In 2017, approximately 23% of online sales amounting to $85.1 billion were fulfilled via dropshipping. The idea of selling products without having to stock inventory or worry about shipping is appealing to many, especially those just starting out. But there are two sides to every coin and whether you are new to dropshipping or an experienced player in this field, here’s a closer look at 6 mistakes you must not make:
1. Pick the wrong distributors
Picking the right supplier is of utmost importance as it impacts everything from product quality to delivery times. Since your reputation depends on the distributor, make sure you check out their reviews and testimonials and place a test order to get a firsthand experience of shipping and product quality.
2. Working with just one distributor
“Do not put all your eggs in one basket”.
Working with just one distributor can lead to issues. You will heavily be reliant on just one supplier to fulfil your orders.
Your business will be in limbo if the distributor goes out of business, raises their prices or runs out of products you sell.
It is good sense to always have back up and work with multiple distributors.
VARStreet integrates with 45+ IT and office supplies distributors in the US and Canada. Our aggregated catalog displays a single-window view of prices from multiple distributors giving you leverage to source the cheapest deal.
3. eCommerce platform too expensive
Many eCommerce websites require a transactional fee or a certain percentage of sales, this reduces your margins. Many eCommerce platforms start at a basic subscription but charge additional fees to scale, for support, additional themes, templates, widgets and plugins.
Distributor catalog plugins are expensive and dealing with multiple distributors can get costly.
VARStreet does not charge an additional fee to scale, whether you sell 100 products or 10000s or more, you pay a flat affordable fee.
We also come integrated with 45+ distributors, you do not need to pay for adding distributors.
4. Return complications
Return rates are 30 per cent or more for merchandise that’s bought online. Clothing returns can be closer to 40 per cent.
One of the reasons eCommerce is so popular is because of easy returns. Customers do not have the ‘touch and feel’ of a physical shop while buying online. You need to assure customers that they can easily return an item if they are not satisfied with it.
Set up a streamlined system for managing returns and refunds while choosing a vendor. Easy returns put them at ease. Mention your return policy clearly on your website.
Clear instructions along with a quick response to customer inquiries and providing a refund or replacement item allows you to maintain a good reputation with your customers and increases customer trust and loyalty in your brand.
5. Not being clear about shipping
High shipping costs are cited as the top reason why shoppers abandon their carts. Sometimes “surprise” shipping costs don’t appear until the checkout page.
Be very clear about your shipping charges and policies. Tight integration between your eCommerce store, your vendors and shipping partners ensures that any changes or cancellations by the customer are updated and each of your partners is on the same page regarding the order.
This eliminates shipping of cancelled orders and errors in delivery.
6. No after-sales tracking
It is also important that you send tracking information to the customers so they are always aware of the status of their order. Failure to communicate can lead to the customer being unsure or feeling scammed.
Provide approximate ship dates based on location and easy-to-use order tracking system. Require vendors to keep you updated on the order’s status and send updates via email or SMS to your customers. Monitor orders if you expect them to arrive later than planned and troubleshoot quickly.
When done right, dropshipping is an excellent low-cost business model, but even the slightest oversight can be the downfall of your business. Avoid these routine mistakes amateur dropshippers make and you are sure to take your eCommerce business to new heights.