Creating a drop shipping business continues to be a hot topic in e-commerce circles.
I’m sure you’ve already heard through the blogosphere the story of Justin Wong. He is an internet entrepreneur who made $12,000 within a month of launching his online store.
He started his drop shipping business with zero investment and hit the proverbial jackpot in less than 30 days.
The remarkable thing is that Justin’s story is not unique. There are literally millions of other entrepreneurs who have started eCommerce stores without any upfront investment. In fact, at Modalyst, tens of thousands of new online stores come to market every month, each emboldened by the dream to build a legitimate and lucrative dropshipping business.
The question is how do you join this party?
First, you need to understand what is involved in launching a dropship store and how it works.
What is Drop shipping?
Drop shipping is a retail method for online stores to sell products and have the suppliers ship the items directly to their customers.
This eliminates the challenges of holding inventory and allows you to focus on things like marketing and sales.
The key difference between drop shipping and the standard retail model is that the selling merchant doesn’t warehouse or own any inventory.
Instead, the merchant purchases inventory as needed from a third-party — usually a brand, supplier, or wholesaler — to fulfill orders.
So, the online seller never actually sees, holds or ships the item, they are effectively advertising it for the supplier and marketing up the price of the product so they can make a profit.
How does the Dropship Model Work?
In simpler terms, this is how drop shipping model works:
The eCommerce merchant “stocks” products on their website or marketplace.
The eCommerce merchant doesn’t actually hold these products. The products are warehoused by the supplier or wholesaler (who could be anywhere in the world). These products may cost $1 per unit from the supplier, while the eCommerce merchant lists them at $3 each (making a profit of $2 from the sale).
When a customer orders a product from the eCommerce merchant’s website, the merchant receives a notification. The merchant then forwards that order to the supplier, either manually or automatically.
The supplier fulfills the order and ships it directly to the customer under the drop shipper’s name.
Understand the Pros and Cons of the Drop shipping Business
Drop shipping offers the ability to start an eCommerce store without the inherent risks of owning inventory.
This is incredibly appealing to entrepreneurs who want to quickly launch a business without the hassle of overhead cost and shipping logistics. That being said, the drop shipping business comes with its own challenges that are often overlooked.
Every business model has its challenges and drop shipping is no different. In order to be successful, you should prepare yourself for some of the challenges you will likely be facing.
You are the one dealing with the customers. That means any issues that your suppliers have with shipping on time or delivery, in general, will fall on you. Make sure you are prepared for many hours of customer service. This is not necessarily a bad thing as any time you have direct communication with a user is an opportunity to retain or upsell.
With shipping costs, you win some, you lose some.
Deciding on your shipping policy can be daunting since your suppliers will all be charging you different rates based on their location. While your inclination may be to focus on covering your costs, instead focus on your customer’s experience. If they are about to check out and find the shipping cost overwhelming, they will more than likely abandon the purchase.
Try offering flat rate shipping with a threshold for free (for example, after reaching $49, free shipping).
In general, approach shipping as “you win some, you lose some” mentality knowing that if you do your calculations properly, you are likely to even out at the end of the day
Suppliers may be a pain.
Remember you are relinquishing your control over inventory so you can only hope the suppliers have the same standard of customer service and professionalism that your store promises its customers.
This may not always be true so prepare your self for constantly updating your product selection until you find the most consistent and reliable suppliers.
Modalyst, however, has implemented a vetting process for suppliers so the network is comprised of reliable, high-quality brands.
Find the Best Shopping Cart Technology for You
Once you are committed to all the challenges (and excitements!) that come with drop shipping, it’s time to find a platform to start your e-commerce store. There are a lot of options out there, so find the one that best meets your needs.
Do you have experience in designing and want something very customizable? Is this your first business and need something not too expensive?
First, decide on your priorities and use a version of the checklist below to evaluate the different options.
Payment gateways offered
Access to additional integrations/apps
Analytics and reporting
Create an excel to compare and contrast the options.
There are also some great companies out there that will help you set up your store if you need assistance.
Parkfield Commerce, for example, is an eCommerce expert who will help you create a beautifully designed eCommerce store with full functionality to offer your customers a pixel perfect experience.
