How to Start Dropshipping: A Definitive Guide

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Smiling dropshipper running his eCommerce store, how to start dropshipping guide

Dropshipping is currently the most accessible entry point to the world of eCommerce. It doesn’t require as much capital as other business models, making it an appealing option for many aspiring entrepreneurs.

If you’re ready to learn dropshipping and start your own digital business, then congratulations! The help you need is right here in front of you.

We’ll walk you through everything you need to knowfrom the basics to actionable tips, step-by-step instructions on how to build your store, and many more.

Table of Contents

Chapter 1: What Is Dropshipping? How Does It Work?

Any business idea could seem intimidating at first. And there’s actually a good side to this, as it prevents you from jumping into any opportunity without enough thought and preparation.

Dropshipping is both easy and difficult. It’s easy when you have a trusted guide to follow. However, it will be difficult and impossible to succeed if you blindly take every piece of advice you see online with no proper research and caution.

What is the truth about dropshipping? We’ll cover this and more in this chapter. 

What Is Dropshipping?

Dropshipping is a retail fulfillment method that doesn’t require the retailer to handle products physically. The retailer purchases the item ordered by a customer from a supplier, and the supplier sends it directly to the customer.

The dropship store owner basically acts as a middleman between the customer and the supplier. 

what is dropshipping, how to start dropshipping guide

Picture this: let’s say that you want to start a brick-and-mortar store or a traditional eCommerce store selling women’s clothing. You would need to purchase inventory from a supplier, have storage space for these stocks, and handle or hire people who will handle every transaction for your store. 

Additionally, you would need to sign a lease and pay for your physical store. All these necessities would definitely cost you a lot just to get started. Plus, there is a risk of your profits decimating when you have unsold stocks lying around.

Dropshipping eliminates these hefty costs and risks. You can cross out the need for storage space and a physical store since you won’t need to keep an inventory. Also, you won’t need to be responsible for shipping since that responsibility is shouldered by your supplier. Finally, you won’t have to worry about dead stock since you won’t be holding any! 

This means that you don’t need a large amount of money to get started and to keep your business running as opposed to a traditional business setup. 

How Does Dropshipping Work?

The dropshipping business model | how to start dropshipping guide

In this model, the dropshipper is the retailer while the other participants complete the whole supply chain. The supplier may or may not be the manufacturer of a product, so it’s possible that some businesses have other people involved in their business model.

Let’s discuss the key pillars that complete a dropshipping business: the manufacturer, the supplier or wholesaler, and the retailer.

1. The manufacturer

The manufacturer makes the product. After the products are made, they are sold in bulk to a supplier or a wholesaler. 

In some cases, manufacturers also sell directly to consumers.

2. The supplier or wholesaler 

The supplier buys a significant number of products from the manufacturer and liaises with retailers to sell the goods. The markup of prices starts from the supplier to the retailer.

For example, the supplier can put a 30% markup on the manufacturer’s price, and the retailer can add in another 30% when they post their products on their website. The retailer’s final marked-up price is what is commonly known as the retail price. 

3. The retailer

The retailer in the dropshipping supply chain is the dropshipper. The retailer’s role is to draw in a steady flow of customers to their online store through marketing efforts, forward orders from the customer to the supplier, and answer customer service inquiries. 

It’s also the retailer’s role to make sure their business complies with any dropshipping legal requirements their country or their target countries might have.

Pros of Dropshipping

Several factors make dropshipping an attractive venture to entrepreneurs, especially those who aspire to run successful businesses from anywhere in the world. Below are some of this business model’s top advantages:

pros of dropshipping, how to start dropshipping guide
1. Fewer barriers to entry

Dropshipping eliminates the number one hurdle of a traditional business setup: high startup costs.

It takes a lot of time and money to develop a product, but dropshippers are not burdened by this responsibility. You don’t even have to buy stocks of a product until an order is placed. 

None of your capital is going to product development, nor will it dry up in non-moving inventory. And because you don’t need to hold the product, you also won’t need to rent a warehouse to stock your items. 

However, this does not mean that dropshipping is a get-rich-quick scheme. Every business is still an investment, and you’ll need to chip in your resources (time, money, and effort) to ensure that your store will perform well.

2. Easy to manage 

Not having to handle physical products lifts a massive weight off your shoulders. When you choose to do dropshipping, you won’t have to worry about:

    • Ordering products and monitoring the stocks 
    • Renting and managing a warehouse or a physical store
    • Packaging and shipping orders
    • Handling returned items. 
3. Flexible location

The bulk of your work as a dropshipper focuses on researching and testing products, marketing, and taking care of customer service. All these are done online, which means that you can run your dropshipping business from anywhere as long as you have a laptop and Internet connection.

In many ways, dropshipping fits the demands and technologies of the present time. You can use the help of automation to keep things running even when you’re taking a rest day or a long vacation. You can also automate recurring tasks to make your business operations more streamlined and cost-efficient. 

4. A wide selection of products to sell

Since dropshipping doesn’t require you to purchase products, you can easily add new products to your store and expand your product catalog. Plus points if you organize your online store so that all products are neatly grouped into categories.

Categorizing can give your customers a smooth shopping experience that could result in positive customer feedback later on. Additionally, if you have a good selection of products, you’ll most likely become a one-stop shop for your niche.

Let’s say your store carries home decor items. You can include a good number of products in your storefrom vases of different shapes and sizes to framed pictures with different colors and designs.

The possibilities are endless with your product selection, and you can do this without a cent out of your pocket! 

5. Easy to scale 

As your online business grows, you would have to increase your marketing budget and efforts. And that’s about it! There would be no need to make drastic changes since you don’t have a hand on the supply side. 

One of the great things about dropshipping is that it doesn’t take a huge amount of money to scale. This means that you can grow your business steadily as long as your store continues to make a profit. 

Cons of Dropshipping

There’s no perfect business model. Just as dropshipping has several advantages, it also has its fair share of disadvantages, including: 

cons of dropshipping, how to start dropshipping guide
1. Lean profit margins

You should expect low margins, especially when you’re just starting out or if your business is in a highly competitive niche. Since dropshipping doesn’t require a huge amount of capital, a lot of people can enter the business and become your competitor.

And in some cases, offering your products for a lower price is what will invite customers to choose you over others.

Customers tend to flock to an online store because of lower prices, even if that store’s site has a poor user interface and customer service. So from time to time, you have to check your competitors’ pages to see their prices and promotional activities, as well as to spot some gaps that you could address in your own store. 

If you’re just starting out but you want higher margins and more room to grow your business, it’s advisable to choose a niche that is not too saturated with competition.

2. Little to no control over the supply chain 

Dropshipping forces you to rely heavily on your suppliers to keep your business going. Although this setup takes an overwhelming amount of work off your plate, it also keeps you from making 100% sure that the supply side will always be efficient.

Moreover, you can’t perform strict quality control on the products. If your chosen products turn out to be subpar, you’ll highly likely receive negative reviews and a low product or seller rating. 

To minimize issues, you and your suppliers can agree on a dropshipping agreement that clearly defines the rights and responsibilities of both parties. Such an agreement also acts as an added layer of protection for both sides, providing clear expectations as well as grounds for legal actions if one party fails to comply.

3. Limited branding 

Although you’re free to decorate your store’s website and social media accounts using a certain brand style, you’ll have no say when it comes to branding your products or even their packaging. This might not be a big deal to some, but it’s one less opportunity to build brand awareness.

Unfortunately, given the limitations of the dropshipping model, some branding opportunities won’t be readily available for you. You can, however, maximize the branding of your store’s digital assets, such as your website, product pages, and social media posts. Then, you can explore more branding opportunities (via white labeling or private labeling) later on as your business gains consistent traction.

4. High competition

A lot of people are getting into dropshipping because of its low capital requirement. This makes this business model highly competitive, so it’s a must for you to be on top of your game.

Dropshipping can be profitable despite the competition. Customers would happily buy from a store with reasonable prices, good customer service, and good-quality products. With that said, it’s important that you make sure your store checks all of these.

5. Complaints will be directed to you

As a dropshipper, customer support will be one of your main responsibilities. In the event that your customer receives a damaged or wrong item, even though that’s a shortcoming of your supplier, you will have to bear the brunt of your customer’s disappointment.

Even a reliable supplier can sometimes make mistakes. And when this happens, you’ll have to do your best to address the situation.

To avoid losing customers and to keep your store’s reputation intact, make sure to follow these golden rules of customer service: 

    • Respond to complaints as soon as possible. The longer you wait to handle the situation, the angrier your customer will be and the higher likelihood that they’ll give you negative feedback.
    • Be empathetic. Instead of being defensive over a mistake, take accountability for what happened and let your customer know that you understand their disappointment.
    • Offer a solution and keep your word. This will assure the customer that you are actively trying to address the situation. However, make sure that you do not overpromise and then fall short later. Do your best to stick to your words and to keep transactions as smooth as possible for your customers.

How Much Does It Cost to Start Dropshipping?

There are at least five things you’ll need to invest in to start dropshipping. These include:

1. Online store platform

To get things started, you need to set up an online store. Shopify is a reliable eCommerce platform to start with. You can sign up for a free trial, so you can test it out and run your site for free. Then, before or after your trial expires, you can subscribe to the Basic Shopify planthe cheapest package available—to kickstart your Shopify dropshipping business.

If you want more features that aren’t in the basic plan, you can also choose to get the more expensive plans that provide, among others, more detailed analytics and reports that should help you make data-driven decisions. You’ll learn more about Shopify in Chapter 5. 

2. Domain

Once you sign up for a paid Shopify plan, you will need a domain name for your store—which you can easily buy directly from Shopify. Or, you may first compare the prices with other providers, like Namecheap or GoDaddy, so you’re sure that you aren’t overspending on a domain name. 

Store names that end with “.com” are generally regarded as more professional, but take note that they usually cost higher than the alternatives.

Additionally, you can also purchase a customized business email address that bears your chosen domain name and can be linked to your store. A business email address can help boost your store’s credibility, especially if it’s just starting to gain business traction.

