Whether it’s through a YouTube video or google search, many people looking to get started with their first online business come across the term “dropshipping”.
Unfortunately, there isn’t all that much out there when it comes to clearly explain what dropshipping is, and how to get started. Most guides are either confusing, inaccurate, or outdated. This can be extremely frustrating and overwhelming if you’re just looking for a place to get started.
So, we’ve decided to put together the last dropshipping guide you’ll ever need. This guide will cover everything from the basics of what the dropshipping model is, how to build your store, scale your business, and everything in-between. It’s up-to-date with the latest in the industry and written with the absolute beginner in mind.
Let’s get to it!
Table of Contents
Dropshipping In A Nutshell
Before you start to learn the nitty-gritty of building a dropshipping business, you need to have an understanding of what the dropshipping business model is. This understanding will serve as a foundation for your business and is necessary if you want to succeed.
What is Dropshipping?
Dropshipping is a business model that allows you to sell physical goods to customers without ever owning any inventory, or having to ship the goods out yourself. Instead, you partner with a supplier who handles inventory, and ships the product directly to your customer whenever an order comes in. In most cases, you will generate orders by driving traffic to your online website where you show your product.
Still a little confused? Let’s break down a typical dropshipping transaction from start to finish. It comes down to four simple steps:
- A customer navigates to your online store and places an order for a product. Once placed, the money gets deposited to your bank account.
- You forward the order information to your supplier — the information includes the shipping information your customer provided.
- The supplier processes the order packs up the order and forwards it to a logistics agency.
- The logistics agency ships out and delivers the package directly to your customer.
And that’s basically all there is to it! Dropshipping isn’t voodoo magic or pyramid scheme. It’s just an eCommerce business model that does not require you to hold inventory or deal with shipping out orders.
Pros Of Dropshipping
The pros of the dropshipping business model make this an extremely attractive option for first-timers. Let’s go over some of the biggest upsides:
Low Capital Requirements
If you’re just getting started, you don’t need to invest thousands of dollars up-front. Since you’re only paying your supplier per-product once an order comes in, you very little up-front costs.
Your initial costs will look something like this:
- $30/month for your online store
- $10/year for your custom domain
- $10-20/month for some optional software
So, all-in-all, you’re looking at a $50-60 investment in your first month!
Say goodbye to offices and cubicles! You don’t have to be in any particular location to run a successful dropshipping business. All you need is a computer with internet access.
Low-Risk Business Model
Thanks to the low up-front costs of starting a dropshipping store, it’s perfectly fine if one (or more) of your stores fail. Since you’re only investing a small amount of money up-front, you’ll probably just be out a couple of bucks.
Great Segway To Other Business Models
The skills and experience you acquire running a dropshipping business are transferable and can extend well outside the business model.
Throughout the process, you’ll learn things like:
- Writing copy to sell your products
- Creating attractive advertisements to generate site traffic
- Designing a professional-looking website
So, if you ever have the desire to move on from dropshipping and do something else, you can take these skills and start another venture (like a private-label eCommerce brand) or go into freelancing.
Your Business Can Run On ‘Autopilot‘
We’re not going to lie: the amount of effort involved in building a successful dropshipping business is substantial. There are a lot of moving pieces that you need to put together in order for your business to succeed and run efficiently, and it may take you a few tries before you achieve that initial success.
The good news is that once things get going, you can outsource almost every aspect of your business to virtual assistants. We’ll go over this in more detail in a later section; for now, all you need to know is that you can spend as little as 30-60 minutes a day maintaining a 6/7 figure store if you have the right systems put in place.
Ever-expanding Market & Possibilities
Worried that it’s too late to get into dropshipping? That couldn’t be further from the truth — it is entirely possible to get started in 2020. If anything, we personally think that there was never a better time to get started!
Ecommerce is one of the fastest-growing industries in our day & age — more and more people are going to the internet to get their shopping done as opposed to visiting retail stores. It’s an astonishingly large market, with new products and niches being introduced every single day.
It’s An Easily Scalable Business Model
With most business models, scaling is difficult and slow. Things like product manufacturing, employees, and office/warehouse space come into play, each requiring careful oversight and coordination to correctly grow. As a result, growth is usually pretty slow and comes with a whole lot of problems.
Dropshipping is different in that you are not only able to easily scale, but you can also do so in record time and practically no additional costs to you.
You don’t have to worry about office space, employees, or logistics — oftentimes, you just need to figure out how to bring more customers to your store. If you’re doing so through paid advertising, scaling is usually as simple as increasing your campaign budgets!
Lots Of Dropshipping Communities
Thanks to the exciting growth of the dropshipping industry, there are plenty of communities out there that you could join. This means you’ll be able to network with like-minded entrepreneurs, have access to mentors and information, as well as a place to receive updates on the latest industry news & trends.
There are thousands of Facebook groups, YouTube channels, and blogs dedicated to dropshipping. These are fantastic resources that we strongly recommend utilizing; you can significantly cut down on the amount of time it takes you to get your first successful business up & running.
Note: If you’re looking for a great group of dropshippers, come check out the Verum community! We have over 20,000 members in our Facebook group, our very own dropshipping forum, and a YouTube channel with all the educational content you need to get started.
