5 Things To Consider When Starting A Drop Shipping Business
When I started dropshipping there were so many questions that came to my mind:
- How to make sure I maintain profitability?
- How to handle the whole process after I sell an item?
- and of course, the most important and my biggest concern, in my opinion, is, what items can I sell?
I am writing this article for those who may have the same questions about drop shipping business. This post contains my own point of view, opinion, and experience as a drop shipper. Business had been good from the time I started the business up to this time. I especially excel in the things to consider when it comes to items sell and dropship.
#1 – NEED
Sell NEEDS and not FEATURES!
An effective seller will have to think like the buyer. Ask the same questions like “Why should I buy this product? or “What’s in it for me?” These questions will define customer needs that you can actually relate with.
These days, people are aware of their needs and they are looking to fill that need. When they figure out their needs, then they find a solution. When you start drop shipping, don’t rely on features. Buyers do not pay attention to features but on the benefit that the product will give them.
Let’s look at an example, when searching the term “Kitchen device” in Amazon I stumbled upon this item:
“Anova Culinary Bluetooth Sous Vide Precision Cooker, 800 Watts, Black“ is the title of the item. As a reseller, you have to come up with a title that will give a higher conversion rate. You also want to be found by buyers who would not look for the same device in Amazon.
Aim for NEEDS
When we aim for NEEDS instead of selling the features of the products we will sell the NEEDS it fulfills. It is for a reason that I chose this relatively bizarre product. It checks the food’s temperature while it’s being cooked to allow you to be more precise with the cooking level. What are its features?
- It is made of metal with a black plastic part and a small electrical screen
- Features a thermometer to check the food’s temperature
- Comes with long-lasting batteries or maybe even a USB charging option
When we build our content, those features are indeed important. No one will buy anything that doesn’t have the specifications that answer the practical needs of the person (you will not buy a shirt that is not your size will you?). So features are important but they don’t answer the one most important question: WHAT DOES THE BUYER NEED?
Here is an example of needs:
- Male in his 50s having a new hobby of cooking, his need is to enjoy the product of his creation
- Female in her 30s with 2 children, her need is to provide a healthier food to her children
- Male in his early 20s with a date with his new girlfriend. His need is to impress his girlfriend with his cooking skills
Now, that we know our audience needs, let’s consider it in our titles, content, images and every communication method that we can use! “Make healthy food with …..” would be a good start for a title or at least could be a nice addition to the image or the content. That is exactly what aiming to needs means.
#2 – PRICE
This is a no-brainer at all!
When in drop shipping business, price matters. I am not talking about expensive items so that you can earn money fast. I am talking about cheap items as you start. Why? it is quite simple, the more the item costs, the more the buyer cares who is selling it.
Would you buy a $20k car from a stranger on the street? Probably not. But what about some cheap $5 items? how well do you check the seller’s background when you purchase those?
I suggest that you sell items that are $20 or below so that you can easily deliver what is expected from you and to have full control of your finances
On the example above, you can see 2 hair dryers that you can buy in top online marketplaces on the web. As you can see, even though the looks are the almost same the price is different. If you wish to sell any item basically, especially when you start, go for the cheaper versions of the same item and you will probably sell more.
#3 – QUALITY
Quality = Money
As opposed to the previous tip of selling low-cost items, your seller ranking might get damaged dramatically in the beginning if you will sell items with too low quality. Building trust with your buyers and gaining positive feedback is crucial, I believe that business like drop shipping will not succeed if you can’t build customer trust.
When trust had been established (when you have many feedbacks or become a top-rated seller), you can do more with your business, such as raising your price and still your customers buy from you. It also produces fewer returns because you are selling high-quality products and you will gain more repeat purchases. As a result, more profit will be expected and your business will grow.
Remember that in drop shipping we don’t hold the item in our stock and have no access to it, so how can we check the quality of the item that you are selling? The easiest way is to look for the buyers rating and comments about the item. Like in Amazon, there are buyers rating by using stars (5 is the highest and 1 is the lowest). You can also read the buyer’s comments about the item. In this way, you can assure yourself that the item you will about to sell is of good quality that your buyers can also appreciate and enjoy.
In many cases, many good reviews or comments would mean that the price goes up. As a seller, if you have many good reviews people would prefer to buy from you and you can set a higher price, so make sure you take in one hand a lower priced item but in the other hand don’t go too low when it comes to quality to make sure it has good reviews.
#4 – COMPETITION
Feel the competition
Competition, whether you like it or not, really exist in every area of life and if we are talking about business especially drop shipping, you can expect that it will be there. Drop shippers copy from each other items, titles, item specifics, logos, almost everything. There are even programs designed to follow other sellers and copy their best selling keywords and products.
But is it all so bad? well here are two theories that might make you feel different:
Items, trends and best sellers change all the time. The community of re-marketers such as drop shipping arbitrage practitioners keep learning new methods in sales and marketing. They improve their customer support. It is the layer between the manufacturer and the actual buyers. This layer creates better marketing and a better user experience for the customers. If there’s no competition, there’s no market, and there would be no profits. So is it that bad?
Some drop shippers are willing to swear that eBay and the rest of the marketplaces tend to redirect different users to different sellers based on many unknown parameters one of them is even to give new sellers a chance to successfully sell items, or that if you sold one item more traffic will come to your other items… Is it true or not? no one truly knows, but if there is something in that theory, that means that you can start drop shipping even if you are not the most experienced online reseller.
#5 – Uniqueness
Which one of the shoes in the picture stands out when you search for “shoes” on Amazon?
At this point, it is really obvious that you have to think of something that is really different and will stand out from the rest. It is like applying for a job, you have to show off your skills above others to get the job that you wish for. Here are some tips on how to be more unique:
- In drop shipping business, some of your services also rely on your skills. When you sell your items, at least at the beginning and as a general saying don’t pick items that you are not familiar with. As an example, I sell items that are related to the sport of chess because I know the sport and I am playing so if buyers ask you about your product you can answer their questions without even thinking.
- Speaking of skills, if you have any of those such as photo editing that you can use to enhance the pictures that you post on your listings. Or, you are good in writing that you can use to describe your product in such a way that you can convince them with your words.
- If you already publish a few items of the same category, make sure you choose at least one that stands out like the pink shoe in the picture above
Don’t pressure yourself if you are not able to follow what others can do in their business, focus on your strengths and invest in learning new things that will improve your own unique aspects.
As you start your own drop shipping business there will be a lot of challenges that you will encounter along the way but this will add up to your experience and become more knowledgeable. In order to be successful in this business, you have to work hard and applying the things that you learned here will hopefully help you get to the top.
We went to ask Kirk Buchanan who is a drop shipping expert and teaching about it on his YouTube channel about what must you consider before starting your business and here’s his comment:
Success in anything is based on having the right mindset. It’s very important to understand that things take time and effort. Most people give up too soon but those who succeed know that persistence is the key. There’s no get rich quick schemes. Slow and steady wins the race.
Here’s one of his latest videos talking about eBay dropshipping:
One last and most important tip, don’t forget to enjoy the ride!
Main image copyright: stokkete / 123RF Stock Photo
all the above information about prices or any general information is not an official information by any of the mentioned above websites nor by dsmtool.com DSM SOLUTIONS LTD
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- Shai is the editor of DSMagazine and our marketing expert. His eBay account is open since 2011, and he just moved out of Thailand after living there for 5 years to travel the world with his laptop. Also, he firmly believes in single-tasking. (P.S, He can speak Hebrew, English, and Thai!)