Mar 16, 2021
 in 
Ecommerce

3 Important Questions To Answer Before You Open A Dropshipping Store

T

he e-commerce industry has gone through a tremendous amount of growth in the last few years, and so has dropshipping. As a reminder, dropshipping is a supply chain model that allows anyone to open up an online store, even if they can't afford to make their own products. Rather than selling their own unique products, a dropshipping store sells another business's products on its website. Once a sale has been made, the dropshipper sends the order to the supplier, who in turn ships the order directly to the customer. The supplier makes a sale, the customer receives a product, and the dropshipper pockets a profit margin.

But even though it is now extremely easy to open a dropshipping store, that doesn't mean success is guaranteed. Dropshipping is difficult, and requires strong levels of flexibility and resourcefulness. In fact, most dropshipping stores will never survive their first 3 months. They will shut down just as quickly as they opened. The reason? A lack of preparation.

"If you fail to plan, you are planning to fail" - Benjamin Franklin

If you're looking to increase the odds of your dropshipping store succeeding, then there are several questions which you need to come up with an answer to. Your ability to answer these questions properly will be a great predictor of your success. And, if you struggle with answering any of these questions, then you should spend some more time developing your strategy. After all, dropshipping is just a way of sourcing products. It isn't going to replace the other aspects of a well-formulated business plan.

So, without further ado, here are the 3 most important questions for you to answer before you open a dropshipping store:

Question 1: How are you going to drive traffic to your dropshipping store?

The most difficult part of starting a dropshipping store is finding a way to drive qualified traffic to your website. No one is going to find it by accident.

Driving traffic is the most important part of dropshipping. In order to make sales, your website needs to have visitors. And, unfortunately, nobody is going to stumble on to your brand new website by accident. Something will have to bring them there.  Luckily, there's more than one way to accomplish this. We'll quickly run through the most popular ways to drive traffic to a website.

Running Ads:

Running paid ads is one of the most scalable ways to drive traffic to your store. You can run paid display ads, through social media platforms like Facebook or Pinterest. These platforms have intricate targeting parameters so you can save your budget for your target audience. These platforms can also integrate with Shopify so that you know exactly which platforms and ads are performing well. If you're going to be running ads on social media, then you should spend some time putting together a strategy. You can optimize for getting visitors, gaining followers, or making sales.

Alternatively, you can position your products in front of people looking for them through search engine marketing. This allows your website to be shown at the top of the search results on search engines like Google or Bing. Regardless of what platform you use, just make sure you know what you're doing. If you don't set up and monitor your ads carefully, you can easily blow your budget on sub-standard results.

Leverage Social Media:

Another option is to create social media content that gets people interested. It's free to create an Instagram or Tik Tok account, and there's no charge for publishing content (besides the time it takes to create it). Social media is basically free marketing for your business, as long as you can get people to pay attention. Tagging your posts with relevant hashtags can help increase your exposure, and find people with similar interests. There are also features like the Instagram Shopping Feed that make it easy to highlight your products in your content.

Affiliate Programs:

Creating an affiliate program is another option well-suited to dropshipping stores. This is a system that works by allowing other people to drive traffic to your store for you, in exchange for part of the revenue the traffic generates. You can strike a deal with social media influencers to promote your products, and for every sale that can be attributed to them, you give them a percentage in commission. While some of the bigger pages will want a flat rate, micro-influencers (<10,000 followers) are usually fine with working off a commission.

Search Engine Optimization (SEO):

Lastly, there's also search engine optimization (SEO). SEO is what gets your website content ranked on Google, and there are all kinds of tips and techniques that can help your content rank better. This is a great long-term strategy because it's free, but it's not suited to drive results in the short term. This is because Google scrutinizes every website before they recommend it. You need to compete on certain search keywords and show Google that your site provides more value than your competitors. Google will measure your site's value using keyword-focused content (like blog articles), backlinks (links to your site on other sites), and traffic levels. All of which new dropshipping stores are unlikely to have.  

Regardless of the method you choose, you're going to need to find a way to lead people onto your site. Otherwise, there's a good chance your dropshipping dream will never get off the ground.

Question 2: How are you going to make your dropshipping store different?

If you want your dropshipping store to succeed, you should find a way to differentiate it from all the others.

Dropshipping is just a way of sourcing products to sell online. It's a supply chain model, it's not a business plan. You're still going to need to create a brand or a following, and find something that makes your business different.

There's nothing wrong with selling another business's products, but how are you going to make your store stand out from all the others? Here are some ideas to help you get started:

Idea #1 — Offer Your Own Products:

One of the best ways to differentiate your store from all the others is to create your own products. Having your own products will give your brand a core focus, and you can use dropshipping to source related products. The advantage of this is that you can create something that people can't get elsewhere because the product is branded and sold exclusively on your site. And, once they are visiting to purchase that item, they will see your other products, and hopefully buy them too.