Dropshipping is an extremely beginner-friendly business model that has a low barrier to entry and a quickly-growing ecosystem. Compared to other business models, you don’t have to worry about nearly as much, and can focus on the core aspects of your business that will fuel your growth.
But, just like any other business model, dropshipping comes with its fair share of problems that you should take note of before getting started.
Cons Of Dropshipping
Profit Margins Can Be Slim
Margins in dropshipping can be somewhat slim. However, this does not necessarily need to be the case with your business! It will depend on things like your niche, advertising costs, shipping costs, and margins, all of which can be controlled (to a degree). It comes down to a bit of a balancing act where you need to leverage various aspects of your business to a point where you are profitable.
The average profit margins of a dropshipping business range from 10% to 45% of sales generated. If you have a six or seven-figure dropshipping store, this is certainly nothing to complain about — you still end up making a large amount of profit!
Slower Shipping Speeds
Many dropshippers will partner up with suppliers who ship their goods out from warehouses in China. While working with suppliers in China will provide you with the best product prices and shipping costs (often-times free), the shipping times aren’t all that great.
Most Chinese suppliers will ship out their goods via a shipping line called ePacket. While this is an extremely cost-effective shipping method (as it is oftentimes free) the actual delivery time can range anywhere from 10-17 business days to countries like the United States & Canada, and around 6-10 days to most European countries.
However, we’ve found that customers aren’t too concerned with longer-shipping times. By being transparent with customers about shipping times, and providing them with tracking codes, you can essentially eliminate any customer complaints about shipping.
There are also alternative shipping lines that can significantly cut down on the delivery time, which we will cover later on in this guide.
Product Quality Concerns
Some dropshipping suppliers will cut corners and source products that aren’t of the greatest quality. This can result in customer complaints, refunds, chargebacks, and potentially large monetary losses.
Luckily, there are ways to avoid this sort of scenario from ever occurring. Working with a trusted supplier, having quality-assurance processes in place, and sampling your own product can prevent this from ever happening.
Limited Brand Identity
Building a brand is all about centered around creating an awesome customer experience. Things like the look and feel of the product, custom packaging and logos make all the difference. As a dropshipper, you likely won’t have much control over the finer details of your product, and will be at the mercy of your manufacturer & supplier.
Not only that, but just about any other dropshipper can create their own store, and sell the same exact product as you are with no repercussions. If you have a hundred other competitors, it can be difficult or even impossible to distinguish yourself from them.
However, there are some workarounds to this. Once you have a working dropshipping store, you can move into something called private-label dropshipping, where you work with the manufacturer to customize your product & packaging. The downside here is that you will likely need to purchase stock of your product up-front; as such, this is typically not recommended until you have seen some traction with your product.
Payment Processor Holds
Payment processors are businesses that allow customers to place orders from your website with credit cards. Considering that most online payments are made with credit cards, working with a payment processor is a necessity.
Unfortunately, the dropshipping business model is generally classified as a ‘high-risk’ business type by most processors, due to a higher-than-average chargeback rate in the industry.
As a result, once your business starts to grow, you might find that payment processors will begin to place ‘reserves‘ on your account. A reserve is essentially the payment processor keeping a percentage of your sales as a sort of ‘guarantee‘ in case your customers are unsatisfied with your product or business and file a chargeback.
Reserves can range anywhere from 10% to 30% of your daily sales, with the length of time being anywhere from 30 days to 180 days. This can make it difficult to pay your business bills on time, unless you have large amounts of credit you can use to wait out the reserve period.
Usually, this is sort of reserve is only put in place if your business is receiving a large number of chargebacks. If you run your business correctly though, offering good customer service and a solid product, you’ll find that your chargeback rate will not be very high.
That’s about it for the cons! Though these are certainly all things to consider, the way you run your business and the decisions you make can will largely prevent any of these from becoming an issue in the first place.
Who is Dropshipping For?
We strongly believe that anybody is capable of running a dropshipping store with some focused effort. However, just because anyone is capable of doing something, doesn’t mean that they should. Running a business takes a lot of time and effort, and some people just wouldn’t be happy doing so.
You need to think about whether or not entrepreneurship is something that will work for you, and is in alignment with what your life goals.
Dropshipping is great for you if…
You’re a first-time business owner
Dropshipping is a beginner-friendly business model for a number of reasons; there’s a low investment when it comes to getting started, and you don’t have to worry about the particularly hectic bits of the business, such as logistics. In terms of making mistakes, it is a very forgiving business model — failing likely won’t set you back very far.
You have an interest in digital marketing and advertising
The success of your dropshipping business will primarily depend on your ability to effectively market your product and store. Unless you partner up with someone who will take care of these facets of the business, you’re going to have a hard time doing something you aren’t the least interested in.
Dropshipping isn’t great for you if…
You want to build a brand
If you’re trying to build a brand, you could potentially do so with a dropshipping store; but the nature of the business model makes it very difficult to do so. Things like longer shipping times, lack of product branding, and copycats make it nearly impossible to create a real brand presence that will consistently bring in customers to your store.
If your ultimate goal is to build a legitimate brand at some point, we still strongly recommend giving dropshipping a try first. You’ll pick up a lot of the skills you need in order to eventually grow your own brand effectively.
