16 Dropshipping Tips for New Entrepreneurs You Need to Know
Dropshipping allows entrepreneurs to sell goods without having to carry inventory. The product manufacturer creates, packages, and ships the product out to your customer for you making this a low maintenance business model. In this article, you’ll learn why you should dropship, and 16 dropshipping tips to help you succeed.
- What is Dropshipping?
- Why You Should Dropship
- Dropshipping Tips for New Entrepreneurs
- 1. Focus on Mastering Marketing
- 2. Create an Amazing Offer
- 3. Avoid Underpricing Your Products
- 4. Automate More of Your Business
- 5. Ensure Your Website is Presentable
- 6. General Vs. Niche Store
- 7. Prepare to Pivot
- 8. Offer Exceptional Customer Service
- 9. Always Choose ePacket
- 10. Be Active Daily
- 11. Import 25 Items to Start
- 12. Order Product Samples
- 13. Monitor Your Competition
- 14. Change the Oberlo Custom Note
- 15. Create a Trustworthy Brand
- Bonus Dropshipping Tips
- Want to Learn More?
What is Dropshipping?
Dropshipping is a business model which you can use to run your store without ever holding any inventory. Once you’ve made a sale your supplier will ship your products from their warehouse, straight to your customer’s doorstep. You’ll never need to worry about storing, packaging, or shipping your merchandise.
Why You Should Dropship
Dropshipping is a great business model for new entrepreneurs. It’s low risk, low cost, easy to start up, and can be automated.
- Low risk business: You only pay for goods sold to customers. There’s no need to buy bulk inventory to get wholesale prices as dropshipping prices are already pretty low.
- Low cost: Since most goods come from China, the cost of goods is generally rather low. Since product costs are low you can price your products at market value and run a profitable business.
- Easy to start: You’ll be able to start selling the same day you sign up. Products can be imported quickly and since you don’t won’t carry inventory you can start promoting them right away.
- Automated business: Products can be imported to your store in only a couple clicks. Orders can be processed in a couple clicks too. You can do all this and more using Oberlo.
Dropshipping Tips for New Entrepreneurs
1. Focus on Mastering Marketing
With so many aspects of a dropshipping business being automated, you’ll have more time to focus on marketing and branding. While tweaking a website, designing a logo, and creating graphics can be a lot of fun, marketing is the money maker. You’ll need to spend time learning how to master ads, grow your traffic, converting your store’s visitors.
Ads and search engine optimization can help drive more traffic to your store. Keep in mind that most ecommerce stores convert at a rate of 1-2%. That means if you have less than 100 visitors on your site you probably won’t be getting any sales. The more traffic you can get to your store the more likely you are to convert the sale. Most focus on ads as it’s instant gratification and can drive a lot of sales in a short time. However, SEO can help drive the long term sales by allowing you to rank high in search. Creating blog content and optimizing product pages can help you build an audience in search with minimal ad spend keeping your acquisition costs low.
Your website also needs to be optimized for conversions. Do you use scarcity and urgency to compel people to buy on your store? Have you added customer reviews to your store to give it the social proof that it needs? Is your website presentable from a customer’s perspective? Are you missing images on your homepage? There are many actions you can take to ensure you’re optimizing your online store correctly.
2. Create an Amazing Offer
An important dropshipping tip is to create a compelling offer. Don’t be the store owner who fails to include sales or bundles. If none of your products are on sale people may lack the motivation to buy your product. However, if you present the right product with the right deal you’ll be more likely to convert them.
Bundle deals can also work really well. In fact, bundle offers are one of the best kept dropshipping secrets. theWhen creating a bundle deal, focus on selling more of the same product. For example, if you sell hair extensions your bundle would include more hair extensions. If people love the product, they’ll want more of it. The hard part is convincing your customer to pull out his or her credit card, but once it’s out – upsell, upsell, upsell.
3. Avoid Underpricing Your Products
Dropshipping products from Oberlo allows you to maintain a lower product cost. The cost of goods is usually relatively close to the wholesale price, allowing you to sell products at market value and make a profit. The goal of a dropshipping business is to be profitable. If you’re selling a five dollar product, you should be charging around $19.99 for it. You need to consider the cost of goods, marketing, business expenses, and eventually hiring a team.
If other brands are undercutting their prices, don’t undercut yours. As long as your prices are fair and within market value, you should maintain a profitable price point. You should also work to increase average order value so that you make a higher profit from every order. Create strategies that will allow you to make more money overall.
If you’re looking for more details related to this dropshipping tip check out our article on Ecommerce Pricing Strategies.