Decide on your Intended Customers
If you haven’t already, now is the time to decide on your audience. As much as you would like to target everybody on earth, the best place to start is with a niche group so you can focus your marketing efforts effectively. Once you know who you want to visit your store, you can apply better branding, messaging and find the best products for those particular customers.
Find Drop shipping Suppliers
Time to fill your store with products from the best drop shipping suppliers.
The times of googling for cool new wholesalers and brands are over thanks to the many drop shipping marketplaces out there who will provide lists of suppliers for you to choose from.
Depending on what you are looking to sell, there are platforms offering mass-produced products at lower prices and some that are more curated with independents.
Modalyst, for example, offers fashion accessories, apparel and home goods from a selected group of suppliers interested in building relationships with e-boutiques all over the world.
Our Shopify Dropshipping app makes it easy for retailers to click to add products to their stores. Where it used to take an average of 38 days to develop a drop shipping relationship, with new technology like what Modalyst offers, it literally takes seconds.
Online stores can sign up for their free forever plan for full access to the dropshipping marketplace and experience the app that automates not only sourcing but also order fulfillment and inventory levels as well.
As a new eCommerce entrepreneur with a million things to do, this means you can manage hundreds of suppliers and vendors in one central place.
Set up Social Media Accounts For Your Online Store
I should not need to convince you about the benefit of social media when building a brand for your dropshipping business.
Your eCommerce store is indeed a brand.
You want your customers to understand your personality and feel like you are a friend so they trust you and therefore purchase from you.
Social media is crucial for this not only as a way of communicating your aesthetic but also as a channel for customer service.
Try not to be daunted by which channel to use.
Find the one that you are most comfortable with and give it a try. You can expand to all channels later on but it is important to experiment to see which ones are going to be worthwhile spending time on (because it can be time-consuming!).
Instagram and Pinterest have worked well for our eCommerce stores so you may want to start there.
Find Helpful Apps
In this day in age, you don’t have to hire a team of people to customize your store. There are third-party developers, as well as Shopify and Wix apps, for that!
Take advantage of all the eCommerce apps out there that you can use to create things like better user flow, email capture, rewards programs, etc.
All these things can greatly increase your chances of sales and are typically relatively easy to set up.
The apps you want to focus on to start with are those that help you retain customers.
This can include things like pop up boxes to learn more about the customer browsing your site so you can reach out with specific suggestions; discount offers after certain user behavior like adding an item to the cart and then abandoning; adding product reviews to encourage sales.
There are over 1500 apps in the Shopify marketplace so embrace plugins as a way to extend and improve your marketing. The Wix App Market is also very extensive. Check out this resource on the top 40 Wix apps for eCommerce.
One app we love is Kit which an automated marketing assistant that helps you post campaigns on Facebook.
It will also suggest new products for you to add to your store so you can also offer fresh products to sell online.
Create an eCommerce Marketing Strategy
Every online store must have a marketing strategy.
And it cannot be that you will offer better pricing. Almost everything can be found on Amazon or eBay these days so that is a battle you will likely lose since they will always be able to offer lower prices. Instead, try reaching your customers before others do.
If you can present a product to them through a marketing email or Instagram post and follow up with seamless user experience, you will likely capture that sale.
Focus on an audience that might not be looking for better pricing but more novelty, niche products, and personalized shopping experience.
This is where you can win.
Lastly, be aware that retaining a customer is more cost-effective than finding new users.
Once you capture a sale, spend time on nurturing that relationship because in the end, it is better for your bottom line.
Deploy Marketing Strategy (Learn and Adjust)
The best lessons can be learned from the mistakes you make so don’t be afraid to try different tactics.
There are so many things to choose from like Pinterest boards, Facebook ads, SEO, Snapchat etc.
I would start there and slowly add on different channels.
The most important thing is to study the results so you don’t keep wasting time on something that isn’t working.
For example, if you post a product on Instagram, make sure you have a link to the product in your bio so that people can easily click through to your site. You can then look at Google Analytics to see how much traffic originated from Instagram.
