Dropshipping Guide, Growing Your Dropshipping Business
Now that your business is set up and running, I guess you want to know how to manage and grow.
It is very important to manage regularly and disciplined.
Your dropshipping business won’t last long if you don’t make any changes or try to reach certain goals.
In this section, I will outline how you can stabilize your business and then suggest some ways to expand it.
Coping With The Problems
The more you sell, the more you will face problems.
This happens to the best dropshippers, and if you don’t know how to deal with these problems over time, your business (and your reputation) will deteriorate.
First, always expect the unexpected.
Even when things are running smoothly, you never know when your supplier will ruin an order or when a customer will send you an angry email.
Dropshipping has a lot of surprises, so just try not to get caught off guard while these surprises happen.
Here are a few problems you may encounter and some ways to solve them.
Dropshipping Returns and Refunds Management
In one way or another, your customers will have the possibility to return products.
In some cases, you can get refunds on orders. Both of these are unique problems so I’ll cover them one by one.
Refunds. First of all, you will want to implement a return policy. This return policy will broadly cover your suppliers’ return policies.
If your supplier has a 30-day return policy, you don’t want to give a 45-day return period either.
Therefore, adjust the policy according to the rules of your suppliers.
Second, understand the process of a return.
After the customer makes the return request, you must obtain an RMA (product return document) number from your supplier. The customer sends the product to the supplier by noting the RMA number.
Then, your supplier will return you the wholesale price of the product and you will refund the customer at the full store selling price.
Third, be aware of some of the problems that may arise.
For example, some suppliers charge a stocking fee. This can cause confusion – who is getting the fee? I suggest you admit defeat and don’t pay your customer the restocking fee.
Yes, it is true that you will lose some profit in this regard, but it will be more friendly to your political customers.
What about defective products? Usually, suppliers do not take returns for damaged or broken items. So this is another fee you have to pay.
However, you should always return cargo regardless of whether your supplier is repurchasing.
It is part of being a good business owner that treats its customers honestly.
A common practice for defective products is to send a new product to the customer and allow the old product to remain with the customer.
Although the defective product remains with the customer, it is cost effective because the supplier will usually cover the shipping cost when shipping a new product.
Refunds. Refunds occur when a customer calls their debit / credit card company and objects to pay a fee. If you receive a refund request from your sale, you may be confused.
This is because the refund requests occur for only a handful of reasons.
Often the refund request will be falsified. It is quite easy to solve these problems. You only need to prove that you have shipped and delivered the product.
This usually means showing the complete order, shipping / tracking information, and a wholesale packing slip detailing the items you purchased and sent to the customer.
Don’t wait too long to respond to a refund request! You only have a few days to make this payment. Here’s more information on dealing with fraudulent refunds.
Still, there is some bad news. If a refund request is made with an order made using different shipping and billing addresses, it is almost impossible to win. Unfortunately, if this happens, I suggest you pay the fee and record it as loss.
Cargo Related Problems
If we talk about shipping costs, many problems with shipping may arise. Most dropshippers are having trouble with rates. Depending on which shipping company you choose, there will be plenty of option prices to choose from and this can be daunting.
Three shipping costs you will often encounter:
Real time prices. ‘Real time’ means that a specific shipping quote is created for each order. The weight of the products and the destination factor give the final price.
This is a very accurate method but can be difficult to implement.
Prices per item. Shipping per item uses flat rates for items of different sizes.
For example, all items weighing less than five pounds can ship $ 5.
Fixed price shipments. This is one of the most popular shipping options as it is very easy.
You only pay one flat fee for all shipments. This means that you will lose money on some orders, but you will get back the money you lost from other orders.
Although it is not a very accurate method, it is simple and straightforward.
Most sellers using fixed-rate shipping prefer to offer free shipping throughout the region and include shipping costs to their product prices.
This is not a worldwide solution; While free shipping is great for some situations, it doesn’t work for all. But if you can do that, offering free shipping is a better way for your customers to enjoy.
So which one of them should you use?
Fixed-price shipping is the method many dropships use. That’s why you should definitely consider it.
It is also easiest to apply when first started.
I suggest you use the fixed price initially and watch how it goes.
If you think you can get more out of another type of fee, be sure to take a full look.
How about international shipping? Since most niches have a global market, this is something you have to face sooner or later.
Get ready to consider the additional costs of international shipping and check out your carrier options to see which one is the best for you.
You can only offer domestic shipping, but depending on your niche this could hurt their sales.
When we come to the subject of the carrier company, I will briefly talk about the options you have. In the US, you basically choose between UPS / FedEx and the US Postal Service (USPS).
