At the same time, the invoices, external packaging, and packaging slips must not contain information indicating the supplier’s name or contact details. Simply put, customers aren’t supposed to know that the items are purchased from another company.
Requires less capital
Dropshipping is a highly accessible and economical way to start a business. Compared to traditional retail methods and e-commerce models like wholesaling, you can earn revenue without buying merchandise upfront and handling products physically. You also don’t need to pick, pack, and ship orders to consumers.
Multiple product categories
Quick setup
High potential for discoverability
Competition
Limited product information
Lack of quality control
There is no way for you to manage the quality of the products that get shipped to consumers. You rely heavily on your supplier for this process. This is why you must carefully choose the companies that you partner with.
Limited promotional deals
Since you aren’t purchasing merchandise in bulk, you can’t offer consumers the usual promotional deals and discounts. Still, you can offer free shipping and discounted bundles. You can also sell different products from your store in bundles to generate higher sales.
Low product inventory
One of the downsides of dropshipping is having low product inventory. If you’re relying on a single supplier who may work with other merchants, you might not have enough products to sell to customers. You can source the same products from other suppliers whenever inventory is low. However, working with multiple suppliers can add complexity to your operations. It defeats the purpose of using the hassle-free dropshipping method.
Customer service concerns
Since your suppliers handle the packing and shipping of the products, you may not always be aware of the order status. What happens when a customer asks about the delivery status? Well—you can’t respond until the supplier forwards that information to you. If a customer receives an incorrect package, you won’t also be able to respond immediately. You have to check with your supplier and verify everything before you can act. Small miscommunications can lead to potentially large problems, such as poor customer experiences and bad reviews. Effective communication is therefore crucial to dropshipping. Both the seller and the supplier must agree and adhere to communication standards to prevent all kinds of customer service concerns. FBA, however, might not be the most ideal option for new entrepreneurs because you will have to invest in merchandise. On top of that, you incur fulfillment charges and monthly storage expenses. You have to take that into consideration to make sure that you earn enough profit to continue your business. Thus, if you don’t have the capital to invest in bulk stock and want to avoid bigger risks, dropshipping is still the best option for you. It’s low risk and profitable—that is, if you put in a lot of time and effort into your business.
Plan your online business
Although setting up a dropshipping business is relatively easy and quick, having a sound plan is still necessary. It will be crucial to your success as an entrepreneur. Aside from the basics like your business name and logo, you need to think about the products that you want to sell, your suppliers, your target market, and potential marketing initiatives. If you intend to sell several products, you might want to get a professional account. That’s because the individual selling plan costs $0.99 per item sold and can take a large chunk out of your margins. A professional seller account has a monthly fee, as well as other additional fees. To register, go to sellercentral.amazon.com. Enter the required details like your identity, email, and password. You’ll also be asked to provide your business details, including address and tax information.
Get approval for your product category
Create a product listing
This will give you two options. The first option is for brands that produce their own products. It’s to ensure that they get Universal Product Codes (UPCs). As a dropshipper, you’ll need to select the second one. It is for those who sell products that are made by other brands. After choosing this option, you can start searching for products to sell. Just click “select” if you find a product that you want to sell. Once you’re all set, click on “Publish” to conclude the process.
Sync your inventory
5 Tips to Improve Your E-Commerce Business
E-commerce has been growing steadily in the past few years, creating opportunities for new entrepreneurs. It’s expected to take up 22% of all worldwide retail sales by 2023.
1. Maintain a 95% seller rating
Aim for at least a 95% sales rating. Having a high sales rating can make you appear more trustworthy in the eyes of consumers. It also increases your likelihood of appearing in organic searches, giving you a competitive advantage over sellers with lower ratings.
2. Price your products wisely
4. Optimize your product titles
Product titles must be relevant to your buyer’s search queries. Instead of just stuffing them with keywords, focus on optimizing your product titles. The brand name must be the first word in your title. Then, you can add product attributes such as size, color, or model to make the titles more descriptive.
