Many people shy away from starting an online store because of the start-up costs and limitations of completion. But imagine if someone offered to pay for your inventory of thousands of items and manage your fulfillment processes. With the 10 useful dropshipping tips for beginners assist you to get started and make sure it will be very easy and you can run your dropshipping business from anywhere in the world.
Dropshipping Tips for Beginners
In this areticle, I’ll remind you of the benefits of dropshipping online store, share important tips for starting a dropshipping business, and provide in-depth tips on dropshipping– perfect for beginners. Here is a list of the top 10 dropshipping tips to help your business succeed.
You own your supplier’s defects
Even big dropshipping supplers make mistakes, and you’re guaranteed to have implementation errors from time to time. So what do you do when your supplier doesn’t ship the wrong product or something? Here are three possible options.
- Admit your mistake. You should never blame your suppliers for a mistake. This will only cause confusion and make you look like an amateur. The customer does not know that the dropshipper exists. Instead, you need to understand the problem, apologize, and tell the customer what you’re doing to fix it.
- Leave it to the customer. Depending on the level of the error, you may want to offer the customer something proactive to fix the error. This may mean a refund of the shipping fee (we have a personal preference) or an upgrade if the customer needs to be sent a new item.
- Pay the supplier to fix it. You may have to take responsibility for the mistake, but that doesn’t mean you have to cut your profit margin. Any reputable supplier will pay for the fault to be rectified, including the shipping costs to return the item. However, it may not pay for any freebies or upgrades you provide to the customer. PR and branding expenses should be considered.
Again, even the best dropshipping suppliers makes mistakes sometimes, but be very wary of a supplier who usually mixes up your orders and doesn’t fulfill them correctly. Unless you can (unlikely) ask the supplier to make changes, your company’s reputation will be affected. If so, you should probably start looking for another supplier.
Manage your inventory levels
Most experienced buyers will agree that the biggest challenge you face when running a dropshipping business is managing the inventory status of multiple suppliers. Do a poor job and you’ll be constantly telling customers that their orders are out of stock – not a great way to attract repeat brand loyal fans.
Properly managing inventory between suppliers and distributors and limiting the number of items you can sell is a complex process. This is a great option if vendors provide a real-time data feed, but it’s not always available to vendors.
Below are some examples of inventory management best practices that will significantly reduce the number of items you sell out of stock.
Use multiple suppliers
If supplier A does not have an item in stock, there is a good chance that supplier B will have the item. In addition, it is dangerous to rely on one supplier as the only place to purchase a product. If they decide not to do business with you, raise their prices, or go out of business, it threatens the future of your business.
You’ll never be able to find dropshipping suppliers with similar products, but if they’re in the same dropshipping niche or industry, they’ll probably carry both of your best-selling items — and that’s your biggest concern.
Choose your products wisely
Based on the last point, try to sell mainly items that you believe both suppliers carry. This way you have two possible options.
Learn more: How to find the best products to dropship
Use generics to your advantage
Even if they do not have exactly the same product, two suppliers can supply nearly identical products that are interchangeable. This is especially true for small accessories and product additions. If you can be sure that two items are nearly identical, write a general item description that will allow you to fulfill an order from any supplier. Also include supplier model numbers in the form fields. In this way, you can transfer the order invoice to any supplier without making any changes.
A word of caution: you have some decisions to make in this area. There will be popular brands in every market (such as Nike and Bose) and one should never be substituted for the other.
Check product availability
Just because a dropshipper lists an item on their website doesn’t mean they consistently carry that item. It is recommended that you check with your sales representative about the availability of the products you are considering selling. Are these items available 90% of the time or more? Or does the dropshipper only stock a few and often has trouble getting the product shipped from the manufacturer? You want to avoid the latter type of product build-up.
Handling of out-of-stock orders
Regardless of your best plan, you will inevitably encounter customer requests that you cannot meet. Instead of telling the customer that the product is out of stock, offer an additional upgrade to a similar but better product. Your customer will be satisfied and you will be able to maintain the relationship with the customer. You can’t make money with an order, and that’s okay. If your customer had also canceled the order, you wouldn’t have made any money.