3. Add-ons

Shopify has add-ons that you can install on your website to increase the Average Order Value (AOV) of your store. These usually come in the form of apps or plugins designed to make your customers’ shopping experience more convenient, which can make them more likely to purchase again. 

There are many eCommerce and Shopify apps that you can explore. Here are some to get you started: 

    • BEST Currency Converter 
      • Converts all the prices in your store into the customers’ local currency
      • Free for five currencies
      • $9.95/month for 160+ currencies
    • Fomo Social Proof 
      • Shows notifications of recent purchases and reviews for your site visitors to see
      • $19/month
    • LimeSpot – Upsell & Cross-Sell Recommendations
      • Gives personalized suggestions to your customers by featuring Frequently Bought Together products, which encourage upsells and cross-sells in your store
      • Free to install and offers tier-based pricing based on your store’s monthly revenue
4. Product testing

After performing product research for your store, you’re now off to sourcing products from AliExpress, Amazon, or any other alternatives for dropshippers. Ideally, you should try ordering the products you want to sell to have a clearer idea of the suppliers’ fulfillment processes and to check the quality of the products. 

Purchasing from a supplier will help you answer important questions, including: Does the shipping take too long? Did they send the correct product? Is it well-packaged? Does the product have good quality? 

Depending on your niche, the prices of products will differ. But for starters, you can allot around $100 on product testing, including the shipping fees. 

5. Marketing

Now that your store is live, it’s time to let people know you’re now ready to serve them. The fastest and easiest way to do this is by running ads on search engines and popular social media channels, such as Facebook and Instagram. 

But for now, let’s stick to discussing the ad costs for the most frequented advertising site for dropshippers: Facebook.

Marketing costs vary per niche and per country. Also, the cost goes higher as you target more specific audiences based on their age range and interests.

For the sake of discussion, let’s say that you want to reach 30,000 people and gain at least 300 clicks and store visits. The average cost per thousand impressions (CPM) in 2020 is around $8-$10 in the United States. We can compute the initial ad costs like this:

(30,000 / 1,000) *10 = $300

Now that we have an estimate for each of the items we’ve listed, we can compute for the estimated cost of starting a dropshipping business.

Is Dropshipping Profitable?

Yes, it is profitable. The ever-growing eCommerce market proves that sales will only continue to grow in the coming years. In fact, according to Statista, e-retail revenues are projected to grow to 6.54 trillion US dollars in 2022

But even with this forecast, do keep in mind that dropshipping isn’t the get-rich-quick scheme that some people say it is. Before you can make substantial profits, you’ll need to have good judgment in choosing dropshipping suppliers and products, plus a powerful marketing strategy that draws customers into your store. This process takes hard work and a string of trials and errors. 

But if you learn from your mistakes and strive to do better each time, then you’re surely off to great heights with any business undertaking.

Is It Worth It to Try Dropshipping?

Yes! Dropshipping is a lucrative business model that can rake in profits just as long as you persevere through your failures and develop an effective strategy that works for you. There are no secret ways to succeed; you’ll have to work smart and master your funnel. 

If you’re up for the challenge, then you can definitely start a dropshipping store as you learn more from this guide.

Chapter 2: How Do I Start a Dropshipping Business?

As exciting as dropshipping sounds, it isn’t something you can just dive into. To set yourself up for success, you must prepare to take some crucial steps and have the willingness to learn the ins and outs of the business.

In this chapter, we’ll talk about the important to-dos in starting a dropshipping business. We’ll also tackle some of the important concepts in running an eCommerce business, their pros and cons, and how you can use research to inform your decisions.

How to Start a Dropshipping Business

Because of the popularity of the dropship business model, there are now many ways to start this venture.

Some companies offer subscription-based dropshipping and ready-made stores. However, if you’re after a business that you can set up and scale from scratch (and in the process become an expert in dropshipping), then this guide will provide you with the five steps you need to get started. 

Steps on how to start a dropshipping business
1. Build and validate your business idea

The ideation process doesn’t have to be complicated. Get a sheet of paper or open a Google Sheet on your computer. Start with green light thinking: write down all your dropshipping business ideas without any prejudgmentyes, including those plans that sound absurd or too ambitious!

The goal of this stage is to simply get all your ideas out for you to assess and validate later. Once you’ve written down your thoughts, you can then proceed to filter them based on the decision points below. 

Note that the first goal is to start your first dropshipping store. Once you’ve built a successful one, it’ll be easy for you to scale and open new stores later on.

a. Choose between the general and niche approach

In simple terms, the general approach means that your store will offer different types of products.

Consider Walmart, for example. It offers diverse product categories, including electronics, clothing, beauty products, and furniture, among others.

Screenshot of Walmart’s Shop by Category section

Pros of the General Approach

      • Easy to implement
      • Gives greater flexibility in testing and selling products
      • Your store can act as a one-stop-shop that meets different wants and needs

Cons of the General Approach

      • May look messy because of too many categories
      • Less likely to be a customer’s first choice when shopping niche-specific products (e.g. skincare products, pet supplies)

Meanwhile, the niche approach focuses on a single product category. It lets you build a brand for a specific set of needs, and it also removes the pressure of having to fill your store with many products immediately.

Rainforest Bowls is a good example of a niche store. It focuses solely on wooden kitchen and garden products, and its branding clearly shows it’s not a place for random products for sale.

Pros of the Niche Approach

      • Easier to brand
      • Allows you to build authority in a specific niche

Cons of the Niche Approach

      • Limited product choices
      • Risk of dependence on a handful of winning products

Both the general and niche approaches can work. However, for beginners, it is often easier to start with a general store and then explore dropshipping niches later on.

As mentioned, general stores offer you greater flexibility in choosing products. And the more products you test, the more winning items you’ll likely get!

b. Define your target market and audience

After you decide between a general or niche store, it’s now time to define your target market and audience. What’s the difference between a target market and a target audience, you ask?

To put it simply, your target market is your store’s ideal customers. On the other hand, your target audience is the target of your ads or campaigns—and they may or may not be the end-users of your products. You may read this guide on defining your target market and target audience to get a better understanding of these two concepts.

Knowing your target market and having at least a few ideas about your future target audience will be helpful in researching products for your store. Additionally, your targets must be considered before deciding on your store’s branding, language, and choice of sale and promotional channels, among others.

c. Research viable products and competitors

This is one of the most crucial steps in building an eCommerce business. You already know whom you want to sell your products to. Now, you need to figure out what products can offer them value based on their problems, needs, or wants. 

Aside from identifying viable products, you’ll also need to research your competitors—stores that sell the same products or are in the same niche. 

You’ll learn more about product research and competitor research later. But remember that doing these two things continuously is highly critical to a dropshipping business.

After all, trends die down and people’s problems change. With that, you’d want to always be updated on new products that you can sell and what other sellers are doing to attract and retain customers.

d. Choose a sales channel

A sales channel is simply where you’ll sell your products. This could be a Shopify store, a seller account on Amazon, eBay, and other online marketplaces.

Each sales channel has its own requirements, policies, and associated fees. Additionally, your choice of a channel will determine the features that your store will have and how you can customize the pages, adjust the settings, and access analytics for tracking and optimization purposes.  

You’ll learn more about sales channels in Chapter 4

e. Secure your startup capital

Low capital requirement is one of dropshipping’s most attractive features. Since you wouldn’t need to pay for products upfront, you’ll only need your capital to cover the setup of your store (domain name, Shopify subscription, optional apps), initial promotional campaigns, and other operational costs until your store starts earning profits.  

If you want to further ensure the quality of the products you sell, you may also set a budget for ordering sample products—ideally not more than $100, inclusive of shipping fees.

Some dropshippers start their business with a loan and other risky financial structures. You may do this as well, but be sure to consider all implications before deciding on anything that adds liabilities.

2. Set up your business legally

First things first: not all sales channels require dropshippers to have a registered business. However, you’ll surely enjoy many benefits with a business license. Here are a few:

    • Recognition as a legal entity
    • Protection against liabilities
    • Good impression among suppliers, customers, and investors
    • Access to private grants and government-funded programs for entrepreneurs
    • Freedom to promote your business anywhere

Depending on your startup capital and choice of a selling platform, you may choose to start your dropshipping business with or without a license. After all, you can always handle the legalities later while your store is up and running. 

Additionally, keep in mind that different types of business entities offer different benefits. You’ll also need some legal advice if you choose to start your business with a combination of debt and equity (also known as financial structure). Let’s discuss these further below:

a. Weigh the pros and cons of different business structures

Your choice of a business structure will determine the registration fees and paperwork you’ll need. It will also affect your taxes, protection against liabilities, and the flexibility your business will have in terms of funding, expansion, and tax incentives, among others.

Generally, the simpler the structure is, the easier and cheaper the registration process will be. Here’s an overview of the four main types of business structures:  

      • Sole Proprietorship
        • The simplest and most affordable structure for a business
        • Gives the owner/proprietor full control over all business operations
        • Offers no protection against liabilities
        • Not attractive enough for banks and investors
      • Partnership
        • Comes in two forms: general partnership (both partners are liable to debts and obligations) and limited partnership (consists of liable owners and no-liability investors)
        • Can be attractive to some investors
        • More expensive than a sole proprietorship
        • Vulnerable to dissolution when a partner resigns or dies
      • Corporation
        • Has two forms: C Corporation and S Corporation
        • Sets a business as a separate legal entity
        • Strongly protects owners from personal liabilities
        • Requires thorough recordkeeping and compliance with many regulations
        • May impose double taxation (both the company and each shareholder is taxed in an S Corporation)
        • May limit the allowed number of owners to 100 people (S Corporation)
      • Limited Liability Company (LLC)
        • Sets a business as a separate legal entity
        • Offers limited protection from liabilities
        • No double taxation
        • No restrictions on how many owners or members can join
        • Limited life; could be dissolved when a co-owner resigns or a new co-owner enters (depends on location)
b. Decide on a financial structure

While most new dropshippers fund their business fully from their personal savings, you may also consider getting a combination of debt and equity. We generally don’t recommend this for beginners (we’ll talk more about this and the value of bootstrapping later), but we’ll discuss it anyway to give you additional funding options. 

