Friday, December 2Be Passionately Curious & Unstoppable

Drop Shipping Tips 2021: Boost Conversions & Become Profitable

Low starting up costs in drop shipping model makes it easy for aspiring entrepreneurs to enter the eCommerce game.

Many enters every day, but very fewer of them stays.

Just because the entry barriers are low, doesn’t mean the business should be treated lightly. Drop shipping is also like any other ecommerce business, it’s just that you don’t need to pay for inventory.

Everything else is same – store development, social media marketing, design, navigation, email marketing, Facebook ads, ad optimization, content creation, SEO etc.

If we talk about drop shipping specifically – the business model is even harder to sustain because of low profit margins.

Often times, things can get messy that can kill your drop shipping store – your dreams!

While technology is constantly evolving & consumers are increasingly moving to online channels, the money is unconditional.

In 2021, over 2.14 billion people worldwide are expected to buy goods and services online[1]

Stats on number of online shoppers worldwide. ecommerce Statistics by Statista

With such a market potential, drop shipping seems a good way to grab very very tiny portion of these numbers.

But, what it really takes to to succeed in drop shipping?

The simple answer is – treat drop shipping as a serious business & follow the best practices & tips I’ve curated from all over the internet & personal experiences:

Drop Shipping Tip #1: Single product drop shipping works well in 2021

Drop shipping might come to your mind as an ecommerce stores selling lots of items around a niche.

But, one more way to getting success with drop shipping is single product drop shipping – a store that sells one product only.

Take this store for example – The Foot Cleaner

single product drop shipping store example

Going this way allows you to channel your efforts & resources into selling one product only.

Below are some advantages of single product drop shipping:

  • You can make your store unique in the space since you are putting all efforts in one product
  • You will get creative with your work if there are nothing extra messy work that comes with multiple product drop shipping
  • You will provide excellent customer service because your dedications & efforts will help you learn all the ins & outs of your product
  • Your brand will gain authority over time if your product is good that customers will love
  • Targeting customers is easier since you’ve already narrowed audience by going with one product only
  • Your store will have high conversion rate as compared to other store that sells multiple products

Instead of experimenting with multiples products, just focus on researching & finding the one right product with good market potential – then invest your time, resources & expenses in marketing & selling this product only.

If the product is flagship, your dedicated store & marketing efforts will give it the attention it deserves.

Drop Shipping Tip #2: Provide stellar customer service

Happy customers are strong pillars for any business.

U.S. companies lose more than $62 billion annually due to poor customer service[2]

If we talk about drop shipping, customer service is the primary thing you must focus on. You must be reachable by people if they have any concern related to your product (before or after purchasing).

If you’re doing bad a customer service:

  • You will lose potential customers.
  • Unhappy customers can also leave bad reviews which can harm your conversions & business reputation
  • Some of the customers will ask for return or refund; some might chargeback.

On the other hand, offering good customer service build consumers’ trust with your business. These happy customers can bring in repeated sales via repeated purchases, friends referral or words of mouth.

You can also ask happy customers to leave reviews on your product/service

So it is viable in drop shipping to focus on offering outstanding customer service.

Not only in drop shipping, but customer service is a key point where every business must focus.

Over 90% of people globally believe customer service is very important in the choice of a brand.[3]

Stats to illustrate the importance of customer service in any brand/business, including drop shipping
Report by Microsoft Dynamics 360 [3]

The same research also stated that 58% of people stop doing business with a company because of poor customer experience.

When you’re drop shipping, returning customers can bring in good profits, but if you’re doing poor at customer service, your store might die within weeks.

Drop Shipping Tip #3: Postpone your plans if you are stringent with budget

No, I didn’t mean to discourage you, but like every other business, drop shipping also require decent budget to get positive ROI.

Otherwise, you might end up with a flop store; you will eventually lose confidence for drop shipping & think this business model does not work.

Setting up a dropship store & going live require less capital, but, to sustain your business & become profitable, you really need to invest money in a lot of things (mainly on advertisements & scaling more ads)

Things not always go the way we expect, especially with drop shipping, so experts drop shippers around the globe recommend having at least $400 in cash & up to $1000 of minimum credit limit.