This is very valuable data. If there are a lot of clicks and no sales, maybe this product is not right for your audience.
Make your First Sale
Once you can get people to your site, it’s time to focus on how to encourage sales to your online store.
This is when website design, particularly the checkout experience, can greatly influence a purchase. Try studying other sites where you like to shop and take screenshots of each step in the check out process.
The key is to eliminate friction points so one doesn’t feel distracted or worse, frustrated when trying to buy something.
For first time buyers, this is an opportunity to capture their preferences.
For example, if the customer is buying a swimsuit, you may want to offer a discount on a beach towel in a few days since you can assume they are in the market for summer gear.
This doesn’t require anything high tech.
Simply review your purchases every few weeks and look for ways to re-engage your customers in a personal way.
As long as you provide a favorable experience for a customer’s first purchase, you should spend more time on ways to get them to come back to your site than finding new customers.
The reality is that returning customers are likely to spend more money than a new user.
If you can build up a loyal customer base you can use them to help gain new users. For example, provide discounts to your customers that invite their friends to shop.
Think of your best customers as your sales force. This is an effective and efficient way to find new shoppers.
Consider the first few months a discovery phase when you are constantly trying new tactics, analyzing the results, and re-adjusting.
While you might start with a specific vision for your store, always be prepared to pivot based on customer feedback. Early on illicit feedback from the users that successfully purchase but also those that abandon during checkout.
Don’t be afraid to ask why they left the site, you may be surprised to hear their answer.
Most importantly, embrace that learning how to start a dropshipping business is a tricky and competitive field. If you focus on measurable tactics, you’ll be able to hone in on what really works for your customer base and drive sales.
Running a lucrative online business doesn’t have to be complicated.
If you’ve been mulling over the idea of launching a dropshipping business, then you’ve come to the right place.
Whether you’re just starting out with your online store, or you’re a 10-year veteran looking to add to your current business model, we’ve created the ultimate dropshipping resource for online stores and dropship businesses alike.
In this guide, we’re going to show you absolutely everything you need to start and successfully run a drop shipping business.
From finding dropship suppliers and picking the perfect platform to delivering customer support and marketing, here’s what you need to know!
If you don’t have to buy hundreds or thousands of products to sell upfront, you don’t need big startup capital.
You only pay for products to sell when the customers have ordered them.
And since you don’t have to warehouse those products either, you’re avoiding warehouse costs.
Finally, it’s much easier to have a digital storefront than renting out a brick and mortar store.
You can run your entire drop ship business from home.
If you decide overnight that you no longer want to stock one product but opt for another, you can do it.
If you decide to move across the world, you can. Your business won’t suffer for it.
You can choose your own hours, strategies, and plans. And with today’s automation technology, you can almost passively run your dropshipping business.
If you want to scale your business, all you need to do is invest in marketing and sales.
And because you can do the majority of work on your own, you don’t have to hire people, rent a bigger store, or pay for more warehouse room.
You just need to set up an ad or two.
You don’t have to have an MBA to start or run a dropshipping business.
You can find everything you need online and get started in a few days.
After all, you don’t have to worry about anything except for selling your products. Stocking, shipping… All of that is someone else’s worry.
You just process the payments and take your cut.
Dropshipping: The Cons
Now, dropshipping has plenty of advantages but there are a few disadvantages:
Depending on which products you sell online, your margins could be slim.
However, dropshipping is a game of quantity. If you take $1 from every sale, you’ll have $100 if 100 people buy a product.
It’s the compound effect.
Additionally, you can stock a variety of products and items to sell. You don’t have to stick to one niche or one type of inventory for dropshipping.
For example, if you sell dog grooming kits, you could also sell leashes, dog toys, and much more.
You could face a few problems with shipping if a customer orders two products from two different wholesalers or dropshippers. You’ll need to calculate the shipping costs for each.
Inventory management can get complicated if you’re working with multiple dropshippers, as their inventory changes often.
A good workaround is getting a tool that integrates the suppliers’ quantity information with your sales systems so you can automatically mark which products are out of stock.
Finally, you’ll be responsible for any supplier errors, which is why it’s always good to work with reputable suppliers.
