5 Drop Shipping Business Strategies to Optimize Sales in 2018
Drop shipping can be a lucrative business decision in the world of eCommerce. It’s different from traditional eCommerce fulfilment in that it minimizes risks: you don’t hold any product inventory, and the money you pay your suppliers has already been received from your customer. Here’s how it works: a customer pays you for a product, and after receiving the money, you pay your supplier to fulfill the order. The supplier then sends the product directly to your customer, thereby preventing you from having to store inventory, hire a fulfillment team, or put out money in advance.
With drop shipping, the reduced overhead makes it easy to scale your business. Nonetheless, a successful drop shipping business still requires careful planning. After all, if consumers are able to get the products you’re selling from other sources, you’ll need to establish a unique value proposition – something that sets you apart and makes people feel compelled to purchase from your site rather than any others.
Here are some strategies to help you do achieve success and grow sales with your drop shipping business in 2018.
1. Become a Curator
One drop shipping business strategy that sets successful eCommerce store owners apart from others is their ability to showcase a curated collection of products. Consumers want to feel as if you’ve truly taken your time in selecting the products you’re selling. To that end, carrying niche products is more effective than attempting to appeal to a broader audience.
Identify a specific group that might have an interest in the products you plan to drop ship. One example of a niche brand would be LUSH, a unique cosmetics brand that sells handmade projects. Its commitment to the use of eco-friendly packaging, organic ingredients, and refusal to perform animal testing, appeals to niche market which has an interest in both quality cosmetics and ethical practices. Although LUSH isn’t a drop shipping business, you can apply a similar approach in your quest to identify a target niche and offer them a highly specific product line.
2. Screen Your Suppliers
Drop shipping businesses need to build trust with their customers, but in order to do that, their suppliers must also be trustworthy. Remember, your suppliers are sending products directly to your consumers on your behalf. You’ll therefore want to make sure that the products you’ve chosen to sell are of the highest quality, and that your suppliers can be expected to fulfill orders in a timely manner.
One simple way to vet your suppliers is to order samples. While this may require an initial investment, it will help to establish your brand credibility in the long run.
3. Experiment & Refine Your Choices
The beauty of having a virtual storefront is that it gives you the flexibility to respond quickly to consumer interest. If a product is selling well, you can choose to add more similar items to your store. On the flip side, if there appears to be little demand for a particular item, you can take it out of your assortment without having lost any money from buying inventory.
While you certainly don’t need to reassess your inventory every day, it’s essential to take a look at sales monthly, at the very least, to determine your best and worst performing items. These insights can guide your future decisions, allowing you to take a data-driven approach to curating your collection.
4. Consider Seasonal Products
Many eCommerce retailers have to be careful about seasonal items: with a shorter buying period, it becomes tricky to predict supply and demand. Over-producing seasonal products could result in an abundance of inventory, while under-producing could lead to irritated customers. With drop shipping, however, you don’t have to worry about this risk.
Holiday-themed products, seasonal items, and other goods sold during specific times of years can be leveraged to persuade your shoppers into buying now. If you choose to implement this strategy, be sure to market these special products wisely. Instill the “fear of missing out” in your existing and prospective customers by reminding them that the items are available for a limited time only.
5. Create an Outstanding eCommerce Site
Lastly, but perhaps most importantly, part of your unique value proposition comes from your ability to create a flawless user experience. Because the products you’re selling aren’t exclusively yours, you’ll need to entice your shopper into believing your store is the single best source for them. This means your website must be crisp and clear, with straightforward yet informative product descriptions, high-quality product images, and quick page loads.
Checkout should also be seamless and hassle-free, and the options for reaching customer service should be simple and direct. Don’t forget your mobile site – this should be of superior quality, too.