Dropshipping – how to get started and what you need to know before you start selling online

Through the article we will discuss Dropshipping and learn:

This article on dropshipping will not be exatcly what you expect and which you can usually find online. Dropshipping is often presented as the easiest way to your new job, six zeros in your monthly income, work from a part of the world where there is always pleasant 27 degrees. In the morning, the friendly hotel staff serves you breakfast and massage, then you quickly check how many thousand pieces of products you sold during the night. You click on a couple of buttons and head to the beach so you can count all the coins you earned in the evening.

Dropshipping can be all of that, but at least in the first, second, or third year for 99% of people it won’t be even close to that.

Anyone who says that dropshipping is easy and doesn’t tell you that it requires high professional business efficiency, to be (globally) the best in all areas of digital marketing, product selection, agreements with manufacturers and suppliers, advertising optimization, accounting, financial and legal relations, knowledge of various regulations, customs, taxes, building relationships with existing customers, getting good reviews and much more, probably wants to sell youtheir super duper mega e-course, seminar or something similar. The first time you see someone like that, turn around the same second, because either he is consciously hiding the actual situation from you, or worse, he does not know the topic he wants to teach you about.

Perhaps dropshipping was fairly easy until 2015. An average product, an average ad, some advanced advertising knowledge, some luck were enough and many people reached a point where they thought they understood this world. But then came the turning point 2018.

Those who survived until then survived for a reason. They had the best ads, the best products, the best policy and approach. They have created a recognizable brand. They then employed experts for measuring and optimizing digital marketing, as well as experts who optimize and control the purchasing and delivery process. These are real companies that have a team of specialists whose basic purpose is to optimize and develop business and build a brand. All others mostly don’t exist anymore or they do not play a visible role. This industry cannot afford amateurism in any part of the business.

Roughly speaking, this means that with your not overly professional knowledge, you will find it increasingly difficult to compete with such professional competition. Even if you have a great product and supply, the Achilles tendon can be maybe your ignorance of digital marketing, which (in case you dream of exotic places and six zeros in your monthly income) is certainly focused on international markets. Where sharks are even hungrier and the waves are even higher.

But enough “scaring”. I emphasized everything precisely for the purpose of distinguishing the article from 95% of others, where everything looks so perfect.

And now the good news. Dropshipping can probably be one of the best ways to start a new business and below I will share with you tried and tested tips to start your dropshipping business properly and start earning with it.

Dropshipping product and supplier selection

You will most likely approach dropshipping like this. You will find a product whose manufacturer or reseller agrees that the minimum order quantity is one piece. You will offer such a product on your website for 100-400% higher price, depending on the initial purchase price of the product. The manufacturer will send the package directly to your customer on your behalf.

It all has to look like the product came from your warehouse. The buyer should not find out about the manufacturer (as he could otherwise buy directly from him).

The first recommendation when choosing an industry and products is, under no circumstances choose an industryto which you feel no particular interest. With the product and industry, there is so much work that needs to be done and also dark days in which you will wonder if it is all worth it. That is why you need an industry you will fall in love with.

Hundreds of hours of analysis, planning, small improvements and the last thing you want is to add a product that means nothing to you. The product must solve a customers problem. And you need to feel that it is your mission to help solve this problem. Otherwise the story will probably not have a happy ending.

You will have to write about the product, analyze the competition, photograph it, record it, control its quality in production, suggest improvements, answer 1001 questions from (potential) customers.

Your enthusiasm or displeasure will be felt for miles as the arrival of the Whitewalkers and the line between success and failure will be very thin. A few small details will lead you to success and you will definitely not achieve them if you are not completely enthusiastic about your products.

When looking for a suitable industry and products, the first piece of advice is not to find industries and products that are not on the market. Because it’s almost impossible. Thousands of online stores open daily, and every product for whichyou‘d say, I have never seen anything like it before, will already be presented in many online stores for months. My advice is to find a product where you will be able to use your experience and knowledge to make the best online presentation in the world, or in countries that interest you.

It will definitely be easier in some way to focus on non-English speaking markets because they are not as saturated and are cheaper to advertise. It is true, however, that you will need an excellent knowledge of the language, e.g. German, French, Italian, Spanish or any of the northern languages (I do not exclude other languages such as Russian, Polish, Ukrainian and other languages). In this case, you have an advantage and so I would definitely recommend that you consider markets that speak one of these languages. Slovenia can also be a good market to start with, especially for learning. But expect the same amount of work as in significantly larger markets. And much lower yields.

Dropshipping and the great barrier to doing business with China

I recommend that you don’t limit yourself to Chinese suppliers in your product search, as this is usually the first thought associated with dropshipping. Despite modern transportation routes, China is still far, far away. And there is a big problem associated with this, which is also a part of the word of this business – shipping.

