Dropshipping is an effective and exciting way for entrepreneurs to launch a profitable business with minimal investment and risk. Use this step-by-step guide to set up your dropshipping business with Shopify and Modalyst today!
What is Dropshipping?
Dropshipping is a fulfillment business model where entrepreneurs can sell items directly to consumers without actually owning any inventory. The online store makes the sale directly to the buyer, but the online store routes that order to a supplier instead. The supplier packages and ships the item directly to the end customer, but under the online store’s name.
Dropshipping involves minimal risk, as no inventory needs to be purchased. This means there is no overhead for storing products, and it is increasingly convenient as the supplier handles the packaging and shipping directly.
What is Shopify?
Shopify is an e-commerce tool that allows you to integrate your supplier catalogs and manage your inventory and product listings in one place. You can easily create and design an online store, set up dashboards and blogs, and create a custom domain that is best suited to appeal to your target market.
Shopify plans begin at $29 per month, but the price is well worth it as it includes 24/7 support. This will allow you to stay ahead of the competition and answer your customers’ questions immediately.
What is Modalyst?
Modalyst is an app that can be integrated into Shopify that enables online stores to source unique and quality items that are immediately available for sale. Modalyst has thousands of suppliers on their platform, in categories ranging from apparel and home to beauty. They also offer useful workflow tools as well, integrating inventory data such as stock levels and pricing.
1. Create Your Shopify Store
Sign up with Shopify
The first step to launching your dropshipping business is to sign up for Shopify. Once you set up your account with an email and password, you will be asked to fill out a few forms with questions about your background to help you set up your store. After these have been submitted, you will be redirected to your new dashboard where you can access the front- and back-end of your store.
Choose Your Layout and Theme
Next, you will need to select a theme that will determine the layout and design of your store. You can do this by selecting “Online Store” under “Sales Channels” and then selecting “Themes”. There are options to customize the layouts, and you can select unique images, fonts, and colors.
While choosing your setup, consider how you want customers to navigate around your store. Set up a menu where customers can find basic information about including products, shipping and return policies, and contact information.
Register a Domain Name
Registering a domain name is the next step. While it is not absolutely required, it is very beneficial for branding purposes to have full control over how your URL will read. To do this, click the “Buy New Domain” button or purchase it through a third party like Namecheap.
2. Select Your Target Market
Once your Shopify store is set up, you must decide on a target market. To get the most out of your dropshipping business, you need to identify a niche market so that you can cater your product offerings to meet their needs.
Through research, you can determine the best products to sell to the target market that you choose, but consider products that cost less than $20 and have no discernible brands, as this will help you maximize earnings and minimize competition.
3. Sign Up with Modalyst to Find Products to Sell
Signing up with Modalyst to find products to sell is your next step. Browse the app store from your Shopify dashboard and select Modalyst, then click “Get”. This will automatically install the app to your Shopify site and integrate all of their features.
You can initially sign up for free on the Hobby plan, and this will give you full access to the app and their marketplace so you can get a feel for how it works.
4. Add Products to Your Shopify Store
What’s a Shopify store without products? You can go directly into the Modalyst application to select the products you want to add, but remember to consider your niche market when creating your product list.
Select which Products to Add
Choosing the right products to feature in your dropshipping store is essential. Focus on items that have a large number of high ratings, and suppliers with a feedback score of at least 95%. Select either branded or non-branded products, and if possible order a sample from the supplier to see how the purchasing process flows and to determine the quality of the product.
You will be working with these suppliers extensively, so make sure you understand their policies as well as how responsive they are with communication.
To add a product, simply click “Add Product”. Make sure that you add the product name, description, and who the vendor is so customers know exactly what they are purchasing. Adding images and creating compelling descriptions will help increase your sales volume and attract customers.
Using the Organization section of the Shopify menu, organize your products into collections by type of item or vendor to make the customer experience even more seamless. In addition, you should create keyword tags to help buyers search for products.
After adding items to your store, you need to determine the selling price. Use platforms like Amazon to research what is reasonable pricing for items similar to the ones in your catalog. Your goal is to sell items for more than what you pay the supplier for the product and for shipping, but not so high that buyers are not interested.
