In dropshipping, you’re more or less at the mercy of your supplier — but you’re the one who still has to talk to your customers directly. Dropshippers are essentially trapped, doing little more than hoping the supplier addresses the problems while simultaneously reassuring the customer about something that’s out of their control. On top of that, there’s also a delay in communication as the dropshipper goes back-and-forth between the customer and the supplier. If one answers slowly, all communication grinds to a halt and the problems take longer to fix. Even the slightest transgression — such as a delay in communication — pushes your customers right into the hands of your competitors.
And if they’re vocal about it, those bad reviews early on could end your business before it even starts. Although this isn’t a common problem for dropshippers, it’s worth mentioning. Some suppliers aren’t as legitimate as they claim, and you don’t always know where the merchandise comes from. Even more deceptive is when suppliers illegally use a trademarked logo or another company’s intellectual property, which happens more than average. Whatever illegal activities your suppliers are up to, as their vendor you’re automatically complicit. This potential problem can be rectified with a solid Dropshipping Agreement Contract, but not every dropshipping upstart knows that. It’s something you’ll want to keep in mind when choosing suppliers. Like ghostwriters or behind-the-scenes songwriters, dropshippers must understand that the credit for their work goes to someone else. If whatever product you’re selling is so amazing, your customers are going to focus mostly on the product’s brand and forget about the shopping experience entirely.
Branding is crucial in ecommerce, as shoppers tend to go to their favorite online stores first. Without customer loyalty, you’ll never get the regular traffic needed to sustain an online business, especially a dropshipping one. Again, that’s just another reason why dropshipping makes more sense for already-established brands than new ones. We’re on a mission to provide businesses like yours marketing and sales tips, tricks and industry leading knowledge to build the next house-hold name brand. Dropshipping makes a better sideshow than the main event. While its faults make it hard to support a business on its own, it still offers enough benefits to help ecommerce companies improve their business substantially. Consider these four approaches to using dropshipping effectively. Dropshipping works better as a means to an end, not the end itself. While a long-term commitment to dropshipping is unviable, using it for temporary projects can be extremely useful — particularly in market research. Use dropshipping to mitigate the risk in trying out new products and used for market research. Rather than raising your inventory costs by packing your warehouse with an unpredictable product, test it out with a trial period using dropshipping. More than just discovering if it sells or not, you’ll also have a better estimate of how much it sells for, giving you a more accurate number of what quantity to buy for your initial stock. This is doubly important for trying out new product types, which always carry inherent risk. For example, maybe you’ve been quite successful at selling dog products. That could be hit-or-miss, but you can always test the water by dropshipping a few products and see how it goes. Experienced ecommerce brands know that market fluctuations aren’t always predictable. Rather than raising inventory costs by overstocking to meet unlikely maximums, having a dropshipping supplier as a backup saves you money without losing those sales. You can cut costs by stocking up on only the inventory you know will sell, and if an unexpected demand for sales comes in, you can satisfy them with dropshipping. It’s a great safeguard against the uncertainties all retailers face. Having dropshipping options in place also makes great insurance against extreme circumstances. If something like a natural disaster happens to your warehouse, you can still fulfill pre-made orders by dropshipping the products from elsewhere. The same holds true for side-stepping surprise shipping delays. One unfortunate consequence of expanding your business is shipping complications. The farther out you get from your warehouse or fulfillment centers, the more shipping fees you’ll incur. Dropshipping can be the perfect solution for some problematic locations that fall outside your profitable regions. Maybe shipping that far costs too much , or maybe storage prices are too high to justify setting up a new shipping center.
Maybe it’s an issue of taxes or extra fees , like when shipping out of the state or country. Relying on dropshipping for these select areas could be the determining factor in keeping you out of the red. Moreover, just as dropshipping can be useful in market research, you can also use it to test new locales.
Why not use dropshipping for a trial period in a new location to see if it’s worth opening a new facility there? Some products cost more to stock and ship than others. In certain circumstances, it may be more profitable for you to dropship them versus storing them yourself. Any products that necessitate extra fees for storing or shipping, such as: Large products — Some products take up so much space, their sales don’t make up the costs of the excessive storage room.