Investing proper capital in drop shipping takes you one step closer to success.

Take Facebook Ads for example. There is Facebook Pixels in FB ads that tracks which type of audience is converting well. The more you invest in Facebook ads, the better set of audience Facebook pixels will craft for your product – based on what audience is actually purchasing.

Additionally, over time when you will think of scaling, you will need some premium services/tools to improve conversions.

If you are stringent with budget, you can still start drop shipping & scale. But with less budget comes greater risks of failure.

Drop shipping still works in 2021 – only if you play it right.

If you have the passion, then sooner or later, you will start – what’s matters is how smart you move & how wisely you plan things out.

Drop Shipping Tip #4: Don’t forget to include Guest Checkout

If you’ve left this unchecked, head over to your drop shipping store & find ways to incorporate guest checkout feature.

guest checkout example on a drop shipping store

Modern users are much lazier than you might think of, especially mobile users. They don’t like filling forms or setting up passwords & then verification link and all.

On the top of that, doesn’t it sound stupid to refuse customers just because they don’t want to create an account on your store?

Be nice with your customers, if someone don’t want to create account, allow them to do quick checkout as a guest.

This will significantly improve your cart abandonment rate & eventually conversions.

Drop Shipping Tip #5: Strictly stick with Shopify if you are a beginner

Shopify is one of the most popular eCommerce store building platform in the market – powering almost 3,603,636 websites (at the time I am writing this post)[4].

Some says, it powers almost 15-20% of the market share.

Just like WordPress was designed to build blogs, Shopify is built to offer 360-degree ecommerce solutions to entrepreneurs.

Let’s see how popular Shopify is using Google Trends:

google trends to showcase the popularity of Shopify & why you should use it for drop shipping

One primary reason behind this much popularity of Shopify is it’s easy to use interface – that is pretty much easy for anyone to use – from moms, students to small as well as big business owners.

Talking about the features, Shopify covers almost every solution you would need for your store – even billion dollar businesses also uses Shopify.

One great feature of Shopify is that it allows you to sell products on multiple channels from a single place – Amazon, EBay, Facebook etc.

Shopify drop ship store building platform screenshot

Just like any other entrepreneur, drop shippers wear multiple hats.

If you are a beginner to drop shipping, there will be a lot of work for you to manage & execute. Many times, some concepts & techniques will be entirely new to you & some work might require additional features or tweakings to your store.

In such a case, Shopify comes as a powerful platform. Since Shopify is specifically for eCommerce, it almost powers all ecommerce features you’d need while setting up & scaling.

On the other hand, if you use other platforms, you might end up messing with a lot of stuffs & spending time that you’d rather have invested in marketing & optimizing ad copies.

So if you are a beginner to drop shipping & non-techy guy, stick to Shopify.

Drop Shipping Tip #6: Invest in improving store design

Unquestionably design is a key factor of any website or store. It can make or break your business.

With more & more consumers shifting online – more competition is arising – that gives users an opportunity to find & buy what they want from where they want as per their preferences.

These modern users prefer to spend time on websites with intuitive design & easy navigation – combined with a lot of other factors.

And so, it is important for drop shippers to focus on their store appearance to make it stand out from the crowd & attract more potential buyers

A good design constitute of a lot of things, including:

  • Elements position & alignment
  • Color & Typography
  • Contrast & Differentiation
  • How well you are able to convey your message – describe your services or products
  • Easy to understand features & navigation

Some studies on user-behavior found that visual appeal & navigation have the biggest influence on people’s first impressions of your brand.

If your drop ship store is designed well, it will make a difference at the first impression to a visitor – which would help you convert potential clicks into purchases!

Drop Shipping Tip #7: High-Ticket drop shipping is another way to more profitability

High ticket drop shipping is quite self explanatory – selling expensive items.

High ticket product dropshipping product example

A standard & typical drop shipping store seems to most of us like a store selling wide range of low or medium priced items.