We’ll show you how to find them later on in the guide.
When you start your eCommerce business with a dropship inventory model, you’ll often encounter some of these terms:
Address verification system – ATS is used to verify that the address buyer provided matches the address of the card to prevent fraud.
Chargeback – Forcibly issued refund from your customer’s bank. If you have a high volume of chargebacks, it can increase your operating costs.
Distributor/supplier – Middlemen businesses who stock certain manufacturers’ products. They’re typically faster to work with than actual manufacturers.
Gross profit – Product sold – Cost of product = Gross profit
Manufacturer’s suggested retail price (MSRP) – The price at which the manufacturer thinks a product should be sold. It’s not obligatory to sell it at that price.
Minimum advertised price (MAP) – The lowest price at which a retailer can advertise the product.
Minimum order size – The lowest number of products you have to order for the distributor or manufacturer to ship them.
Multi-channeleCommerce – An eCommerce business that uses multiple sales channels (e.g. Shopify store and Amazon listings).
Net profit – Product sold – Cost of product – Operating costs = Net profit
Per-order fee – Some manufacturers and distributors charge a fee for handling and shipping the order for the retailer.
Restocking fee – The fee charged to customers when they return a product.
Wholesaler – Distributor or manufacturer who offers bulk discounts for ordering large quantities of product.
How to Start a Dropshipping Business
Even though it isn’t hard to start a dropshipping business, there are a few things you should pay particular attention to:
Business Structure of Your Dropshipping Store
Every professional manufacturer or distributor will ask you for proof that you’re a real retailer before they consider doing business with you.
They’ve spent a lot of time negotiating with people who ultimately decided that dropshipping isn’t for them, so nowadays you won’t get further than a quick reply unless you can prove you’ve established a business.
Additionally, once you get the ball rolling, you won’t have the time to think about defining your legal structure.
When you’ve committed to starting a dropshipping business, the first thing you need to do is set up a business entity.
The majority of dropshipping entrepreneurs and internet business owners in the US use one of the following two business structures:
Sole proprietorship – The simplest business structure with a minimal amount of paperwork. However, when you set up a sole proprietorship, you are your business. You only file your own taxes. The main downside of this is that you guarantee for your business with your personal assets.
Limited Liability Company (LLC) – A LLC is the best way to protect your assets. For all intents and purposes, a LLC is treated as a separate entity, which means you get a lot more liability protection. You will have to pay additional taxes and fees, and the LLC will be subject to different filing requirements.
Calculating the Costs of Starting a Drop shipping Business
Even though dropshipping is one of the most affordable, cost-effective ways to start a profitable internet business, that doesn’t mean it comes without costs.
The first thing you’re going to need to start a dropshipping business is an online store.
Now, you could opt for a platform like Shopify or Wix, but you’ll still face some costs.
Some platforms charge per sale, while others charge a flat fee.
If you want a separate website, you’ll also have to handle hosting costs. You’ll need a domain in any case. Fortunately, the whole store setup won’t cost you more than $100-200.
Finally, depending on the type of legal structure you choose, you may have to pay set-up fees and/or any business licenses you may need.
It’s best to consult a lawyer for a detailed breakdown.
The majority of your investments will go toward marketing your dropshipping business.
You can create estimates of the costs, although you will only know the real figure once you start selling.
Even though you can absolutely run a profitable dropshipping store without ever touching the products you sell, that doesn’t mean you should.
It’s always a good idea to order product samples so you know what kind of quality your customers can expect from your products.
This can also greatly inform your pricing structure.
As you scale your online business, you’re going to need bigger plans for eCommerce and wholesale platforms, as well as a few enhancements of your store.
Of course, that depends on the platform you choose so keep reading to find out what the best ones are.
Ecommerce Platforms Top Dropshipping Websites Use
Tech has come very far.
And instead of having to spend hours upon hours on manually setting up your dropshipping website, you can do everything with a few clicks if you opt for one of the most popular ecommerce platforms today.
We’ll show you a quick breakdown of each, as well as their pricing structure.
Shopify for Dropshipping
Shopify is one of the most widely used platforms for dropshipping and eCommerce.