Anyone who claims that the supply of products from China is ongoing has not done much business with the Chinese. Most people are aware of this the corona virus period experience. You wake up one day and the shipment you ordered and paid for will arrive when the ship sails, when they allow it in a few months. The buyer, however, expects delivery in a day or two (no matter where in the world it is located).

There are several shipping methods available. There are even free options that do not have tracking numbers. Then there are various providers like E-packet and China post where you already have a tracking number. And of course top-class suppliers like DHL shipping, which are correspondingly more expensive.

But how do these types of shipping turn out in reality?

Delivery is promised within 60 days.

In fact, the shipment travels to the US or UK for at least 45 days (50%) or the shipment is delivered within 60 days (20%) or even within 90 days (20%). Expect a lost shipment 10% of the time (and 100% angry and frustrated customers who write negative comments online).

Delivery is the promised within 30 days for the price of approx. 1 – 5 USD per package.

In fact, only 50% of shipments are delivered within 30 days. It takes a further 10 days for the remaining 45% of shipments to arrive. 5% of shipments will never arrive at their destination (include that in the price you pay).

It is the fastest (7 days in 60%) but also a correspondingly more expensive delivery option (approx. 15 EUR per package). But still, about 40% of shipments will only be delivered within 30 days.

Dropshipping delivery. As you read the various delivery guarantees, remember this picture and imagine your package being transported from warehouse to warehouse among millions of others, with mopeds, vans, river boats, and across ocean ships. They then arrive to customs, where they sort out millions of small shipments a day. That only 5-10% of packages are lost, stolen, stocked, soaked, run over or misdelivered is basically a real miracle.

Therefore, free dropshipping delivery without a tracking code in 2020 is just too risky.

Lets now analyze the middle delivery option with e.g. E-packet or China post.

If you sell 1,000 products a month, about 50 customers will be extremely dissatisfied because they simply won’t be delivered. The higher the price they will pay (relative to the price on Aliexpress), the more dissatisfied they will be if they don’t get the product. If you promise delivery within 45 days, you will offer a refund to those who did not receive the product after 60 days or to resend the product to the customer. In short, there will be significant costs (remember that in addition to the products, you also have to pay the people who will organize and arrange all this in your company on paper to make the accounting satisfactory).

The problem arises when most people are not so enthusiastic about a product to give an excellent rating. We as humans are a lazy species and even if something excites us, we are still too lazy to give a positive rating. With 5-10% of customers who do not receive the product, you can count on negative reviews from their side. And negative reviews are the Armageddon for your dropshipping.

Therefore, you are left with no other option than relatively expensive delivery via DHL. But even here, you don’t promise delivery in less than 30 days. A few percent of orders will be delivered extremely quickly in two or three days, but something can easily go wrong at customs, and your shipment can stay there maybe even 14 days, so even such services are difficult to sell as 7 day delivery.

Delivery via DHL can be so expensive that customers will not want to order the product and pay for full delivery. Therefore, you will need to hide a few more dollars or euros in the price of the product to cover part of the shipping cost. Plus all other costs such as advertising, etc.

That’s why you need to pay close attention to your sales landing page so that the conversion rate exceeds 3%.

With shipping costs and long delivery times, China is no longer such an ideal option to buy dropshipping products.

Not to mention business downtime, guaranteed production deadlines, poor quality of a certain percentage of orders, changes in materials without disscussing in advance, non-existent quality control, poor communication and other things that most providers on Aliexpress are “equipped” with.

Local stock or own production

One of the opportunities to overcome the barrier of shipping will therefore be to find a supplier in your home country or within the country where you are selling. In fact, the opportunities are huge. Most of the manufacturers are in love with their product, care about quality and develop it. They only forget one little thing several times. Who will buy these products? And here you can jump in.

One of the options is also offered by Aliexpress, which now also offers shipping of products from countries such as the USA, Spain, Germany, Poland and others. These are products that have already been imported into the country from which they are shipped, which is great for fast delivery within the EU or the US. But you also need to be aware that these options are available to everyone, so you need to convince customers with something else: mostly top-notch digital marketing, an attractive website, effective email marketing, brand building, and relationships with existing customers. Just targeting the fact that a certain percentage of people still can’t find the same product cheaper is a tactic that will last for a couple of months.

Dropshipping products for adding a print

The goal of being different from the competition and to offer something unique and your production is local can be achieved by putting a print on products such as T-shirts, pillows, notebooks and similar. In such a case, you will find a provider that offers these services and at the same time is suitable for your type of business. This means that it does not require the purchase of a larger quantity of products to stock.

