In the previous post of this series, we were looking at the concept: What is Drop Shipping? In this edition, we will look more carefully into the Best Practices of Drop Shipping. In 5 posts you will learn a lot about drop shipping. The best combination of theory and hands-on experience on doing drop shipping with for example China. Also you will get exclusive access to some great free and premium templates, forms and tools that will enable you to do drop shipping instantly and help you to do drop shipping successful.

In this part 2 of  What is drop shipping?, "Best Practices Drop Shipping."

Enjoy reading,

Team AllBusinessTemplates.com

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Drop Shipping Best Practices

Drop shipping is a retail fulfillment method in which the retailer does not keep goods in stock but instead directly transfers customer orders and shipment details to either the manufacturer, another retailer or a wholesaler who then ships the goods directly to the customer.
In the retail businesses, the majority of retailers make their profit on the difference between the wholesale and retail price, but some retailers earn an agreed percentage of the sales in commission, paid by the wholesaler to the retailer.

1. Drop Shipping Success examples

Look for a great example how to run a Drop Shipping T-shirt business via Shopify:

from Shopify.

Below find more successful drop shipping companies. We start with the most famous one:

Alibaba is one of the largest websites in the world and one of the best parts of the site is that you can find manufacturers for your products. Keep in mind that you shouldn’t just type in the product you want to sell and contact the manufacturer. A part of their business is total fulfillment solution for their manufacturers: dropshipping. Also they provide Dropshipping manufacturers. To find dropshipping suppliers on Alibaba, you can fill in “dropshipper,” in the search bar (http://www.alibaba.com/products/dropshipper.html) then filter down to the desired product. Not all manufacturers on Alibaba offer drop shipping.

However, if you’re on a tight budget and you generate a quality strategy, drop shipping might just work well for you. They are basically doing a form of arbitrage with physical products. Find some example shops that operate successfully:

  • Movie-gadgets.myshopify.com
  • All-awesome-stuff.myshopify.com
  • Totoroshop.net
  • Funfinds.net
  • Nestoftheowl.com
  • Ilovecutebabies.com
  • Leogary.com
  • Outletuk.org
  • Barkoy.com
  • Bling-town.com
  • Fullforceimports.com

Drop shipping supports the existing physical business: it is also a very good addition to your current business. Suppose you are currently already selling physical products, it’s an attractive way to get more sales.

2. Drop Shipping failures

Do not accept resources with small margins
Ebay for example doesn’t allow you to solely do drop shipping, because margins of the products offered by the suppliers are too small. You can buy on 1 platform, and sell on the other. But don’t try to do buy and sell on 1 platform.

Aftersales issues when supplier is not reliable
It is highly important your supplier is providing the right products, for the right price and right service. If he is not shipping on time, you are responsible for the delay and need to pamper your customer. Make sure you have agreed about the service level you need from your supplier, and put this in a Dropshipping Agreement with the supplier.

Unprofessional online marketing and IT support
If your marketing and IT are not properly set up, you will be heading for a disaster. Successful Drop shipping highly depends on a slick web shop and attractive product range for the right price. Besides this, traffic is very important. Also the IT infrastructure must be working flawlessly, otherwise you will miss out on opportunities and nowadays with strong social media your company will be ruined within minutes…

Drop shipping supplier don’t ship frequently
Customers expect fast delivery nowadays. If your supplier is not able to produce or have stock, they
will not be a good partner. You need to be able to ship every day, not to miss out on opportunities!

Technical support
If issues may arise, your supplier should be able to quickly deal with the questions you received from the customer. Make sure your supplier can provide such service. It will be a quick end of your company, if you cannot answer your customer’s questions.

drop shipping strategy

3. Drop Shipping Handbook

Find a supplier through your network, in your neighborhood or by searching on Google, Bing, Yahoo, Baidu, Sohu, etc. Another very strong way to find suppliers of the products you are interested in, is to go and visiting trade fairs. Trade fairs are always focused on a specific industry, which makes it an efficient way to meet many suppliers of the same or similar products.

The ideal supplier to partner with:

  • Needs to be reliable and needs to produce quality products;
  • That don’t have a lot of business online yet;
  • They have to be open for innovative ways to do his business, and wants to outsource this online marketing tasks to you, and who will not try too;
  • When your supplier has your products on stock;
  • Then need be ready for growth for his company;
  • They are able to ship goods worldwide (much bigger market);
  • Needs to ship your product frequently, and max. once a week. This is important, because 
  • your customers wants to receive the products as soon as possible;
  • Has a showroom to show its products;
  • Can provide customer support for you, when you receive questions from customers;
  • Can pay your commission on a frequent basis.

After you selected the right supplier, and you worked out the Drop Shipping Agreement. The next step is to start business. After the first product shipments, you will find more issues that need to be solved in a permanent way. A good option is to develop a handbook together with your supplier(s). This handbook answers questions for situations or problems that might happen in the future.

A valuable drop shipping handbook can be found here: Drop Shipping Handbook.

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In our next post we will be talking more about how to select channels and partners.

Related free & premium drop shipping templates:

  1. Drop Shipping Agreement Template
  2. Drop Shipping Handbook