3 Practical Drop-shipping Tips for New e-Commerce Retailers

Is drop-shipping a poisoned chalice or a good idea for brands?
09/26/2017

3 Practical Drop-shipping Tips for New e-Commerce Retailers

You can say that drop-shipping is the new sexy in the e-Commerce world.

If you’re reading this, chances are you’d like to get involved and ride this new trend to multi-digit gains. Well, good news. The drop-shipping model makes selling online so simple because it doesn’t require any up-front investment (such as purchasing inventory), there are no shipping or packaging costs involved, the overheads are low and you can run your business from anywhere in the world!

Let’s give it a moment for that to sink in.

Of course, drop-shipping doesn’t come without its drawbacks. Since it’s the new sexy, everyone’s trying to claim a share, so the competition is high, while the margins can be low. But hey, what’s a perfect business model these days?

As a newcomer, you’re bound to make mistakes. And that’s fine, as long as those mistakes are not serious enough to blow off your entire project. Many first-time retailers get burnt by choosing the wrong suppliers or failing to provide adequate customer service.

For those pondering the idea of opening an online store, here are some practical drop-shipping tips to help you get off to a good start.

  1. Find your niche

The world doesn’t need another Amazon. Or to put it more bluntly, the World Wide Web eats generalist shops for breakfast. Finding your niche is central to a successful business. Although many think specializing decreases their target audience and limits their potential sales, the opposite is actually true! Take a moment to think about the most successful online stores and what they have in common. More often than not, they are proudly niche.

To become the online destination for a certain product, a shop needs to stand out from its competition and have a very clear value proposition. Let’s say you decided to sell baby clothes. If you stock your online store with a wide variety of baby clothes, you’ll be in direct competition with some of the biggest players in this industry – basically, everyone from Mother-Care to John Lewis. And given their advertising budgets, it simply won’t work. However, if you spin your online store as the one-and-only online retailer that sells organic, ethically-produced baby clothes in white, your odds to take home the big prize increase significantly. Sometimes think small pays off, too.

It’s a hundred times easier to charge a premium price and differentiate yourself when you’re operating in a well-carved niche. So, do the thinking before doing the work.

  1. Choose the right supplier

I’ll be honest with you – a few paragraphs won’t cover all the supplier-related questions. It’s a fat topic that deserves its own full-blown article, but I can run through the main points to give you the gist of the story and point to places where you can look for more answers. So, how do you go about choosing a drop-shipping supplier?

One of the best places to start is to deep-dive into forums and private groups where new retailers are discussing drop-shipping suppliers and sharing their hard-won wisdom on everything from the supplier blacklist to wholesale etiquette. Reddit and Quora are also great and information-rich sources that are worth exploring. Familiarizing yourself with the most common issues that other retailers face on a daily basis will help you to avoid unnecessary headaches and get off to a smoother start.

Choosing the right supplier comes down to several aspects. First, remember that you’re the middle-man here, so your reputation is completely dependent on your drop-shipping partner. Checking whether the wholesaler delivers on time and to the standard you’d expect is key before you place your business’s future in their hands. Second, make sure your wholesaler is located in a central spot of your shipping territory so that all orders reach the customers on time and the shipping costs stay within reasonable limits. Third, choose a wholesaler that is tech-savvy… When you start browsing wholesaler websites, you’ll quickly realize that they really suck at branding and web design. Don’t be fooled, though — website is not everything. If a wholesaler offers real-time inventory and a detailed online catalog and takes orders via email, it’s a huge win already. And definitely worth digging deeper.

The list of wholesale suppliers is long and promising. If you have the time and patience to vet them one by one, then definitely do so. Alternatively, you could go down a tried and tested route and opt to work with sites like Oberlo that is seamlessly integrated with Ali-express and has a reliable Google Chrome extension to search for the best Ali-express suppliers with a few clicks.

  1. Create custom content for your products

There are too many online merchants who simply copy/paste product descriptions from their wholesaler’s site and expect the sales to go through the roof. Unbelievably, there are still some who don’t add any descriptions whatsoever. That’s just plain careless.

To optimize conversions you need a fair sprinkling of punchy copy that sells. And everyone knows that crafting well-converting product descriptions is a business on its own. By catering to your target audience’s preferences, using the right tone of voice and addressing the most pressing pain points, you put yourself in the best position to sell. This tactic is most apparent in online stores run by retailers with a vested interest in the niche.

  1. Final thoughts

Have I mentioned that drop-shipping is the new sexy? Well, sometimes embarrassing mistakes happen where sexy is involved, so don’t fall into the beginner’s trap of agonizing over every little misstep. If you get the basics right (see above), the rest will sort itself out. Well, not exactly, but you’ll be halfway there. As with any business, staying up to speed with industry news and immersing yourself into community matters can do wonders.

Remember, there are no silly questions — it’s better to ask and learn early, then watch your new project crumble.