Comply with commands
Using multiple suppliers has several benefits that we’ve discussed: it increases the likelihood that items will be in stock, provides geographic diversity for faster delivery times, and provides access to a single source for your products. But with so many options for order fulfillment, how do you know which supplier to choose? There are several different methods to consider:
Send all orders to the selected supplier
If you have a resource that you could do better with (excellent service, great selection, etc.), you can redirect all requests to that resource by default. This is especially easy to implement because you can add your supplier’s email address as the recipient of all new order confirmations, automating the entire process. If you use this method, it’s best if your chosen supplier has most of the items you sell in stock. Also, you often have to deal with redirect commands that you can’t execute.
Track orders by location
If you use multiple suppliers that carry most of your products, you can simply send the order to the supplier closest to your customer. This not only speeds up delivery to the customer, but also saves on shipping costs.
Route order subject to availability
If you have a large inventory of products that is split between multiple suppliers, you will need to route each order based on the item the dropshipper has in stock. This option requires more work if you do it manually, but if your suppliers provide the data feed, it can be automated using a service.
Track orders by price
This sounds great in theory, but unless the supplier has a better price, it can be difficult to automatically decide which supplier will be the cheapest. Any automated solution must take into account possible drop charges, real-time shipping rates, and real-time supplier rates. Therefore, while not impossible, it can be difficult to implement an accurate automated system
We’ve tried all four methods and found that there is no “best” way to do it. It really depends on your store, suppliers and your personal preferences.
Learn more: AliExpress VS Alibaba
Implement security and fraud prevention best practices
1. store credit card numbers
Storing customer credit card information allows for easy reordering and increases sales. But hosting your own website is usually not worth the security and liability issues. You must comply with all types of PCI (payment card industry) compliance regulations and security audits to store credit card data. This process is expensive and complicated, especially for non-technical business owners. And if your server is hacked or hacked, you could be responsible for the stolen card information.
The best solution is not to store your customers’ credit card details. Consider offering payment options like Shopify or PayPal, which speed up the checkout process and can reduce cart abandonment. Implementing a payment gateway allows you to focus your efforts on marketing and customer service instead of security auditing. Fortunately, if you use a hosted platform like Shopify, you don’t have to worry about this. But if you’re using a self-hosted shopping cart, make sure to disable the store card info feature in your configuration panel.
processing fraudulent requests
The possibility of fraudulent orders can be scary when you’re starting out, but with common sense and a little caution, you can prevent most fraud losses.
address verification system
The most common and widely used fraud prevention measure is the Address Verification System, or AVS. When the AVS feature is enabled, customers must enter the address registered with their credit card to confirm the transaction. This helps prevent thieves with only raw credit card numbers from making successful online purchases. Fraud is rare for orders that pass AVS checks and are shipped to the customer’s billing address.
Most fraudulent e-commerce orders are made when the billing and shipping addresses are different. In these cases, the thief enters the cardholder’s address as the billing address and enters a different delivery address for the package. Unfortunately, if you don’t allow customers to ship to non-billing addresses, you’ll lose a lot of valid orders. But if you allow this, you risk fraudulent orders that you will have to pay for. If you ship the order to an address other than the cardholder’s address, the credit card company will pay the bill in case of fraud.
Fortunately, fraudsters follow patterns that make it easy to spot illegal orders before they are shipped. Individually, these signs won’t help you report a scam, but if you see two or three of them, you should investigate:
- Different billing and delivery addresses. Again, over 95% of all fraudulent orders will have different billing and shipping addresses.
- Different names. Different names on billing and shipping addresses can be a red flag for fraudulent orders. Buy this or a gift.
- Unusual email addresses. Most people have email addresses that include part of their name, so you can associate part of the email address with the customer’s name. However, if you see an address like email@example.com, there’s a good chance it’s a fake address, which is one sign of a scam.
