Dropshipping: The Ultimate Quick-Start Guide To eCommerce!
Unless you've been hiding under a rock for the past 12 months, you have no doubt heard the term "Dropshipping" being thrown around a lot. So what is dropshipping, why is it so popular, and how can you get in on the boom?
Dropshipping, put simply, is the process of selling products online through a 3rd party supplier/fulfiller marketplace such as AliExpress.
AliExpress provides access to a vast marketplace of wholesalers in China and Hong-Kong, allowing you to "stock" potentially thousands of products in your online store, without ever having to worry about inventory costs, warehousing, fulfillment or shipping!
In this guide, you'll learn the ins-and-outs of getting started in the lucrative business of ecommerce dropshipping.
Let's dive on in.
The first and most critical phase of starting your new dropshipping business is niche selection. This can be a stumbling block for newbies, but by keeping it simple and focusing on just a few important metrics, we can quickly and efficiently evaluate a niche idea with a reasonable level of certainty.
When first starting out, it's best to stick to niche's that you have at least some level of knowledge and interest in. Choosing a niche that you have a personal stake in will make the entire process more enjoyable, and your natural enthusiasm for your products will shine through.
As you gain more experience, it's certainly possible to branch out into niche's that you're less experienced in, but this comes with its own set of challenges and is best left for later ventures.
Start by listing your top 3 - 5 hobbies and/or interests. Don't be too picky at this point, just list them out so you have 5 - 10 general ideas.
Ideally, you're looking for niches with products in the $100 - $200 (retail price) category.
Why? This pricing level strikes a balance between profit margin and ease of sales. Products above this price point generally drive the customer to put a greater emphasis on product discovery. Of course, this isn't necessarily a problem, but you'll need to be prepared to handle the increased customer support the goes along with selling high-ticket items.
Now, head on over to AliExpress.com and find the "Shop By Category" list. Locate your niche within the menu, and head on through to the products page.
Now, we simply browse the list of available products until we find one (or more) that fit our needs.
The first thing you want to be looking for is products with a decent amount of orders, combined with stellar feedback from buyers. Avoid suppliers with multiple negative feedback entries or a suspicious lack of feedback, as these guys will only make your life difficult!
Ensure you check that your chosen product offers the "e-packet" shipping option. This is simply the fastest, cheapest way to ensure your buyers receive their products from your Chinese distributors.
Avoid the "Free shipping" options, as the shipping timeframes are often over 3 weeks with this option, which is much too long for a retail business in most cases.
As a general rule, customers have been conditioned to expect their products to arrive within 7 - 10 days max. Although not set in stone, you will save yourself headaches later by ensuring your products are promptly shipped, and received by your customers within 2 weeks or less. If unsure, don't hesitate to contact the supplier to confirm.
Once you think you've found your new hot product(s), it's time for some simple analysis to validate our product idea.
Head over to Google AdWords to make use of their handy (free!) Keyword Planner tool.
Select the "Get search volume" option, and enter 1 - 3 keywords directly related to your product niche. Be sure to select any specific locations or countries that you plan to target, otherwise you will be provided with global figures only.
In the results table, you'll see a number of metrics, but the main one we're interested in is:
- Avg. monthly searches
The more the merrier in most cases. Although a higher search volume is no guarantee of success, this metric gives us a good ballpark idea of the general demand for this product.
- Global search volume
Although less valuable than targeted local search volumes, this metric also helps develop an overall picture of the demand for this niche.
Don't let the "competition" measurement throw you off: this refers to the level of Google Adwords competition, not the specific keyword difficulty, but never the less can be used as a very rough gauge of the keyword difficulty.
Next, we head over to Google Trends. Here, we input our primary keyword and track the interest levels in the product. Ideally, we're looking for a steady upward trend, or at least a steady sideways trend, indicating a good baseline of interest in the product.
Here we can also track the seasonal spikes in the interest of our product, often correlated with holiday seasons such as Christmas.
Finally, we'll conduct a Google search for our product/s, using the same keywords from earlier. Now is the time to evaluate any competition, and develop a picture of the competitive landscape in your niche.
It's crucial that you know your marketplace before committing any significant investment, and this includes knowing your competition.
Who are they? How well funded are they? Do you have a realistic competitive advantage that will allow you to outperform them?
Make a brief list of the top 2 - 4 primary competitors and evaluate your business strategy against them. Now is the time to honestly consider your marketing and business models, and clearly articulate WHY your customers should buy from you over your competitors.
If the product you have chosen has massive amounts of competition from major suppliers such as Amazon or eBay, this can be a red-flag that this niche may be saturated and not worthwhile to dive into, as you will have little chance of attracting and growing a sustainable audience.
In some cases, you will not compete directly through the search engines at all, and instead, use alternative channels such as social media advertising to drive traffic to your store.
Whatever the case, by developing a clear picture of your marketplace, you'll allow yourself to identify strategies to ensure you remain competitive into the future.
