Dropshipping can be tricky to get right and be profitable, avoid these common mistakes:
1 – Check Shipping Times BEFORE Choosing Which Countries to Sell To.
A lot of beginners see that a seller on Ali Express ships worldwide, and so list the item with worldwide shipping without further thought.
This is a huge mistake.
Why? Because the Ali Express supplier is dealing with businesses, not consumers.
They can send items to any country, but it may take 20-40 days for an item to arrive. For businesses buying in bulk and making considerable savings, waiting may be an option, but for your customers, it is not.
We strongly recommend as a beginner focusing on countries with shorter shipping times of 2-3 weeks, as this will cause less customer support issues.
2 – Make Shipping Times VERY Clear
We recommend that you include a shipping times in the following places:
1) In product description on the product page.
2) On the checkout page.
3) In the purchase confirmation email.
It is better to miss a sale than to have to deal with an unhappy customer, and lack of clear shipping times will hurt your sales more than long shipping times.
3 – Set Up A Limited Company
“Do I need to set up a limited company?” is a common question for people starting out dropshipping.
The answer is that no, you don’t need to set up a limited company. You can sell as a sole proprietor.
However, while you don’t NEED to, it is a good idea to.
Setting up a limited company protects you legally. If there was to be a problem with products and customers were to sue you, being a limited company protects your personal assets. This is especially important for sellers in the USA.
4 – Create Your Own Store for Dropshipping.
However, we generally recommend that you don’t do this. Low barrier to entry means that these sites are already saturated with most drop ship items and pricing competition is fierce. Many sellers end up drop shipping at a loss after fees. Customers on eBay and Amazon also have high expectations when it come to shipping times. Even if you make it clear that your item will take 2-3 weeks to arrive, you still risk negative feedback from customers, which could kill your business on such a competitive platform. Dropshipping on eBay and Amazon only really works if you have a dropshipping source with shorter shipping times and more unique items. If you can find a more local source that works it can be done, we actually operate our own eBay store using a dropshipping platform for the UK that has good shipping times, we use it to test our eBay tools.
If you want to drop ship, spend the extra money upfront to sell in your own store.
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If you decide to sell on eBay use our completely free eBay Hot Product Finder to find the best selling items on eBay in any category and see how many they sell each week or month.
5 – Create a Strong Refund Policy Page
Set up a refund policy page and make it clear that you only accept returns for faulty/broken products.
Selling in the UK there are additional regulations for online selling as follows:
You must offer a refund to customers if they’ve told you within 14 days of receiving their goods that they want to cancel. They have another 14 days to return the goods once they’ve told you. You must refund the customer within 14 days of receiving the goods back. They do not have to provide a reason. Also, if the goods are faulty, your business must pay for the costs of returning the item and refund the cost of the original delivery. Click to find more information on UK regulations.
It’s also standard in dropshipping to require customers ship the item back to you for a refund at their own expense (unless faulty as above). Include a link to this refunds page in the footer of your store.
If you don’t want to insist that customers pay to return items to you, you may want to ask for photographic or video proof of the fault.
6 – Set Up a Follow-Up Email Sequence
Don’t just use customer’s emails for promoting products to them. Use emails to keep the customer happy while they are waiting for the items to arrive. Send 3-4 follow-up emails over this period. In the emails do the following things:
1) Remind them about the shipping times that they agreed to when they purchased.
2) Let them that if they are having any issues, they can always email you.
3) Remind them that they can track their order online and give them a link to how they can do this.
7 – Run a Like Campaign to Your Facebook page
Before you run ads to sell products, set up a like campaign and get a few hundred likes to your store’s Facebook page to build trust.
8 – Add a variety of Products to Your Store BEFORE Testing Products
Do not get impatient and only add a few products to your store before running ads.
Too few items in your store will make your store look illegitimate and you will create mistrust between you and your potential customers as it makes your store look half-finished. Make sure you add lots of products before running ads/tests. You may also find a surprise bestseller by having more products available!
9 – Have Either a Credit Card Or Money Set Aside to Purchase Items Customers Buy
When a customer buys an item from you, you will not get that money instantly. PayPal often holds money for up to 3 weeks. And Stripe pays out money weekly. So you need to make sure you have money set aside on a debit card, or have a credit card to purchase items the customer buys from you while you’re waiting for your money to clear.
10 – Be Prepared to Spend Money to Make Money
Although dropshipping doesn’t require stock investment, that doesn’t mean that it is investment free.
Facebook ads are the preferred method of advertising for most dropshippers.
If you plan on running paid Facebook ads, then be prepared to test a lot of products. Don’t run a few tests and then give up if they don’t make you money immediately. Set aside a budget of a few hundred dollars and be willing to spend that while running lots of tests to find your winning products.
The single most harmful misconception about dropshipping is that a successful dropshipper is someone who can identify a product that people want to buy, advertise it through Facebook ads and have thousands sell instantly.
In reality, dropshipping is all about testing.
Run a handful of ad campaigns, see which ones work, trim out the bad ones and scale up the campaigns that work. The same with products; put a range of products in your store, and see which ones work. If a product isn’t working, don’t be scared to disregard it and move on. Successful dropshippers simply find products and ads that work, and grow from those. A well-developed dropshipping business should have more products and ads disregarded as unsuccessful than products and ads it is working to scale.