Be sure to link payment options to your store at this time too. Shopify payments are ideal as it can track all of your transactions for you and help you create customized templates. However, it is not available in all countries so you may want to consider setting up PayPal as well.
5. Configure Shipping Terms and Rates
At this point, you have to edit your shipping rates to ensure you are providing accurate prices. To do this, look at the size and weights of your products and determine the pricing for both local and international deliveries.
Note that this price should also consider the surcharge the supplier may charge for packaging and preparing the product for shipment – you want to make sure you are not on the hook for these costs. There are
6. Set Up Customer Support
Setting up customer support is an extremely important step, as you want to help your customers make a purchase. Even though you already set up contact information in your store, consider an additional tool like ZenDesk or Intercom to decrease your response time. They can help support your customers through chat or phone and can be seamlessly integrated into your store or social media.
7. Launch Your Dropshipping Store
Last but not least, it’s time to launch your store! Up to this point, your site has been password-protected and kept private, but when you are ready to open for business you can unlock it and make it open to the public.
To unlock the site go to the “Password” section of the “Preferences” page, then un-check the box that says enable password page. Once you hit save the site will be live, so now you can get started with promoting your store on social media and start attracting paying customers. Good luck!
Setting up a drop shipping store is a great way to earn money as an eCommerce business. The most compelling feature of a drop shipping store is managing a store without the hassle of inventory and shipping logistics.
You’ve likely heard stories from entrepreneurs about how expensive starting a business is. These include tales of hopelessly seeking investors, or businesses struggling to stay afloat due to bleak financials. Don’t let this scare you out of starting a drop shipping store because this model allows you to sell products with little risk.
All you need to do is receive the orders and get in touch with your supplier – the rest is up to them.
When it comes to funding your business, there are very few financial obstacles associated with setting up a drop shipping store. In fact, you can get started with an online store with almost zero initial investment.
Here’s a 7-step foolproof plan on how to start a drop shipping store on a shoestring budget.
Setting Up Your Drop Shipping Store on a Budget
1. Research Your Options
Before starting any type of business, you’ll need to do some homework.
This involves getting online and checking out your competitors who are selling similar products. You’ll also want to spend some time researching your potential suppliers and distributors to see what each has to offer.
Each shipping partner will have a unique way of doing things and pricing models, so pay close attention to those details so you can make sure you’re pairing up with the right group for your drop shipping store.
2. Create a Plan and Stick To It
Before you can start your business operations, you’ll need to have a solid plan in place. This includes a budget. Whether you have $50 or $500 to get started, it’s important to identify what your budget is and make sure that you stick to it. The best way to do that is to keep careful records of all of your expenses to make sure that you don’t go over your budget when you’re setting up your store.
If you know you want to sell animal related products, pick a specific area of that industry, such as vegan pet food or clothing for dogs.
You’ll have a much better success rate when you can narrow your focus down because you’re more likely to be found when people are searching for a certain type of product. If your focus is too broad, your small shop will get lost in a sea of competitors.
Shopify and Wix are some of the most popular eCommerce platforms available to sellers today. It’s easy to get started and its user-friendly interface makes setup and maintenance easy, even for sellers who aren’t particularly tech-savvy.
Shopify and Wix are both affordable option, with monthly rates at less than $40, making it a great way to get started in the world of eCommerce on a budget. You can also start a Modalyst store, which helps you to increase your distribution and streamline your distribution process
After you get set up with a basic online storefront and have your products selected, you’re ready to move on to the next step.
5. Make Arrangements With Your Drop shipping Suppliers
There are plenty of choices out there when it comes to deciding which supplier to use for your drop shipping store. Since you’ve already done your research in step one, this is the time where you formalize your choice. You can do so by entering into a deal with the product distributor(s) of your choice. Each of the most popular shipping partners makes it easy to get started and you can be on your way in no time, without having to pay any upfront costs.
The most important questions that you ask of your potential suppliers are:
Do you keep products in stock?
How do you handle returns?
What is your average processing time?
What areas do you ship to? Do you ship internationally?
What type of support do you offer?
Is there a minimum order quantity?
