Success in drop shipping is not a question of luck or chance. First and foremost, it is important to do as much right as possible and as little wrong as possible in relation to your own business model. So it is up to you whether your own shop works well on the basis of DropShipping and runs successfully in the long run. We introduce you to the most important factors that influence the success of DropShippers. We clarify the background and provide you with a total of 6 professional tips, which you can immediately implement in your own shop.
DropShipping alone is not a business idea
If you are just about to start your own business as a DropShipper, there is one thing you should keep in mind: DropShipping alone is not a business idea. By opting for this trading model, you merely define the external framework of your future activities. Two things are hereby defined: First, you intend to earn your money by selling products on the Internet and second, you choose the concept of DropShipping. However, a few things are still missing to turn these two pillars of your independence into a real business idea.
A business idea describes concretely how you want to earn your money with an independent concept. Imagine a friend or acquaintance who, with regard to his or her own plans, would only entrust you with the task of working independently as a craftsman in the future. On your side there would be still many questions open: In which trade should the activity take place? Is there a specialization? Where will the company be opened and where will employees be employed?
These and similar questions are now going through your mind. With regard to your own business, you must also be able to answer such questions. The description of a business idea must show an outsider within a few sentences how you imagine your independence concretely.
These 5 factors define your concept as DropShipper
Let’s summarize what’s already established: You want to trade products on the Internet and you want to do this as a DropShipper. What you must at least define now is the concrete design of your assortment. Which articles do you want to offer to your customers? In addition, you should also describe who you actually imagine to be your customer. Work with categories and define for example age, gender, income and interests. Once you’ve come this far, all you need to do is define the reasons why the target group you’re targeting should shop in your shop in the future. This is called strategic positioning.
;”>You then described the industry in which you would like to set up your own business (e-commerce), which processing model you have in mind (DropShipping), which products you would like to offer (assortment), which customers are to buy from you (target audience) and for which reasons you should decide on your offers (strategic positioning). These five factors together form your business idea.
The focus for the DropShipper must be on the suppliers.
There are excellent reasons for choosing the DropShipping retail concept. As a DropShipper you benefit from a variety of advantages and discounts. Some of them may have been the reason why you chose a career as a DropShipper.
You probably liked the fact that DropShipper almost doesn’t need any seed capital to build your business. Even the low running costs have certainly met with your approval. And the fact that as a DropShipper you have considerably more time at your disposal than is the case with a classic dealer certainly didn’t bother you very much.
Now it is the case that every advantage in the business area has its own individual price. As a DropShipper this price consists mainly of the fact that you need really good suppliers. Now one could say that good suppliers are also an important prerequisite for success for the classic online retailer. This is correct in any case. However, you assign significantly more tasks to the supplier. Everything that relieves you so much as a DropShipper, you burden the manufacturers and wholesalers with whom you will work. In principle, this is not a problem. After all, your suppliers voluntarily choose to work with you as a DropShipper.
Errors of your DropShipping suppliers fall back on you
However, the situation is that your suppliers need to be particularly reliable and professional. It is important that you can always rely on the performance of the selected manufacturers and wholesalers. After all, any misconduct or omission always falls back on you and harms your business model in the medium term.
As a consequence, you as a DropShipper will have to make a special effort to select the best suppliers for your business model. If you fail to do so, you will quickly face negative consequences. Carefully select suitable candidates and thoroughly review the companies before deciding to work with them.
Among other things, you should also carry out one or two test orders in order to experience first-hand how the potential business partners really work. Even during the cooperation, you should not refrain from checking the manufacturers and wholesalers again and again and bringing up errors immediately. And last but not least, it is worthwhile to negotiate the conditions with the suppliers constantly and regularly.
DropShippers can significantly increase the potential of the trading model
We have already examined some areas in which your planning and work as a DropShipper is important. The development of a viable business idea and the selection and management of the suppliers involved have been particularly important so far. If you take these two points into account, then you are clearly on the right track. However, there are a few more things you can do to help your success as a DropShipper on its feet.
On the one hand, we would like to clearly recommend at this point that you draw up a business plan. This is a classic planning instrument with which almost every responsible founder and entrepreneur works. The business plan simulates your business development over a certain period of time. In most cases, a term of three years is assumed. In the business plan, you first enter all the revenues that you can expect to generate.
In a second step, you compile the costs that these revenues will have to bear. You have to work very hard so that you don’t forget any important expenses. Here, for example, there are the costs for the purchase of your merchandise, space and personnel costs, charges, fees and contributions, costs from contracts and agreements or even taxes.
Online marketing is the adjusting screw for DropShippers
If you now compare the income with the expenses, then you can see at a glance whether your company would make profits or generate losses according to the current state of knowledge. If you don’t like the results yet, you can simulate what needs to change to make the bottom line better. You see: The business plan gives you a glimpse into the future and gives you a lot of security.