- Fast delivery. Since they’re charging everything to someone else’s card, fraudsters often choose the fastest and most expensive shipping method. It also reduces the time it takes before the product is delivered.
If you see something you suspect is a scam, just pick up the phone. Scammers almost never put their real numbers in sequence. If the request is valid, you may have a 30-second discussion with someone who explains everything. If not, you get a dead number or someone who doesn’t know they ordered a 25 foot boat for overnight delivery. At this point, you can cancel the order and issue a refund to avoid any chargebacks or issues.
Learn more: Top 10 Payment Gateways 2022
Process refunds quickly
When a customer contacts their bank or credit card company to dispute the discount they charged you, you’ll receive what’s called a “chargeback.” Your payment processor will temporarily deduct the disputed fee amount from your account and require you to provide proof that you have supplied the goods or services to the Customer. If you are unable to provide proof, you will forfeit the amount and incur a $25 refund processing fee. If you charge too many refunds for the volume of orders processed, you may lose your merchant account.
Fraud is usually the biggest reason for chargebacks, but customers will also be charged differently because they didn’t recognize your company, forgot the transaction, or didn’t like the product they received. We’ve seen it all.
When you receive a refund request, you often only have a few days to respond, so act fast! In order to be eligible for a refund, you will need to provide the original order documentation, tracking information showing delivery, and a bulk packaging receipt showing the items purchased and their shipment. If the disputed charge is related to a legitimate transaction, you have a good chance of getting a refund, unless you made any false statements or promises during the transaction.
Unfortunately, if the refund is for an order with different billing and shipping addresses, you almost certainly won’t. Most processors will only reimburse you for fraudulent orders shipped to the billing address on the card. In our business, we don’t bother responding to this type of chargeback because we know it’s a waste of time.
Write an effective return policy
Before you write your returns policy, you should make sure you know and understand how all your suppliers handle returns. If they have a free 45-day return period, you can be generous with your terms. It’s only because of the supplier’s strict return policy that you may overestimate the terms you can afford.
When a customer needs to return an item, the process will look like this:
- A customer contacts you to request a refund.
- Ask your supplier for an RMA (Return Merchandise Authorization) number.
- The customer sends the goods back to your supplier, specifying the RMA number in the address.
- The supplier returns the money to your account for the wholesale price of the goods.
- Return all product costs to the customer.
However, it is not always that simple. Returns can be complicated by the following factors:
- restocking fee
Some suppliers will charge a restocking fee, which is essentially an additional cost for returning the item. Even if your supplier charges these fees, we strongly recommend that you do not include them in your return policy. They seem outdated and unfriendly to your customer base. Although you may have to pay fees, it is more likely that these expenses will be covered by the customers who decide to work with you.
- defective goods
The only thing worse than receiving a damaged item is paying extra postage to get it back. Most dropshipping suppliers do not cover return shipping fees for damaged items. According to them, they did not create the object, so they are not responsible for defects. They see it only as a risk of selling substandard quality products in the retail market.
However, if you are interested in building a reputable business, you should always reimburse customers for return shipping costs for damaged items. Again, this is a fee you won’t be able to pay anyone, but it’s part of the cost of a quality dropshipping business. Unless you have your own UPS or FedEx account, it can be difficult for customers to print prepaid shipping labels, so you may need to issue a return for the shipment to recoup your expenses. Whatever you do, make sure you compensate them in some way.
Learn more: Dropshipping Tips Reddit
If the damaged item is relatively cheap, it often makes sense to just send a new one without asking the customer to return the old one. Bringing back the old variety has several benefits, including:
- It can be cost effective. It doesn’t make sense to pay $10 to return an item that only costs $12 from a wholesaler. You’ll get a net credit of $2, but it’s not worth it because of the concerns of customers, suppliers, and employees.
- The customer is surprised. How often do companies ship a new product without returning the old one? Mostly no! You’ll score major points and be able to land a customer for life. In addition, the customer will get the new item much faster if the old item has to be returned to the warehouse before the new item is shipped.