Also, before going into the technical details, remember that there’s another low-risk way to borrow funds: asking a friend or a family member for help.

Now, let’s go back to discussing what a financial structure is. Basically, this structure is a mixture of debt (short-term or long-term) and equity (or shares) used to fund business operations and other assets. This type of funding approach could be ideal for limited partnerships, corporations, and LLCs. However, it’s advisable to have a financial manager when doing this to avoid getting into trouble.

3. Find your first products and suppliers

Now, it’s time to research products to sell and reliable suppliers that will provide them. Researching is one of the most crucial prerequisites of dropshipping, so be sure to dedicate time and effort to do it.

Here are a few tips for finding your first ideal products and suppliers:

a. Maximize leads from trusted marketplaces

There are many eCommerce marketplaces designed specifically for retailers and resellers. Some examples are Alibaba, AliExpress, and Dropshipper.com.

And because of the popularity of dropshipping, many manufacturers and suppliers are more than willing to deliver their products to different parts of the world.

To find your first few products, you may focus on a couple of marketplaces first—Alibaba and AliExpress are popular go-to’s. Then, type a keyword of your choice based on your initial brainstorming.

For example, you may type “baby supplies” and then scan the results. Pay attention to the product and seller ratings and the number of items sold. Click on products that capture your attention, and then look at the customer reviews to see if buyers were satisfied with the products.  

Screenshot of AliExpress results page for the query baby supplies

You won’t ever run out of leads when you use trusted marketplaces. To avoid being overwhelmed, you can start with three to five items first, so your store won’t look empty.

Later in Chapter 3, you will learn about several other eCommerce marketplaces that you can explore and how you can find your ideal suppliers from these platforms. 

b. Set criteria for vetting suppliers

Suppliers are key actors in the dropshipping business model. Because of that, you have to make sure that your suppliers offer high-quality products, are reliable, and are capable of dealing with common dropshipping issues, namely, failed deliveries, wrong items delivered, returns, and refunds.  

Make your own list of the characteristics that you want your suppliers to have. Yes, working with just any supplier you find would get you started more quickly. But in the long run, not vetting suppliers before closing deals will surely backfire. This could be in the form of fulfillment and delivery issues, faulty or subpar products, and negative customer feedback.

So don’t skip this step. A simple shortlist of criteria can save you from lots of headaches and stress later on.

c. Pay attention to high-engagement ads on social media

One of the key traits of entrepreneurs is that they’re quick to spot opportunities. And some of the most accessible opportunities are often right in front of us, even in the ads that we see.

When you see an ad with lots of positive reactions and comments on social media, what that shows is that the particular product in that ad is highly marketable. And if there aren’t many sellers of that product, then it would be a good idea to research and test that product. 

Checking ads for product ideas could be highly useful for dropshippers, especially those with a general store. 

d. Conduct product tests

A common mistake among new entrepreneurs is immediately diving into full-scale campaigns and website changes without testing their products first. And if the product doesn’t lead to sales, they’d have wasted their investment and will need to edit their web pages again.

Always test products first. It doesn’t have to be complicated, and it could save you lots of effort and money. A quick way to do this is by using Facebook Ads. If you have the budget, it’s also advisable to do A/B testing: prepare a couple of ad sets that look the same, except for one detail. The changed detail could be the target audience, a line in the copy, the creative, or the ad placement.

Then, run the ads for a few days and observe how many impressions and conversions they get. If very few proceeded to order, then the product might not be worth any additional effort. 

When A/B testing, make sure that the ads differ only in one element. This way, you can conclude later on which ad works better and what detail made the difference. 

Be persistent about product testing. The more you test, the sooner you’ll find the winning product that will pay off your efforts. And once you do find it, the next step would be to scale, sell more of that product, and continue to find your next winning products.

4. Learn from your competitors

Did you know that your competitors could be one of your best sources of ideas, tactics, strategies, and even leads to suppliers? 

Make a list of your competitors, especially the more established ones. You can usually find them by using search engines and social media. Check out what they’re doing, what has worked for them, and what hasn’t. 

If they have a Facebook page, you may check their Transparency Page to learn more about them and check if they’re currently running any ads. The Transparency Page should also have a link to Facebook’s Ad Library, which you can use to view active ads and investigate both the low- and high-engagement ones. 

Additionally, dropship competitors could also lead you to potential suppliers. You simply need to order from them, check the return address that comes with the package, research the address for contact information, and then initiate contact.

Don’t be afraid of competitors—they’re an irremovable part of doing business. Instead, maximize what you can learn from them, so you can take your business off to a good start.

5. Build and promote your store and products

Depending on your choice of a sales channel, building your dropship store could be quick or may require studying some tutorials. But once your store is ready and has at least a few products to sell, it’s now time to promote your offer.

A couple of things that could set you up for success are creating a customer acquisition plan and defining the analytics that’ll help you evaluate your efforts. Let’s talk more about these in the sections below.

a. Create a customer acquisition plan

Customer acquisition refers to how you can bring new customers to your business. This process touches the entire sales funnel, from the awareness stage down to conversion, so it could be implemented through different forms across the different stages of your funnel. 

When creating a customer acquisition plan, there are two main elements that you must consider: your ideal customers and the acquisition channels you’ll use to reach them. 

      • Ideal Customers – Go back to the target market and target audience you’ve identified. Do more thorough market research, and use the information you’ve found to choose viable acquisition channels. It’s also advisable to consider your ideal customers’ demographics and psychographics.

 Intimately knowing your ideal customers will help you create compelling content and creatives, so always keep them in mind as you build your store. 

      • Ideal Acquisition Channels – Simply put, acquisition channels are the platforms or traffic channels through which you can acquire customers. Some channels, you can easily identify using your gut feel. However, it’s still always best to decide based on the characteristics of your target market and audience.

Some of the commonly used acquisition channels are social media, influencer partnerships, content marketing, email marketing, mobile marketing, search engine optimization (SEO), press releases, and webinars. For new dropshippers, paid social media ads are the easiest to use.

b. Set which data and analytics to track

How much data you can generate from your store depends largely on the sales channel you choose. But regardless of the extent or limitations of the data you have, what’s important is how you use them to make informed decisions.

Additionally, when you run paid ads through Facebook or pay-per-click advertising, you should make it a point to evaluate how your ads performed using defined metrics or data points. This way, you’ll see if the advertising costs paid off and if there is room for improvement. 

The Value of Bootstrapping

Did you feel intimidated by some of the business terms and requirements we’d mentioned so far? Don’t worry, you don’t have to be an expert to start a dropshipping business. And this is where bootstrapping comes in.

Bootstrapping, as defined by Neil Patel, is “growing your business with little or no venture capital or investment.” But it isn’t only about financial capitalit may also include other resources, such as your current knowledge, skills, and material resources.

Robert Lahm and Harold Little, researchers who studied and wrote about business startups, wrote these lines about the bootstrapping approach: 

There are many companies that bootstrapped their way to success. If you need some dose of inspiration, go ahead and read these companies’ stories!

In dropshipping, bootstrapping will expose you to all the nitty-gritty of the business. You’ll learn research, marketing, design, budgeting, accounting, and many other things. You’ll have to outsource some of the tasks eventually, of course, but knowing how everything works will allow you to grow your business more effectively. On top of that, if your first attempt fails, you’ll still have the knowledge and skills to start again. 

In terms of finances, bootstrapping (instead of incurring debts) saves you from the risks of accrued interests, debt-related cases, and bankruptcy. If you don’t want these liabilities, then bootstrapping is the best way to start your business.

Chapter 3: Choosing the Best Dropshipping Suppliers

Now that you’re set on starting your business, the next step is to find dropshipping suppliers and handpick those who fit your goals.

Be careful not to source products from just any supplier you find. In the following sections, we’ll talk about why carefully choosing suppliers is worth the effort, how you can find suppliers, and how to recognize the good ones from the bad.

The Value of Getting the Right Suppliers

You already know that suppliers will handle the bulk of your business’ operations as a dropshipper. And this is enough reason why you must be extra cautious when choosing whom to work with. 

Getting the right suppliers will impact your business in many ways. Among others, it will help you ensure the following: 

1. Good product quality

While dropshipping doesn’t give you control over the product manufacturing processes, you can still find high-quality products by testing different suppliers and building good relationships with a selected few.

As much as possible, you’d want to work with people who are easy to talk to and who show professionalism during all transactions. Once you’ve built a good relationship with reliable dropship suppliers, you’ll be more confident that the products your customers receive are of high quality.

Additionally, some suppliers may even give you good supplier recommendations for products that you want but they do not offer. They might even help you find viral products that could help both your and your supplier’s business. 

2. Efficient fulfillment process

You can win your customers’ trust by delivering products on time or sooner than expected. 

Of course, this is only possible if you work with efficient and reliable suppliers, which is another reason why you should invest time and effort in researching and getting to know your ideal dropshipping vendors.

3. Customer satisfaction

Your customers’ satisfaction depends heavily on two things: your customer service and your supplier’s ability to deliver high-quality products fast. 

Make sure that you and your supplier are like-minded when it comes to satisfying your customers. Otherwise, it will be nearly impossible to win your customers’ loyalty or to build a positive reputation for your business. 

4. Positive brand reputation

A good brand reputation can keep people interested in purchasing from you. With that, it’s always wise to keep giving people a reason to praise and trust your brand.

Make it a point to make every transaction a satisfying one for your customers. A survey by BrightLocal reveals that 48% of consumers only read new reviews written within the last two weeks. So don’t rely on old reviews—keep on winning positive feedback!

This further emphasizes the importance of teaming up with suppliers who understand your goals and are willing to help you reach them. Keep providing your customers with the best products and customer service, and a good brand reputation should naturally follow. 

5. Better time management

A Gallup survey found that 39% of small business owners work over 60 hours a week. This figure might sound impressive for someone who takes pride in overworking, but the long-term consequences (fatigue, lack of time for family bonding and leisure, poor mental health, etc.) are rarely worth the sweat. 