The problem with selling low priced items in drop shipping is the profit margins, which are pretty hard to squeeze – hence, greater risks of failure.

On the other hand, selling high-priced items allows you to grab hefty of profits – you would also get flexibility to set your own custom prices.

Here are some examples of high-ticket drop shipping products:

  • Steam Showers
  • Sports Cycle
  • Golf Simulators
  • Game Tables
    • Foos Ball Tables
    • Air HockeyTables
    • Poker Table
    • Indoor Tennis Table
    • Snookers Table
  • Electric Massage Chairs
  • Drones

Drop Shipping Tip #8: Do Branded Drop Shipping

As the name suggests, branded drop shipping is about drop shipping products that have your brand on it (logo printed on product, packaging, tags, etc)

white label drop shipping example
Image Credit: Retail Insider

Just like drop shipping allows you to sell products online without having to hold any inventory, drop shipping branding allows you to sell products under your brand name without having to manage any manufacturing process.

Here is an example of drop shipping store that sells white-labelled or private labelled product – this store is doing well in the market & brand is now well known.

private label & single product drop shipping example

It’s good to sell products under your brand in drop shipping as this gives you a competitive advantage over other drop shipping stores.

There are two ways to get into branded drop shipping:

1. White Label Drop Shipping

White label drop shipping is a concept wherein manufacturers allows selling of their products under seller’s brand name – manufacturer is different & brand is different.

Drop shippers can pick from a wide range of generic products available in the market for white labeling.

Advantages of white label drop shipping:

  • Less money required as compared to private label drop shipping
  • Get product at wholesale prices

Disadvantages of white label drop shipping:

  • High competition
  • Limited branding options
  • Limited choice of products

2. Private Labeling

Private labeling is a concept wherein a manufacturer create products (& add branding) exclusively for sellers, who then can sell these products.

Since private label products are exclusively made for you, you are the only one who can sell it.

For example – Wickedly Prime is Amazon’s private labelled grocery brand that’s dedicated to snackfood.

example image to showcase amazon's private label brand named Wickedly Prime

You can find suppliers that allows drop shippers to explore private labelling.

Advantages of private label drop shipping:

  • Increased profit margins
  • Get Brand Credibility & Customer Loyalty

Disadvantages of private label drop shipping:

  • Minimum order quality required
  • Buying wrong inventory can lead to losses: no-one will buy back your product if you’re not a recognized brand already

Drop Shipping Tip #9: Don’t Ignore Influencer Marketing

Influencer marketing works really well, especially with drop shipping when you are limited with advertising budget.

As the name suggests, influencer marketing is basically connecting with popular social media profiles & asking them to promote your product with their audience.

influencer marketing example for drop shipping

Just like other marketing channels, influencer marketing will cost you as per your targeting needs.

There are primarily two types of influencers:

  • Macro Influencers: Popular social media profiles with over 100K to million of followers. Example – celebrities, industry experts & veterans, youtubers, models, etc
  • Micro Influencers: Social media profiles with an average of 1K – 10K or more, or less.

Most of the drop shippers love to work with micro influencers, because they do not demand huge $$$ & their reach is worth it if you choose the right profiles.

If you are not leveraging influencer marketing in your drop shipping campaigns, it’s time to allocate some budget here & put in some efforts in outreaching & collaborating with potential influencers that might be interested in working with you for cheap.

Drop Shipping Tip #10: Verify products by ordering sample

People love drop shipping because it’s really easy to just start selling any good product you could find – no need to even touch the product.

But a smart drop shipper would never sell a product without placing a test order – to verify if the product is worth selling & the supplier & their operations) are good.

Placing test orders not only helps you with understanding the product & supplier, but also with shooting promotional images & videos of your product, this would definitely help your selling style stand out from the crowd.

While all other drop shippers would use stock images for promotions, you would go for an entire different route – creative marketing materials, personalized shoots, videos etc.

So once you finalize your product & supplier, don’t forget to place a test order for yourself. In case you have shortlisted multiple suppliers for your product, order from each of them.

