Blog posts about dropshipping tutorials, best practices and tips are a dime a dozen.
It does not mean that they are not good – it just means that one can easily get paralyzed when navigating between vastly different knowledge on the same topics. and a bigger question is “How Can I Know What You’re Saying Is True?”
So we took it up a notch.
We joined these huge Dropshipping Communities.
We decided to lay low, read case studies after case studies. Days after days.
We read every comment, every question and every answer.
Finally, we’re able to condense all of these knowledge pieces and advice into this blog post. Dive in now!
01. Always Order Product Samples
When asked, all of the successful dropshippers always recommend newbies to order product samples.
Having product samples allows you to take better product photos, which is the lynchpin differentiating your dropshipping store from the other stores selling similar products and using low-quality photos downloaded directly from Aliexpress.
Being able to experience the products yourself, you will also get a more accurate understanding of your own products’ values, hence capable of writing a better, more persuasive product description, or ads copy. By putting yourself in the shoes of your customers, you’ll get an authentic experience of what it’ll be like shopping from your store.
02. Carefully Choose Your Dropshipping Suppliers
Imagine you’ve done all the hard work to get your marketing strategies done right and your business starts to take off, just for it to be foiled by angry customer reviews because of delayed shipping times, or poor-quality products.
The thing is, this happens all the time. So you need to make sure that you have a method to find the right suppliers.
Follow this 03-step process:
01. Assess Your Supplier: Look through the suppliers’ license and business information, review their product selection, look into customer reviews, order yourself a sample, hop on Facebook Groups or Reddit to ask other suppliers about their experience with said suppliers.
02. Don’t Put All Eggs In One Basket: Draw up a short list of best dropshipping suppliers and have a comparison table detailing the differences in Product Prices, Shipping Times, Support & Services, Dispute Policies. Work with at least 03 suppliers.
03. Ready To Pivot: One of the reasons you need to work with at least 03 suppliers because you also have to quickly get rid of bad suppliers while making sure your operation won’t be disrupted while relaying the orders to the replacement.
03. Have The Right Competition and Pricing Strategy
There are three common pricing strategies: Cost-based Pricing, Competition-based Pricing and Value-based Pricing.
With Cost-based pricing, Simply sum up all the costs, and add your profit margin – which is usually 20 or 30%, then you have your product price.
With Competition Pricing, You set the price based on what your competitors offer. Now this is one of the most common mistakes pointed out by many successful dropshippers. If your only competitive edge is lower price, you will lose the moment another dropshipper undercuts you and you find yourself on the losing end of a price war.
So this is when we look into value-based pricing, which is set your price based on customers’ perception of your products and how much they’re willing to pay for it. Instead of trying to lower your price, look for ways to offer more values and justify your higher price with better product expertise, better product photography, packaged deals or free shipping.
Besides the above suggestions, one way to add more values to an existing product is to use SCAMPER method.
The SCAMPER model is a useful tool for quickly coming up with product ideas by asking questions about existing products. Each letter stands for a prompt:
- Substitute (e.g. faux fur for fur)
- Combine (e.g. a phone case and a battery pack)
- Adapt (e.g. a bra with front clasps for nursing)
- Modify (e.g. an electric toothbrush with a sleeker design)
- Put to another use (e.g. memory-foam dog beds)
- Eliminate (e.g. get rid of the middleman to sell sunglasses and pass the savings on to consumers)
- Reverse/Rearrange (e.g. a duffle bag that doesn’t wrinkle your suits)
By asking these questions, you can come up with novel ways to transform existing ideas or even adapt them for a new target audience or problem. (Source: Shopify)
04. Find The Right Niche and Products
This one sounds like a no-brainer. But not everyone knows the right method to find niche merchandise/product.
Here’s the 04 questions recommended by most successful dropshippers when finding niches and products.
- Is it a business or hobbyist product: Targeting products for businesses, like rubber stampers, is a great way to sell in bulk, while targeting hobbyist products can make value-based pricing easier to implement, plus, you get a devoted customer base.
- Is it a repeatable product: Of the many golden rules of ecommerce, one of the most prominent is never ignore your repeat customers. It’s a rule that many forget; returning customers may only make up 8% of your customer base, but they contribute over 40% to the revenue of your store.
- Is it bulky: In dropshipping, smaller and lighter is nearly always better. Bigger products tend to be more expensive and, traditionally, new prospects tend to stick to established companies when parting with larger sums of money.