If you don’t want additional concerns that demand a huge chunk of your time, having reliable suppliers is the way to go. Your ideal suppliers should be prepared to handle issues related to product quality, inventory, fulfillment, returns, and refunds. 

With reliable suppliers, you’ll have more time to focus on your roles as a retailer and other activities you love doing during your free time.

Types of Dropship Suppliers

Suppliers are usually a manufacturer, a wholesaler, or a dropship aggregator. How are these three different? Here are a few things you must know. 

1. Manufacturers

Manufacturers are product creators. They’re the people you must find if you want products at their lowest price. The downside, however, is that some manufacturers prefer to work with wholesalers who can guarantee regular orders. 

2. Wholesalers

These suppliers are middlemen who stand between manufacturers and retailers. What they do is buy from suppliers in bulk and then sell the goods for a higher price. 

Their only con is that buying from them is slightly more expensive than buying from a manufacturer. However, they’re still a lot better than most resellers who usually price goods too high.

Wholesalers don’t sell to the public, making them ideal for dropshippers. If finding manufacturers who dropship gets too challenging, finding dropshipping wholesalers is your next best option.

3. Dropship aggregators

Dropship aggregators source products from multiple wholesalers. Their best advantage is they can offer a wide variety of products and product categories, giving you more options and opportunities to sell bundled items.

A dropship aggregator can be an ideal supplier. But before you work with one, do consider that they buy products at a marked-up price and then reprice them before selling to you. If you aren’t careful, you might find yourself with a very slim and unsustainable profit margin.

Later in this guide, you learn the marks of a good supplier to guide you in choosing the best partners for your dropship business.

Where to Find Dropship Suppliers

You can find dropship suppliers through online dropshipping marketplaces, by ordering from your competitors, and by attending trade shows. Some of the most popular and trusted marketplaces are AliExpress, Doba, Dropshipper.com, Inventory Source, Wiio, and Megagoods.

1. Dropshipping marketplaces

Dropshipping marketplaces are online platforms where entrepreneurs can find wholesalers, make comparisons, and contact anyone who seems to fit their needs. You may even find manufacturers on these platforms.

Below are some platforms you can check out to find potential suppliers, especially in mainland China.

a. AliExpress 
Screenshot of the AliExpress homepage

AliExpress is an online retail service that offers various products under different niches, including consumer electronics, home improvement, fashion, and beauty. It’s free to create an account on this site, and the products are generally cheaper compared with other wholesale stores. This makes the store budget-friendly for first-time dropshippers, but make sure to observe due diligence in choosing products to dropship. 

Aside from affordable prices, AliExpress is also the top go-to of many dropshippers. If you explore the platform, you’d find that dropshipping with AliExpress is beginner-friendly and that there are apps you can use to make the process even easier.

b. Wiio 
Screenshot from Wiio

Wiio is an all-in-one dropshipping platform that helps dropshippers grow their stores and reduce overheads by managing the entire business process. Wiio’s on-the-ground team in China source high-quality and in-demand products for their clients. They’ll also purchase these products for their clients at competitive prices and will store them in their own secure warehouses. Other useful services include quality checks for every acquired product prior to repackaging and shipping to your customers, and customized product photos and labels.

2. Ordering from your competitors

Another way to find suppliers is by ordering from your dropship competitors. Once you receive your order, find the return address that should come with your package.

Look up the address online to get an idea of who the original shipper is and where they’re located. Then, contact the supplier to learn more information about their business and for you to assess if they’re ideal to work with.

3. Attending trade shows

You can also attend trade shows, physical or virtual, where business owners gather to promote their products and services. You’ll highly likely meet dropship suppliers in this type of event, so take advantage of the opportunity to network and build professional relationships.

Signs of a Reliable Supplier

After learning where to find suppliers, the next question you need to ask is how you can filter the best ones. It’s easy to spot the marks of a reliable supplier, thanks to the ratings and written reviews of their previous clients.

But aside from positive reviews, here are some other factors that you need to consider:

1. Customer support

This is a no-brainer, but reliable customer support is especially important for dropshipping businesses since a supplier could be living in a different continent and time zone. You’d want to choose a supplier who’s responsive to all queries and concerns. Additionally, it’s best if you can work with someone who can quickly handle product returns, refunds, and other product-related issues.

2. Location

Location is another important factor to consider. Shopify recommends choosing suppliers located near or in major cities where shipping services are generally faster.

For example, if you are dropshipping locally-made products in the United States, you’d find that the best US dropshipping suppliers in terms of delivery time are in central locations. Centrally located suppliers can deliver items to both the east or west coasts faster than those who are located at the country’s borders.

3. Investments in technology

Dropshipping hinges a lot on technology. With that, it would be best to choose a supplier who knows their way around the latest apps and other technologies, especially the ones for data importing and order tracking.

4. Efficient and organized operations

Efficiency is a must in the eCommerce industry, especially when processing orders and delivering them to customers. With that said, reliable suppliers should be able to keep up with your needs as well as your customers’ by setting up clear and efficient processes and tracking systems. 

Signs of a Fake Wholesaler

Part of finding dropshipping suppliers is filtering out those who might harm your business. Not all suppliers have your best interests in mind. Worse, there are fraudulent wholesalers who will attempt to trick you into paying them, only to produce inferior items or not provide the items at all.

To protect you and your brand’s reputation, be sure to watch out for these signs of a fake wholesaler:

1. No samples upon request

Although many dropshippers never order the products they sell, suppliers should be able to provide samples of their products upon request. These could be paid or for free, but a supplier should be willing to allow you to see the product if you want to.

Getting sample products is a good way to test a supplier’s fulfillment process and the quality of their products. If a wholesaler rejects your request for a sample and insists on heading straight to a dropshipping partnership, consider that as a red flag.

2. Questionable fees

Another red flag would be fees that the supplier can’t fully explain the reason for. If you encounter questionable fees, it’s best to just move on to your next prospect. 

In the event that you encounter suppliers who impose a minimum order quantity (MOQ), do understand that many suppliers who are also manufacturers do this to protect their business. Manufacturers need to make sure that their production costs will be covered by the orders they receive, so be wary of MOQs if you’re just starting out in the business. 

3. Selling straight to the public

Suppliers that sell to the public usually sell at inflated rates. To be safe, we recommend looking for suppliers on the websites mentioned above as these suppliers generally sell only to retailers. Moreover, they are likely to have undergone verification processes imposed by the online platform they’ve joined.

You may also double-check your prospects using search engines and social media platforms to see if they also sell to the public or not.    

Best Practices for Contacting Suppliers

Once you home in on a prospective supplier after thorough checking, it’s advisable to make some preparations before initiating contact.

The ideal supplier you’re eyeing most likely handles several other dropshippers, so you’d want to stand out for them to consider working with you. After all, suppliers can easily decline anyone who might not be worth their time and effort.

And of course, you’d also want to be prepared with a list of your needs. This way, you can assess objectively whether you and the supplier you’ve found are indeed a great fit. Below are some important guidelines for communicating with potential suppliers:

1. Assure them that your business is legal and ready

Suppliers run their own businesses too, so it only makes sense for them to check if yours is a legal one. Prepare for questions about your business, such as its registration, size, location, target market, and the like.

These details can help suppliers make a more informed decision about partnering with you. Plus, you can give them a good impression if you’re ready to present relevant documents (or show your store’s social media following) when they ask.

2. Be upfront about your needs

Think about questions you can ask to assess whether or not the supplier can meet your needs. Ask them about their products, payment terms, warehouse locations, apps and equipment used, warranties, return policies, etc.

The benefits of asking questions go both ways—you’ll be able to evaluate the supplier more objectively, and the supplier will see that you’re serious about your business.

3. Adopt an approachable tone

You can sound as business-like as you can, but be careful not to sound standoffish. Adopt an approachable tone to reassure your prospect that you’re open to their ideas. After all, building rapport always pays off.

As a dropshipper, you can benefit from higher quality items and support once you’ve secured a reliable supplier. So reassure your prospects of the legality of your business, do your best to sound sincere, and be transparent about your needs while talking in an approachable way.

Chapter 4: Choosing a Sales Channel

You now have an idea of what you want to sell and where to source products. Now, how will your offer reach your target market? What can you do to make lots of sales? Which platforms will allow you to customize your store so that it looks more compelling to potential customers?

In this chapter, we will tackle all these questions and more. Be sure to read this guide before signing up for any sales channels! Remember: different channels have different features, and the wrong choice could eat up your capital and profits through excessive fees or sales commissions.

What is a Sales Channel?

A sales channel is any place, physical or online, where you can sell and market your products. Some businesses use both types of channels. However, since we’re talking about dropshipping, this chapter will focus solely on the options available online. 

Note that you may choose more than one online platform to gain a broader reach and potentially earn greater profits. We’ll talk more about the multi-channel strategy later, but for now, let’s discuss how you can choose the best platforms for your dropshipping store.

How to Choose a Sales Channel

Here are some of the things you need to consider when choosing a sales channel: your business goals, your target customers, and the requirements and fees of the available options. 

1. Define your goals

You probably already have a general goal in mind. But if you haven’t put it into writing, now is the best time to do it. Also, it will be helpful to write smaller, short-term goals that will direct you towards your big target.

Most of the time, you’ll need different goals for your entire dropshipping business and your specific dropship store. We encourage you to write both kinds and place them where you’ll always see them. This way, you’ll always be reminded of the reason for your hustle and why you must persevere even when difficulties come.

Here are a couple of examples:

    • Dropship Business Goal: To build one general and one niche dropship store, earning at least $50,000 monthly, before the end of 2021.
    • Dropship Store XYZ Goal: To sell high-quality pet products to at least 20,000 customers from January to June 2021. 

The first example works for a dropshipper who’s after multiple dropshipping businesses. This goal clearly implies the need for different digital sales channels. For the general store, it’s a good idea to choose a platform that can reach mixed types of audiences. As for the niche store, it’s advisable to go wherever people who are interested in your niche tend to hang out. 

