Dropshipping Basics & Video Course Review

Background…

I am sure that many of you may have seen or purchased through the many online stores that sellers have added to the internet. You may have wondered how the site owners got their store up and operating, and maybe considered entering the business yourself…

If you want to join the e-commerce revolution, which is fact happening, there are some decisions you will have to make. I will go through some broad brushstrokes here for presentation purposes only…

(1) What Products?

First of all, you need to decide what to sell, as in which products or sets of products will you focus on.

(2) My own Products or Other’s Products?

Once you have decided the next step is to determine where you will source the products from. Are your going to manufacture them yourself, are you going to buy them from another, what quantities will you need, etc.

(3) Where Will I Store My Products?

Then you have to think about where to store your products until they are sold and store them in a manner that will allow quick order fulfillment once the orders start rolling in from your online store.

(4) How Will I Ship My Products?

That brings up the next consideration: How to ship them…There are many options available, but today buyers have an expectation of quick order fulfillment. You have to use a system that will get the product to buyers FAST.

(5) How Will I Get Paid?

Of course, you also will need to set up a system for receiving payments, and perhaps using refunds to customers who return goods for one reason or another…

(6) Customer Support…

Next comes …Customer support. This is a VERY important part of any business, and today it is truer than ever. Social platforms offer customers a way to express their dissatisfaction quickly and share it with others. You need to plan for that and take steps to counter any negative comments that may arise…

(7) Build A Website or Online Store…

You also have to decide how you want to present your products you are selling on a website. You will need such a site so customers see what you have to sell…Will you build this yourself or will you hire someone to do it?

(8) How Will I Get Customers?

The other concern after you have ALL of the above in place is getting people to come to your site so they see what you are selling. The marketing involved can be complicated and you have a wide variety of options to get the word out.

Is There A Way To Cut Through All Of The Above Steps?

Just from the information above, you can see that getting an online store together is not such an easy undertaking… having actual products that you own,sell, and ship out to buyers is quite an involved process.

For many people, it is intimidating. They do not want the problems nor the work involved with the many steps and considerations above…

This is where drop-shipping comes in and will work for you….

Using drop-shipping you can have an online store and fulfill orders that are made through your site directly from the wholesaler or manufacturer of the product.

This means that many of the pieces above for a regular online store you don’t have to worry about. Inventory management? No worries, the wholesaler or manufacturer does it…Shipping? Same thing…

Before dropshipping came about, there were two major e-commerce models in use:

(1) Manufacture Your Own Unique Product. This was a way to sell your own products that YOU built or manufactured yourself. Of course, this still works and many people are doing it, but unless you have the desire and the time plus money, it can be hard to scale up whatever it is that you are making to make a sizeable amount of money.

(2) Buy Other Products In Bulk and Resell. This system will also work and has worked for many people, but there are drawbacks to this business model as well. If the products you are buying in bulk from others does not sell, you could get stuck with a bunch of worthless items. You also have all the logistics, payment, and customer support concerns, as well as marketing…

Now we have a third method that more and more people are using: It is called drop-shipping, wherein you are only responsible for marketing and selling the products. You still will have to build a website, add products, and market the site, but the products you sell will be shipped by the manufacturer.

Of course, there is a lot of competition out there for getting sales, and some heavy weights like Amazon, eBay, and Alibaba Express, so you will have to use some clever marketing techniques to draw customers to YOUR store as opposed to the big sites…

Not to mention there also are a lot more drop-shipping e-Commerce stores you will be competing against as well. So you really need to try to be as unique as possible, plus use marketing techniques that will get you traffic to your page over others.

What Are The Benefits and Dangers of the Dropshipping Business Model

It may seem like there are only benefits to using this business model to get into the e-Commerce sales world, but as with most things in life, there are upsides and downsides. Let’s look at some of each…

Benefits of the Drop-shipping Business Model

Here are some of the benefits of entering into a drop-shipping online store business…

(1) You Do Not Need A Lot Of Money To Get Started.