Drop Shipping Tip #11: Recover abandoned carts & boost revenue

Cart abandonment occurs when a customer add product(s) to cart but doesn’t complete the checkout / purchase.

Over 3/4 of online shoppers leave without completing their purchase [5]

Carts abandonment is a major challenge for every ecommerce store. In 2019, the avg. cart abandonment rate was around 70% [6]

Online shopping cart abandonment rate stats worldwide. A report by statista

So if you’re not optimizing your drop shipping store for recovering abandoned carts, then you are leaving a lot of money in the table.

There is massive opportunity to increase your profits if you invest time in optimizing your store to minimize cart abandonment & recover abandoned customers.

According to a research by Baymard, below are some top reasons for cart abandonment during checkout:

Cart abandonment reasons & how you can use this tip to improve your drop shipping store

Drop shipping Tip #12: Finding a reliable supplier is key to drop shipping success

In the growth & success of any drop shipping store, suppliers play a key role.

Your store won’t sustain for long if you’ve skipped investing time in finding a good supplier who can fulfil all the order in time & do the work professionally.

In short, your drop ship store need supplier(s) whom you can trust. This is another time consuming task in drop shipping & you should do extensive research at your end – this is quintessential for a smoother eCommerce journey.

What exactly does a reliable /good supplier means in drop shipping:

  • Provide high-quality products
  • Provide good customer service to you
  • Maintain healthy connections with drop shippers
  • Professional for their work
  • Provide good delivery time
  • Reasonable product pricing

Things to do / look for before finalizing your supplier:

  • Place a test order & verify the product
  • Check their business & product reviews
  • Check their history – how long they have been into business.
  • What other products my supplier deal with?
  • How is their customer support?
  • Will my supplier be able to help me in case things get messy?
  • Connect with them & know more about their product to see how willingly they are helping you.

Remember that a bad supplier can really mess up things at your end – and your plans would not go the way you’ve wanted – even if you’re sure with the success of your products & store.

Drop Shipping Tip #13: Offer fast & free delivery

In the pool of competition, free & fast delivery helps eCommerce businesses stand out from the crowd.

Free delivery is key. Over half of internet users globally say this would most increase their likelihood of buying a product online, reaching a peak of 65% among boomers. It’s likely that as consumers have become more accustomed to the efficiency of online shopping, this additional cost has become slightly more acceptable.

Commerce Flagship Report by Global Web Index[7]
stats to show why people shop online & you can use one of these to improve your drop ship store conversions

If you are drop shipping, this path will be a little expensive but can help improve conversions significantly.

Not only in conversions, but offering free & fast deliver could potentially help you with other benefits like upselling, repeated purchase & many more.

Conclusion – Stay Ahead in the Drop Shipping Game

Drop Shipping is definitely not a get quick rich scheme.

It is just like any other ecommerce business you see & those who treat drop shipping business like real ecommerce business, reap the rewards.

While drop shipping may not be the perfect way to build a successful online business, but you can definitely build a million dollar company if you play smart & stand out from the crowd.

The drop shipping tips I’ve shared above are really effective, backed by statistics & curated from trustworthy sources across the globe.

I hope this article helped you get at least one more idea to get ahead with your drop shipping plans.

What else tips do you have for drop shippers to effectively boost their revenue & sustain in the ecommerce game for long? Please let me know in the comments section below.

Source Citations

[1] www.statista.com/statistics/251666/number-of-digital-buyers-worldwide/

[2] www.helpscout.com/75-customer-service-facts-quotes-statistics

[3] https://clouddamcdnprodep.azureedge.net/gdc/gdcPiLLQw/original?ocid=mkto_eml_EM582302A1LA1

[4] https://trends.builtwith.com/shop/Shopify

[5] www.barilliance.com/cart-abandonment-rate-statistics/

[6] www.statista.com/statistics/477804/online-shopping-cart-abandonment-rate-worldwide/

[7] www.globalwebindex.com/hubfs/Downloads/Commerce%20Flagship%20Report%20-%20GWI.pdf

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