- Your supplier may pay for shipping. Suppliers will not pay for return shipping for a defective product, but most will pay for the customer to send a replacement. Since they will pay for the return anyway, most suppliers can be negotiated to cover the shipping of an alternative product that you buy separately. In addition, many are happy to avoid the hassle of processing returns.
If a customer wishes to return an item without defects for a refund, most companies expect the buyer to pay for return shipping. This is a very sensible policy. If you’re willing to offer free returns on everything, you’re sure to stand out (and companies like Zappos have made this part of their unique business model). But this can be expensive, and most customers will understand that you don’t have to pay return shipping just because they ended up ordering a product they didn’t want
Start with simple charging rules
Calculating shipping rates can be a big mess for business owners. With so many different products being shipped from multiple locations, it’s difficult to accurately calculate shipping rates for orders.
- You can use three types of shipping rates:
- Prices in real time. With this method, your cart will use the total weight of all purchased items and the shipping destination to get the actual, real-time price. It is very accurate, but it can be difficult to calculate shipments from multiple warehouses.
- Price for each type. With one method per type, you’ll set flat shipping rates based on the types of products you order. So all the smaller gadgets will ship at a flat rate of $5, while all the larger gadgets will ship at $10.
- Standard tariff for cargo regardless of quantity. As the name suggests, you will be charged a flat rate for all shipments regardless of type. You can also offer free shipping on all orders. This method is the easiest to implement, but the least accurate in reflecting actual shipping costs.
When it comes to shipping, it’s important to mention the general shipping principles we mentioned at the beginning of this chapter. Specifically, we want to find a solution that emphasizes simplicity over perfection, especially if we’re just starting out with dropshipping.
Some business owners will spend days or weeks dealing with shipping terms for an ecommerce store that hasn’t yet sold. Instead, they should focus their optimization efforts on search engine marketing, social media, customer service, and implement delivery policies that make sense from a general level. After they start growing, they can invest in a more complex system. Using this principle, it is often best to estimate the average delivery charge and set it as the total fixed price. You will likely lose money on some orders, but make it back on others.
Even if you could implement a system that charges additional shipping fees based on the location of the supplier, are you sure you want to? Most customers reject additional shipping charges, especially if they believe the order is from one location. Instead, try to limit multiple shipments by using suppliers with overlapping inventory and choosing which items you sell. It is a simple and practical long-term solution.
- international shipment
International shipping has gotten easier, but it’s still not as direct as domestic shipping. When shipping internationally, you will need to consider and/or do the following:
- Different weight and height restrictions for different countries
- Additional fees from suppliers for processing international orders
- Additional costs for resolving default orders due to higher shipping costs
- High cost of shipping large and/or bulky items
Is the trouble worth it? It depends on what market you are in and how much profit you make. If you sell smaller items with a higher profit margin, greater market access can be beneficial to deal with the hassles and costs of international shipping. For others, especially small business owners who sell large or bulk items, the added profit won’t be worth the cost and inconvenience.
- operator selection
Choosing the right career is important because it can save you a significant amount of money. In the US, the biggest decision you will have to make is between UPS/FedEx and the US Postal Service.
- UPS / FedEx. These privately run behemoths are perfect for shipping large and bulky packages locally. Their prices for larger shipments will be much lower than the fees charged by the USPS.
- US Postal Service. If you’re shipping smaller, lighter items, you can’t beat the prices USPS offers. After shipping, the cheapest UPS shipping you’ll see is around $10, and you can often ship items through the post office for $5 or less. Post is a better option for sending international parcels, especially smaller ones.
When setting up shipping options, consider rating them by delivery time (“within 5 days” or “within 3 days”) as this will allow you to choose the most economical carrier for each order and delivery time. The option is available.
Provide customer support
Take it from us: Managing all customer emails, orders and returns in an Excel spreadsheet is not recommended. As great as Excel is, it’s not designed for customer support. Also, as your business and team grows, managing support with a single email inbox also breaks down quickly and leads to service issues and errors.