Depending on your financial position, this may or may not be a concern for you. Either way, a business needs to operate in the black (as in make money) as fast as possible from day one. Using drop-shipping, you can offer multiple products on your sales site with little outlay of cash.

A lesser amount you have to spend to get started means that you can make a profit faster, as long as you are doing the things to get customers to your site and you have something they want and value to buy from you, and you have a reputable manufacturer you are working with…

(2) You Will Have Fewer Headaches.

Remember that using drop-shipping, the manufacturing or ordering jobs are done for you and there is no on-hand inventory to worry about, plus no packing or shipping  tasks to think about. Instead, you can focus more energy on the marketing and the scaling up of your business.

(3) Scaling Up Is Easy.

This is a great way to see what the market is looking for at little to no cost for you. Add new products to your sales page and see what the customers will do. If they sell well, they stay…If not, you can switch them out and add other products to see how they might do. Over time, you can have a whole line of products all of which are good movers for your business. Remember there are no costs for inventory, so this is not something you could do easily if you handled the whole business top to bottom in a traditional manner

All this sounds quite good but wait…There ARE some caveats to this business model…

Downsides to the Dropshipping Business Model

Here are a few to consider…

(1) How Will Your Manufacturer(s) Manage Logistics

As you get bigger, you likely will use more and more manufacturers for offering a wider variety of products. In some cases, these manufacturers may operate from different regions of the globe and have multiple warehouses.

If the customers do not get their orders in a timely manner, you will have some unhappy customers, and the chances of mistakes increase as you have more manufacturers and warehouses involved. This can be deadly for your business

(2) The Ease Of Entering The Dropshipping Business

You may think this is a positive point, after-all it was kind of covered above, in mentioning how easy it is to get started and with very little cash needed. Sweat equity is almost enough if you are resourceful and know how to get a free website and hosting, etc.

BUT remember, if you can do it, so can everyone else. There will be a lot of other people selling maybe the same products you are selling online!

That, of course, means that a regular run of the mill sales site will likely not do very well for you unless you have a ready resource of traffic that will stop by.

You will have a harder time standing out in most cases,

(3) You Have Little Control Over Packaging

Remember that you are using manufacturers or wholesalers to take care of your inventory and shipping. They will more than likely use whatever works best for them when it comes to packaging and shipping.

There is less of a chance to have any interaction with your customer, as with a regular store, and oftentimes the first physical contact that the customer has with your or your product is when they get the package from the manufacturer.

There is no chance to offer some freebies, add a note, or any other personal touch to the package. Always nice if possible…You are wanting that customer to come again to your store and buy other products, and this is one way to gain their confidence and trust.

Note that many of the better manufacturers are allowing for some modifications that will help in this regard, as in offering personalized invoicing, and maybe packing slips, so that can help. You need to check to see which are doing this to minimize this downside to drop-shipping.

(4) The Profit Margins Are LOW In Most Cases

Small businesses do not have the luxury of competing on price because the margins are low when overhead costs are considered. This is true with drop-shipping as well. Because you are not selling a unique product, you likely will not be able to add in a high margin of profit for your items.

Rather, you will have to use those thin margins to make your site and offering different from the others that are selling the same thing. There are tools like offering video reviews, training or hands-on assistance (via streaming video), and implementing strong copywriting into your pages and product descriptions will help.

(5) The Products Are NOT Unique In Many Cases

As mentioned above, you and a thousand others will likely be selling the same products. This is not ideal and forces you to take measures that you may not have to take if you have your own product to sell.

Similar to affiliate marketing, where you are promoting other’s products, you have a harder time getting organic traffic. You likely will have to use paid advertising to get any sizeable quantity of sales, and achieve the resulting profits…

How To Succeed With Dropshipping?

It may help in determining how to succeed by talking about some of the things to avoid when you start a dropshipping business…In that light, have a look directly below to see what I am talking about…

Avoid These Common Dropshipping Mistakes

So once you have made a commitment to starting a dropshipping business, you then need to make sure you’ve got a solid strategy in place from the get-go. And that means avoiding these common mistakes.