- Does It Have Good Marketing Potential: Think of marketing potential when you do product research: Can you use Influencer Marketing, Inbound Marketing or Facebook Ads for this product? Are there any online communities crying out for this product? etc
Combining this checklist with the following Niche Scraping tools can reveal untapped niches and products with huge potential for profit:
- Google Trends: With Google Trends, you get insights into products’ demand over the course of months or years, based on Google Search queries.
- SellTheTrend: Designed to help people find profitable niches and products, Sell The Trend’ features include Product Insight Tool (Number of Orders, Sales Volume, Product Cost, Selling Price, Profit), Nexus Mode – which filters out trending products, Hot stores and Trending Stores, Explorer Dashboard for each selling platform – whether it’s Facebook, Aliexpress or Amazon.
05. Conduct Competitive Intelligence
In recent years, dropshipping sounds like the new Gold Rush.
The barrier is relatively low, and there are tools and gadgets to help you in every step of building a dropshipping business. So the competition only grows stronger and tougher to the point that only most unique sellers can enjoy its bountifulness.
That being said, beating the competition should be one of the top priorities for any new dropshipping business – to truly understand what your competitors are plotting, and to get a headstart with even better strategies and tactics. This is when Competitive Intelligence comes into play.
There are a plenty of ways to keep tabs on your competitions, including but not limited to:
- Check their websites. Use tools like Ahrefs, Spyfu or SimilarWeb to break down their traffic sources, their focus demographics, which organic keywords they are targeting, which PPC channels they are using – and how much they are paying for each channel.
- Visit their social media profiles. Use tools like Awario or Mention to monitor, listen and dig out insights from their social media activities.
- Order their products or Chat with their support team to learn more about how they position, or introduce their products.
- Subscribe to their mailing lists.
06. Being Customer-Focused Since Day One
Upon gathering data and insights from Facebook discussions on Dropshipping, one recurring advice that stood out was to put customers first.
So what do we talk about when we talk about being Customer-Focused?
It means having a stellar, or at least above average Customer Service. Online shoppers dread getting ripped off. We’ve all been there.
- If a customer emails or messages you, a quick and attentive response will make them feel that their voices heard, and their opinions matter. Good impressions are the foundations of repeat purchases.
- Make sure that you keep your customers in the loop with on-time updates on their order status.
- If a customer is unsatisfied with the received product, be more than willing to give them a full-refund, or a replacement. It’s better to bear the costs than to have an angry customer with the risk of bad review.
Trust me, efforts put into customer support pay off!
The name of the game here is Trustworthiness. Good customer service yields positive feedback, reviews and 5-star ratings. And between a store with all 5-star reviews, and a store with little or no reviews at all – what do you choose as a shopper?
07. Experiment Constantly
Most successful dropshippers advise dropshipping beginners to constantly re-examine their business: Is this good enough? Are there any alternatives to make it better?
Constantly putting yourself under a microscope can inspire you to have bolder experiments testing new theories and assumptions. The most common experiments run by many dropshippers include:
7.1. Shipping Rates Experiment
According to this report, unexpected shipping costs are a reason for cart abandonment among 65% of online shoppers. On the other hand, 75% will purchase more if free shipping is available.
Consider the above statistics, free shipping is still a valid marketing strategy. By offering free shipping, dropshipping businesses can acquire new sales or increase order values. According to UPS, 43% of consumers research delivery costs when shopping online.
Obviously, shipping products cost you money. To offer free shipping is simply to build the shipping cost into your price point and weight the costs vs the benefits.
7.2. Experiment with Pricing Presentation
Let’s talk about one of the most common pricing psychology phenomenon: The anchoring effect
The anchoring effect happens when people rely too much on the first piece of information they find and use this information (anchor) when making decisions.
For example, first you see a plain white t-shirt that costs 300$, then see a second one – which is identical to the first one, that cost 90$ – you’re more likely to buy the 2nd one since it’s cheaper – when in reality, if you only get to see the 2nd t-shirt – which costs 90$, you probably won’t think it as cheap.
So how the anchoring effect can be used for pricing experiments, here are a few examples:
Position Prices To The Right Of Large Quantities: If you’re selling bundles, and the quantity is larger than the price (i.e: 80 Items for 39$), presenting the quantity first triggers an anchor effect – customers anchor on high quantity and infer that the price is a good deal.
Expose People to Higher “Incidental” Prices:
Also Selling: ABC: 99$
Also Selling: XYZ: 49$.
By exposing people to higher prices – even for unrelated products – you can anchor people toward the higher end of the price spectrum, making the price of your product seem like a bargain.