It’s simple, and it’s affordable.
It has integrations for most major dropshipping integrations (including Modalyst) so you can automate the majority of tasks.
You don’t have to manually send orders to your manufacturer as the integration takes care of that.
And you’re only a few clicks away from importing products from the dropshippers’ profiles.
Shopify as an eCommerce Platform
Additionally, Shopify also has features for:
Some add-ons aren’t free (for example, bulk sale processing), but they’re well worth the money ($10-$50).
You can also set up manual or automatic collections, which is a good idea if you’re selling different products.
Finally, Shopify also has handy SEO features (e.g. meta descriptions) to help you reach more people with your store and Shopify Lite which lets you sell through Facebook Messenger.
Shopify comes with a 14-day free trial, after which you can choose one of the following plans:
1. $29/month plan – This plan comes with an additional 2.9% + 30¢ online credit card fee per each sale, which is something you may want to calculate into your net profit calculations.
2. $79/month plan – This plan comes with gift cards enabled, as well as professional reports. The online credit card fee is lower – 2.6% + 30¢.
3. $299/month plan – Finally, Shopify’s most expensive plan comes with a great dropshipping features: third-party calculated shipping rates. Additionally, this plan includes only 2.4% + 30¢ online credit card fees.
Wix for Dropshipping
Millions of people around the world use Wix to power their websites and eCommerce stores.
Wix is used by over 100 million people across 190 different countries.
It’s an affordable, easy and hassle-free way of creating your own website in a matter of minutes.
Wix and Modalyst just launched an app for dropshipping on Wix. It is available in the Wix App Market or directly on Modalyst. Even though the dropshipping app is still relatively new to the market, it already has some positive reviews. We encourage you to check it out!
It offers app integrations with major dropshipping companies, as well as other apps that simplify order fulfillment and inventory management.
BigCommerce also supports multi-channel retailing.
And because of their partnerships with Facebook, Amazon, Google, PayPal and Square, BigCommerce users get to experience new sales features first.
And if you want to convert visitors without giving them huge discounts, BigCommerce has features for that!
All in all, it’s a powerful platform to fuel your drop shipping business. Especially if you plan on growing it.
BigCommerce comes with a 15-day free trial.
1. $30/month plan – Unlimited storage, but few marketing features. You can also have only $50k in annual sales before you have to upgrade. No transaction fees if you use payment gateways. If you process credit card payments, the fee is 2.9% + $0.30¢ per transaction.
2. $72/month plan – Marketing features like customer groups and abandoned cart saver are available with this plan. You can process up to $150k annually before you need to upgrade and the transaction fee for credit card payments is 2.5% + $0.30¢.
3. $225/month plan – Google review integration, custom SSL certificate, up to $400k in annual sales, and a 2.2% + $0.30¢ credit card fee.
Other Options for Setting up a Dropshipping Website
If you don’t want to set up your dropshipping store on any of the major platforms, you could always get a custom website and then add payment and marketing integrations.
For example, if you have a WordPress website, you can get a WooCommerce plugin that will allow you to process payments without switching to an entirely different eCommerce platform.
It’s all a matter of what you need. However, going with an out of the box solution or cloud hosted platform is usually simpler and more affordable.
How to Find the Best Dropshippers
When you’ve decided on a dropshipping platform, you’re going to need the main thing: products to sell online.
Now, as an online store, you’re not going to have or store any dropship products on your own.
As a rule of thumb, manufacturers don’t know the first thing about marketing.
Let’s be real: if they’re still in business without marketing knowledge, that means their products are definitely something special.
However, that means it may be harder to find them.
It’s usually easier to find wholesale distributors but as always, be careful. There are plenty of middlemen presenting themselves as dropshippers so you could lose out on profits by accepting their price.
In addition to directly getting in touch with manufacturers and asking them about distributors, you can also find suppliers by:
If you sign up for it, you won’t just get access to millions of trending products to sell online. You’ll also be able to integrate the products with your store, syncing all product data and orders.
Everything is streamlined so you can focus on the important things – marketing and selling the best products.