If you find that you have some initial success, you can also potentially look into private-labeling your product, or even working with a manufacturer to create some variation to it, which can distinguish you from other dropshippers. More on this later!
You want to make a quick buck
You’ve probably seen those ‘get rich quick dropshipping’ schemes at one point or another. While it is true that you could potentially generate incredible amounts of wealth in a short amount of time, more likely than not, it’s not going to happen. Your first few dropshipping businesses will probably fail. And that’s completely normal.
Depending on your background, it’s more than likely you’re going to be learning things completely different from anything you’ve ever seen before. It’s going to take some time to hone your newfound skills to a point where you’re proficient and can do the things you need to do in order to build a successful business.
As long as you are comfortable with going through some initial failure to get the ball rolling, you’re going to do just fine. But if you’re only interested in dropshipping because you want to make a quick buck, you’re better off looking for something else to do.
Finding A Great Dropshipping Product
The single most important factor behind any successful eCommerce business is finding a great product to sell. There’s no way around it — if you have the right product, you’re going to have a much easier time building a successful business.
It is a little bit difficult to say exactly what ‘right product’ is, though. After all, there are a number of different factors to take into consideration, which we’ll go over in detail in the coming sections.
But before we do so, there’s one important myth that we need to debunk…
Market & Product Saturation
One big mistake that beginners make all the time is they blame their failed store on their market saturation. Either that, or they won’t even consider trying out a product if they have seen other people advertising it.
The truth is that your product market probably isn’t saturated to begin with. Market saturation really only occurs when you are competing with companies that own a massive portion of the market. Think Microsoft & Apple in the computer space, and Snow in the teeth whitening space.
If you see 10 people running Facebook ads for a particular dropshipping product, you shouldn’t be concerned about the market being too saturated. There are potentially tens or hundreds of millions of people that can purchase your product; it is unlikely that other dropshippers have hit all of those people. We encourage beginners to look at products with a proven track record, as it takes a bit of the guesswork out of the equation.
Now, let’s get back to figuring out what makes a great product.
What Makes A Great Product?
Based on our experience, there are four things that constitute a winning product: margins, product cost, product quality, and potential market size.
The higher the margins on your product, the more profit you are going to make. It can be difficult to successfully sell a low-margin product, especially if you intend to use paid advertising as your primary source of traffic where costs tend to rise with greater scale.
We recommend working with products that have a markup of at least 250 – 300%. This is especially true if your product has a lower base cost; a general rule of thumb is that for products under $30, you want a markup price of anywhere from 300% – 500%. If your product is over $30, you can get away with a smaller markup.
A product priced at $99.99 is going to be considerably more difficult to market and sell than a product at $24.95.
This is because people are less likely to purchase something expensive from a website on their very first visit. They will want to spend time researching your product and brand before they come to a decision.
As such, the product-page copywriting, advertising, and look of your website will all become more important. If you’re just getting started, chances are you don’t have these skills fully developed, and may not get results as good as you would like.
If you are selling a product that does not meet the expectations of your customers, it will be difficult to stay in business.
Things like returns, chargebacks, and various penalties from payment processors can quickly eat up any profits you have made, and prevent you from continuing to run your business.
Potential Market Size
Though you can certainly generate large amounts of profit from products that appeal to a very small audience, we generally recommend sticking to products that have a broad appeal. There are a couple of reasons for this:
- Higher Scale Potential: A larger audience means you can sell your product to many more people than a niche audience!
- Easier Targeting: If you intend to use paid advertising methods such as Facebook ads, it will generally be easier to reach your target audience.
Niche products will smaller audiences can certainly be profitable but require more expertise to navigate and get working.
Product Research Methods
There are a number of different ways to find products, ranging from browsing Facebook newsfeed to web apps that scrape information from various sites such as Aliexpress and Amazon.
Ultimately, the actual method used to find the product doesn’t matter nearly as much like the process you use to research and qualify the product.
We strongly recommend reading this article about our product research method that covers everything from product idea generation to quality checking, and marketing research.
Finding The Right Supplier
While you will be responsible for generating sales and driving traffic, your supplier will be the backbone of your business. They are responsible for sourcing the product and shipping out orders to customers as they come in. Without an effective supplier, your business simply cannot exist.
It is absolutely vital that your supplier can run operations in a smooth and efficient manner, allowing you to focus on other aspects of your business without worrying about things going haywire. But, if you’re a beginner, it can be a bit difficult to differentiate between a good and bad supplier.
Having worked with a variety of different suppliers over the years, we recommend making sure that your suppliers have a few key traits.
Traits Of A Great Supplier
The single most important trait of a great dropshipping supplier is having effective communication skills. This includes their ability to work through any issues with you, as well as how accessible they are on a daily basis.
If there is a mishap in your logistics and all of a sudden you have a large pileup of orders, you need to be able to work with your supplier to resolve the issue in a timely manner. If your supplier only communicates by email, and it takes them a day to respond to any messages, doing so might be difficult.
Tip: Don’t be afraid to ask what channels of communication are available for you to use; many suppliers will offer live-chat services such as Skype, WhatsApp, Text Messaging, etc.