Creating a help desk and writing a series of FAQ articles is one of the best things you can do to provide quality customer service. Help desk software comes in many forms, but they all provide a central location for managing customer support correspondence and issues. Most offices provide the ability to flag issues to team members and maintain a record of communication between all involved.
Some popular options to choose from:
- Help scouts. Help at Scout is less congested than other offices, so all issues are handled as emails and traditionally all the attached ticket information that customers see in support requests is removed. Instead, support tickets appear like standard customer emails, creating a more personalized experience. Plans start at $15 per month.
- Zendesk offers a variety of tools and integrations, is highly customizable and powerful, and is one of the most popular help desks. It requires some customization, but it’s very powerful when tailored to your business. Although the app is free to use, it requires a subscription to the Zendesk Support Team plan, which starts at $19 per month.
- Designed specifically for Shopify stores, Gorgias manages all your support requests in one place, helping you reduce response times and increase customer support efficiency. Gorgias has automation tools to customize answers to your frequently asked questions. Plans start at $60 per month.
- Help Center. Access all customer inquiries via email, live chat and FB Messenger in one platform and save time. It’s easy to create an FAQ page from the start to help customers self-service and find answers to their problems. A free plan is available.
- See ordering information next to each ticket. Submit tracking information, change orders, and issue refunds without leaving the help desk. Create self-service scenarios in the Help Center and get quick answers to frequently asked questions. A free plan is available.
9- Telephone support
Deciding to provide phone support can be a difficult decision. Obviously, this is a great way to provide real-time support, but it’s also one of the most expensive. If you work 9 to 5 hours, you won’t be able to handle calls. But if you work full-time in your business or have an employee who can, it can be a viable option. If you can’t turn on your phone all day, you can always take a call from your phone number to voicemail and answer customer calls later. It’s not a perfect solution, but it can be a good compromise.
When considering how to provide phone support, you need to consider what type of delivery products will be sold. If you’re a diamond jewelry store in the $1,000-$5,000 range, many customers won’t feel comfortable placing such a large order without speaking to a real person. However, if you’re selling between $25 and $50, most people will feel comfortable buying without phone support, assuming you’ve created a professional and informative website.
If you decide to provide phone support, consider strategic ways to do so. Placing a large 800 number at the top of every page can increase the number of low-value phone calls that cost more support than they’re worth. Instead, consider adding your number in more strategic places, such as the contact us and shopping cart pages, where you know the visitor is most likely to make a purchase.
Regardless of how you handle sales orders, you should always be ready to contact customers after the sale if any issues arise. There’s nothing wrong with carefully evaluating the best ways to provide pre-sales support, but when it comes to taking care of the people who buy from you, you should never refuse to help them over the phone.
The following services can help you set up a toll-free phone number and sales line.
- Grasshopper provides telephone services and is designed for small businesses and entrepreneurs. You get a toll-free number, three extensions, call forwarding, and voicemail for a reasonable monthly fee (around $26).
- Airplane bell. Aircall offers a basic plan that gives you phone, email, and a help desk, making it the ultimate help desk software. Allows you to receive one toll-free number and unlimited calls to the US and Canada (international rates apply). It also integrates with other popular help desk software such as Zendesk.
10-Focus on marketing
Making sales ultimately depends on customers finding your store. To do this, you need to create a constant flow of traffic. As a new dropshipper, to increase website traffic, the best marketing channels to focus on are usually Search Engine Optimization (SEO), Facebook Ads, and Google Ads.
SEO is the process of fine-tuning your website to increase its chances of ranking higher in search results for relevant keywords. Ideally, you want your product pages to rank for your keywords so people can find them naturally through search engines. Although most keyword searches are short queries consisting of two to three words, they tend to be more competitive and crowded, which makes them difficult to rank for. Instead, try to focus on longer keywords that are more than three words long. Although long-tail keywords tend to have lower search volume, they are easier to identify because of the lack of competition.
You can search for them using tools like Google Ads or keyword.io. Enter your product name into the tool and you’ll see a list of related questions that you can copy to your product pages
2. Facebook ads
Facebook is a platform used by many e-commerce pioneers, especially those who are just starting out and don’t have much advertising experience or a large advertising budget. It’s full of opportunities to reach new customers and drive them to your online store with over 2.6 billion monthly active users. Creating Facebook ads allows you to directly reach an active and engaged user base.