Once you find a supplier who answers those questions to your satisfaction, you’ll have a solid understanding of how your suppliers run their business. Furthermore, you’ll know what you need to do as a seller working with them. At this point, you’re on your way to a successful working relationship.
6. Start Selling
Congratulations! This is one of the most exciting steps in starting your online store. Once you have all your plans and agreements in place, it’s time to upload your product information to your site and start selling.
You might not see many sales to start out if people aren’t aware of your products. If this is the case, you’ll want to spend some time and resources on advertising. You can keep advertising costs fairly minimal by starting with low-cost ads on Facebook and Instagram, or advertising on blogs and other websites that have a similar audience.
7. Optimize Your Site
Once you have some sales and experience under your belt, you can take some time to customize your site. You can do this earlier on in the process, but it’s often a good idea to wait to see what’s working before you start making changes.
As you can see, all it takes is a few steps to set up an online store, and most of them don’t require any money. If you’re passionate about becoming an eCommerce business owner but don’t have a lot of capital to start with, you’re not alone. This is why there are so many platforms that make it easy to get started without spending a fortune in the process.
Make sure you do your homework and formulate a plan that you can use to guide you through setting up your dropshipping store while staying within your budget, no matter how limited it may be.
Once you start creating strong relationships with successful drop shippers, you’ll set the foundation to become one yourself.
So don’t hesitate to join groups, ask supplier-related questions, and build vital relationships.
Subscribe to a wholesale supplier directory
Directories are populated databases of wholesalers that store owners can research by product type or market.
They’re one of the best ways to find drop shipping suppliers because every listed company has to go through some type of screening to confirm their legitimacy.
And while a directory subscription may be expensive, the appeal is in the hours saved having to contact manufacturers one by one. Plus, many of these supplier directories are curated, which means the suppliers are mostly vetted for you.
Trade shows are ideal events for you to find wholesalers and product makers in the areas where you want to dropship.
They also offer a way for you to keep yourself updated with the latest methods and technologies being used in manufacturing.
According to Ecom Elites, it’s during trade shows that you can get some face time with dropshipping suppliers.
Therefore, it’s imperative for you to come prepared.
For example, preparation would help you better demonstrate what kind of packaging you’re looking for, where to place your branding, etc.
Trade Show News currently has the biggest directory of trade shows, and you can look for the type of event you’re interested in by country or by industry.
Choosing the right suppliers for your ecommerce store
You’re probably excited by the range of droship suppliers at your disposal.
However, there are just a few who’d be able to live up to your expectations.
Below are some tips to help you decide whether you should work with a vendor who dropships or look somewhere else.
Once you’ve identified the dropshipping suppliers you wish to work with, order a few samples from them.
When you order from them, make sure they offer you the wholesale pricing for the item. If they attempt to charge you more than the wholesale price, you should be wary.
This will enable you to verify their packaging, delivery times, quality of products, and more.
Be wary of ongoing fees
It’s recommended that you avoid suppliers who insist on ongoing or monthly fees to work with them.
Directories charge membership to access their database, but no independent supplier is known to partner for a fee.
Keep tabs on pre-order fee
Most dropshipping suppliers will ask you to pay a pre-order fee.
However, a few will also take advantage of the inexperienced dropshipper by quoting outrageous figures. This could be anywhere between $5 to $15.
Although the highs and lows rest on product margins, you should keep monitor and compare pre-order fees between your preferred suppliers.
Determine their production capacity
Some dropship wholesalers only manufacture items seasonally, which is a big red flag if you’re planning to dropship products all year round.
Get familiar with their returns policy
If you dream of becoming a successful drop shipper, you need to effectively deal with product returns.
So getting yourself familiar with the return policy of your supplier is a crucial aspect of narrowing down suppliers to partner with.
Ensure the policy doesn’t hang you to dry out by understanding the entire returns process.
It’s also a good idea to discuss this in detail with the supplier and have the policy documented.
How to Find Top US Dropshippers with Modalyst
What is Modalyst?
Modalyst is a dropshipping app for e-commerce platforms that connects you with thousands of drop shipping suppliers.
With Modalyst you can access a huge variety of different products to sell online. From fashion, electronics, toys, beauty – Modalyst makes it easy for you to find products from dropshipping suppliers and instantly add them to your own online store.
