How to Use Dropshipping to Scale up Your Online Business

Sales growth is often the long term aim of any company, but there will always come a time when a small business owner has to ask themselves if they are really ready to grow. Online stores that serve 10 customers a week obviously don’t have the same considerations of similar stores that serve 100 customers a week, so in order to decide if scaling up your business is a good idea usually requires serious organizational changes and management balance.

Using dropshipping services can significantly facilitate your work during the busiest time.

Generally speaking there are two situations that a company might consider:

1. The first scenario involves working within one’s means by selling products according to a manageable amount of orders that lets you send them to your customers by yourself. You want to earn more money but growth is slow and taxing on your employees. One possible solution is opening a second store to handle the extra orders and production and this can be based on a dropshipping model. This involves choosing some long-tail or popular goods that people are likely to buy and can get them easily from a wholesaler and then using a dropshipper to take care of fulfilling the orders without any additional effort on your behalf.
2. The other situation may happen when you see that you’re sales are rather good and your orders are growing, but your margin still remains low. The obvious solution is that you need to sell more to make up the difference. This is an ideal scenario to employ a dropshipping partner who can concentrate on shipping products, while you work on marketing, building sales channels, improving SEO, and focusing on other activities to bring in more orders.

Gain the opportunity to extend your catalogue by over a thousand of items.

Let’s take a closer look at the dropshipping method and find out how it works.

What Is The Dropshipping Model?

It basically means outsourcing your backlog job to the dropshipper who will take care of stock inventory, packing and shipping the orders to the customers.

The dropshipping model works only if you’re not the manufacturer yourself but sell products which have originally been purchased from a third party supplier.

The benefits of this are no stock inventory, no warehouse rent costs, and the convenience of having thousands of available product categories at your disposal.

It all seems too easy! So what’s the catch?

The Pros & Cons of Using Dropshipping

PROS:

1. A very little amount of starting capital is probably the biggest call to launch for an up-and-coming eCommerce store. This is because the dropshipping model allows retailers to pay for the product purchase after they get paid themselves as well as avoiding the cost renting a warehouse.
2. Independence of location lets you to enjoy the core benefit of running an eCommerce business, namely the freedom of mobility. You can travel around the world and the internet connection is your only limit for work.
3. Convenience of limited employees also helps cut down costs by outsourcing the control over the inventory, packing and shipping to your dropshipper. When you get rid of the stress of fulfilling the orders you can concentrate on marketing and branding and focus more on your customer base.
4. Product placement and availability is also eased by dropshipping, allowing you to expand your catalogue with minimum inventory risks and avoiding situations where the physical product is either out of stock or unavailable, which can lose you customers to competitors.

Thanks to dropshipping you can enjoy the real independence of being an ecommerce merchant.

And because everything that is easy has also its downsides, this is what you must take into account when using the convenience of dropshipping model, as well as some hints on how to avoid the most common pitfalls:

CONS:

1. Lower margin and lot of competitors: In the eCommerce world, a competitive pricing can sometimes feel like your only weapon and way to incentivize customers, but rather than running yourself ragged try another strategy such as concentrating on marketing and improving your brand image.
2. Missing real experience with the product you sell can happen to all of us. If you sell a wide range of products, it can be difficult to see or visualize them all physically. Find the wholesaler who provides full data feed that allows you to import pictures and description to your website. Then communicate the most attractive features of the products and provide a flawless customer experience.
3. The third party failures involve losing control over the shipping process, which can be risk for an online business. Choose the right dropshippers, built good relationships with them, and you can always sleep well knowing that your orders will get through. Order an item yourself and monitor the process step by step to ensure that you have a clean process.

If it’s cost effective, also try to optimize activities such as branding packaging to improve customer experience. Set the documenting expectations such as shipping times, inventory updates, and good communication and also don’t be afraid to enable an easy return policy that can help build trust and loyalty among your clientele.

Due to limited control over the shipping may happen your products get lost.

What Is The Criteria For Choosing A Dropshipper?

When you’re searching for the best dropshipper it always depends on the situation you want to solve and how an external service like dropshipping can prove effective. In most cases there are combination of these factors:

• number of products and inventory management
• quality of overall services and shipping options
• membership fees and costs
• providing an account support
• active communicaion and flexibility in case of issues
• ability to manage the relationships with multiple suppliers

Drop shippers have many specializations. Take the time to find the one that fits your needs best.

According to Top Ten Reviews and other resources these are the TOP 10 dropshipping agencies for 2017 that were given the best user reviews:

1. Inventory Source — offers 1 million of products from more than 100 suppliers. It’s comprehensive free plan is on par or above those of any other dropshipper offers currently on the market.
2. Dropship Direct — this is the best option in sense of pricing. The biggest advantage is that it gives you an opportunity to customize your packaging.
3. Wholesale2b — provides and overall excellent dropshipping experience in all regards, and great it’s great option if you want a website built for you.
4. Sunrise Wholesale — full support on selling on eBay and seamless integration with Shopify and BigCommerce platforms. When you use these multiple marketplaces, don’t forget to provide your eCommerce analytics to understand more about their markets so you can adjust prices accordingly.
5. Doba — suitable for enlarging your catalogue. It has about 2 million items from over 200 suppliers with and easy user interface and many additional features. On the other hand, it’s one of the more expensive options out there.
6. National Dropshippers — offers the fastest shipping periods, from one to three days. It has about 250,000 products you can choose from currently.
7. Megagoods — a specialist in electronics at a small cost. It also gives good shipping speed, allowing products to be delivered within two days.
8. Dropshippers.com — provides multiple options to online selling. It’s the biggest wholesaler who works with 500 suppliers — except Amazon.
9. Smart Living — is interesting service because of its focus on products for home, including furniture, home décor and lighting. Unfortunatelly it doesn’t export images and descriptions of products.
10. Dropship designs — service with one-time fee, good inventory management and over a million items. It ranks lower due to lack of shipping option.

Summary

Whether you’re considering running your own online business or you already have one dropshipping is always good choice when it comes to scaling up. The potential possibilities of a third party have their costs but at the same time can yield some impressive results in terms of growth. The biggest advantage is that your business can expand without any extra hiring, allowing you to maintain a sense of independence in the marketplace. So if you’ve already heard about dropshipping, or think it’s something that might benefit your online store, don’t wait — find a suitable product, a reliable wholesaler, and set good marketing strategy as you enjoy the ride on the eCommerce highway! Who never tries, never knows!