The advantage of Facebook advertising is that you can target customers based on demographics, interests, and behaviors. Facebook was created as a place for people to share personal updates, vacation photos, new songs they discover, and relationship statuses. All the likes and connections Facebook makes create a detailed user profile that advertisers can use with targeted advertising.
You can use Facebook ads to tailor your products to a long list of user interests, traits, and behaviors, increasing your chances of reaching your ideal customer. From there, you can bid to make your product available to the user. Try the different ad types Facebook offers (image, video, carousel, or group) and see which convert the best at the lowest cost.
3. Google ads
Google Ads lets you advertise directly to your ideal customer on the two biggest search engines: Google and YouTube. It has the same features as most other advertising platforms, allowing you to set both a budget and a maximum daily spend, as well as pay-per-click ads, so you only pay when someone visits your site . These features make it a great advertising platform for beginners, although the interface seems quite complicated.
Their ability to reach consumers in three different ways makes Google Ads uniquely attractive: search ads, the Google Display Network, and YouTube ads. The real beauty of Google Ads is that you can target specific audiences based on certain behaviors, how they’ve previously interacted with your website or brand (from visiting a specific page to leaving a shopping cart), demographics, interests. and other properties. Considering the budget as a new dropshipper can help you target new visitors or retarget previous visitors and earn sales.
By including some of these features, you can try to use the Google Display Network to retarget users who view certain products. This means that when you browse the web and set up display ads for websites, they will see the product they are looking for in your online store. Or, earlier in the SEO section, we described how to find and use long-tail keywords. If the price is right, why not try bidding them before PageRank?
Advantages of the dropshipping business model
There are many reasons why you should consider dropshipping as an online business. Here are some of the most compelling:
- You don’t need capital to get started. Dropshipping makes it very easy to start selling online. You don’t have to invest heavily in inventory, but you can offer thousands of items to your customers.
- Convenience and efficiency. Successfully starting and growing an e-commerce business requires a lot of work, especially if you have limited resources. You don’t have to worry about execution, it’s very convenient and saves you time to focus on your marketing plan, customer service and operations.
- Mobility. With all physical enforcement issues resolved, you are free to run your business anywhere you have an internet connection.
- This is a proven model. Many online stores, even large retailers like Macy’s, use dropshipping sites to offer their customers a wide variety of products despite growing inventory.
You should know the principles of dropshipping
If you’ve never run a dropshipping business, the information in this chapter can save you weeks of wasted time and frustration. Many of these dropshipping tips are derived from two key principles for running your dropshipping business effectively:
- Accept that things can get messy. The convenience of dropshipping comes at a price, and things are often complicated by the involvement of an unseen third party in every sale. From failed orders to out-of-stock items, you’ll have to deal with fulfillment issues. If you accept it early, you will likely throw in the towel in frustration.
- Adopt a kissing mindset. If you’re thinking about kissing (keep it simple, stupid!) you’ll be fine with the dropshipping model. Given the complexity of dropshipping – multiple suppliers, shipping from different locations, etc. — it’s easy to think that you need to customize your system to keep track of costs and inventory at all times. But if you try to do that, you’ll probably go crazy and spend thousands on custom development and never open a store. Focusing on solutions that are easiest to implement, even if they are not “perfect”, is usually the best solution, especially if you are just starting out.
Ask any dropshipping store owner and they will agree. With these two concepts in mind, let us discuss some dropshipping tips that will help you organize your business quickly and make things run as smoothly as possible.
Are you ready to run your own dropshipping business?
Although starting a dropshipping business is one of the fastest ways to start and run a business, remember that it is not a fast track to passive income. Growing a successful dropshipping business requires proactive work to keep customers happy and coming back. Hopefully these 10 useful dropshipping tipsf for beginners will greatly help to learn, start and run a successful dropshipping online store easily.