On the other hand, the second example is highly targeted. You’re after people who have pets, so general marketplaces might not be your best choice. An eCommerce website would be a good idea, coupled with targeted ads placed on search engines or popular social media sites.

Clearly defined goals inspire action. If your goals leave you confused on what to do next, then it’s advisable to do a reassessment and write clearer and more realistic targets.  

2. Identify where your target customers spend their time

There’s a reason why some channels are preferred over others: traffic. For example, Amazon remains the United States’ most popular eCommerce platform because it consistently gets millions to billions of visitors monthly. Just imagine that many people who could potentially see your products!

However, traffic is different from qualified trafficand a broader reach doesn’t necessarily mean more sales. In most cases, smaller but targeted audiences lead to higher returns, which is why you must know where your ideal customers are.

If you’re selling handmade products, for example, then Etsy and Pinterest could be your most viable options. On the other hand, if you’re selling workout equipment, then Instagramwhere many fitness enthusiasts hang outmight be a good choice.

Additionally, having your own eCommerce website is always a good idea, regardless of your choice of additional channels. A website will give you greater flexibility in terms of branding, payment options, and app integrations, among others. Plus, a website will keep your store intact and secure from out-of-your-control issues that may occur on other platforms.

3. Get to know the different eCommerce channels

Every online sales channel has its own share of pros and consdetails that you must know before you start selling. 

Some channels are completely free, while others require that you subscribe and pay. Also, other channels allow you to list products without upfront fees but will charge commissions once you start closing sales.

In the next section, we’ll talk about some of the commonly used sales channels for dropshipping, as well as their pros and cons. 

Popular Sales Channels for Dropshipping

In a nutshell, the sales channels for dropshipping can be categorized into three groups:  

  1. General marketplaces
  2. Social media
  3. eCommerce website
1. General marketplaces

These are platforms that allow retailers to sign up, upload products, and sell. Free traffic and good SEO are two of their advantages. Plus, these marketplaces are generally known and trusted names, so you wouldn’t have to worry about building customer trust from scratch. 

Amazon, eBay, and Google Shopping are three of the most popular selling channels. They offer a number of benefits that you won’t find on lesser-known platforms. However, they have a few drawbacks as well. 

a. Amazon

Aside from being the United States’ most frequently visited marketplace, Amazon is also available worldwide. With that, you can dropship on Amazon and make your products visible to very broad types of audiences.

Amazon also offers the Fulfillment by Amazon (FBA) program. With this program, you can ask your supplier to send inventory to your chosen Amazon fulfillment center. After that, Amazon itself will handle all orders you receive, from packing to shipment and customer service. Talk about convenience!

But of course, Amazon also has its disadvantages. One of the most glaring ones is its selling fees. The cost will depend on your choice of an Amazon selling plan. But given the generally low profit margins in dropshipping, having to pay commissions per sale could eat up a huge chunk of your earnings. 

Below is an overview of the advantages and disadvantages of this platform.

Pros:

        • Instant access to a large audience
        • Free marketing and instant SEO
        • Reliable back-end support
        • Warehousing, packing, and shipping support through the FBA program 

Cons:

        • Selling fees, referral fees, and fulfillment fees (for FBA subscribers)
        • Limited store and product page customization
        • Limited communication lines between sellers and customers
        • High competition
b. eBay

eBay offers nearly the same benefits as Amazon. It’s also a popular auction site.

If a product is listed for auction, buyers can bid whatever amount they think is fair for the product. But at the same time, sellers are also protected by what is called a reserve pricethe lowest price for the product, as set by the seller. 

Auction listings could be great for rare products. But for dropship items with low to average profit margins, sticking to regular listings is the more advisable route. Dropshipping on eBay could be profitable as long as you consider all fees before pricing your products.  

In summary, here are the pros and cons of using eBay:

Pros:

        • Instant access to a large audience
        • Free marketing and instant SEO
        • Choice of fixed-price and auction listing
        • Lower fees and shipping discounts

Cons:

        • Listing fees, final value fees, and PayPal fees
        • Risks of low bids on auction listings
        • High competition
c. Google Shopping

Google Shopping is ideal for businesses with an existing sales channel but would like greater product exposure. Listing products on Google Shopping is free worldwide, and this is something that dropshippers can take advantage of.

Products listed on Google Shopping have a chance of appearing in search engine results pages (SERPs), even without ad fees. But of course, you can always choose to take advantage of paid listings to secure competitive SERP positions for your products.

Note, however, that Google Shopping is also a comparison shopping engine. People use it mainly to compare the prices offered by different retailers, so it could be hard to close sales if you have lots of competitors.

Pros:

        • Chance of visibility on top of related search results
        • Detailed appearance on Google (image, product name, price)
        • Choice of free and paid listings

Cons:

        • No guarantee of appearing on search results
        • High price competition
        • Listed prices don’t sync with stores; they’ll have to be manually updated when needed
2. Social media

Social media platforms have become many people’s favorite hangout spots. And that’s exactly why these channels are ideal for many businesses, including dropship stores. 

Additionally, using social media to market products has become a lot easier. You can find tons of tutorials online. And if you have an eCommerce website, you can easily connect it to your social media pages for a more seamless process and positive customer experience.

a. Facebook

Facebook is still the world’s most popular social media platform, making it an attractive selling channel for nearly all types of businesses. Also, because Facebook is used by people of different age groups, nationalities, and interests, it is undoubtedly a good place to promote brand awareness, build customer relationships, and post nurturing content to guide potential customers to your desired action.

What’s more, Facebook also gives businesses easier access to people’s Messenger inboxes. So if you’ve decided on marketing via Facebook, you could also set up a Messenger bot, paid or free, for automated transactions and customer service done through chat.

Pros:

        • Free to create a business page
        • Large and diverse audiences
        • Customizable features and settings
        • Provides audience insights and analytics
        • Built-in targeting tools for paid traffic
        • Could be used in tandem with Messenger bot and Instagram

Cons:

        • Very limited organic reach
        • Posting content regularly could be time-consuming
        • Ads manager could take a lot of time to master
        • Ad accounts could get disabled by Facebook
        • Lack of customer support
b. Instagram

Do your products have great visual appeal? If so, then Instagram could be one of the best eCommerce channels for your business. 

Instagram users are mainly young folks—mostly from the Millennial and Gen Z crowd. Be sure to consider this, as well as your store’s ideal customers, before creating a business Instagram account.

If you decide to use Instagram as a way to lead potential customers to your eCommerce website, you should note that this platform allows clickable links only in your account’s bio.

You could include links on your posts, of course, but people will have to copy and paste them to their browser to visit the landing page—something that could make some people lose interest.

One way that Instagram tries to make shopping easier is through Instagram Shopping, a feature that allows you to tag products on posted photos. If someone clicks on the tag, they will be shown an option to visit your website or browse other products in your catalog. Instagram Shopping is currently available in several countries, including the United States, the United Kingdom, Canada, Australia, Singapore, Taiwan, and more.

To sum up all this info, below are the pros and cons of using Instagram as a sales channel.

Pros:

        • Free to create a business account
        • Great for visually appealing content
        • Hashtags help posts reach a bigger audience
        • Provides insights and analytics
        • Instagram ads can be published via Facebook Ads Manager
        • Instagram Shopping can give potential customers quick access to your catalog and website

Cons:

        • Very limited organic reach
        • Posting content regularly could be time-consuming
        • Captions don’t make links clickable
        • Not many Instagram users use the platform to shop
        • Instagram Shopping is unavailable in some major markets
c. Pinterest

Despite the popularity of Facebook and Instagram, eCommerce website owners—particularly of Shopify sites—would be happy to know that Pinterest is actually the second largest traffic source of Shopify stores.

On top of that, Pinterest’s demographics show that the platform’s users are mostly from the 18-24 and 30-49 age groups. With that, you can expect that your audience on Pinterest would have greater purchasing power compared with the audience on other social media sites. 

Still unsure if Pinterest would be good for your business? Here’s an overview of this platform’s pros and cons to help you out. 

Pros:

        • Free to set up
        • Great for visually appealing content
        • Has shopping features: product pins and catalogs
        • Pinterest users generally have strong purchasing power
        • Pins can be easily turned into Pinterest ads
        • Provides audience analytics

Cons:

        • Creating repin-worthy content and building your Pinterest SEO could be time-consuming
        • Most Pinterest users are women, so not all brands could benefit from this platform
        • The catalog feature isn’t available in all countries
d. Twitter

This platform is great for eCommerce for many reasons. For one, a study by Twitter revealed that its users shop online at least six times a month. Also, data show that these users are 2.7 times more likely to shop for a product after seeing it on Twitter. 

Among other things, Twitter is a place of casual interactions. So if conversational marketing fits your brand, this platform might be your best option for reaching your ideal customers and increasing your buyers’ lifetime value.

It’s quick and easy to post on Twitter. The downside of this, however, is that it’s also easy for people to talk about brands publicly and put them in a bad light. Here’s a shortlist of other Twitter pros and cons for you to consider:

Pros:

        • Free to set up
        • Large and diverse audiences
        • Tweets are easier to write because of the character limit 
        • Hashtags help posts reach a bigger audience
        • Interacting with followers and other Twitter users is easier
        • Allows promoted tweets and Twitter ads

Cons:

        • Gaining followers could take a lot of time
        • Twitter’s character limit for posts could hinder brands from communicating their message effectively
        • Mistakes and unintentionally offensive tweets could easily be retweeted and shared with millions of people
3. eCommerce website

Setting up your own eCommerce website is advantageous in many ways. For one, a website gives you greater control over your branding, policies, product page layout, and customer experience. Having a website also gives you more opportunities to fire up your lead capture campaigns, promotions, and content marketing efforts.

Less distraction is another benefit. People shopping on general marketplaces and social media get exposed to a lot of offers from other businesses. An eCommerce website, on the other hand, will purely be about your brand. Additionally, having a website gives you an opportunity to sell your store for a good price later on.

