What don't people tell you about dropshipping
Dropshipping as a cheap and fast way to test new product ideas
Dropshipping is one of the best ways to quickly start a profitable online shop. This insight has meanwhile gained acceptance.
We should therefore now take a look at how you can test new product ideas with dropshipping and how you can move a business forward after a phase of experimentation.
This article is primarily about dropshipping print products (such as t-shirts and posters). However, what you have learned here also applies to the dropshipping of other products.
A Shopify store is the easiest way to get started with dropshipping! Try now for 14 days free of charge.
Dropshipping to research new markets and product ideas
The whole point of dropshipping is for a partner company (and not yours) to take care of shipping your products. Since you don't take care of the shipping yourself, you don't necessarily have to be near your dropshipping provider. This opens up a whole new world of possibilities for you. Dropshipping, for example, is ideal for entering a more distant market.
It is Z. For example, for an Austrian retailer who wants to expand into the American market, it is advantageous to use a dropshipping provider in the USA, as they can offer cheaper and faster shipping. This is particularly useful as customers in the USA are used to fast shipping for online orders, e.g. B. two-day shipping with Amazon Prime.
Most large retailers are also using dropshipping as an expansion strategy. You can use it to test new products and types of products as well as new markets and more.
Not sure if a new product will arrive? Would you rather not risk buying a huge inventory in case the new product goes flop? No problem. Just arrange dropshipping to order. You will test your idea and you can get an idea of whether you want to continue in this direction.
Some great examples of dropshipping wholesalers are Zappos, Gilt, and even IKEA. (Or the Wiesbaden dealer Ontaria, which we present in detail here.) Some initially only sent their goods via dropshipping and only later took on the fulfillment of their products themselves.
Companies like Wayfair only work with dropshipping and have 7,000 different providers!
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What to look for when choosing a dropshipper
“Dropshipping your products” is easier said than done. The question is: How do you find the right dropshipping provider?
Here are the questions you should ask yourself when considering a dropshipping provider:
1. Can the dropshipper be integrated into your e-commerce platform?
You make your life a lot easier if you can connect your shop directly to your dropshipping provider. Then orders are automatically forwarded to your dropshipping provider, you pay the costs and can keep the rest of the money.
There are several dropshipping providers for print products that can be integrated with Shopify stores. Here are some of Shopify's most popular dropshipping integrations for print on demand:
Reading tip: What exactly print-on-demand means and how you use it for yourself,can be found here.
Your own print-on-demand business in 30 minutes
In this compact tutorial you will learn how to start your own shop and sell your designs - without having to buy inventory beforehand! We'll also tell you how to make your shop legally secure and how to market it.
2. How is customer support handled?
In any case, make it clear who will handle customer service. What happens with a return? Who cares? Communication is very important. If z. B. Something is out of stock to print a certain product, who will inform you or your customers about it?
3. Is the dropshipper located near the market you want to open up?
If your target audience is in the US but your potential dropshipping provider is in Australia, this is probably not the best choice for you. Choose someone close to your target audience to reduce delivery time and costs.
4. How are the products packaged that your customers receive?
Consider white label packaging, which means that each order will be labeled with your store's information, rather than that of the dropshipping company. Then it looks like you sent the product yourself.
Inform you in this posthow you can bind your customers to you with unforgettable packaging
Professional tip: Be sure to order samples to test quality and delivery times and of course to check the packaging again.
Decision for your first dropshipping experiment
Choose something that can easily be shipped directly to the customer via direct delivery
Once you've decided on a dropshipping company, take a look at the products they have on offer. What can you effortlessly offer your customers that is new and different? If you're selling t-shirts, why not try printing. Or with cups?
Reading tip: Here you will find 12 apps that will help you to find products - also independent of print articles.
Test the product for seasonality
Try something that is seasonal. Try it in summer e.g. B. sometimes with crop tops and swimwear and in winter with sweaters and hats.
Listen to customer requests and inquiries
If you've been running your business for some time, customers have probably asked if you might not sell certain other products as well. Why don't you give it a try? Once a customer has inquired, chances are that there are tons of others who want the product but just don't bother to write it to you.
Ask your customers for insights and feedback
Communicate with your customers, start a conversation. Ask them to tell you what they think of your product before you launch it. Send out a survey with product-related questions after the purchase or ask this question on social networks.
Once you've decided on a product to experiment with and found the right dropshipping company, it's time to sell! Just post the product on your store and use your marketing and growth tactics to see if it resonates.
The results of your dropshipping experiment
When you've finished your dropshipping experiment, it can shape your future business decisions and you can transfer what you've learned to your shop.
Here's a look at three different results, and what you can do next:
- The product from your experiment sells the same or more often than your bestseller
- The product from your experiment sells as often as one of your average products
- The product from your experiment sells worse than the rest of your products
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1. When your product has sold as well or better than your bestseller
You tested the market and found that there is demand. Maybe the product is selling as well, if not better, than the other products in your shop.
Consider buying inventory
If your dropshipping experiment was a huge success, you probably want to make even more profit. The experiment was successful, you can be confident and take over the fulfillment yourself.
Consider making the product yourself
How quickly can you pay for the cost of a printing press? An acceptable direct textile printer for beginners costs around € 28,000 with installation and maintenance. How fast can you get that money back in? Can you do without this profit for a few months?
Reading tip: You don't know how to calculate your sales prices correctly at all? Learn in this post.
2. When your product has sold as well as one of your standard products
So your experiment didn't lead to the sales record you expected? Don't worry, it was low risk and inexpensive. You have gained valuable insights into your market and audience that you can now use to your advantage.
Continue to use your dropshipping provider if you don't have time to fulfill the products yourself, if you don't want an inventory or if the shipping prices are beyond the scope.
In order to be able to offer you cheaper shipping prices, your fulfillment company often has deals with shipping service providers, as they can send high volumes and negotiate discounts.
Do the experiment again with a different product
Your target audience didn't like this product. After the elimination process, you don't have to go any further in this direction. That's ok, because now you know! How about the next product experiment?
Change the platform or audience
It didn't fit the market well. That doesn't mean it wasn't a great product. It just wasn't what your customers wanted. Are you still convinced that it's a successful idea? How about you open another shop in a different market niche and market the product to a different audience?
3. If your product sold worse than the other products in your store
Keep it in the range, but keep sending it direct. That way, you won't take any damage, make some buyers happy, and even earn a little more from it.
If your experiment failed, ask yourself if people even knew you had this new product on offer. Have you sent any emails? Don't have a mail list? How about advertising on Facebook? People can't buy your product if they don't know it exists.
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Find out more about dropshipping
If you want to know more about the benefits of dropshipping, be sure to check out the infographic below. Would you like to join AliExpress? Then we recommend our ultimate guide for dropshipping with AliExpress.Under this article you will also find links to many dropshipping articles in German!
Not only can you use dropshipping to boost your business, but you can also drive development. New product ideas can thus be convincingly tested.
Do you have any ideas on how to try out products and business ideas with dropshipping? Then leave a comment below!
More articles on dropshipping in Germany, Austria and Switzerland:
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Posted by Hendrik Breuer:Hendrik is the editor of the German Shopify blog. Do you want to publish a guest post? Then please read this guide first.
This article by Julia Gifford originally appeared in English on the Shopify.com blog, was localized, and was last updated in 2020.
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