Multiple Years Of Experience
It is strongly recommended to work with suppliers that have been in the industry for at least several years.
A more experienced supplier will be more capable of handling problems that arise on a day-to-day basis, having faced many of them before.
They will also have access to a wide range of resources and may be able to provide you with opportunities that you wouldn’t be able to get with a supplier that has just started up their business.
A Thorough Quality Assurance Process
In order to ensure that your customer receives a high-quality product, it is essential that orders go through a quality assurance process before being shipped out.
As such, your supplier will want to double-check that there are no products being shipped out to customers with manufacturing defects.
A good dropshipping supplier will have a definitive Q&A process in place, that can consistently weed out products not up-to-par with your standards.
Tip: Ask potential suppliers to provide details about the quality-assurance processes they have in place. If they don’t have any or refuse to provide specifics, move on to someone else!
Fast Shipping & Processing Times
Another thing to keep in mind when picking out a supplier are the shipping & processing times on orders.
When an order is placed, there is generally a small delay between the time the supplier receives that order, and the time an order is shipped out. This is known as the order processing time.
Ideally, a great dropshipping supplier will be able to ship out orders within a day of them being placed. We’ve worked with dropshipping suppliers that shipped orders out the same day that they were placed!
Some suppliers also have access to better shipping lines and can ensure that your customers receive their products as fast as possible. Be sure to ask about both!
Supplier Research Methods
Finding a good supplier is not as difficult as you might think. There are plenty of places on the internet that will provide you with a list of suppliers and their contact information.
- Google: Simply looking around for suppliers via Google is a great way to start off. There are plenty of websites and directories that have suppliers broken down by niche, location, and other factors that you might be considering.
- Aliexpress: If you plan on dropshipping from China, Aliexpress is not only the best way to source your products but also a great way to put you in touch with suppliers. If you’ve already found your product, simply go ahead and type the product name in the search bar. Then, go ahead and sort by orders, and check the individual listings. Be sure to check the Aliexpress vendor’s supplier feedback score!
- Alibaba: Though Alibaba is more focused on connecting you directly with manufacturers, you can sometimes get lucky and find a manufacturer that supports dropshipping. Alternatively, you can also ask the manufacturer if they have anyone they can refer to you. Chances are if they provide you with a reference, they have done business with that supplier for a long time, which increases the chances that the supplier is high-quality.
So long as you keep in mind the traits of a great supplier, you should be able to quickly work through lists of potential suppliers and find a good pick.
Contacting Your Supplier
Once you have a list of suppliers, you’re going to need to contact them and see if they are a good fit for your company. It’s important that when you contact your suppliers, you effectively communicate the needs of your business with them. This will help filter out any candidates that are a poor match for your business right from the start.
Some questions that you might consider asking could be:
- What kind of shipping options do you have, and do they cost?
- Do you have a QA process?
- What will the cost per unit be?
- What sort of volume can you handle?
- What is your processing time?
- Can you do custom branding?
- What is your return & refund policy?
- Do you have Skype or WhatsApp?
Marketing & Generating Traffic
Once you’ve found an awesome supplier and a great product, it’s time to start selling! Generating sales comes down to bringing traffic to your website that is interested in your offer.
There are a number of options out there, some of which can bring about better results than others depending on what you’re trying to sell.
We’re going to go over the following methods:
- Paid Advertising (PPC/PPE)
- Content Marketing
- Influencer Marketing
- Email Marketing
For each method, we will give you a brief idea of what it’s all about, providing some pros and cons that you should take into account. We will also give you some examples of ways to get started for each method, should you be interested.
Paid Advertising (PPC/PPI)
What it Is
In digital marketing, paid advertising refers to the use of digital ad space in exchange for monetary payment. Typically, advertisements will appear on webpages or mobile applications, and you will be billed on the basis of how many clicks an ad receives, or how many impressions it receives (depending on the platform).
Who It’s For
Though you might think that paid advertising is reserved for businesses with a large marketing budget, this is not necessarily the case. Certain platforms can provide great results regardless of whether you have a $100 or $1000 budget.
If you have a few hundred dollars that you can comfortably spend on advertising, you can definitely get started with ad platforms.
- Immediate traffic and feedback: Unlike organic traffic that can take months to substantiate, paid traffic can immediately start bringing in potential customers to your store. You can also see how well your advertising efforts are doing thanks to digital tracking, which will allow you to quickly adjust your marketing practices to bring in the best results possible
- Massive potential reach: Paid advertising platforms will generally allow you to target hundreds of millions or even billions of people across the entire world. This will allow you to quickly test different demographics and see if there is a potential market for your product
- Highly Scalable: To increase your site traffic, often times all you need to do is increase the budget on your campaigns.
- Highly Targeted: Most advertising platforms will offer sophisticated targeting methods, allowing you to specify things like the age, gender, location, and even search terms & interests of your audience. This makes it a lot easier to make sure that the people visiting your online store are interested in what you’re offering
- Testing: Thanks to the immediate feedback you get, you can quickly isolate which campaigns and marketing strategies are more effective than others, allow you to isolate the best possible strategy that will result in the largest amount of profit.