But as with any eCommerce channel, a website has its downsides. Some platforms could be too expensive for first-time dropshippers or too complicated for non-techies. Also, website designing could be overwhelming and too time-consuming, and the total effort needed for setting up might not be worth it if you’re only after a short-term business venture.

Some of the most popular eCommerce platforms are Shopify, WooCommerce, Magento, and BigCommerce. Each has its own perks and perils, but in terms of user-friendliness, app integrations, and other important features, many entrepreneurs consider Shopify to be the best platform. We’ll discuss Shopify and other eCommerce website builders in the next chapter.

Single-Channel vs. Multi-Channel Strategy

Now that you know the different sales channels for eCommerce and dropshipping, you now have the information you need to choose between a single- and multi-channel strategy. 

The single-channel strategy, as the name implies, is focused on only one channel to offer your products and reach customers. On the other hand, the multi-channel strategy is a combination of two or more channels.

Opting for the single-channel option makes the best sense for new dropshippers. After all, you can always expand your reach later on as your business grows.

If you decide to take your store to multiple channels, here are a couple of things you need to remember:

  • Make sure that your prices and messaging are consistent in all channels
  • Study each channel’s policies to avoid incurring violations

Using the information in this chapter, you can now choose your main sales channel and then proceed to the next big step: building your eCommerce store.

Chapter 5: Building an eCommerce Store

Even if you’ve found a reliable supplier and a highly profitable product, you will not win in dropshipping without an optimally designed eCommerce store. The competition gets tougher by the day, so it’s only logical to opt for a platform that can give you a competitive edge.

You’ve already learned about the different types of sales channels in the previous chapter. Now, let’s dive even deeper into the choices you need to make and the factors you must weigh as you build your eCommerce business.

Key Decision Points When Building an eCommerce Store

Your choice of an eCommerce platform will have bearings on your needed capital, technical support, and even the flexibility you’ll have to customize your store. This is why you must make careful considerations when choosing any platform, especially between joining a marketplace or setting up your own website.

What features will make your store look credible and trustworthy? How can you provide the most convenient and satisfying shopping experience? Keep these questions in mind as you filter your options and finally set up your store.

1. Joining marketplaces vs. dropshipping on your own store

Creating a seller account on a well-established marketplace provides an easy route to selling online. Plus, you already know that places like Amazon and eBay offer several advantages that you won’t easily get anywhere else.

It’s completely up to you if you’d like to take this direction. However, it’s important that you also understand why many dropshippers choose to create their own eCommerce site and then use Amazon or eBay only as additional distribution channels.

Below is a recap of the best benefits of having your own dropshipping website. Note that different eCommerce website builders have different features, but here are the ones you’d commonly find:

    • greater control over your store’s website structure, branding, and policies
    • more customization options
    • availability of a content management system (CMS) 
    • access to eCommerce tools, plugins, and security features
    • a wider range of payment options

In terms of fees, dropshipping on your own store will save you from having to pay listing and commission fees. You’ll only need to pay for the domain and platform, and then you’re free to add as many products (and as many add-ons, plugins, etc.) as your subscription package allows. And then, it’s up to you if you want to invest in more features or software to optimize your store.

2. Open-source vs. hosted eCommerce platforms

As mentioned, not all eCommerce website builders are created equal. Their features and limitations vary. Plus, their hosting type (either open-source or hosted) is another important thing you must consider.

What is an open-source platform? It’s a website builder that allows users to modify the original source code and customize their site however they wish. The downside, however, is that you’ll need coding skills and technical know-how to do these.

Some examples of open-source eCommerce platforms are:

    • Magento Open Source
    • WooCommerce
    • OpenCart

Open-source options may look like a cheaper recourse at first, but they could turn out to be more expensive once you start hiring professional developers or pay for extra features typically included in hosted eCommerce sites. Below is a summary of the pros and cons of using this type of platform.

Pros and cons of using an open-source eCommerce platform

Hosted eCommerce platforms, on the other hand, are an all-in-one solution that lets you build a store quickly and easily. Also called software-as-a-service (SaaS) platforms, they are cloud-hosted so you won’t have to install everything on your computer.

They’ll also take care of most of the maintenance and security-related work for you, so you can focus more on the design of your site, especially in terms of user experience (UX) optimization and SEO. Some examples of hosted eCommerce platforms are:

    • Shopify
    • BigCommerce
    • Wix Stores

Using any of these options will save you from worrying about coding and other advanced web development issues. Note, however, that some website builders (like Shopify) may allow you to code and customize some of their templates to a certain extent.

Here’s a summary of the pros and cons of using a hosted eCommerce platform:

Pros and cons of using a hosted eCommerce platform

Features of an Ideal eCommerce Platform

There’s no single best platform for all entrepreneurs. However, there’s surely at least one that will fit your needs, resources, and your ideal customers’ preferences. 

It would be helpful to do your own research on the best eCommerce platforms. But as you do, make sure to consider these features that can give your store a strong competitive advantage:

        1. Availability of subscription tiers
        2. Design and customization options
        3. SEO capabilities
        4. Mobile responsiveness
        5. Multi-channel integration
        6. App and plugin integrations
        7. Content management system
        8. Analytics and reporting capabilities
        9. Technical support
        10. Multiple payment options
1. Availability of subscription tiers

Subscription tiers offer you flexibility and scalability. You may choose a tier that fits your startup budget. Then, once you’re ready to scale, you can upgrade your subscription to one that has more features.

Pick a selling platform that can keep up with more stringent demands as your dropshipping business takes off. It’s also worth choosing a platform that won’t charge you outrageous fees when there is a spike in your number of orders. 

2. Design and customization options

Most eCommerce website builders offer professional-looking templates that you can use. However, if you want to optimize your customers’ browsing and shopping experience, it’s best if you choose a platform that allows you to customize based on functionality as well as aesthetics.

The homepage, product pages, and checkout page are some of the most important parts of an eCommerce site. Make sure that your chosen platform lets you build these with an optimal site design.

Additionally, if you wish to take advantage of every visit your store gets, it helps to add some upsell and cross-sell options to strategic places on your websitesomething that a highly customizable platform should allow you to do.

3. SEO capabilities

Organically appearing on SERPs, especially on the first page or first few pages, will likely result in greater traffic and more sales. With that said, it’s a must that you optimize for search engines if you’re building an eCommerce website.

At the very least, you should be able to modify your page headings, title tags, meta descriptions, URLs, and robots.txt file. Compelling and keyword-optimized product descriptions are also very important, so your store must allow you to publish these.

4. Mobile responsiveness

You’ve probably bought more products through your phone than your desktop computer. This is a fact for most online shoppers, which is why it’s not surprising that mobile responsiveness affects how well your site ranks on search.

Most website builders today will allow you to see and modify how your site looks when viewed on different devices. But don’t simply assume it’s always a given. Instead, check for mobile SEO features before subscribing to anything.

5. Multi-channel integration

Using multiple sales channels will help you reach more audiences. Fortunately, some eCommerce platforms (like Shopify) allow you to seamlessly connect your secondary channels (i.e., Amazon, Google Shopping, Facebook, Instagram) to your website.

No need to debate between a platform like Shopify or Amazon or any other marketplace. If you want to try using a multi-channel strategy, there are eCommerce platforms out there that can support it.

6. App and plugin integrations

Apps and plugins help you do more through a single platform. For example, some of the best eCommerce platforms come with tools for order confirmation emails, abandoned cart emails, discount codes, and reward programs. 

Also, with the right apps or plugins in place, you can slowly integrate automated dropshipping into your day-to-day operations and overall strategy.

7. Content management system (CMS)

Although your store’s main goal is to sell, offering free and relevant content pieces can help you increase the perceived value of your products, win your customers’ loyalty, and even rank for more keywords on search engines. 

Content marketing has become part and parcel of many entrepreneurs’ strategies, which is why many eCommerce platforms also serve as CMSs.

8. Analytics and reporting capabilities

As with any business, you should refer to data before adjusting your strategies or making any big changes to your website. To accurately measure your store’s key metrics, it’s best to use a platform that has built-in analytics and reporting capabilities. Some of the most important reports you should look at are your product analytics, sales and finances reports, and customer reports.

9. Technical support

Regardless of your experience and expertise in web development, you should always consider technical support when choosing a website builder. Some platforms offer 24/7 support, while others are only available during usual business hours. Some platforms, particularly the open-source ones, may not offer any help at all.

Aside from their schedule, also find out the type of support that will be provided to you. Do they have live agents, a chatbot, or published references for self-service help? If you’re new to building and running an online business, you should choose a platform that offers extensive support.

10. Multiple payment options

Every customer has their own preferred payment method. And if they don’t find that preference in your store, then they’ll likely click away and find another store. This is why it’s advisable to offer multiple payment options on your websitesomething you can easily do with the right platform.

Dropshipping on Shopify

Shopify, a hosted eCommerce platform, is one of the most user-friendly website builders out there. A Shopify store is customizable, works with various apps, and can be integrated into multiple sales channels.

Additionally, with the help of a suitable program (like Oberlo and Wiio), Shopify can be linked to some supplier sites, such as AliExpress, to make product importing and order fulfillment easier. This feature could lessen the workload of dropshippers, especially those with multiple dropship stores. 

There are many perks to dropshipping on Shopify. To help you decide whether or not it’s the ideal platform for your business, here’s an overview of its pros and cons. 

Pros of Shopify
    • Free trial – Shopify gives a 14-day trial to all subscribers. You can use this trial to get a feel of the platform without shelling out any amount.
    • Multiple subscription packages – Shopify offers three plans: Basic Shopify, Shopify, and Advanced Shopify. Beginners can choose the cheapest option and then switch to a more advanced plan as they scale their business. 
    • Fully hosted – No need to pay extra for server hosting or maintenance.
    • Simple and user-friendly interface – Even non-techies can easily understand, use, and customize Shopify’s features. The platform also includes templates you can edit through simple drag-and-drop.
    • App store – This platform has its own marketplace for free and premium Shopify apps and plugins. With this, you can easily find add-ons that could optimize your store for better conversion, improved customer experience, etc.
    • 24/7 support – Shopify offers customer service day in and day out. If you want some technical customizations done for you, you could hire experts straight from the platform. 
    • Scalability – The platform works for all eCommerce business sizes.
Cons of Shopify
    • Pricing – Shopify subscription isn’t affordable for everyone, especially first-time business owners.
    • Do-it-yourself SEO – Shopify stores could take a long time to rank organically on search engines. You will have to invest a lot of time and effort in order to rank.
    • Limited content marketing features – Although Shopify allows you to post blogs and other content types, its features are not as straightforward compared with other CMSs.  