Mistake # 1. Products Will Sell By Themselves

Remember that entering the dropshipping business means you will have a lot of competition. Many others are doing the same thing as you, and they may also think that sales will magically happen. Not the case.

In fact, it is the opposite…The time and money and energy you save from having to maintain an inventory and shipping/handling etc. will be needed to market your store.

Two sources of traffic you will be seeking includes organic (free) and paid (PPC or Solo Ads, etc.). There are a number of courses that can help you learn to work on both, you will see that I am adding these in over time to the site here for your use.

Know that SEO is as important for dropshipping as it is for other kinds of online marketing such as affiliate marketing or product sales. This covers your organic traffic, because when you implement good practices, Google and the other search engines will be able to send interested traffic to your site.

On the paid traffic side, as mentioned, there are a number of strategies you can use such as paid ads on Google, Bing, or Facebook, probably three of the best-known ad platforms. These use a payment system called pay per click (PPC). Other options are there as well, i.e. Solo Ads, forum adverts, etc.

The other area you should focus on is making sure that your customers have a positive experience through the whole purchase process. That is something that you can control and take action on.

Mistake # 2. Relying Too Much on One Supplier or Not Testing All Of Your Suppliers

Always have plan B. I learned this a LONG time ago in the military, and it will serve you well in the dropshipping business as well…

The problems can start if you rely on only one supplier and do not have a backup. If there EVER is a logistical issue with that one supplier, your business is dead in the water.

Also, you are then at the mercy of that supplier when it comes to prices they are charging. At some point you will stop making money, they could raise the prices to the point there is nothing left for you.

Other things can happen as well…What if they go out of business? What if they cut the relationship with you (I have seen this happen)? What if they are out of stock too often?

Bottom line is that you should plan from the start to have a backup supplier to whom you can contact and work with if your initial supplier can’t perform. It just makes sense for your business and for your customers.

When you are trying out new suppliers, my recommendation is to try them out with a test order to see how they fulfill it. Look at the order when received, was it as described, in good working order, and delivered in the time it was scheduled?

Make sure the test order process and fulfillment offered quality from start to finish, THEN commit to a relationship. You may also want to continue with test orders from time to time, to make sure they are maintaining top quality service.

Remember always that customer fulfillment is of critical importance to any business, but especially with online business, this is the case…Stay vigilant so you catch any small problems before they become BIG problems.

Mistakes # 3. You Stress About Shipping Rates

How much to charge for shipping can be a nightmare. Think about a scenario where an order is coming from different warehouses or suppliers. Even when the order is from one location, shipping rates will be all over the map depending on the size and weight of the order.

You could get really stressed out about calculating the costs if you let yourself, but I recommend taking another route that will make things a lot simpler for you.

This shipping cost part of the business should not be your focus. Rather you need to make sure that customers have a good experience and will come back again.

Therefore, I recommend that you calculate the approximate shipping cost and make it one set or flat price for most situations. There will always be exceptions to the rule, but by doing this you have largely eliminated a problem and headache…

This could cut into your profit margins at times,  but there will also be times when you will be charging more than the actual rate, so pretty much it is a wash.

Another reason for doing this is that it will actually increase your conversions. Studies have proven that one of the reasons for cart abandonment has to do with the shipping rate. Consumers see this as a hidden fee that they had not counted on…

What Is Next For This Dropshipping Tutorial?

As you can see, dropshipping isn’t a one-size-fits-all solution, but it can be a great way to start or scale an e-commerce store. At every stage of your business, you need to step back and evaluate whether or not dropshipping makes sense for your store.

OK We have covered things NOT to do, now I’d like to move on to what you SHOULD do…That is covered in the course I am offering you today…

NOTE: This is not an expensive course, and is totally a video based format, so get some paper and a pencil, shut out all other distractions and get ready to learn how to properly get started with your dropshipping business…

 

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