- Learning Curve: Though this will vary with each individual advertising platform, you’ll find that there is a bit of a learning curve when it comes to running paid advertisements. Things like bidding methodology, machine learning concepts, and various platform-oriented details come into play.
- Capital Investment: You need to be willing to put up some initial capital to test different marketing strategies and target audiences. You will likely lose some amount of money in the beginning while you do so, which can be a difficult mental hurdle for many beginners.
- Competition: Paid advertising can be quite competitive, depending on what your target audience is, and what platform you go with. There are a limited number of people in a demographic, and a limited number of ads that can be shown to those people — in order to make sure that your ads are displayed to your target audience, you will generally need to ‘outbid’ your competition.
There are hundreds of different advertising platforms out there, each of which can bring you greatly different results. Some platforms are better than others for particular types of products and audiences.
Among the most popular platforms for eCommerce are:
- Facebook & Instagram
- Google Ads
- Tik Tok
If you’re a beginner, we personally recommend looking into either Facebook/Instagram and Google Ads. These platforms have been around for many years, and have a solid backend system with sophisticated targeting methods and a large potential reach.
What It Is
Content marketing is a form of marketing that is centered on creating and delivering valuable content to an audience, with the ultimate goal of driving your audience to perform an action. The type of content can be anything from a blog to a YouTube channel.
The type of content you’ll make will depend greatly on your target audience. Usually, your content will focus more on the particular lifestyle associated with your product rather than the product itself.
Who It’s For
Content marketing isn’t for everybody. Creating high-quality content that will appeal to your audience requires some serious dedication and knowledge of your niche.
If you aren’t sure about your product and aren’t comfortable potentially spending months generating content to see potentially insignificant returns, you are much better off with something like paid advertising.
- Develop Relationships With Your Audience: Building a relationship with your audience is extremely valuable. Doing so will allow your business to stand out from your competitors, increase general trust with your brand, and generate word-of-mouth references.
- Build Brand Authority: By providing high-quality content that resonates with your audience, you can establish yourself as a credible authority in your industry. People are more likely to purchase from brands with authority!
- Educate Your Prospects: The content you create will educate your prospects, which will ultimately reduce the amount of friction the customer has when making a purchase.
- General Long-Term Traffic: Creating excellent content and placing it in the right channels will provide you with consistent traffic over time.
- Cost-Effective: You don’t need to spend any money to produce great content that will attract customers. It can be as simple as putting together a series of well-written blog posts to educate your prospects and ultimately lead them to purchase.
- Slower Traffic: Unless you create a viral piece of content, chances are you will need to wait a bit for things to pick up. It may take weeks, or even months to get substantial traffic from your content.
- Time Consuming: Creating high-quality content can be extremely time-consuming, especially if you’re trying to beat your competition in a niche where there’s a lot of good content out there. It may take several tries and different angles to find something that resonates with your audience.
- Difficult To Measure Performance: It can be a little bit tricky to track the performance of your content. You need to make sure you have a process for analyzing whatever data you have available to determine whether or not your content is doing well.
There are a variety of different types of content you can create and different channels where you can publish them.
The different types of content you can create are endless; for example, a well-written blog post, a video, an infographic, eBook, meme, or an email campaign are all viable options.
Popular places to publish your content include YouTube, Instagram, Facebook, Pinterest, and blogs.
The best format for content will depend on your particular product & niche. A good way to get started would be to analyze your competition, and see what types of content they publish.
And, depending on what format you use for your content, different channels will give you different results. If you create primarily video content, you might find that Instagram and YouTube could do better than Pinterest and Facebook. Ultimately, we strongly suggest testing out different formats of content, placing them on various platforms to see what works best.
What It Is
Influencer marketing is a form of social media marketing that relies on endorsements from public figures with a following. You essentially work together with someone that has a large follower-base on a social media platform and ask them to promote your product in exchange for payment.
Usually, you would pick an influencer that has a dedicated follower-base in a niche related to your product. By doing so, you increase your chances of reaching an audience that would be likely to purchase your product.
Who It’s For
Influencer marketing is a good option if you have some capital to invest, as how much you pay will typically depend on how many followers an influencer has. There are other metrics to consider too — such as the engagement rate that influencer has on their post, and their particular niche.
Typically, items such as jewelry, clothing, and gadgets tend to do well — though, you can see success with just about any product so long as you find a good influencer match for your particular product.
- Helps Build Credibility: People generally have a high amount of trust with the influencers they follow. As such, when you receive a shoutout from an influencer, that influencer’s followers are more likely to believe that your product & brand are worth considering.
- Broad Reach: You will be able to advertise your product & brand to people that would not have been reachable through other means of advertising.
- Bang For Buck: For beginners on a budget, a properly-executed shoutout can result in an excellent ROI. This is especially true if you work with micro-influencers, or influencers with a smaller (yet dedicated) follower base.
- Finding The Right Influencer: In order for your endorsements to be effective, you need to find the right influencers to promote your brand. This can prove to be somewhat difficult, especially if you aren’t quite familiar with your industry. Picking the wrong influencer could result in a shoutout that generates little to no sales.
- Measuring Results: It can be extremely difficult to measure results if you already have other streams of traffic — and unless you blindly pay an influencer for a shoutout, you won’t have a way to determine whether or not the influencer has delivered on value.
