Drop shipping can be a cheap and relatively easy way to get into business. It’s a retail sales model where you make the sale and the manufacturer or supplier mails out the goods directly to the customer.
You don’t hold stock and your overheads are low. But on the flip side, profit margins can be tight and you have little control over presentation and delivery. Drop shippers often work with multiple suppliers so it can also be complicated to manage all of those relationships and the bureaucracy around importing and shipping from different countries.
How to succeed in drop shipping
Find a niche
To succeed in drop shipping in the UK you need to have a marketing edge. If your only edge is low price you won’t last long. Successful drop shippers add value. For example if you are already established as the ‘go to’ place for sci-fi movie reviews, then adding a shop with movie related goods could be a smart move. People will buy from you because they already value the quality of your reviews; they will assume that your selection of gifts will be similarly informed.
You can also start a value-added business around a product range where you are able to add value through information, advice or smart curation. Do your research to identify product niches where the value-add is poor among current sellers.
As the drop shipping industry develops it’s also possible to have unique products designed for individual orders through services like printful.
Create your shop front
Platforms like shopify are geared up for drop shipping and if you are new to online retail starting on a ready made platform can make sense.
However you can also set up drop shipped sales by adding a shop function to a standard website or even making sales directly from Facebook or platforms like ebay and Amazon.
Find your suppliers
There are a number of established marketplaces and tools for drop shipping suppliers. Those are a good place to start, especially if you are new to drop shipping. The Oberlo app includes verified suppliers and links to marketplaces like Alibaba and Aliexpress.
Directories like Worldwide Brands and Wholesale Central also pre-screen suppliers, although you may need to pay a subscription fee to use those services.
If you are targeting a particular niche then Google is your friend. Search and see if there are any specialist drop shippers in your space. It can also be worth contacting manufacturers directly either to see if they would consider providing a drop shipping service or if they can provide you with their top suppliers who could provide that service.
You will want to agree clear terms with your drop shipping partner and make sure that you have an agreement in place that includes all your expectations, including payment format and terms.
Test the service
Your reputation is on the line with any back office drop shipper. So check out the reliability of the supplier with some test orders. Things to check include: the ease and speed of the ordering process, delivery time, packaging and presentation.
As far as the customer is concerned they are doing business with you. That’s good news as this is another space where you can stand out from your competitors. Put yourself in the customers’ shoes and consider how you can improve their retail experience with you. An easy win is to make sure that you have detailed product information, pictures and buyer reviews where possible. You can also provide FAQs and if at all possible be available to deal with customer questions and respond promptly to any problems. In a competitive retail marketplace, if you look after customers you make coming back to your online shop an easy decision for them.
Drop shipping is not an easy way to make big profits, but you can increase your odds by targeted marketing, branding for a clear niche and providing fabulous customer service.