UPS / FedEx
If you ship large packages regularly, UPS and FedEx will give you better prices. Unfortunately, international prices are a bit expensive.
If you’re sending more small parcels, USPS will be fine for that. You can usually send small packages under $ 5. USPS also has better international values than UPS or FedEx.
It doesn’t hurt to use both (or three) companies to ship both small and larger packages. Consider which firm will offer the best prices for specific sizes and destinations.
For a small business to be incredibly successful, it must have a great customer support solution.
I’ve seen many dropships use nothing more than a Gmail business account and an Excel spreadsheet to manage their customer support.
This “solution” is nothing more than trying to fix your car with duct tape.
Sure, it will work for a while, but won’t last forever.
It is ideal to use special support software from day one. Help desk software is scalable and easy to use with your business. There are many options to choose from.
Here are a few of my favorites:
Zendesk: One of the biggest names in customer support, Zendesk is one of the most popular options. It also offers a wide variety of pricing options so you can get a start small when you need it.
Help Scout: Help Scout plays an important role in customization. Support requests are designed to look like normal e-mails rather than corporate. So your customers don’t feel like they are getting a ready-made response.
Desk: Desk is operated by the highly respected Salesforce and is a powerful platform that centralizes everything like Salesforce and makes it easy to manage.
Many dropships use one of these platforms, but there are many other options. Find something that works for you and stick to it. The software you choose must be able to accommodate a growing team.
Despite being an old method, telephone support is also an issue to consider.
Phone calls are very important, especially for dropships who sell products with a larger price tag.
Grasshopper is a good starting point useful for small businesses.
Working with Multiple Suppliers
Although I recommend starting with only one supplier, most mid-sized dropshipping sellers work with multiple suppliers. If you’re selling a lot of products, having multiple suppliers at your service can make your job a whole lot easier.
There are many benefits of working with multiple suppliers:
The order is easier to fulfill. Working with only one supplier, you have no other choice if an item is out of stock. Working with more than one supplier with similar product stocks increases the likelihood of always reaching a product.
You can choose carefully. Being able to carefully select the best products from various suppliers is a big thing. You indicate if you are looking for a specific product and you can find it at supplier A if not. This facilitates product selection.
It provides you a secure network.
If a supplier unexpectedly raises prices or closes, you can rely on your other suppliers to do business.
And once you find a supplier, it is very easy to find other suppliers.
It is a must to keep track of the products you have.
Out of stock items can lower conversion and retention rates because the customer cannot be told that their items are not currently available.
Here are a few tips to reduce the number of out of stock items in the store:
Ask your suppliers about product availability.
Some suppliers may not be able to regularly stock all of their products. For example, some products may be seasonal. Check with your suppliers about this and make sure your most popular products are available year-round (or almost year-round).
Don’t be afraid of using off-brand products.
Suppose you have two suppliers. If you want to sell a joint product like a water bottle, there is a chance that they both have similar products in stock. Supplier A’s water bottle may not be the same as supplier’s B’s water bottle.
But if they’re almost identical, you can usually write a general product description in them and sell both bottles under the same list. (Of course, don’t do it at big brands like Samsung or Adidas.)
Use a robust inventory solution.
Suppliers often have their own way of managing inventory, if it’s good enough, use it. If you think it’s missing, look for software like Ordoro or HubLogix.
These tools can also help you manage your inventory for multiple suppliers.
Building a team
You can easily manage your business yourself when you are new to business.
However, as you grow, you may be overwhelmed by tons of daily work, support requests, and other administrative tasks. That’s when you should consider bringing more people with you.
But when should you hire someone? In general, dropshipping sellers benefit most from recruiting people in certain positions.
Virtual assistants. Virtual assistants can often make it easier if you need help with administrative issues such as invoice processing or document editing. Hiring a good virtual assistant is usually pretty cheap.
However, a virtual assistant can do just that much.
Even if the virtual assistant helps to get everything on track, it cannot take on digital marketing tasks as an example.
Customer support representatives. If you’re constantly receiving support requests and lots of messages from customers, it can be helpful to hire a dedicated customer support representative.
This provides time to focus on higher-level responsibilities.
SEOs, digital marketers, copywriters and designers.
Depending on your business model and goals, you may want to hire several freelancers to do a one-off job.
For example, if you are having trouble with visibility on the SERPs, hiring an SEO to optimize your site can help.
You may already know some people who will fill these roles, but you must remember that you will need all of these services up to a point.
Only you can decide if it is worth hiring salaried employees in these roles.