Supplier reliability is crucial to the success of your new business, so it's crucial to check the suppliers' personal feedback and ratings.Back on AliExpress, these can be found by clicking on the sellers name on the product page. If the vast majority of customers are leaving 4 - 5-star reviews, it's a good sign that this is a reliable supplier.
It's a good idea (especially with new suppliers) to send a brief message to the supplier to open the lines of communication. This is also a good chance to evaluate the quality of their customer service prior to setting up shop. You're looking for swift, professional responses to any inquiries. Non-contactable suppliers or those who seem unprofessional should be dumped immediately. It's critical not to settle for the easiest option here, but really take the time to do your research. You'll thank yourself later!
First up, we need to select our ecommerce platform. This is where many new e-commerce entrepreneurs hit a brick wall. The sheer amount of choice out there can make the choice a nightmare, especially for less tech-savvy users. We've put together a helpful guide to make the process much clearer and easier, check it out here!
When it comes to set-up of your store, although there are plenty of DIY options out there, it is strongly recommended that less tech-savvy business owners work with a trusted e-commerce web design studio, who will ensure that you are setup with exactly the right tools your business will need for success.
Although DIY'ing your website may sound like an attractive option, it's easy to underestimate how much work is required to build a professional web presence that generates a positive ROI. As a business owner, it's more effective for you to focus on serving customers and growing your business, rather than trying to manage tech support and web design, on top of everything else!
There is much more to ecommerce website design than simply selecting a pre-made template and filling it with your products. Although these options allow you to get started quickly, without an extensive understanding of user behaviour and best-practice design principles, it is almost certain that your store will not be optimized for converting users into buyers. This usually results in the need for extensive website redesigns or changes a few months after launching, once the owner realizes something is not right!
Your web design studio will draw from their extensive knowledge of UI design (user interface design) to craft a website design and layout that will maximize conversions, whilst minimizing cart abandonment and lost sales.
By getting your conversion strategy right from day one, you're setting yourself up for success, and avoid the hassle and disruption of having to make website changes or improvements once your store is live.
One of the first email automations you'll want to get in place is your abandoned cart email campaign. Research has shown that the average shopping cart abandonment rate was 67.23%, so it's not difficult to see why you shouldn't ignore your cart abandoners!
A strong mailing-list building strategy is also a must-have for all e-commerce businesses, and will allow for targeted email marketing campaigns once your list starts to grow.
Integrating a trusted analytics package into your store will allow you to track and manage all aspects of your store, including inventory management, user tracking, marketing insights and conversion rates. Many ecommerce platforms now come with native analytics included.
Your new ecommerce store is open for business, so now what!?
Well, it's no secret that an ecommerce store needs traffic in order to survive. However, it's not just traffic that you want... it's targeted traffic.
Think of it like this:
With a large enough budget, you could potentially drive thousands of users to your website weekly. But if not a single one of those people are active buyers you're simply throwing money down the drain (or into Googles pocket!).
Instead, we'd much prefer to see 100 users per week, of which 30% convert to buyers.
So how do we find these "target buyers"?
Although this will vary greatly depending on your market/industry, there are a number of strategies you can employ to drive these targeted users:
- Blog commenting/community engagement
By seeking out communities related to your product and providing helpful content in the form of answering questions, solving problems etc, you can position your product as the ideal solution for the communities pain points. This is best conducted on relevant forums, blogs and similar communities. This can be a powerful strategy if conducted tactfully (read: no hard-selling! Think "helpful solutions" not "sales pitch"). Be wary of the terms of each place you are posting, as some blogs and forums have strict "no promotions" policies.
- Social media advertising
Paid social media marketing channels on Facebook, Instagram, Linkedin etc, allow for powerful audience segmentation and interest-basted targeting, allowing you to put your ads where they count most. If using paid channels, it's crucial to set a budget and educate yourself on social media advertising best practices. Without a clear understanding of what you are doing, it is very easy to spend big with little to show for it. If in doubt, talk to a trusted digital marketing agency.
- Google PPC (Pay-per-click) advertising
Google's PPC ad network is a convenient and effective, albeit somewhat complicated ads platform. The platform itself is similar to the Facebook ad network, in that it allows you to customize audience targeting to a granular level, set daily spend budgets, and create custom advertisements that are displayed above organic search results. The PPC network can be a little overwhelming to less tech-savvy users, although with a little practice and study, almost anyone can leverage this powerful network to their advantage.
THE BOTTOM LINE
Dropshipping and ecommerce are fast becoming the ultimate ticket to entrepreneurial success. By taking the time to correctly research and understand your niche and target market, and then providing a flawless user experience to them, you'll be avoiding the common pitfalls that many newcomers to this exciting industry face.
We hope you found this guide helpful in your journey to ecommerce success!
If you're getting started in ecommerce and need some friendly, no-nonsense advice from a leading Perth web design studio, we'd love to hear from you!
Questions? Comments? Share them below!