Modalyst has a membership plan for beginners in which you can add products to your store for free. You can use the Modalyst Hobby plan and start dropshipping today.
How does Modalyst work?
Modalyst helps online stores automate dropshipping with Shopify, Wix, and BigCommerce platforms.
Our main focus is to present you with a vast list of suppliers from high-quality markets like the US, Canada, Australia, and Europe.
What’s fascinating about Modalyst is that many of our suppliers are in the United States. They also warehouse and ship their orders from the US.
Having US dropshipping suppliers is a big point of differentiation for Modalyst and can be for you too as you start your dropshipping business.
The Benefits of Dropshipping with Modalyst Suppliers
Shipping is one of the most important factors when deciding to purchase something online.
One of the key downsides of drop shippers in China is the long lead times and delivery windows. Depending on the Chinese manufacturer, it can sometimes take days or weeks for a customer to receive their package.
This alone can make customers dissatisfied with their buying experience. When a customer is dissatisfied, the customer is less likely to return to your store. Potentially losing a customer because of slow shipping options shouldn’t be a factor you’re willing to live with.
By contrast, working with American dropshippers offers the following benefits:
Fast Shipping & Delivery for Your Customers
Shipping within the USA typically takes between 1-3 business days.
This means that your customer could purchase a product from your e-commerce store and have the order delivered the next day.
A satisfied customer is always your best marketing asset as it can lead to word of mouth advertising for your online shop.
On Modalyst, we have dozens of suppliers who offer fast shipping and delivery to your customer within 3 business days, and many others, within 1 week.
A Reliable Tracking System for Orders
Your customers will want to have visibility into the status of their orders, including shipping and tracking.
On Modalyst, we allow you to track your customers’ orders once they are shipped by the drop shipping supplier.
Our suppliers partner with a wide of range of shipping companies, including USPS, FedEx, UPS and DHL.
A Variety of Shipping Options
US courier services like USPS offer a wide range of shipping options.
These options include next-day, second-day, or third-day delivery to your customers.
In some cases, these shipping providers can provide same-day delivery.
Generally, the faster the delivery, the higher the price. However, at Modalyst, we prenegotiated shipping prices with our dropshippers and set a ceiling of $5 per order for US deliveries.
Before we expound on the benefits USA-made products offer, it’s important to acknowledge the elephant in the room.
Products made in the United States and shipped by suppliers in the US are generally going to be more expensive than those made in China and shipped by Chinese suppliers.
Why is this the case? Well, the input variables are very different depending on the location of the supplier.
For example, the relatively high cost of labor, materials, rent and other factors all factor into higher product costs in the United States. But those added costs come with product benefits that will allow you to charge your customers higher prices.
And as customers become more sensitive to fair trade and sustainability, they’re more than happy to pay a premium for American made items.
Let’s look at some of the product benefits of using US dropshipping suppliers:
US drop shippers have an established reputation for making high quality products.
The suppliers on Modalyst are no different. Through our vetting process, we find the best suppliers of high-quality products.
By contrast, the products manufactured in Asia do not have this reputation. When you source from China, the expectation of quality is usually much lower.
Why does the quality of products matter?
If you sell quality products, you’re more likely to draw the customer back to your online store.
Traditionally, consumers are looking for something of durable quality and precise craftsmanship. While the ticket price can be prohibitive for some consumers, others are willing to pay a premium for high quality products.
Charging your customers a premium for products can be a distinctive advantage for a small business. To learn more about how to sell high priced items, check out our guide on Selling High Priced Items.
When your products are made in the America, you are allowed to advertise them as “American-made.”
The American-made badge is a seal of approval. It’s also a competitive advantage for ecommerce stores who are dropshipping. It’s a powerful marketing tool that sets you apart from many other online shops, especially sellers on eBay and Amazon.
Like they are for high quality products, consumers are happy to pay more for American-made products.
Higher Retail Prices
Per the discussion above, you can slap a higher price tag on American-made products.
While you may pay a higher wholesale price to your supplier for American-made, you can almost always pass those costs onto your customer.