Obviously, this strategy is a bit more involved than some of the other ones on this list. It might cost you $1000-$3000 to get started (the price of a wholesale order) but the margins will likely be much higher. This strategy will provide your business with a foundation, and give you a strong product base that you have more control over. Even though it is a step away from dropshipping, it creates more value to consumers and sets you apart from your competitors.

Idea #2 — Build A Brand:

Building a kick-ass brand is important if you want your dropshipping store to stand out. If you do it properly, your customers won't know or care that the products aren't yours, because your brand adds enough value to distract them. You don't have to sell your own products to be a brand, you just have to stand for something and have symbols to represent you.

Get a nice logo designed, and put it on all of your social media, emails, and invoices. Come up with a story to put in your About Us page, and give it some meaning. Create some engaging social media content, and develop a consistent style. The goal is to build the attention surrounding your brand and to then use your brand as a platform to advertise your products. Don't be afraid of allowing your brand to have a personality — you want to polarize people into loving or hating you.

Idea #3— Take Your Own Product Photos:

Taking your own product photos (or hiring someone else to) is very underrated. The majority of dropshippers never invest in their own photos, and as a result, they end up using the low-quality, ill-fitting photos uploaded by the supplier. The same photos that every other dropshipper has access to.

Taking your own product photos will ensure that you can highlight the features of the product that you think are most relevant. You can display the products in a way that matches your store's aesthetic or color theme, which is important if you want to build trust with your users. You can also ask for photos from your customers, and use those throughout your website. Regardless of how you do it, you should find a way to get away from the default photos. You want your business to be special, not just another dropshipping store.

Question 3: How are you going to keep the customers your dropshipping store acquires?

It is significantly more expensive to sell to a new user compared to a repeat customer, so keep this in mind when coming up with a marketing strategy for your dropshipping store.

Acquiring new customers is much more expensive than convincing existing customers to buy from you again. While you might be able to survive by only selling to your customers once, it's much more profitable to find a way to sell to them on a recurring basis.

There are many different strategies to keep customers coming back, and we're going to take a look at a few of them:

Subscriptions/Refills:

Products that require replenishment are great for dropshipping. In this case, we're talking about consumable products that can't be readily purchased at the store down the street. These are products like cosmetics, skincare, or even electric toothbrush heads. Subscriptions are similar but make re-ordering the default option.

Email Marketing:

Once you capture a customer's email, usually through the checkout process, email marketing to them is one of the most cost-effective ways of getting another sale. You can draw attention to new promotions, give them referral discounts to pass on to their friends and family, or highlight a relevant product that they might have missed. There are many layers to email marketing, but platforms like Klaviyo and Mailchimp allow you to get the most out of your email lists.

Retargeting Ads:

Retargeting allows you to cater specific ads to people that have already engaged with your store. Rather than setting up one ad to be shown to everyone indiscriminately, retargeting allows you to segment your audience based on the actions they've already taken. You might show recent customers one Facebook ad, while you show recent visitors who left without purchasing anything a different ad. This allows you to set up your ads to support your customer journey, and only show ads that are relevant to the stage of the journey that a unique customer is on.

Community-Building:

If your product stands for something or is better enjoyed in the company of others, then you can create online communities for your users to congregate. This can be something as simple as a social media page that allows users to have discussions in the comments, or it can involve a dedicated discussion zone like a Forum or Facebook Group. Either way, building a community around your product is a great way to get people engaged, set your brand apart from the others, and provides you with a focus group for your next product launches or improvements.

Wrapping Up:

If you can answer those three questions, then you're more likely to succeed than most new dropshippers. While it isn't an exhaustive list, these questions are designed to get you thinking about your marketing strategy, which is crucial for dropshipping stores. As a dropshipping store owner, you don't need to think about developing new products, your supply chain, or any of those tough subjects. Instead, your job is to market and sell your products. Focus on whats important.

Now that you've got the basics covered, you're ready to start looking at products! DropCommerce is the first place you should look, since we have over 24,000 products, all shipping from North American suppliers. If you're going to be building a brand, you want to partner with suppliers you can trust, which is what DropCommerce is all about. Our application is available on Shopify and BigCommerce, and we have plans starting as low as $19 per month. It's completely free to create an account and look at the products we carry, so take a look! You might find what you're looking for, and more.

If you enjoyed this article, then make sure to check out:

How This Dropshipping Business Owner Sold $2.3M In Her First Year With A Simple Sales Strategy

5 Important Mindset Shifts For Unlocking Your Entrepreneurial Potential

The Most Common Dropshipping Mistakes & How to Avoid Them

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