- Potentially Time Consuming: Though some influencers will wholeheartedly endorse your product without much thought, those with a dedicated follower-base might not be as easy to convince. Any influencer that values their reputation will want to quality-check the product before doing any sort of shoutout. This means you need to ship out a sample product to the influencer, which can take up a lot of time.
There are plenty of places you can go to find an influencer. Every single social media platform will have influencers, with both small and large follower bases.
Your best bet to run a successful campaign is to determine which platform your target audience is more likely to use. As an example, if you’re selling a product that appeals primarily to women in their 50’s, working with influencers on Tik Tok (where over 50% of the users are under 15 years old) is probably not going to be the greatest idea.
What It Is
Email marketing is the use of email to communicate with prospects and customers in the hopes of generating sales.
You can email prospects encouraging them to take action and make a purchase, as well as email your existing customers to turn them into repeat customers.
Usually, you will collect emails through some sort of form or pop-up on your store; popular options for Shopify-based stores include Privvy, and Klaviyo.
These services will allow you to get started for free, and won’t require any payment until you reach a certain amount of people on your email list.
Once you have an email-collecting mechanism set up on your website, you’ll want to sign up for an email marketing platform such as Klaviyo or Mailchimp. We typically recommend Klaviyo to beginners, as it has an automated integration process with Shopify.
Who It’s For
Email marketing is so effective that we recommend it to all beginners, regardless of what type of product you’re selling, and what niche you’re in.
It costs close to nothing to set up, helps convince your prospects to make a purchase, and encourages people who didn’t finish checking out to come back and make their purchase.
- Incredibly Targeted: Through proper segmentation of your emails, you can effectively place people in different ‘lists’ and send them emails based on what list they’re in. So, if someone signed up for your newsletter but didn’t make a purchase, you may consider sending them additional information about your product or brand in hopes of gaining trust. If you have someone that abandoned checkout on the payment page, you might find it more effective to send out an email with a 10% discount code to sweeten the deal
- Brand Recognition & Trust: A well-formatted email can make a really great impression on your customers, creating trust with your brand, increasing perceived authority, and more. There’s a reason all the big eCommerce brands use email!
- Reach People On All Devices: Regardless of whether someone primarily uses their phone, tablet, or computer, you can get ahold of them by sending them an email.
- High Conversion Rates: Email marketing tends to convert extremely well if properly executed — typically much higher conversion rates than you would experience with other advertising channels
- Quantifiable Performance: Tracking performance in email marketing is easy — most email marketing platforms have this feature built-in.
- Extremely Scalable: You can build your email list to be as large as you like, potentially reaching millions or even hundreds of millions of prospects.
- Marked As Spam: If you don’t take care to create high-quality email content, you may find that the recipients of your email will mark it as spam. This can create problems, as many of the major email service providers can start marking all of your emails as spam, which will prevent people from ever seeing them
- Importance Of Design: If your email is not designed in a manner that will make it appealing and easy to read on multiple devices, you’ll find that your campaigns won’t be very effective. It can take a good amount of time to come up with a format that will work for your brand
- Copywriting Skills: Unlike other forms of marketing where visual elements are more important, emails tend to rely primarily on text. In order to have an effective email campaign, you need to take great care of what you say and how you say it.
There are hundreds of email marketing platforms available for you to use. And the good news is that most of these platforms will offer very similar functionality, so you can’t really go wrong with any particular one.
If you’re looking to curate a massive email list, we recommend taking a look at the pricing models of whichever platforms you’re considering.
We’ve personally tested Mailchimp and Klaviyo in the past and found that both were effective options. We recommend Klaviyo, as it has an intuitive user interface, and offers a simple integration process with your Shopify store via the Klaviyo Shopify app.
Running Your Business
Once you’re bringing in some consistent sales through some means, you need to make sure that your business runs smoothly and continues to grow.
There are a number of different things that you need to keep in mind once your business starts to take off. This includes anything from cash flow management to order fulfillment and customer support.
We’re going to go over the following:
- Order Fulfillment
- Customer Service
- Legal & Incorporation
- Scaling Your Business
- Common Problems & Solutions
Fulfilling orders is one of the most important tasks when running your business. You need to have a system put in place that will allow you to quickly and effectively process orders, so they get shipped out quickly and arrive to your customers in a timely fashion.
This will greatly reduce complaints and chargebacks from unhappy customers.
When it comes down to it, orders can be processed in two ways.
Manual Order Fulfillment: Either you or a virtual assistant will go into Shopify, and forward the information over to your supplier (usually in the form of a spreadsheet).
Automated Order Fulfillment: Depending on which platform you use, there are applications that can automatically forward information to your suppliers as soon as a customer places an order.
Tip: If possible, we strongly suggest you talk to your supplier about setting up an automated system.
The cornerstone of any successful business is excellent customer service. It is inevitable that customers will reach out to you with questions or concerns regarding their order.
Benefits Of Providing Great Customer Service
Some benefits of great customer service include:
- More Business: If your customers are happy, they are more likely to spread the word about their experience with your brand, which can bring in additional customers.
- Good Reviews: Happy customers are much more likely to leave a positive review. This will provide social proof, which is something that can help convince prospects to do business with you.