This allows you to extract your baseline profit margins or perhaps even higher margins depending on the category you sell.
How to Find Suppliers for Dropshipping (in the USA) on Modalyst
Modalyst handpicks all the dropshippers on our platform, including the US drop shipping companies.
Today, the number of suppliers on Modalyst exceeds 1,000. While we have a global platform with vendors from all major corners of the globe, most of our suppliers are based in the United States.
US based dropshipping suppliers are especially important to our platform because they offer many unique benefits that Chinese wholesalers do not.
Modalyst suppliers and products are different from what you will find on Oberlo.
Our focus is not just on the location of the supplier, but also on the quality of the products and how fast orders ship to customers.
Modalyst believes that these attributes will keep your customers coming back for more.
You can also find plenty of niche products to sell online in the Modalyst marketplace. Access to these niche items means you don’t have to struggle for profits in a very saturated industry.
[UPDATED] If it were easy to start a successful ecommerce store, everybody in the world would be millionaires.
The ecommerce industry plays a role in this misconception. They make it sound like running an online store is a piece cake. Everywhere you turn you can find a Youtube ad in which a talking head tells you they made $100,000 in a single month with their Oberlo dropshipping store.
While they may be telling the truth about their success, these ads aren’t telling you all that goes into the process.
Namely, those drop shipping gurus are experts at finding great products to sell. They understand the value of a curated product selection and have a defined process that ensures they’re buying and selling at a reasonable profit.
As a new entrepreneur, you can’t create that process out of thin air.
You need a starting point, and that is what we’re offering below.
We’re going to start by outlining where you can find popular products to sell on your online store.
Trending Products to Sell Online in 2020
Before we dive into the nitty gritty, it’s important to discuss the importance of Google Trends in finding top trending products.
When it comes to starting your drop shipping business, the first step is usually the hardest. However, if you know how to use Google Trends, you will be able to be decisive about a plan and ultimately put your worries and fears to rest.
If you’re not selling products that are in high demand, any cumulative gains you realize may not be worth your while.
For one thing, trending products is actually a very competitive niche. There are lots of people jostling for ever-shrinking bits of the ecommerce market.
As players in this space continue to use advanced search engines and tools for an advantage over their rivals, they continue to drop their prices to new levels of low.
The suppliers aren’t doing any favors with their prices either. They are in business to make money, just like every business outfit.
Let’s put this plainly: there are opportunities with this business model, but they aren’t lying around for the average Joe. It’s up to you to find them wherever they might be hidden.
Google Trends to the Rescue
Thankfully, there is at least one easy way to uncover these opportunities. It’s Google Trends, a tool which lets you know what people in your locality or around the world are looking for with its search engines.
It displays the most popular search queries of the moment, as well as over different periods from the past. A lot of this information is depicted in charts that are easy to understand.
Here’s why this concerns you: when a lot of people are looking for particular products, their searches will turn up in Google Trends. And if you use it, you’ll be able to tell the most-searched-for merchandise within any given period.
If you know anything about SEO, you’ll probably realize straight away the potential gold mine this resource could be for you or for any other dropshipping venture, online website, or businesses in general.
How to Grow Your Business Using Google Trends
Sell Products That People Actually Want
With Google Trends, a drop ship business becomes about delivering stuff that people are looking for. When there is a large audience looking for a product via Google search, it’s a good indication that the product has a sizable pool of potential customers you can market to.
Make Relevant Content Marketing and Ad Campaigns
You already know that the demand for any given product varies over different regions.
What Google Trends does is to give you a glimpse into what those differences are. For instance, if you’re going to reach potential customers in two locales with ads, you’ll want to know how to allocate ad spend for the different campaigns.
While Google Trends won’t help you with exact sharing formulas, it will let you know the difference between the levels of interest in both towns for the product you intend to offer. This will, in turn, inform your decision on how effort you should expend in reaching target audiences in each locale.
Also, the tips gotten from this tool can be used to drive more targeted digital marketing initiatives. You can mine trending keywords from Google Trends and plug them into your online content. When combined with other SEO strategies, this could help your content get more clicks and score higher search result rankings.
Come Up with Deals and Promotions for Specific Locations
Google Trends deliver accurate insights that are integral to the success of your region-specific marketing campaigns.