Build with Scaling in Mind

Thinking about scalability is a powerful factor in determining the best platform for your eCommerce store. After all, you wouldn’t want a website that cannot keep up with your business’s growth. 

If you’re ready to dive deep into dropshipping, then it makes sense to start with scaling in mind. Go for a platform that lets you serve customers the best way possible, and make sure to listen to their preferences (product-wise, payment option-wise, etc.) as you build your store.

Chapter 6: Choosing a Payment Gateway

It’s important for your dropshipping store to provide a wide range of payment options to customers.

If a customer realizes that their preferred payment method is unavailable, there is a possibility that they will abandon their shopping cart and never come back. On the other hand, a reliable payment gateway will allow them to have a friction-free experience and will encourage them to come back again in the future. 

There are many eCommerce payment gateways out there, but not all of them will suit your target market or your chosen dropshipping platform. So before you set up your store’s checkout processes, here are some of the most important things you should know about payment gateways.

What is a Payment Gateway?

A payment gateway is a third-party technology that lets stores accept payments via debit or credit cards or any digital wallets. It serves as a bridge between your store’s bank account and that of your customer, thereby enabling a secure process for payment capture. 

A reliable online payment gateway should ensure the availability of funds before accepting any payments. Once the payment is secured and deducted from your customer’s account, it will then be deposited into your store’s account. 

Note that different gateways will impose different fees. These could be in the form of a transaction fee per fund transfer, a monthly or annual subscription fee, a withdrawal fee, or the like.

Factors to Consider When Choosing Payment Gateways

Your choice of payment gateways could make or break your store. A smooth payment process will not only encourage customers to finish the checkout process; it could also motivate them to keep adding to their cart, thus increasing the value they spend per transaction.  

So before you select from any of this year’s best payment gateways, be sure to first consider your target market, your business goals, the platform’s fees, and the protection you’ll have as a retailer.

1. Target market  

Conduct research to determine the most popular payment gateways in the countries or regions you are targeting for your products. Also, check if your chosen payment gateways support the different currencies used in these locations.

Knowing your target market allows you to make decisions based on their needs and preferences. This step is also crucial if you want to sell your products globally since you will be catering to a diverse range of markets.

2. Business goals

As early as now, check if your payment gateway options will be able to accommodate your needs when you scale your business or begin selling in the worldwide market. It would be a shame to miss out on opportunities to sell your products in a specific country just because your payment gateway has a limited reach.

Additionally, make sure that your chosen gateways can seamlessly integrate with your chosen eCommerce platform.

3. Transaction fees

The cost of using any payment gateway has a direct impact on your profit margins. With that, be sure to study their setup fee, transaction fees, refund fees, and any other charges they may incur.

Find out if there are any additional charges for international transactions. Then, factor everything in when you’re calculating the cost of each payment gateway and even when pricing your products.

4. Processing speed

Payment processing speed refers to how fast a payment gateway completes a transaction. It usually takes no more than a few seconds, but it’s best to double-check and read reviews to be sure. 

Find out if an eCommerce payment gateway can maintain a high processing speed even when you’re receiving volumes of orders. Slow processing speed can lead to a long checkout process, which could trigger order cancellation. 

5. Fraud protection

The most reliable payment processing companies offer fraud detection and protection tools. Fraud is a common occurrence in the eCommerce industry, so it’s wise to protect your business from the get-go.

At the very least, you should ensure secure encryption of consumer data, especially their bank account information. You’ll learn more about fraud issues in the next chapter. 

Using Payment Gateway Combos

Just as using multiple sales channels can help you reach more audiences, using multiple payment gateways can help you accommodate diverse customer preferences and reduce shopping cart abandonment.

But of course, it wouldn’t be wise to jump into multiple options immediately. Instead, you can start with at least two gateways and then evaluate and optimize later on. Here are some of the most popular payment gateways combos that you can consider:

  • Stripe and PayPal
  • PayPal and Skrill
  • Skrill and 2Checkout
  • 2Checkout and PayPal

By picking the best eCommerce payment gateways, you can provide your customers a hassle-free experience that could lead them to buy again and refer your store to their friends. This, plus other dropshipping best practices, will help you set your business towards sustainable success.

Chapter 7: Keys to Running a Successful Dropshipping Business

The previous chapters have equipped you with the fundamental know-how to get started. Now, let’s dig deeper into how you can prepare for potential challenges and optimize your way to dropshipping success. 

How can you effectively work with suppliers? How can you avoid the common eCommerce pitfalls, such as security issues and fraud? How can you prevent disappointments from derailing your business goals? Let’s answer these questions and more in the sections below. 

Cultivate a Long-Term Perspective

So many wannabe entrepreneurs open startups only to give up too soon. There are many reasons behind this fact, some of which are a poor choice of products, lack of product demand, and insufficient cash.

It doesn’t matter whether you’re already thinking of building an eCommerce empire or you simply want to try dropshipping. If you want your first venture to succeed, you’re going to need to balance your business goals with realistic expectations.

A business usually takes at least one year before it starts earning an income that matches that of the average full-time job. There are amazing dropshipping success stories out there, of course. But if you don’t at least consider the possibility of your venture not taking off within its first few weeks or months, then you might be in for some big disappointments.

This is why it’s important to cultivate a long-term perspective. Define your long-term business goals, and then use these as bases for your short-term priorities. Don’t expect everything to work out overnight—embrace challenges, and learn to frame each difficulty as an opportunity for growth. 

Also, as previously mentioned, it’s helpful to start with scaling in mind. Scaling a dropshipping business could mean different things for different people. It could mean expanding your business by offering more products and product categories later on. Or, it could mean opening a second and third business once the first one gains good traction.

Whatever your future goals are, clarifying them as soon as now will help you make it through the early—and often the most difficult—stages of your business. 

Identify and Prepare for All Possible Challenges Early On

Early preparation always makes a huge difference. With that, it’s advisable to list down all potential issues that your business will face and then start gearing up for them.

In most cases, you’ll find that you can even prevent certain issues from occurring as long as you have the right systems in place. 

It also helps to learn from the issues that other dropshippers commonly encounter. Check out online dropshipper communities and forums (like the eCommerce Elites Mastermind Facebook group founded by Steve Tan), and you’ll instantly find posts about various issuesespecially with regards to supplier relationships, inventory management, order fulfillment, shipping, order tracking, returns, chargebacks, and security. 

1. Supplier relationship management

You can’t run a successful dropship business without building solid supplier relationships. You may opt for a formal and purely transactional type of relationship, of course. But putting in a little bit more effort, plus extra friendliness, can make a lot of difference, especially if you intend to scale your business in the future.

How can you build supplier relationships? Here are some ways. 

On-time payments

This is the best way to win your suppliers’ trust. Just like you, your suppliers’ cash flow is what keeps their business running, so it’s only fair to pay them right and on time.

Plus, once you build this reputation of paying on time, your suppliers are likely to become more eager to continue working with you and provide you with excellent service.

Prompt replies

A lot of common supplier-related issues stem from miscommunication. With that, it’s best to respond to your suppliers as quickly as possible every time they contact you. 

You should also initiate conversations whenever you have concerns or need clarifications. Remember that unresponsiveness is a big red flag, so be careful with suppliers who don’t promptly respond.

Regular friendly communications

Reliable suppliers are more than just your source of products. They’re highly

important partners who will help you establish your brand and satisfy your customers. 

This is why it makes sense to regularly check in on them instead of just showing up whenever you need products and then disappear the rest of the time. A quick check-in is also a good opportunity to update your suppliers about your business, give feedback to their service, communicate some of your plans or products you’re considering to sell, or talk about product forecasting.

Who knows? Maybe a few casual talks are all it takes to know who among your suppliers are willing to go the extra mile for your business.

Dropshipping agreement

A comprehensive dropshipping agreement protects both your business and your supplier.

It isn’t always a necessity, especially for first-time dropshippers. However, for businesses that have established their brands, gained a consistent demand for products, or are working with multiple suppliers at the same time, having a legally binding document is always a wise idea.

Among others, a dropshipping agreement should contain:

        • service-level agreements, including handling and shipping standards
        • the agreed wholesale price for products
        • policy for returns and refunds
        • confidentiality clauses
        • the valid grounds for contract termination

Curating a contract with your suppliers is also a way of expressing your eagerness and seriousness to work with them. Plus, when they know that you can take legal actions should they fail to fulfill their roles, then they’re more likely to take you and your business seriously.   

But what if a supplier breaches your contract? Well, your response should depend on a few things.

For one, consider how your supplier had been from the beginning of your partnership until before the breach took place. Was the supplier reliable or have there been recurring problems? Does the breach look like it’s intentionally done, or is it possible that the supplier is just having some short-term issues?

Secondly, consider how big or minor the consequence of the breach is. If it resulted in a big loss on your part, then you might want to take some legal actions and demand compensation. If the result is not as significant, then you can perhaps talk to the supplier first and clarify why the problem happened. 

It’s almost never wise to head straight to legal actions every time your supplier fails to meet your expectations. Such an approach could be costly and stressful.

Plus, keep in mind that there could be suppliers out there who talk to each other and might even be disclosing information about retailers who are problematic, too demanding, and worth avoiding. You wouldn’t want to be someone whom suppliers would passionately avoid, right?

If you’re after long-term partnerships, understand that all businesses (your suppliers included) face short-term problems from time to time. With that, it’s advisable to first understand your suppliers’ situation before opting for legal actions.

2. Inventory management

In the context of dropshipping, inventory management refers to syncing your store’s inventory records with those of your suppliers.