- Fewer Refunds & Chargebacks: One of the most frustrating aspects of running a dropshipping business is dealing with refunds & chargebacks. In addition to making sure your product quality is great, you’ll find that. Great customer service goes a long way in reducing refunds & chargebacks.
How To Deliver Great Customer Service
If you’re looking to provide your customers with fantastic customer service, here are the most important aspects that you should focus on:
- Respond Quickly: If your customer has to wait three days for you to respond, you’ve likely lost them forever. Promptly responding to any emails will make it seem like your business has everything together, reassuring your customer.
- Be Transparent: You should always be completely honest with your customers. Even if it’s something the customer might not want to hear, they will appreciate you being forthcoming, and you will have gained their trust.
- Stay Positive: Sometimes it’s easy to forget that you’re dealing with another human being. You will have a fair share of customers that are visibly upset, and sometimes even come across a few that are extremely rude. Always respond in a courteous and professional manner!
- Go The Extra Mile: Going above and beyond is something that customers are sure to notice. If a product arrives damaged to a customer, send them out a replacement and include a freebie or discount. Own up to your mistakes, and put in the extra effort to make up for them!
Multiple Channels Of Communication
There are many different channels you can use to provide your customers with quality service. You may wish to set up one or more of these depending on your particular business needs and resources.
- Social Media: Your customers likely spend more time on social media platforms than in the email inboxes. Providing customer support through your Facebook Page or Twitter makes it easier for customers to contact you, resulting in a more pleasant experience.
- Email: This is the gold standard for customer support in the 21st century. You can set up a special email address dedicated to customer support (email@example.com) making your brand appear more credible and trustworthy.
- Phone Support: Though most customers will contact you through a digital platform, many prefer having a conversation over the phone with a person. This is especially true if they have multiple questions — chances are they will get whatever information they need much more quickly than waiting for multiple email responses.
- Live Chat Plugins: These are essentially applications or widgets you can install on your website that allow customers to send you messages in real-time. Many customers will pick this over a phone call, as it is a bit less daunting form of communication.
Hiring The Right Team
Unless you intend to do customer service by yourself (we strongly advise against this, as it can easily get overwhelming) you’ll need to train someone to handle this for you.
Depending on whether or not you wish to remain location-independent, you can either someone locally, or look for a virtual assistant.
What Are Virtual Assistants?
Virtual assistants are remote workers that you can hire through sites such as UpWork, that can help you run multiple areas of your business. Some virtual assistants have worked for dropshipping businesses before, and are familiar with many of the tasks and systems that they will be dealing with on a daily basis.
How Much Do Virtual Assistants Cost?
If your virtual assistants are based in Asia or Eastern Europe, they will usually charge much less than an on-site employee would, making them a great option if you have a limited budget.
Typically, you’ll find that many virtual assistants will bill you around $3 – $10/hour, which is extremely affordable when compared to the minimum wage of countries such as the United States.
How Do I Hire A Virtual Assitant?
We typically recommend using a site such as UpWork and posting a job listing. With any amount of luck, you will start to receive a bunch of applications from potential candidates.
In order to receive applications from candidates that will be an effective match for the position, you should write a very clear job description. Though this will vary based on the particular needs of your business, an example template might look like this:
I’m looking for a reliable and motivated individual to assist me in running my business by handling day-to-day tasks as a virtual assistant.
Your daily tasks will include the following:
- Customer Support
- Order Fulfillment
- Communicating With Our Supplier
- Must be fluent in English
- Must have experience with customer support
- Must be familiar with the Shopify platform
We look forward to reviewing your application!
Once you start to receive applications and narrow down some candidates based on their resumes, you will want to do a follow-up interview process with your potential candidates.
Get a feel for their personality, and whether or not you think they would be a good fit for your business. Some things to look out for:
- Effective Communicators: If your employees are not effective communicators, you can run into some serious problems down the road. This is the most important quality that we look for in all of our candidates.
- Freelancing For Others: Unless you want to potentially deal with some delays that could be problematic for your business, you will want to pick out candidates that will be focused entirely on your business. This can be a little bit tougher to manage in the beginning, if you don’t have enough work for your VA’s to make it worth their while.
- Experienced In Dropshipping: You will want to look for candidates that have had prior experience in dropshipping. This will save you a lot of time and money, as inexperienced candidates can require a lot of training before they are ready to take the reigns of your business.
Common Customer Support Requests
Regardless of what type of product you sell, something like 95% of your customer support requests will fall under one of a few categories. To save time, it is a good idea to have some responses prepared that can be used in certain situations.
Where Is My Order?
This is the message that you will see the most when you run your online dropshipping business. The reason you might receive this particular message could be any of the following:
- The customer has been waiting a long time for their order
- The customer never got a tracking code for their order
- The tracking information is not very clear and does not indicate what is going on with the package
Regardless of the cause, your answer will largely remain the same. Something along the lines of this should do well:
Thank you for contacting [business name]. Happy to help!
Taking a look at your order, it appears that it was shipped out on [date] and is making its way to you.
On average, our orders take [number of days] business days to arrive to their location. You can keep an eye out for your order by using this link: [insert a link that will allow tracking]
Hope this helps! Please let me know if you have any other questions or concerns.