Deals are usually designed to get more people interested in the things you’re selling from manufacturers, and ultimately, raise sales and revenues. But unless you’re offering deals for things that people in the areas you’re targeting actually want, you may not achieve the result you hope for.
Leveraging Google Trends can help bring you closer to your goal.
Gain Valuable insights Into Viable Markets and Target Audiences
The trend lines you see are not just summaries of droll statistics. They represent the stories of real people: their problems, hopes and dreams, expectations, their search for a solution, and their painstaking review of answers they think are viable.
These lines and charts deliver real-time insights into the major concerns and pain points of your target audience, as well as tidbits into the viability of a product and inside scoops about their preferences that you could exploit in your brand messaging to draw them to your products and services.
Tips on How to Find Trending Products in 2020
1. Look in the Mirror
You’re an entrepreneur, so you probably have some pretty great ideas for top trending products.
It’s always worth investigating something you’ve already thought of before desperately scouring the internet for that one magic product idea.
It’s wise to consider products, niches, and industries in which you and your friends are interested. After that, brainstorm any potential pain points or inconveniences you experience in your own life.
2. Look to the Local Trends
The answers you seek may lie in your local community.
Meaning, you don’t necessarily need to embark on an epic journey to Middle Earth or – even worse – the dark web to find trending products to sell.
You can visit local brick-and-mortar establishments and assess trends.
Therein might lie a ground-breaking product idea that you can take into the retail space. Take a few weekend afternoons to study the newest and most exciting retail concepts and products.
Alternatively, if you aren’t into galavanting around town searching for ideas, local newspapers feature innovative products being developed and sold in your community.
Decide if the local trends could sell in the digital sphere. Some products sell better in physical locations than they do in the digital space – and vice versa.
3. Adhere to the Experts
Online consumer trend publications will steer your online business in the right direction.
Within trends publications are experts whose job is to be accurate and discerning about the growing trends. By reading them, you’ll start getting a sense of consumer preferences – or in layman’s terms, what new trends online are shoppers flocking to.
You’ll also be privy to what other online stores are bringing to the consumer marketplace.
These publications will also bring to light new product ideas and industries you otherwise would have never known.
Trend Watching’s team of 30 professionals throughout London, Singapore, Sydney, and Largos report on a smorgasbord of worldwide trends.
Those seeking a more mainstream trend publication will enjoy Trend Hunter – the largest of its kind.
With a global network of 137,000 members and 3 million fans, Trend Hunter is brimming with inspirational product ideas that might help get your ecommerce website off the ground.
4. Turn to the Top Dogs
Reinventing the wheel is virtually impossible.
It always helps to look at the best sellers over the last couple of years and the new trends in the present, then use those examples as starting-off points.
Once you have an idea of your preferred market or industry, there are multitudes of online tools, such as Topsy and Followerwonk, that’ll aid in discovering social media influencers in those spheres.
Influencers can actually teach you a lot.
By using their example as a template for success, you’ll be in way less over your head than if you try conjuring up a business model from scratch.
5. From the Mouths of Critics
The truth lies in product reviews blogs.
You can find out the ins and outs of any product, market, or industry based on this valuable content.
Reviews will let you know about failures in products, gaps in the market that you could leverage, and the type of people to whom you’ll be selling.
These blogs will also offer a well-rounded look into the newest trends on the market and can provide another source of inspiration for finding popular products. Many of them also include long products lists and Google Trends data supporting how certain product categories are trending over time.
Niche blogs act as a conduit to finding those top trending products to sell online.
6. Social Curation is Your Key to Finding What to Sell Online
The following two social curation sites have built-in social signals that can offer an immediate sense of a product’s popularity:
Pinterest contains 100s of thousands of images that contain exciting new products. There are 50 million users and a dedicated ‘popular’ section that shows trending items.
Fancy is equal parts store, magazine, and wish list. It’ll offer you a strong sense of new product trends that’ll give you great ideas about which products to sell online in 2020.
7. Reddit is Your Realest Product Source
Other than being the largest social media news aggregator, Reddit is ostensibly the most powerful digital platform.