Dropshippings problem's name is Amazon

The next problem you will have to overcome will be Amazon. You can already find a vast majority of products on Amazon, which you can also find on Aliexpress. In most cases, these products are already in stock at the Amazon Center, which means that they are delivered quickly (in one or two days) to countries such as Germany, the UK and a few other countries.

The next problem that accurs with Amazon is the price of the products. Companies that sell on Amazon buy in bulk and have production and delivery highly optimized, targeting quantity and therefore their price is often even cheaper than on Aliexpress (you will also find it difficult to find a manufacturer on Aliexpress – in most cases they will be resellers).

Amazon dropshipping

Amazon also potentially allows dropshipping, but keep in mind that your delivery could take more than a few days. You can also forget about good positions in the Amazon search engine if your product is not in stock in Amazon’s warehouses. And also forget about any success if you sell low quality products. Amazon is based on customer satisfaction and they want the best quality for as little money as possible. And they will tell you that in the reviews of your product on Amazon. Therefore, I do not recommend Amazon for the dropshipping business.

Dropshipping business can only be solved by creativity and a lot of research

I guarantee you that you will not find the ideal product with a few clicks (which is persistently communicated to you by various ads, platforms and fake consultants).

I suggest that you first determine the industry in which you want to do business, imagine the product, and then do as in-depth global research as possible of who produces this kind of products. It is good, of course, that this product is not yet mass sold on Amazon or Aliexpress. The price does not need to be excessively low. It is important that the product solves the problem of the ideal buyer and is not yet sold by more sellers. Products with a price of around 100€ will work best for dropshiping. That way, you’ll have enough margin to cover all your expenses.

Arrange for dropshipping with a company that does not offer this as their primary service

One of the biggest opportunities is to find a product that is not on either Aliexpress or Amazon.

One of the best ways to get such a product is to attend trade shows where you meet manufacturers who are more dedicated to the product than to the digital age.

Talk to the company that manufactures or sells a particular product as professionally as possible. Say that you will invest XY in the product promotion (also include your work on an annual basis), that you will sell the expected XY quantity on an annual basis (which must be at least a little intriguing to the company), but that your requirement is to work with a minimum 1 piece order and that the company sends the products directly to the addresses of customers. Also try to arrange for the product to be packed in your packaging, which you deliver to the company, or arrange for the packaging to be purchased by the company for you. The packaging should also include your logo. You may have to guarantee a certain consumption to the company and buy it in advance, which means that some initial investment will still be needed. But you will gain a great value for dropshipping in 2020, it is a product that is not immediately found in the market.

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You have found a great product, but what now?

A great online store is crucial to the success of dropshipping. Therefore, you must first select the appropriate platform or CMS on which you will build an online store. Of all the options, two platforms strongly stand out when it comes to online stores.

If none of these are familiar to you and you want to learn and get used to the platform in as little time as possible, Shopify may be more appropriate, but you should be aware that it will cost you more in the end and will offer fewer options when you will want to change anything on the website.

Therefore, I recommend that you set up your online store on the WordPress platform and its WooCommerce website. As many as 30-40% of all websites and online shops operate on this platform. It is easy to learn, you are not dependant on those who created the website for you and you have the most options in creating the desired image and functionality.

Each platform, of course, has its benefits. The main benefit of Shopify is that your website will be done in a few days. For WordPress and Wocommerce, you’ll need a little more time to get to know the platform. But you can also learn this well (e.g. through a practical online course). So a week or two difference doesn’t play a role because time runs very fast anyway. It is important that you have a free hand in the further development of the site. If you are going to have someone create your website, they should also teach you about the site so that you can edit it independently (e.g. publish products, set prices, discount codes, etc.). Avoid providers who do not offer this but want to make you dependent on them.

If you want to get a good position on Google with your website, there is no longer a dilemma. You need WordPress and WooCommerce.

Oberlo and easy importing of products from Aliexpress

The most popular add-on related to dropshiping and intended only for Shopify online stores is Oberlo. I don’t see excessive added value in it, mainly because I don’t want and don’t believe in easy reselling of products from Aliexpress. Oberlo allows you to easily import products from Aliexpress into your online store. The data will include stocks, price changes, photos and other. There is no reason to believe that your online store will be successful just by simply importing products from Aliexpress into your online store; that you will be able to use as many photos as are available there; and that importing thousands of products you don’t even know will be a good idea and that more products means more customers.

But, flying carpets only fly in fairy tales, otherwise you already know everything about what is written before the word but. Let this not be the case with your plans for successful online sales.

Similar platforms also exist for CMS Woocomerce. These include the Dropship.me plugin, Woodropship and Spocket. But, no, I don’t recommend mass inputs of products you don’t even know. You can only come among the top 1% of the most successful ones with mass use of your brain and knowledge of the target group.