[Name][Business Name] Customer Support
Legal & Incorporation
Note: Before we jump into this section, please note that this information should not be construed as legal advice. Any legal questions should be taken to a lawyer that is familiar with the laws governing the country you operate in.
As with a business belonging to any industry, there are certain legal requirements that you must adhere to. We’re not going to go too much into detail here, as the laws vary depending on what country, or even state you reside in.
Most countries will require you to purchase a business license. This is typically known as incorporation. The process generally involves providing multiple pieces of documentation, and a fee for establishing your business.
It is important to incorporate, as this will also add an additional layer of protection in case you were to run into legal issues.
If you were to run your dropshipping business without incorporating, anyone seeking legal action against your company could come after you individually. On the other hand, if you have an LLC set up, any legal action will be taken against the business and will protect your personal assets.
Scaling Your Business
Once you start seeing some initial results with your business, you can consider scaling up to increase sales. There are a couple of ways to do so, depending on what type of products and business structure you have.
Explore New Marketing Methods
Chances are that when you first get started, you’ve picked out one or two of the marketing methods we listed earlier.
One of the easiest ways to scale and find new audiences is by mixing things up. Different platforms will generally have different types of people, which will provide you with a fresh audience to use.
You might also find that some platforms will give you much better performance because the audience is more geared towards your business than another platform. Or maybe the type of product you’re selling is easier to advertise on that particular platform.
If you’ve tried free traffic and seen some results, don’t be afraid to test out paid traffic. Use what data you have on your potential audience and apply it to different marketing methods & platforms.
If you’re only targeting people in certain countries, explore the possibility of targeting others! You’d be surprised to find that many countries outside the US, UK, CA, and AU have people that are interested in purchasing from your business. More often than not, targeting other countries can provide you with much cheaper conversions.
Introduce New Products
If you’re running a niche store, always test and add new products to your store. While you may think that your current ‘winning’ product is as good as it gets, it is entirely possible (and likely) you might find more products that your audience is highly interested in.
You can also potentially increase the average order value* of your store, which can quickly cause your sales to skyrocket.
Note: Average order value refers to the average amount of money a customer spends, per order, on your store.
Move To New Seller Platforms
In addition to selling products on your own website, you can utilize existing eCommerce platforms such as Amazon, eBay, and Etsy.
This will allow you to reach a larger market than you would have otherwise by simply marketing to people via Facebook, Instagram, etc. Each platform will offer different features and seller experience; we won’t delve too much into this topic here, but make sure that you check the terms & conditions of each to determine if it’s going to be a good match for you.
We find that many people just learning about dropshipping come in with mixed ideas of what to expect, and a variety of misconceptions regarding the industry.
Question: Is Dropshipping in 2020 Still Viable?
Absolutely! The dropshipping market is ever-expanding, with new opportunities and niches being introduced every day.
If anything, now is a great time to get started due to the sheer amount of instructional content out there. When we got started in 2017, there really wasn’t much to go on; it took a ton of trial and error. With the right information, you can drastically cut down on the amount of time it takes to figure everything out!
Question: Is Dropshipping difficult? Will I actually make any money?
Dropshipping certainly has its fair share of challenges. However, with some dedication, you can pick up everything you need to know pretty quickly. After that, it all comes down to actually taking action on the knowledge you’ve accumulated, and launching your first store.
It is by no means a get-rich-quick scheme that will allow you to make a six-figure income in the first few days of starting off. You will probably make mistakes, and your first few businesses may not quite pan out — this is completely normal.
Tip: Make sure that when one of your endeavors fails, you understand why it failed, and what you can do to improve next time around.
Question: Realistically, how much can I earn with dropshipping?
This depends entirely on what product you’re selling, what your margins are, and what your marketing strategy is.
Using Facebook ads, we’ve been able to build multiple 7-figure businesses. If you’re curious to see a breakdown of revenue & profit for one of our stores, check out this article.
On our Facebook group, we have seen people who never made it beyond five figures because they gave up too early, and also seen people who have made it to 7-figures and beyond.
Question: Aren’t Customers Going To Be Upset With Long Shipping Times?
The answer to this question depends on a few things:
- Are you transparent about your shipping times?
- Is your product something that customers would really like to have as soon as possible (pain-relieving products, seasonal products)?
We’ve found that a majority of customers won’t necessarily complain about the shipping times, especially if you are up-front about how long they will have to wait. This is especially true if you’re selling to countries outside of the United States, Canada, Australia, and the United Kingdom.
If you do find that customers would like to receive their orders in a more timely fashion, you can talk to your supplier and see if they can provide faster shipping lines — usually, you can shave a few extra days off at a relatively small cost.
Conclusion & Moving Forward
If you’ve made it this far, congratulations! You have everything you need to go out there and build your first dropshipping store, scale your operations, and create a great team that will be able to effectively run your business.
For you beginners out there, we strongly recommend taking a look at our YouTube video on building your first successful Shopify store — we show you how to do everything from proven product selection to building and designing your store.
If you haven’t already, be sure to join our Facebook group, where you can join a group of like-minded entrepreneurs who are progressing through their dropshipping journey. We regularly post educational content and answer any questions that you may have!