There’s a reason the online powerhouse is known as the front page of the internet.
Within Reddit, there are thousands of subreddits offering a window into virtually any niche topic you can imagine – making them one of the best places to find different types of products.
No matter the industry or product niche, it’ll be on a subreddit.
Don’t believe us? Just search, and we guarantee you’ll find a subreddit for the most obscure and niche products online you could imagine. Then, you’ll know if there could be a viable interest.
Since Reddit is interactive, you can engage directly with your target market to gain further market insights about the best products to sell online.
Evaluating the Best Products to Sell Online in 2020
When choosing top trending products to sell in 2020, you must evaluate the market as well as the product itself.
First, let’s look at what to consider when assessing the market:
8. The Size of Your Playing Field
You must initially hypothesize the market size for your product.
Start by using common sense.
Running shoes for males between 18-25 are going to have a large market with high demand. Whereas, a tracksuit catered to 40-50-year-old plumbers with an active lifestyle is too much of a niche for your business to make waves.
9. The Stiffness of Competition
Are you selling a product with no competition?
Well, that’s likely due to the product not being attractive to consumers.
Conversely, if the market is too saturated, despite the product probably being a great seller, the competition will make it difficult to get a strong foothold in the market. In this instance, you must find a way to set your product apart with creative branding to find any success.
The safest strategy is choosing a product that has a few successful competitors and is on the rise. Though, playing it safe doesn’t guarantee success.
10. The Shelf-Life for Selling
Under any circumstances, avoid getting caught up in a product fad.
The returns will be very short-term because the demand will die out quicker than you can say ‘why me?’
It’s possible to capitalize on a fad if you buy in and out at precisely the right times – but those are tricky waters to navigate since the lifespan of a fad is highly unpredictable.
A trend is akin to a fad’s more charming and reliable brother.
While trends do have a shelf-life, they grow and decline at a far steadier rate than fads and are, thereby, far more lucrative. Trends can develop into long-term stable markets, but much like fads, it’s tough to predict.
When looking to limit ups-and-downs, selling a product that exists in a stable market could work – which has undeniable lasting power and does not fluctuate. This fact does mean, however, that the market is unlikely to grow, so your success will hit a ceiling.
Lastly, there are growing markets that show steady improvement and an ability to cause a long-term market shift.
11. The Convenience Factor
How easy is it for your consumers to get the product you intend on selling?
Is purchasing a simple matter of heading down to the local strip mall? Then it might not be the best product choice. On the other hand, if a product isn’t easy to find, people are far more likely to search for it online.
12. The Customer Psyche
Get a good feel for the type of customer that your product appeals to, including knowing their online shopping proclivities.
For instance, selling to teens comes with the obstacle of your target not having a credit card to make an online purchase. Whereas, selling to baby boomers means your target customer will be technology-averse and generally won’t purchase online.
In the case of catering to teenagers, you may benefit from directing your marketing efforts towards their parents, as they’ll make the purchasing decisions. With baby boomers, positioning your product as a gift might work.
This way, your advertising would appeal to the children of boomers, who’d purchase your product for their parents.
Now, we’ll take a look at product evaluation:
13. Markup Can Make You Crazy
You’ll be amazed at the mountainous list of fees that render each sale bereft of profit.
As such, sufficiently marking up your product is a must before trying to sell, especially right off the bat. You’ll need to offset those selling fees on top of the other costs associated with getting your business off the ground.
Click here for an example of the fees you might be stuck with when selling a product. It’ll give you a good idea of why some eCommerce businesses mark products up nearly 1,200% to generate a reasonable profit.
14. The Selling Price Sweet Spot
The sweet spot for eCommerce pricing is estimated to be around $75-$150.
You won’t need to move tons of product to generate a return, nor will you be stuck with hefty marketing and operation costs.
When a product is too inexpensive, you’ll have to sell an enormous number of units to turn a profit. Then, there’ll be mix-ups and issues with customer service due to the volume of sales.
On the other side of the spectrum, expensive products come with extended sales cycles and pickier customers.
Finding the perfect product for the ideal price is vital in being efficient as a dropshipper, where you’re already wearing many hats and need to streamline operations as much as possible.
