Everything You Wanted To Know About Drop Shipping
Unless you’ve been living under a rock and never use the internet you’ve probably seen ads from people claiming to make a fortune from drop shipping. The most memorable/cringeworthy are those featuring the cliched Lamborghini or fancy pool house as props.
I’ve been in this and many other industries online since 2003, so I’ve seen lots of trends – and sales pitches come and go.
Dropshipping may have been around for a couple of decades, and pitched differently than before, but is still very much a current trend.
The thing with dropshipping is and has always got just as much about what NOT do as well as what TO DO do online.
What is dropshipping and what can it do for you?
Drop shipping is so appealing because it promotes the concept of selling products without the hassle of having to carry stock or ship the products yourself.
You create a store and the distributor or provider of the product (the dropshipper) ships the product straight to the end-user (your customer) on the merchant’s behalf (that’s you).
Dropshipping is often confused with affiliate marketing. Affiliate marketing is a referral service in which you place specialized made banners, buttons and site links on your website or social properties to attract clients to a specific website. You receive commission on any sales made as result of linking to that website. To be a drop shipping website, you need to sell physical products onsite in your own store, where you don’t stock the product yourself, but organise the product to be sent to the customer direct from the supplier.
It’s true that you can make a nice living from dropshipping, but like everything, there is a learning curve. There are some fundamental things to know, and MOST importantly you need to have the right mindset.
Once you’ve got that mindset wired in, you can apply that thinking or best practice to all online business applications for a much higher chance of success.
Then you’ll quickly be able to weed out the ideas that don’t have all the elements needed to be a success – and move on to those ideas that do have a good chance of winning.
It all starts (like any exceptional online business plan) with market research.
Market Research For Dropshippers
The majority of courses online will emphasize the importance of doing good market research.
The better courses teach you how to apply the principles you need to real like scenarios, so you can actually use them as you go. This saves a huge amount of time and you feel safe, because it makes sense and takes away the guesswork.
There are some great tools out there like Alidropship’s Niche Tester for finding a dropshipping niche. This gives you an idea of the process courses take you through in more detail. You can also try their Profit Estimator Tool
You can use Neil Patel’s Ubersuggest tool for interim keyword research or check out Google Trends, to see which keyword searches are rising.
Research is the place to start, but there are many questions asked about dropshipping.
FAQ: Here are some of the most common questions people ask about dropshipping:
Q. What is the definition of dropshipping?
A. We have already covered this but it’s worth describing again. Dropshipping is selling products on your website that are shipped directly to your customer but the supplier without physically being handled by you or your staff.
Q. How do I start a dropshipping business?
A. You’ll need a website, dropshipping app or software, and to source stock to sell. Some website themes manage both sales and drop shipping orders behind the scenes. Dropshipping apps include Dropified, Oberlo or Alidropship (my favorite).
Q. How does dropshipping work?
A. Someone buys a product from your website, you order the product(s) from your supplier who ships it direct to your customer.
Q. How long before I earn money as a dropshipper?
A. Some people make money within days but generally if you are paying monthly fees, it may take a month or two to get going. If you follow a drop shipping course, you can grow your customer list and therefore your profit exponentially.
Q. How much can I make from dropshipping?
A. Some people make $200 to $1000 per month as a hobby, but others hundreds of thousands. It depends on what you know, who you know and how much work you put in. You can grow a business quickly if you follow a mentor.
Q. What apps and website do I need to be a dropshipper?
A. Shopify or WordPress websites are the most common websites. I recommend and use Alidropship because its low cost, high converting and the set up is all done for you. That’s really important if you are new to DS. Marketing is made easy for newbies.
Q. What does it cost to start and run a dropshipping business?
A. Your monthly fees vary hugely, some apps like Alidropship don’t charge a monthly fee which I like (just low annual website hosting fees).
Shopify.com starts from $29 (but is very limited on that basic plan) and Oberlo or Dropified which run from $29 to $99 per month.
Commerce HQ is another website platform I like starts at $99 per month. The good thing is that there are no hidden costs or sales processing transaction fees on top of your monthly costs. These are hidden costs with Shopify.