In addition, you should also deal with the topic of online marketing at an early stage. With your activities in this area, you determine how advantageously your business will develop. There are many things you can do to attract more potential customers to your site, or to really get visitors to your site to make a purchase. Further instruments help you to increase the shopping basket value significantly or to generate one-time buyers in a clever way to regular customers. Online marketing is like an adjusting screw or a regulator that you use to adjust how your sales develop. Those who do without this give away considerable potential.
With these 6 tips you will become a successful DropShipper
In order to make online trading a complete success as a DropShipper, you should strictly follow a few recommendations. While the benefits for DropShipper and their DropShipping companies are clear with low entry barriers, virtually no capital requirements and little knowledge of online trading, there are also challenges for DropShipper, especially in selecting and negotiating with appropriate DropShipping suppliers. In the following six practical tips we have summarized the most important information for you.
First analyze, then implement
As a DropShipper you have countless products from numerous suppliers at your disposal, which you can include in your assortment. Even if there is a great temptation to expand your product range to thousands of items, you should still carefully design and plan your sales area in advance. This is not possible without a thorough analysis of markets, consumer preferences, demand and supply. Use the Internet for research around your preferred product area and limit your selection of articles to those which you consider to have good sales opportunities and a high attractiveness for the visitors of your shop.
Supplier selection is the be-all and end-all
The perception of your efficiency by the customers of your online shop depends essentially on the reliability and seriousness of your suppliers. If goods arrive too late or in a bad condition at your customers, then this does not fall back on the supplier but on you as DropShipper. So take plenty of time to select your future partners. Convince yourself in a personal conversation of the competence and professionalism of your suppliers and test their performance with several test orders before you include their products in your own range.
Trust is good, control is better
Once you have gained a positive impression of a supplier, you should not blindly rely on it to stay that way. Remember, new brooms sweep well. Perhaps at the beginning of the cooperation the company took special care with your orders and the reliability decreases with time without you noticing it immediately. Take criticism and complaints from your customers seriously and always get to the bottom of the causes.
Check your suppliers regularly with test orders also during the cooperation and do not miss to have a personal conversation with your partners from time to time. This not only strengthens your willingness to cooperate, but also gives you as a DropShipper the opportunity to regularly renegotiate your purchase prices.
Regular renegotiations for maximum profits
In addition to a careful selection of suppliers and their regular monitoring with regard to delivery reliability and product quality, as a DropShipping dealer you should also regularly renegotiate the conditions with the affiliated partners. Keep in mind that any additional percentage discount granted to you by your supplier will immediately end up in your own pocket and increase your profits. There are plenty of occasions for subsequent negotiations.
If, for example, your turnover with a manufacturer, wholesaler or importer develops better than expected, then this offers an ideal opportunity to actively approach the partner for a higher discount on purchase prices. The same applies if the situation on the market changes or if potential competitors of your supplier appear. Re-negotiations do not necessarily have to relate to the pure purchase price. As a DropShipper you can also negotiate shipping and handling charges or other fees. The existing conditions for returns, complaints or warranty cases also form a useful field for negotiations and should not remain unused.
Consistent use of marketing opportunities
Trading via DropShipping allows you as an online retailer to concentrate fully on selling your products and promoting your shop. While conventionally acting companies have to deal with topics such as warehouse management and shipping logistics, as a DropShipper you have the time and opportunity to deal comprehensively with the optimal marketing for your company. Take advantage of this potential and make use of the modern possibilities of online marketing. This starts with the optimization of your pages and offers for the search engines. Even if it is practical to take product descriptions directly from your suppliers, you should consider that you can only achieve an excellent position in the search engines if you are represented with your own texts and descriptions, which must be matched to your preferred search terms.
Social marketing should not be neglected either. Facebook, Twitter and other social networks offer online merchants excellent opportunities to present their shop and products to a wide audience. Take advantage of this potential and ensure sustainable, stable and high sales with a strategically planned advertising and marketing concept.
Self-confidently occupy market niches
As a DropShipping dealer, you can offer products with comparatively little effort from which conventionally working salespeople prefer to stay away. This applies in particular to goods which, due to their bulkiness, size or weight, require a great deal of logistical effort. Due to the problematic handling of such products, there are often lucrative market niches that you can optimally occupy. Examples of such products are carports, household appliances, whirlpools, bathtubs, garden sheds, furniture, kitchen equipment or bulky products for the garden and outdoors.
Manufacturers, wholesalers or importers who deal with such products are usually used to delivering their goods directly to the end consumer anyway. Against this background, it is comparatively easy to convince providers of a drop shipping model. Use your preferred position as DropShipper to deal with the sale of products that are uninteresting for your competitors due to the difficult handling and confidently occupy attractive market niches.
Did you like our six carefully selected practical tips for a more successful DropShipping? Then you will be interested to know that we have another guidebook ready for you, in which we will provide you with a total of 8 Rules for selection and evaluation from suitable DropShipping suppliers.