4. Automate More of Your Business
Using dropshipping tools like Oberlo, many aspects of your business will be automated. As this dropshipping tutorial points out, you can do product research before you launch an online store, and Oberlo is just the tool you need. If you have a full-time job or are looking to create a more passive income, figuring out how to automate more aspects of your business will allow you more freedom to pursue your passions.
Ecommerce automation tools can help you grow and scale your business quickly. Buffer allows you to automate social media posting. Kit automates marketing tasks like advertising, retargeting, emails, and more. Also, you can check out marketing automation software and Shopify tools, to help simplify your marketing tasks.
5. Ensure Your Website is Presentable
One of the most important dropshipping tips is to make sure your website is customer friendly. By that I mean your website shouldn’t scare off a customer. Many new store owners start marketing their stores when their home page is missing images, has placeholder text and all of their products are lumped together in one big category.
Before launching your store, take a look at other websites in your niche. What does their home page look like? What’s the format of the copy on their product page? Do their images include logos on them? What types of pages does their website have? Which features or apps does the store include on their website?
After taking notes about the look and layout of different stores in your niche, browse through the Shopify app store to find apps that allow you to model your store after other successful brands. You might include countdown timers, shoppable Instagram galleries or affiliate programs. You can also add pages to your website such as refund policies, FAQs, shipping information, and more.
When it comes to banner images for your homepage, feel free to use relevant stock photos from Burst. You’ll be able to find images for a range of niches and they’re free to use and modify on your store. If you’re looking for more stock image websites there are reams of free resources online.
6. General Vs. Niche Store
If the goal of creating a store is purely for experimentation and to find the right niche, create a general store. You’ll still need to create separate product categories for each product type to allow for easy browsing. While most successful stores start with a specific niche focus, the idea behind an online general store would be that it’s your starter store.
If you’ve already done your research or have validated your business idea, you should work on building out a niche store. Your niche store allows you to have a focus on finding the right audience for your products easily. The running niche would be an example of a niche within the general fitness category. You don’t need to include your niche name in your domain if you plan to expand into other product categories as you grow. Brands like Amazon started as a niche store (online book store) and eventually expanded to become a store that sells everything. If you’re interested in learning about how to choose a niche for your dropshipping store check out how niche companies on your radar do things to get some good ideas.
7. Prepare to Pivot
While a dropshipping business is easy to startup and great for new entrepreneurs, it’s still a business. You’re going to experience challenges and obstacles that’ll require you to find a way to overcome adversity.
You’ll be required to pivot several times as you grow your store. A new trend might pop up within your niche that you need to add to your store immediately to capitalize on sales. A product you really like might not be liked by your customers requiring its removal from your store. An ad might perform really well and require you to scale quickly resulting in you negotiating with your bank for a business loan.
A pivot isn’t good or bad, it’s a requirement if you want your business to last for years to come. You’ll need to have the intuition to know when to take action in your business to ensure its continued growth.
8. Offer Exceptional Customer Service
There are ways to stand out when selling the same products as everyone else. One of the best ways is to offer great customer service. Offering refunds and responding to customer inquiries is important but it doesn’t really separate you for many of the big brands out there.
Joke around with your customers. Write them thank you cards if they order from your store multiple times. Run monthly giveaways exclusive to customers who’ve ordered from you in the past. Do whatever it takes to make each customer feel valued and appreciated. If it weren’t for them, you wouldn’t become a success. Start these customer appreciation habits from your very first sale.
Customers might not always remember what they bought from your website but they’ll always remember how you treated them.
9. Always Choose ePacket
As a dropshipper, you’re free to sort products based on ePacket shipping. Since ePacket shipping is the fastest affordable shipping method, you’ll be able to ensure quick delivery to customers without breaking the bank. On average, ePacket shipping costs under $5 for most products. This allows you to still make a profit when selling goods at market value. From personal experience, I’ve seen ePacket deliveries reach customers within a week making it the best delivery method for dropshippers.
We delve into ePacket delivery in more detail in our ePacket article to give you more information.
10. Be Active Daily
Running a business requires daily effort. You don’t need to spend eight hours a day working on your business but you’ll need to spend at least an hour a day on your store as you grow your sales. Each day, you’ll need to process orders so that products arrive to your customers promptly. You’ll also need to respond to customer inquiries within 24 hours (ideally less) so that customers can depend on you.
Marketing efforts will also need to take place each day. You can automate your social media posting at the beginning of the week. However, you should aim to be active on social media daily. You’ll also want to make sure that your ads are always running.
11. Import 25 Items to Start
When I built my first online store four years ago, I made the mistake of importing 600 products to my store in one day. I know it can be exciting to add a ton of great products to your store since it can be done in just only a couple of clicks.
