So you may have been thinking about opening up your own online business but do not know where to start. You don't know what you should sell, and you don't have any money to invest in products and looking around your home, you realise that you don't have any room for inventory. That's what drop shipping is all about.
See, with drop shipping, you can sell products online without the products ever being in your hand. All you need is a computer, an online store and a basic understanding of how to market and how to sell online.
How does drop shipping work?
- You find what you want to sell from a supplier and then list the product on your website at a price that you set.
- When someone places an order on that product, your customer pays you the retail price that you've set, and you make a profit. Then you place the order from your supplier at wholesale price and have it shipped directly from the supplier to your customer.
So, let's say you find a watch, listed on a supplier website for R100. You will then list the watch on your own website for R300 and when the order comes through your website, you will then place the order on the supplier's website, using your customer's information, keeping your R200 profit and then have the product shipped directly to your customer.
That's drop shipping!
Why does drop shipping work?
So, you might be thinking, why wouldn't somebody just order the watch directly from the supplier's website? Well, there are a few good reasons.
- It’s a very Big Internet and customers may not know about which suppliers they can buy from directly.
- When people buy anything, they are not just buying into the product, they're buying into the marketing, positioning, trust, and lifestyle these products represent.
With Dropshipping, you can focus on Marketing your products and saying the right thing, at the right time, and providing real value to the right people because you are not warehousing any inventory or dealing with most of the other challenges that come with running an e-commerce business.
Now, a couple of challenges that need to be considered when dealing with drop shipping are finding credible suppliers with good quality products and making sure you have visibility and your customer's shipping process.
Honestly, you can find suppliers on your own, however, when you are drop shipping completely on your own, you can end up spending a lot of time with searching and negotiating with the suppliers to guarantee your customers satisfaction.
Another option is a tool like Dropstore which with a few clicks gives you thousands of products to sell and has dozens of features to make your life easier. Like monitoring inventory levels, automatically calculated profit margins, fulfilling and tracking orders, monitoring of the shipping status, product performance and a whole lot more.
Dropstore supplier network is a vital part of dropstore that allows you to partner with vetted, trusted and South African based suppliers. This gives you access to great quality products and faster shipping times and awesome customer service with thousands of different products, to choose from.
If you want to get started, all you have to do is start your own "dstore" and install the dropstore app and find products to start selling online.
Why should you get into Dropshipping?
- It is really fast and easy to get started. You can dropship with incredibly low investment costs.
- You don't need to have an existing business entity when you get started even though it's probably smart to then get one when you get started.
- You don't have to worry about managing inventory, packing or tracking. Which means that you can focus almost exclusively on marketing and merchandising.
- You will have access to an unlimited number of products instantly that suppliers are constantly researching to determine what is trending and what to sell.
- You can set the retail price so you control the margin.
- Drop shipping is really easy to scale because you can hire virtual assistants as your volume increases.
What are the challenges of Dropshipping?
Of course, there are some challenges associated with drop shipping too and I will list them below:
- Because it is really easy to get started, there is a lot higher potential for competition. That is why you will find a lot of advice out there that will recommend that you start off with finding a niche audience like dog lovers or women's lingerie so that you can operate with less competition.
- There are supplier errors. Although uncommon, it is inevitable that a supplier will mistakenly ship the wrong products to your customer. And if this should happen, don't take it personally. Handle the matter like a professional, so, order a brand new product from the supplier or offer a complete refund to the customer.
- If you dropship from China which I do not recommend, shipping times are generally long! Turning some customers off. Rather stay away from drop shipping from China because it causes bad customer experience and it is bad for online shopping reputation in South African. However, if do choose to drop ship from China, you must make the shipping time clear during the buying process, many visitors appreciate the clarity. Especially if you're selling items in a niche where the delivery times are a little less crucial.
How do you get started with Dropshipping?
Ok, you might be wondering to yourself: How do I get started?
Step 1: If you do not have a store: Start a free 14 Days trial on Dropstore.co.za and choose the option to create your own store through Dropstore. If you create a store through dropstore, the dropstore inventory app will be automatically connected to your online website.
If you already have a Shopify store or woocommerce store, sign up on dropstore.co.za and install the dropstore app onto your store.
Step 2: find products from dropstore that you will like to sell and add them to your store.
Step 3: Enable the payment gateways so that you can start accepting money. Payfast payment gateway is a great option if you are selling in Rands. You may want to enable a few other gateways such as Paygate, Zapper, Snapscan and Setl-it or any of the other payment gateways that dstore has integrated with.
Step 4: Once you have all that, you will need to create a plan for sending traffic to your store. I won't go into much detail about that here, but you can find a great resource on building traffic in our next blog post. To stay in the loop, subscribe to our blog and subscribe to our YouTube page.
Step 5: Try to produce quality content for your store. From eye-catching photography to engaging product photos, to great post for your blog, your audience loves to know more about your products and how they can be used and the stories behind them.
Conclusion: 4 Additional tips to keep in mind.
Now that we have covered everything you need to get started, here are the additional things to keep in mind:
- Drop shipping is easy to learn but it's still a learning curve and you will experience challenges along the way. However, mistakes can become learning opportunities, and if you can develop resilience along the way, there are plenty of people out there, finding success with drop shipping products.
- There is a significant investment in terms of app investments compared to traditional e-commerce. Drop shipping isn't free. You'll probably have to spend money when you drive traffic, market your products, and handle returns.
- There is no overnight success and this is not a get rich quick scheme. Drop shipping still required you to work consistently for your store. True - you will need to dedicate less time compared to a traditional e-commerce business but it's not going to succeed without your hard work. You will always need to invest time in improving your business.
- Most importantly, don't source copyrighted items. This is illegal in South Africa and around the world and can cause you serious trouble.
My Advice? Choose products from Dropstore suppliers. A network of trusted suppliers who make it a priority to avoid copyright infringement. That way, you can rest assured that you won't infringe on any copyright laws and everybody remains in the 'legal'.
If you are completely new to drop shipping, start small with a single product, or a small handful of complementary items from a single supplier. You can always add more inventory as you become comfortable but it's better to start small and build than it is to start big and become overwhelmed.
My final tip for when you become comfortable with drop shipping is to - DIVERSIFY.
Many drop shippers don't rely on a single store for their entire income stream but operate a series of stores by targeting various niches to build multiple sources of income.