Having a system for monitoring your suppliers’ stocks is the best way to make sure that you aren’t selling unavailable products. It’s also a good way of avoiding stockouts; when you see stocks running low, you could immediately reach out to your supplier and confirm when they’ll replenish their goods.

If your supplier tends to run low on stocks due to high demand, a good inventory management practice you could consider is asking your supplier for safety stocks.

Inventory management could be as easy as setting up spreadsheets that you and your supplier can update as needed. However, you will need a more sophisticated system if you’re working with multiple suppliers or a whole lot of products. The key is to make sure that your system simplifies things and doesn’t complicate them.

Some sales channels could also help you with inventory management. For instance, Shopify has an Inventory feature that allows you to export and import inventory with a CSV file and hide out-of-stock items, among others. 

You may also explore different inventory management software or systems and see which one can cater to your needs best.

3. Order fulfillment

As a dropshipper, your order fulfillment process will be like this: you’ll need to inform your supplier about a customer’s order, wait for the supplier to process the order and send the order details, fulfill the order through your sales channel, and then notify your customer about the shipment and the parcel’s tracking number.

Sounds simple, right?

Well, not really. Doing these steps manually over and over again—especially during peak seasons—makes you highly prone to error. You could end up misspelling your customers’ information or ordering the wrong products for them. 

It’s absolutely okay to do this manually, of course, especially at the beginning of your dropship journey. However, once you begin getting tons of orders, it will be advisable to consider more efficient ways of sending the order details to your supplier and then fulfilling them in your digital store. 

4. Shipping and tracking

Buyers love cheap and efficient deliveries. Who wouldn’t, right?

But in a dropshipping business, you as a retailer wouldn’t have a lot of control over shipping fees and the completeness of tracking details. This is why it’s crucial that you clarify all shipping and tracking-related details with your suppliers even before you begin your partnership. 

If you want to ensure low shipping rates and easy order tracking, it’s recommended that you work with suppliers who use ePacket shipping.

What is ePacket shipping? It’s basically a fast and relatively cheap international shipping method that third-party logistics providers from China and Hong Kong offer. ePacket shipping time usually doesn’t exceed 30 days, so that’s an additional perk for dropshippers selling to various countries.

Keep in mind, however, that ePacket isn’t available for all countries nor applicable to all types of goods. Be sure to double-check ePacket shipping guidelines and policies to minimize shipping and tracking issues later on.  

5. Returns and refunds

Returns and refunds are normal parts of a retail business, and you can prepare to handle them well by creating a clear Return & Refund policy and making your policy page easily accessible for your store visitors.

Having this policy is also a good way to earn your visitors’ trust. In fact, statistics show that 67% of shoppers check a store’s return policy before they purchase. What this shows is that having a clear policy improves shoppers’ confidence, especially when they’re buying from you for the first time.

At a minimum, a Return & Refund policy should answer:

      • which goods are eligible for return and refund
      • how many days after receiving a product can a customer request a return or refund
      • what information or proof of wrong/damaged product is needed
      • what product/parcel conditions should be intact during return (e.g., original packaging, price tag, etc.) 
      • who will shoulder the return shipping fee

In some cases, it’s also good to offer product replacement. Some sellers offer free replacement while allowing buyers to keep the product they’ve already received in order to regain the buyers’ trust and increase the chance that they’ll still give positive reviews. 

Returns and refunds could seem intimidating at first, but you’d be glad to know that most dropship suppliers aren’t new to handling them. You and your suppliers could agree on a return and refund system and then include that in your dropship contract.

6. Chargebacks

While a refund request involves you and your customer, a chargeback mainly involves you and your customers’ bank.

What leads some shoppers to demand a chargeback? It’s usually because they see a seller as a fraud or because the product they received did not meet their expectations.

Chargeback occurs when a buyer shops with a credit card and then contacts their card issuer about a dispute involving their purchase. If the bank accepts the dispute and initiates a chargeback, you will be charged the total order cost plus a certain chargeback fee. 

Chargebacks are an expensive issue to have, which is why you should plan how to avoid and manage them beforehand. Below are a few tips for avoiding and managing chargeback notices.

Write a clear return and refund policy

Yes, this policy would be useful for minimizing chargebacks. How? Filing a dispute to claim a chargeback is usually a hassle, so giving shoppers more convenient options to get their money’s value—via free return, hassle-free refund, or product replacementcan discourage them from taking the chargeback route.

Product return, refund, and replacement are usually cheaper than a chargeback, so they are worth offering to your unsatisfied customers.

Set up open communication lines

Does your store have a contact page or does it provide at least one or two ways for shoppers to contact you?

Be sure to have open communication lines, so that customers can easily reach out to you instead of heading straight to their bank or spewing rants on your store’s reviews section. If you have the resources, you may also invest in conversational marketing tools, such as chatbots or live chats.

Most of the time, you and your customer can arrive at a win-win agreement if you give them a space to express their concern and get to know the arrangements your store can offer. So make communication easy, and make sure that your store visitors know that you’re open to hearing their concerns. 

Publish accurate product descriptions

It could be tempting to exaggerate your product descriptions in order to attract purchases. However, if you raise your customers’ expectations only to underdeliver later, then what you’re really doing is setting your business up for failure.

Disappointed or unsatisfied customers will likely result in ugly reviews and tons of costly chargebacks—problems that you can avoid if you stick to good business ethics.

Provide realistic delivery dates

Some customers file disputes prematurely when their order is taking too long to arrive. With that, you’d want to provide realistic delivery dates and avoid promising fast shipping when you know it’s not guaranteed. 

If you’re concerned that long delivery time could push back potential customers, you may craft compelling offers that could compensate for the waiting period, like free shipping and freebies.

7. Security and fraud issues

Security and fraud issues could threaten several aspects of a dropship business. The sources of these threats could come from fake suppliers, unsecured websites, hackers, and even scammy buyers. 

Below are some of the most common security and fraud issues that you should be cautious of. 

Fake suppliers

The ease of online product sourcing comes with some disadvantages, especially if you don’t intentionally watch out for signs of fraud.

For dropship beginners, it’s advisable to stick with finding suppliers in well-known marketplaces, like AliExpress and Alibaba, to avoid scams. These sites require sellers to submit a copy of their business license or other proof of legitimacy, so it’s unlikely that you’ll encounter scammers on these platforms.

If you’re considering suppliers who have their own domains, do watch out for some of the common signs of fake supplier sites, like the lack of SSL certificates, unavailability of office/warehouse addresses and business email addresses, messy web pages, and poorly written policies or Terms and Conditions pages. 

Online store hacking

According to Inc., small businesses are attractive targets for hackers because they generally have weak online security and poor encryption technology.

To protect your eCommerce website, here are some tips that you could act on even if you don’t have a lot of experience in dealing with security issues:

        • Stick to a trusted eCommerce platform, like Shopify and BigCommerce
        • Purchase and maintain an SSL certificate
        • Secure and regularly change your store’s password
        • Keep your eCommerce apps and software up to date

It also helps to be wary of the information you ask your customers. For instance, if it isn’t necessary to ask for their birthdate, then don’t do so. The more information you keep on your site, the more safety issues can occur in the event that your site gets hacked.  

Credit card fraud

This type of fraud occurs when a person orders from you and then uses stolen credit card data to pay. This might sound harmless for you as a store owner, but once the real credit card holder takes notice and reports the unauthorized transaction, you are going to have to refund the product cost even if the order was successfully delivered.   

Some usual signs of credit card fraud include:

      • Mismatch between the billing address and the buyer’s IP address
      • Multiple and consecutive or almost simultaneous orders from the same IP address
      • Orders from a location where you don’t usually get orders or advertise to
      • Bulk order of similar products

As technologies grow more and more sophisticated, it’s safe to say that online fraud will also become more rampant in the years to come.

With that, do your best to stay updated on eCommerce security and fraud issues, as well as the strategies that you can take to protect your store.

Invest in What You Can Control

You already know how dropshipping works and what roles you’ll play as a retailer. You’re also now aware of the processes that you wouldn’t have control over, plus the external risks and threats that your store could potentially face in the future. 

Considering all these, what would really help you establish a successful dropshipping business is doing all that you can with the business elements that you can control.

Among others, you can start crafting plans or standards for the following controllable factors:

    • Supplier screening
    • Product sourcing and testing
    • Marketing
    • Cross-selling and upselling
    • Customer support

Provide Outstanding Customer Support

No matter how awesome your products are, you’ll still struggle in gaining loyal customers and establishing a successful dropshipping business without exceptional customer support.

With that said, it’s crucial that you establish some rules or standards, especially as your business grows and as you gain more and more customers whom you’ll need to satisfy with positive shopping experiences.  

According to recent statistics, 73% of customers tend to love or become supportive of a brand if they were met by friendly customer service representatives. So make the most of customer support and always strive to improve your customer service rating. 

Once your store starts to demand a lot of time and effort for providing customer support, you may choose to outsource the job while maintaining the standards as well as the brand tone and personality that you’ve already started to use.

Use Analytics to Guide Optimizations

You may generate your store and your campaign analytics from the sales and marketing channels that you use. These analytics will let you know the performance of your store or your advertisements. Additionally, they could also offer insights about what you can improve, remove, or add to the strategies you’re currently using.

Looking at a bunch of data could feel intimidating at first, but you’ll slowly get used to analyzing and understanding them as you monitor your business.

Embrace Continuous Improvement

The eCommerce landscape continues to evolve, and not all best dropshipping practices today will remain the best after a few months or years.

How to adapt? Continuous improvement is the key.

Don’t stop learning, even after years in the business. More importantly, avoid the tendency to just trust in your experience and ignore the trends. Remember that new technologies and systems are constantly disrupting the eCommerce landscape. 

It’s also highly valuable that you work with mentors or join communities where you and other dropshippers can discuss your successes, issues, and best practices.

Success is rarely an easy goal to attain. However, you can enjoy the process as you establish your business, probe and address issues, and continue to improve on the areas that you can optimize.

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