Here’s the problem though: When you add too many products to your store, you need to rewrite product descriptions and maybe remove the logo from a few images. Writing copy for even 100 products can be time-consuming and exhausting, especially if you’re a student or hold a 9 to 5 job. Stick to 25 at the start. You can write quality product descriptions for 25 items in only a few hours.
By starting with a smaller collection, you’ll be able to launch your business quickly so you can start making sales. Once a week you can add 10 to 20 new products so that you build out your store’s collection while already making a profit. You don’t need 100 products to get your first sale. All you need is one great product to land your first sale.
12. Order Product Samples
If you’re planning to dropship a small number of items, a good tip is to order samples from your suppliers. As an online seller, this dropshipping tip holds great potential for your store. It allows you to take better photos of the products that you’ll be offering. Being able to experience the product yourself, you’ll also be much more accurate when writing the product descriptions. You can also use these sample products for video product reviews, ads, and other marketing material. It’ll give you a true feel of what it’s like to order from your store. You’ll also know then if you have any space for improvement, or to make any adjustments accordingly. By putting yourself in the shoes of your customers, you’ll get an authentic experience of what it’ll be like shopping from your store.
13. Monitor Your Competition
Another dropshipping tip is to like your competitors on social media. Monitor their websites and social media pages regularly. By liking their page, you’ll start receiving their product and retargeting ads. Which products do they advertise? Does that product get a lot of engagement such as comments or shares?
By monitoring and paying attention to your competition, you’ll know which products you should be selling on your store. When you pay attention to the types of posts your competitors add to their social media pages, you’ll know what type of content people within your niche really like — this helps make you a better marketer.
14. Change the Oberlo Custom Note
As a dropshipper, you should change your custom note to your supplier. Under Settings, click Suppliers, you’ll find Custom Note on the bottom. Here you can leave a message for all your suppliers. You’ll want something that’s relevant to all your suppliers.
On my store our message reads, ‘Ship with EPACKET only! We’re dropshipping. Please no invoices or promotions!’ Since we only import ePacket products, we remind suppliers to use ePacket shipping when shipping products to ensure customers receive their goods quickly. We also tell them that we’re dropshipping so that they don’t add their invoices or marketing materials in packages. We haven’t had an issue with suppliers adding their own invoices or promotions in a package because of this message.
Are you an experienced store owner? Which dropshipping tips would you share with new entrepreneurs to help them build their first store? If you’re a new store owner, let us know which of these dropshipping tips helped you the most.
Check out our 50 ecommerce tips for new entrepreneurs!
15. Create a Trustworthy Brand
This dropshipping tip is about taking responsibility for how you present yourself. Strengthening your brand position can improve your reputation as a leader. Take a look at what makes your business unique, and what part of it will help strengthen your brand image. Entrepreneurs who know how to brand have a competitive edge. Build that trust through your brand image, and raise brand awareness. Think of your brand as your company’s personality. A strong brand image will help increase the value of your company and make you memorable for your customers.
Learn more on this dropshipping tip about branding in our Brand Awareness eBook.
Bonus Dropshipping Tips
16. Be Seen Online and Offline
Social media is important to a dropshipping business but it is not the only channel you should be active on. Spend time researching video marketing, and be part of events where attendees are your target audience. Maybe you can identify a segment of an influencer’s audience who would benefit from a product so a partnership can be created. Be innovative about how to get in front of your audience both online and offline to get ahead of the curve.
17. Create High-Quality Custom Content
Consumers browse hundreds of website every month and get accustomed to reading the same information over and over again. If they are researching a new product to sell this can be frustrating as they may feel they are not learning enough about the product. Create custom content that contains information that is new and valuable to your consumer and you will separate yourself from the noise. This could mean updating product descriptions, writing an interesting about us page, or creating images that are high-quality, functional photos that inform customers.
18. Focus On Holidays Like Black Friday
You probably consider Black Friday to be a sales bonanza for brick and mortar outlets, but in the last few years, the shopping frenzy has moved online as well. So much so, that ecommerce sales on Black Friday outdid overall in-store purchases in 2016. With this shopping holiday becoming an ecommerce game, make sure to follow these Black Friday tips to get your store off the bench.
Want to Learn More?
- 8 Oberlo Tips You Need to Know as a Dropshipper
- Oberlo Dropshipping: How Repeat Failure Inspired the Oberlo App
- 15 Product Photography Tips That’ll Make You More Money
- What Should You Sell Online?
- How to Market a Product: 18 Effective Marketing Tips to Skyrocket Sales
Is there anything else you’d like to know more about and wish was included in this article? Let us know in the comments below!