You know the DropShipping trading model so far mainly as a variant of online trading, which is especially suitable for beginners in e-commerce. However, the mail order business without warehouses and investments also has distinct advantages for established Internet entrepreneurs. In the following, we explain how you can use DropShipping as a conventional shop operator to optimize your business model and describe step by step how you can comprehensively expand your existing product range without having to go through special growth steps.
Those who base their online trade on the DropShipping model do not have to worry about large start-up investments or high running costs. Since the affiliated suppliers themselves take over the dispatch of products to end customers, Internet entrepreneurs set up accordingly do not need a warehouse or expensive logistics personnel. You do not take any commodity risk with the decision for certain articles and have, since you do not have to worry yourselves about the small-step order handling, sufficiently time, in order to make known your Shop and your offers and to care for their customers in the best possible way.
At first glance, DropShipping is therefore of course particularly suitable for for beginners in online trading. They don’t have to raise any special capital, don’t take responsibility for employees, can work from their home desks during the start-up phase without any problems and have maximum time flexibility.
But all these advantages also apply if an online retailer already established on the market decides to expand its existing business concept by the factor DropShipping. In the following sections, we will explain exactly how this works and how Internet entrepreneurs can concretely benefit from the expansion.
Would you like a little more?
As an online retailer, you constantly have to do an exhausting balancing act between success and effort. Of course, on the one hand you want to increase your visitor numbers, your sales quota, your turnover and your profit. On the other hand, you know that a larger and more attractive assortment is associated with high purchasing and logistics costs and that every additional order increases not only the business profit but also the workload in your company. So you always have to weigh up growth against expenditure and in many situations consciously decide against measures that would make your company more successful.
Imagine you could add hundreds or thousands of additional products to your current assortment in just one step, without spending an extra cent on purchasing the goods. Your delivery program would be automatically always up-to-date, without you having to deal with the latest trends yourself. You would not need to store or ship the additional items. An expansion of your storage area would not be necessary any more than an expansion of your personnel base. Does this idea seem unrealistic to you? If so, then you have not yet sufficiently dealt with the DropShipping trading model and it is high time to do so now. Please consider the following advantages once again:
» Attractive product range extensions with improved sales opportunities
» Automatically updated delivery program without own research
» Growth without additional costs and increasing workload
» Enough time reserves for marketing and customer service
All this is made possible by a Expansion of your business model by the factor DropShipping. In doing so, you neither endanger your previous success nor take an economic risk. You simply add as many DropShipping products to your range as you like and make lucrative profits with every additional sale without increasing your running costs. Since the affiliated manufacturers and wholesalers automatically deliver all orders of your products to the end customers themselves, your own effort is limited to the placement of additional articles in your online shop, the promotion of your new range and the support of additional customers. You want to know how it works? The next section explains it step by step.
In 5 easy steps to your second leg
You probably imagine now that such an extensive improvement of your turnover and profit situation must be connected with a considerable expenditure. You will therefore be surprised to learn that the complete integration of the DropShipping trading model into your existing business model takes only 5 simple steps:
Step 1: Select suppliers and products
At the heart of every DropShipping model are professional and efficient suppliers whose products you selectively include in your assortment and who ship future orders on your behalf directly to the end customer. Track down suitable business partners on the Internet or simply use the database of DropShipping.com. Here you will discover more than 220 DropShipping suppliers from every imaginable industry and gain access to over two million interesting products that you can immediately include in your range.
Step 2: Set up interfaces
Ideally, orders for DropShipping products are automatically forwarded from your shop system to the respective supplier. Many programs offer ready-made interfaces for this purpose. Check your software for such functions or talk to the provider of your shop system to get information about possible interfaces. If your program does not offer the appropriate options, you can of course also manually forward incoming orders to the manufacturer or wholesaler.
Step 3: Integrate DropShipping products into the shop
Thanks to your new suppliers, you now have access to numerous additional products with which you can selectively expand your existing product range. In the first step, close any gaps in the delivery program and only add items that match your shop profile and your target group. Avoid confusing your visitors with too many products and limit yourself, at least in the beginning, to manageable additions.
Step 4: Actively market the new product range
Now is the time to market your expanded range. Existing and new customers should find out what they can expect from now on in your shop and for this you have to stir the advertising drum as hard as possible. Among other things, use your newsletter to inform your existing customers about the enhancements. Communicate within the social networks, draw attention to the new range on your homepage and also use all other advertising and marketing channels available to you.
Step 5: Negotiate prices and conditions regularly
You can certainly imagine that in terms of price and condition negotiations with your suppliers it makes a difference whether you purchase individual products or buy the goods directly on pallets. Since the mere inclusion of DropShipping products in your shop does not give you any information about the actual purchase quantities, most manufacturers and wholesalers will not grant you any volume discounts for the time being. You should therefore carefully monitor the actual sales quantities and take every opportunity to negotiate discounts, bonuses or other favourable conditions with the respective supplier.
These tips will make DropShipping successful
Finally, we would like to give you 5 proven professional tips to help you celebrate real success with the DropShipping trading model:
Tip 1: Navigation
Every expansion of the product range in your shop leads to changed navigation requirements. Ensure that your customers continue to find their way around your offering. If necessary, use additional product categories and support your visitors with an intelligent search function when selecting articles. Remember that the assortment extension must not lead to a deterioration of your conversion.
Tip 2: Returns at a glance
Discuss with your DropShipping suppliers exactly how to proceed in the case of returns and consider the additional expense associated with returns. When expanding your product range, always avoid products that are known for a high return rate. On the Internet you will find sufficient information about the susceptibility of different product categories to returns.
Tip 3: Automatic interfaces
At the beginning of your DropShipping activity, automated interfaces to your suppliers may appear to you as a rather luxurious and thus dispensable extension. This can change quickly, depending on business volume and number of orders. Think about setting up such interfaces at an early stage in order to keep the effort required to generate additional orders in your company to a minimum.
Tip 4: Supplier selection
The DropShipping trading model can only function smoothly if your connected suppliers are reliable and efficient. You should therefore check the individual manufacturers and wholesalers with regard to their performance. Test orders that you yourself place with the supplier on behalf of a friend or employee offer a good opportunity to observe how quickly and in what condition the delivery reaches you.
Tip 5: Large and bulky products
As a DropShipping retailer, you can mainly get Sale of large and bulky products benefit. Due to the one-time shipping costs (from the DropShipping supplier to the end customer) you have a clear advantage over your conventional competitors. They not only have to store the products, but also pay twice the shipping costs. Give the advantage, which results from it, at least partly to your customers and score so with particularly favorable prices.
On the basis of DropShipping, highly remarkable career models can be realized. Which many dealers are not aware of: DropShipping on marketplaces like eBay or Amazon is a true concept for success if you consider the rules and recommendations we provide in our guide.