sense for your store.