How to get to the customers in dropshipping?

Your strategy from here on out will be how to get the most potential customers into your online store. You definitely need to master digital advertising, but your strategy can also rely only on online SEO optimization.

If you’re tackling a project on your own, it might even be better to think about just one or the other, as there won’t be room for a half-approach in large markets. It is better to conquer one area than to devote only one part to each.

When it comes to advertising, don’t expect easy work and don’t expect your ads to work from the start. It will take a lot of testing, discipline, and then dedication to running ads. But the reality is that even ads that sell very well today will stop selling over time.

You can read more about advertising on Facebook, Instagram, Google in other articles on our website.

A lot of competition simply skips the opportunities that the right Google SEO optimization offers. You will need a lot of content, great articles, real research and tips that will actually benefit your visitors. And especially a lot of external links to your website or online store. Of course, you will need to choose a market and industry before in which, you will be able to reach some top 5 positions and attract at least 10,000 highly relevant visitors to the website on a monthly basis. And of course you will have to adore the industry. You can also find more about SEO optimization on our website.

The effect of advertising will be visible after a few days. The effect of Google SEO optimization will be visible only after a few months. But it will be free after that.

Yes, a lot of work awaits you. Finding the product, logo, packaging, shipping was basically the fun part.

Techniques for a successful start of dropshipping

If you can afford it, consider the following strategy: Gain market share, satisfied customers, reviews, and work with a positive zero for a few months.

The free + shipping method is known. The product is therefore free. The buyer only pays for shipping. This method works in case you find a manufacturer whose product is not more expensive than one or two euros, but its perceived real value in the eyes of the buyer is over 10 euros. Such an offer will receive a lot of attention. Find the product in a warehouse in the country where you sell, so you can spend max. 4 € together with shipping. Your price with shipping must be max. 9 € (below the price of the product). Calculate in another 5 € for advertising costs and with just a some extra capital, the wheel could start spinning.

The idea is therefore that the buyer sees the value of the product as 10 €. He pays 0 €.

Therefore, he pays for shipping of up to 9 € (which still pays off because he gets a product of similar value).

The method will not bring you profit in the short term, but it will bring you valuable first customers and users, as well as a fairly large database of e-mail contacts (count on getting between 3-5 contacts per 1 sale, as many people will leave the cart when they see that the product is not completely free).

An example of an ad that works through the dropshipping system free + shipping. In order for your ad not to be considered misleading mention that they have to pay for shipping (which is not the case in the case above).

By that logic, if you spend 10,000 € on advertising, you will get invaluable advertising experience, about 2,000 sales, and about 5,000-8,000 e-mail addresses. A total of 10,000 e-mail addresses and as many as 2,000 customers who tested the product. And some of them have submitted positive comments on your website, Google my Business review, etc. Quite a nice capital for a successful start right?

Of course, if you know how to (also) sell to visitors and customers in the future – through remarketing.

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Remarketing and its meaning for dropshipping

The secret of successful people is how well they can communicate with potential customers after they have already visited their online store.

When you experience first-hand how difficult it is to get an e-mail address and how difficult it is to convince a person to buy something from a new online store, only then will you start to appreciate remarketing enough.

In remarketing, I will not only count advertising where you show ads to people who have already been to your website or bought from you, but to all communication that will take place after the user has trusted you with at least their e-mail address.

I also recommend the use of Messenger marketing, with which you can warm up potential customers perfectly for the purchase.

Dedicate time to digital marketing and remarketing, and also create e-mail and Messenger message sequences that will tell a story and encourage communication. Measure satisfaction. Recommend relevant products.

I recommend using Active-campaign to create e-mail sequences.

Summary

Dropshipping will be as successful as well as your website will be successful. If your website is vague, poorly set, product photos are bad, there is no interesting content on the page, the text is superficially written, the purchase process is complicated and all you can say is “Buy, buy”, then you better forget about this business.

Educate yourself, follow best practices, write interesting emails, make a structure of communication with customers, design a brand, make a professional graphic design, have excellent service, be immediately available for questions, be ready to return money when customer is not satisfied, invest in visiting your manufacturer, take your own photos of the products, invest in professional ads, and I could go on and on. Do not start up this business like 99% of others that are doomed to failure.

The basis for a successful dropshipping business is always a product, a reliable manufacturer and supplier, and building a recognizable brand and customer relationship.

At the same time, be aware that you are solving the customers problem. You are not selling a product, you are giving a solution. That’s why you need to love the industry because that’s how you will manage dropshipping with passion and make your customers happy.

I invite you to read another one of our articles on the topic of digital marketing. And for step-by-step video tutorials, check out our hands-on e-courses.

Find out more about them at https://www.martin-orange.com/e-courses/