All up you can pay several hundred dollars a month for website, drop shipping and transaction fees. This sounds like a lot when you first start out. As I stated earlier on, there are good alternatives that cost a lot less to get started and are scalable long term. You don’t have to endure the growing pains many new online businesses experience as your business develops.
Q. What sort of products should I dropship?
A. This is a “how long is a piece of string question”. There are pros and cons to choosing a wide niche store like https://inspireuplift.com or https://wish.com for example which sell a wide variety of items. These guys have built a brand with repeat customers, and aren’t focused on an audience with a specific passion.
The opposite example is a very niche specific site which focuses on a narrow interest.
Q. Where do I find dropshipping products?
A. You can manually find dropshipping products yourself by sourcing your own drop ship suppliers with a Google search. There are also drop shipping sourcing sites who sometimes also warehouse products and ship them too. The most common drop shipping source of products is Aliexpress or Ebay. Dropified, Oberlo, Alidropship and EComTurbo all allow you to import products.
These programs will also handle your orders and some like Alidropship will even send tracking details to your customers from the back end of the website. Note EComTurbo ONLY works with Shopify as a theme, a skin for your store. It includes add ons you may otherwise need to pay for with Shopify. Alidrop is stand alone, it works with WordPress with no monthly fees other than your annual hosting which starts from $49 per year.
Q. How do I manage stock and returns etc?
A. Stock management is important. Making sure you are not selling products the supplier has sold out of. This is why it is crucial for your credibility (in my opinion) to use software to monitor stock.
Many independent drop ship programs offered directly by brands may charge an annual or monthly fee. Some provide their services at no extra cost. Check out the contract arrangement BEFORE you sign up with a program. All drop-ship programs are different so make sure you understand the small print and make sure they fit your requirements.
Q. What are the Advantages of Drop Shipping?
A. Because a warehousing business can buy in big volumes, they will likewise have the ability to provide you the best prices on products and shipping, which will return a higher profit to you.
There’s no capital expense and no need to purchase inventory.
Using drop shipping offers you awesome versatility in regards to item range – promote dozen products or promote a thousand!
Instead of stressing over inventory and delivery, you can concentrate on listening to the market and discovering the items your visitors most desire.
Q. How Do I Get Started With Dropshipping?
A. To start your own dropshipping business you’ll need the following:
- Your own website – one that is user-friendly and therefore has a high conversion rate to orders.
- A fulfillment app or software to order products through your supplier and manage the payment/shipping process.
- Keyword research and market research tools – paid and free to assess the potential profit of a niche.
- Social media accounts.
- Tools to automate some of your marketing and reduce overwhelm.
- Tracking to test so you can measure and improve your ROI fast.
- Good supplier of products.
- A course to show you how to set up your website, select products based on shipping cost and speed and calculate potential product popularity. A course will fast track your learning curve and set up to get you earning $$ much faster.
I have personally tested a lot of these tools, some paid some free, and can recommend the ones that are well worth investing time and/or money in.
Drop shipping can be expensive to start if you are not earning much to begin with. What I mean is, paying monthly website and drop shipping apps like Oberlo, Dropified, and Shopify with app addons can add up to $280 or more per month.
This may not sound like much, and isn’t one you get up and running, but is a lot for some people starting out with little spare cash to devote to setting up a business. Over a few months it is a lot, when instead you could put this money into a course to start earning money faster.
For those of you who are interested in taking a leap into the world of drop shipping, I do have some recommendations for starting your business for a one off set up cost of $299 which includes complete setup of your website and even stock to begin with.
I recommend it’s also well worth taking a drop shipping course. You’ll save potentially hundreds of hours or learning curve, eliminating doubt and accelerating your success.
Many courses are $1000 or more, but the best one I have found is by Ecomelites. It’s just as comprehensive and easy to follow as the more expensive courses.
The basic course is $197 and the bigger course with bonuses is $297. Again, it’s at least as good if not better than any of the other well publicized courses you see advertised on youtube etc, yet is priced affordably to allow newbies a good kickstart.
There are many things you need to get right when creating a drop shipping business. I have been marketing online since 2006, so I have to make all of the mistakes, and been through all of the learning curves on the road to understanding how to make a really good income online.
Drop shipping is not just an easy way to get involved in ecommerce, lots of established online merchants are now relying on it as a technique for reducing stock on hand, decreasing overall shipping expenses.