15. Subscribing to Success
Turning customers into subscribers is the best way to get continued business.
It also automates the selling process which requires less effort and decreases operating costs.
Even if your product isn’t traditionally subscription-based, try to do what Dollar Shave Club did with razors. It could turn into one of the most profitable decisions you make for your business.
16. Size DoesCount
The size and weight of a product can eat directly into your profit margins.
Customers won’t settle for anything less than free shipping, and you may have to eat the costs associated with more substantial items.
Decide whether the market demand can offset the size and weight-related costs of your product.
17. Durable Products Could Mean Enduring Success
Fragile products will cost more in replacements, exchanges, and protective packaging.
While it’s possible to be effective at shipping fragile products, it requires considerable strategy so that it doesn’t devour your profits.
18. Is Your Product a One Season Quitter?
Seasonal products won’t necessarily sink your business, but they come with more challenges than products that sell year-round.
Ensuring consistent cash flow with seasonal products requires marketing to different countries at different times of the year. This tactic works very well with winter and summer clothing, as opposed to holiday-based products.
Seasons happen differently all over the world, whereas most holidays happen on the same day, regardless of country or continent.
19. Product Turnover Could Mean Profit Turnover
There are products, like smartphone cases and running shoes, that regularly need new designs to meet the latest demands of the market.
Meaning, the older models need to sell before the newer ones hit the market. Otherwise, there’ll be a massive stockpile of outdated product.
Selling items that need to be refreshed and updated continually is risky, so planning and adhering to a turnover schedule is a must.
20. Can the Product Grow with Your Business?
Okay, so your business is in its infancy.
Amid all the initial hiccups, planning to scale your business is a tall task.
Regardless, accounting for scalability from the building-block phase of your business will equip you for long-term success.
If you’re selling spices from a local butcher, will the butcher be able to get you enough product to meet an increasingly growing demand? Will you need more employees to handle the increase in sales?
Those are just a couple of questions you’ll need to consider when evaluating your ideal product.
Validating your idea requires getting a clear idea of real buyer interest in your product.
Here are some methods you can use to validate your product:
21. Want Answers? Then Ask the Right Questions.
You can peruse all the Google reviews you want, but there’s nothing quite like first-hand research to paint a truly accurate picture of your product’s selling potential.
There is plenty of survey software, such as Survey Gizmo, that’ll help you create valuable surveys.
To execute a useful survey, you’ll first need to verify your target audience, which entails asking key questions to validate them being the potential consumers most interested in your product. Reaching the right people ensures the survey won’t be superfluous.
From there, determine whether people genuinely like your product idea. Then, even if they are a fan of the concept, figure out if there are aspects they don’t like.
The last element of a useful product validation survey is gauging purchase intent. Seek random survey subjects instead of people you know, as they’ll provide you with more honest answers
Products like Survata help distribute surveys to your target audience.
22. Let the Crowd Fund Your Dream
Crowdfunding is a real proof-in-the-pudding way to validate your product.
When people are willing to shell out their money for your Indigogo or Kickstarter campaign, it means your product idea is – at the very least – exciting.
Then there’s the benefit of collecting money upfront to fund initial operations costs and inventory. It’s worth noting that for a successful crowdfunding campaign, you’ll need an innovative product that piques your audience’s curiosity. Generic or rebranded products won’t fit the crowdfunding bill.
You will likely require a prototype before making a campaign and setting up crowdfunding is a taxingly comprehensive process that’s a job unto itself.
23. Landing on Product Validation
All a landing page requires (other than very well-written copy and a strong brand narrative) is your value proposition and an email collection box.
Collecting email helps you gauge if there’s any real interest in your product. Plus, you can establish goodwill relationships with potential customers.
One way to execute a landing page is by using Shopify’s pre-launch page. From there, embed an email sign up form from an email provider like Klaviyo.
24. Testing the Waters
Setting up a test store is going to provide the most stone-cold proof on whether you have a profitable product.
It involves driving traffic to a temporary store and selling your product for a brief time to test consumer interest and demand.
Now that we’ve equipped you with some basics on how to find, evaluate, and validate your products, it’s time to take your eCommerce or dropshipping business plan to the next level!