Lots of businesses will have an interest in teaming up with you in a drop shipping arrangement as it’s an easy method for them to create extra earnings, however there’s a number of points to think about and to keep an eye out for:
When choosing drop ship programs, there are some questions you should be asking:
Some of these questions apply to DS programs that are not Aliexpress or Ebay based, because they involve negotiating directly with a supplier, usually via their website or a drop ship community/co-op website such as Salehoo.com.
Q. How long the drop ship program has been around?
A. Make sure they are a respectable business and they are experienced in drop shipping.
Q. What Fees Do I Need To Pay?
A. Make sure you understand precisely what the charges are if any. – You do not want to get hit with nasty surprise charges later.
Q. Cost Setting For Products?
A. Does your software or supplier allow you to set your own costs? This is important especially when it pertains to shipping rates. (We will talk more about shipping later).
Q. What Sort Of Imagery Should I Use?
A. Do your suppliers offer professional product pictures and descriptions to use on your own site? If you can not display quality photos for customers, they will not want to purchase from you.
Q. Can I Use My Own Branding Or Does The Dropship Supplier Have Professional Branding?
A. Does a supplier include your company name when shipping out to clients? Branded products are sometimes offered with your own logo. If the item is consumable and the buyer is like to buy again at some point, seeing YOUR business name on a product is an excellent way to retain new consumer.
Q. Who Handles Stock Management?
A. Does your software app/website display inventory and stock numbers so that you understand what is readily available for your clients? Nothing will upset a customer more than buying a product to then discover, it is out stock after they have already paid for it.
Q. How Good Is Parcel Tracking?
A. Can you provide tracking details to pass along to your customers via your suppliers?
Q. Product Prices
A. It’s best practice not to accept the very first drop carrier you come across unless they are willing to supply you a “Best Price Guarantee.”
Q. What Are Drop Ship Charges and costs
A. Some business will have a handling fee over and above freight costs – it’s essential to know all the expenses involved so you can calculate your earnings margins precisely.
Q. Shipping Fees
A. Are they using small private shipping companies, packed with Aliexpress, Epacket or UPS? Will they deliver internationally? You’ll want to be sure that their shipping systems will guarantee your customers receive their orders in one piece.
Keep in mind that you might require a specific type of shopping cart in order to handle drop shipping. Lots of shopping carts just allow for one “ship from” postal code in the configuration for freight calculations. If you are dealing with a variety of drop-shippers NOT on Aliexpress you might have lots of point-of-origin zip codes – and this can be a genuine headache if freight is based on distance.
Q. Instant Payment or Pay By Account
A. If not using Aliexpress, will the drop shipping company automatically debit your credit card on each order you submit, or can you get month-to-month payment terms? When you are beginning with a business, they are unlikely to provide credit, however it’s good to inspect if this will be possible when you’ve developed trustworthiness.
Q. Do The Suppliers Offer Assistance, Returns, and Refunds?
A. The last thing you’ll want is to be handling lots of returns – and have to cover the associated costs. Ask the drop shipping business about their return policy, what kind of assistance they’ll provide you for their items and about any assurances associated with their items – and get it in writing. Read their reviews before committing to listing their products.
Q. Supplier Trustworthiness?
A. How long has the business been around for? Do they respond to your ask for info quickly and expertly? Check out their reviews – or if using Alidropship or another app to import products, you can exclude products with poor review ratings.
Other positive benefits that a dropship business may provide, but not obligatory are:
- Will the supplier allow you to start an affiliate program with their products.
- Will include your company cards or other goodies into your shipped packages.
- Do they provide both thumbnails AND big photos.
- Ideas To Enhance Your Dropshipping Website and Conversion Rate
Once you have established a product line, drop ship partnerships and a site, you can get started on the marketing with some handy tools like Social Rabbit (if using Alidropship) or Meetedgar.com for Shopify and Commerce HQ sites.
Make sure that your content’s punctuation, grammar and spelling are good. Be sure that the website allows you to write your own description.
Navigating your website must be easy, so you’ll need to group comparable items together. Try not to add a lot of items with large images on one page. It can make the page load slowly and effect your ability to rank in search engines and worse not load for customers who click away.
Q. How Is Your Prospective Ecommerce Website’s Site Structure And Navigation?
If your future clients can’t browse through your site easily, or feel they are lost, you will lose them 80% of the time. So make sure you include a theme for your website with good navigation, an html site map and a universal search engine website map so the search engines can know about the pages you are offering and when they are updated.
If your potential clients can’t browse through your website easily or feel they are lost, you will lose them 80% of the time from my experience and website analytics tracking.
Q. Will You Make Make Me Feel Safe As Your Customer?
A. If you do not have any kind of SSL certificate, BBL logo design, or “hacker safe” logo design on your site, then you need to investigate these out and do whatever you can to get at least one of these included to your website where visitors can plainly see. Anything you can do to assist individuals feel safer on your site (even a little bit) will assist to increase sales.
Make sure you have a phone number where people can call you, email address and mailing address. When people understand they can call you, they feel more secure and will be less reluctant to purchase from you.
Make sure that you are using the cleanest looking, fastest loading and most enhanced images you can. There are several programs out there that will help you optimize your images for the web.
Q. Do You Have Clear Photos And A Fast Loading Site?
A. If you were lucky enough to find a website platform that provides you both thumbnail and large photos, that’s a bonus. This makes your product pages much easier to create and looks more professional. If they do not provide thumbnails AND large images, don’t stress. There are lots of services that can develop thumbnails for you. Look into image gallery software.
You may even have some software on your computer system and not even know it. Many programs like Photo Shop, or Paint Shop Pro (even the basic operating system image programs) have image optimization programs that can assist accelerate the load time and clarity of the photo. The more images that can help explain the item you are selling, the better. Remember the saying that a photo deserves a thousand words.
Alidropship comes with a built in image editor so you can tidy up images without leaving the product page.
Q. Is Your Costing Clear?
A. Set shipping costs for orders, both single item and multiple item orders that are not confusing to customers. If drop shipping programs fixed pricing does not allow you to set your own prices, or combine shipping, then obviously you will have to work with the costs DS program has currently established. If they do allow rate modifications, this can be useful, particularly when it pertains to allowing for shipping.
Personally I suggest using either one program that already has actually established pricing OR using ones that permits you to set your own prices, NOT BOTH. It can get extremely confusing. Alidropship has a formula to set prices based on market demand and competition.
If you have a bunch of different drop shipping suppliers its better to use Woocommerce with the Alidropship plugin and this can get confusing to manage. This is because if someone buys two items with different DS shipping costs, you have to set the highest price and tell your cart to do this.
Again, picking a theme and plugin that allow for this makes issue life a lot easier.
The easiest solution I recommend is setting flat shipping rates and changing your retail price to accommodate shipping.
Now that you have answered these questions, you can think about starting the process
Your Dropshipping Startup List
- Read Alidropship’s Dropshipping Guide and go through the Niche Research process.
- Buy a domain that is keyword rich if you can. Here are some tips for choosing a domain name
- Pick a website platform such as Shopify, Commerce HQ or my tried and true favorite – a WordPress and woocommerce based website/hosting package based on your budget, keeping in mind it may be many weeks until you start selling enough products to pay for your costs. Remember that Oberlo or Dropified will cost you a monthly fee. Oberlo does offer a very basic free version, however this does not allow order fulfillment monitoring. Shopify is easy to set up, but can be expensive if you need to add alot of extra addons which you pay a monthly fee for. EComTurbo is a Shopify theme (skin) which includes all of the add ons you need to create a high converting ecommerce website. Commerce HQ is another very cool platform that has all of the built in apps included. It may seem pricier than Shopify, but again, all apps are included free of charge, and there are no extra transaction fees for sales. This can add up to a very economical option long term.
- Populate your website with products based on their popularity, reviews, support, and shipping time. Start small and think quality, not quantity.
- Promote your website using apps such as Social Rabbit for WordPress and woocommerce or Meet Edgar for all platforms.
- Add optional other plugins which can massively increase your conversion rates to sales.
All of the above can be made much easier by enrolling in an online course like this one.
Starting any online business can seem overwhelming, but really is just a process that you can follow step by step. With the right guidance you can feel reassured you are on the right path.