Product sourcing is fast and easy on Modalyst.
It only takes one-click to add a product to your store, and Modalyst takes care of everything else.
Dropshippers in the USA
Modalyst handpicks the dropshippers on their platform, and these dropshippers are primarily from the USA. Having US dropshipping suppliers is especially important since these vendors offer so many benefits that Chinese wholesalers or foreign dropshippers do not.
Modalyst products are different from what you can find on AliExpress and Oberlo. The focus is placed on the quality of the product and how fast it ships. Modalyst believes that these attributes will keep your customers coming back from 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 highly-saturated industry.
You can set pricing and shipping rules to profit no matter what
Shipping status updates
Shopify, Wix, and BigCommerce APIs
Inventory level notifications
Why Dropship From the US?
The conventional formula most online entrepreneurs use to find suppliers is as follows: find cheap products from Chinese dropshippers and sell the products for massive profits.
This formula still works today. However, it’s becoming less effective and less profitable as more and more online shops use the same product sourcing strategy.
While more Chinese products flood the market, the more competitive pricing becomes, making it more difficult to reap a profit on the sale of an item and differentiate your business from others.
This is not necessarily a bad thing, though. It has helped create interest in a new market: USA dropshipping suppliers.
One way that you can differentiate your online shop is by working with suppliers who are based in the United States.
You don’t have to be located in the US for this to be a viable option.
So long as you have a strong customer base in the USA, or you’re looking to break into the American market, then using US dropshippers makes a lot of sense.
What to Look for in USA Dropshipping Suppliers
There are thousands of wholesalers and manufacturers in the United States.
While partnering with American dropshippers is compelling, you still have to do your due diligence.
A dropshipping company in the USA isn’t automatically qualified just because they are based in the United States. These dropshipping companies need to be vetted, just like any other supplier you want to work with.
You should follow the same process that you would when vetting any supplier. After all, your supplier is one of your most important business partners. You want to choose the best one.
Modalyst Pricing for Access to US Suppliers
1. Hobby Plan – Free – Up to 25 products, 5% transaction fee
In addition to finding the best dropship wholesale suppliers in the first place, you also have to be careful when choosing them.
You’ll usually spot a scam if:
They want monthly fees – Dropship wholesalers don’t charge subscriptions just so you could do business with them. They charge per product. Anyone else who wants to charge ongoing fees is a con artist.
They sell to everyone – If these dropship companies sell to private individuals, they’re not wholesalers and you won’t be able to profit off their products.
However, legit suppliers do work on certain principles:
Per-order fees – These fees usually cover the costs of packaging and shipping which are different when you order a single product (as opposed to multiple products).
Minimum order size – This is completely legitimate. Some drop ship companies just don’t think it’s profitable to ship below a certain order size so make sure it fits your needs. If you really love their products, get in touch with them and see if you can negotiate special treatment.
And when it comes to dropshipping, the reliability of your suppliers is everything.
That’s why you should make sure that your suppliers are:
Organized – If it takes a dropship wholesaler ages to respond to your query, they probably don’t even know their inventory
Capable of receiving and processing orders through email or platform
Errors can always happen and in a business where so much of your revenue depends on the suppliers, you want professionals capable of resolving problems. Not amateurs who will say they can’t help you.
Communicating with Drop ship Suppliers
As with anything related to your business: be professional and clear about what you want.
This is especially important if you have a special request that they don’t normally fulfill.
Keep in mind that many suppliers will ask you for proof of business, as they’ve communicated with a lot of reluctant online stores who ended up forgoing the idea.
While you will often communicate with dropshipping wholesale suppliers through platforms (especially if you use Modalyst) and email, don’t be afraid to get in touch with them by phone. Especially if they’re smaller suppliers of niche products.
It always pays to be polite and undemanding. Don’t ask for discounts from the get-go as the dropshipper has no idea if you’re serious at the moment.
However, as you build your relationship with the suppliers, they’ll be more likely to grant your requests and help you out in any way they can.
Additionally, double-check the shipping time. It should be like the dropshipping company claims.
If they claim that the product will be with you within a week and it arrives a month later, steer clear. Speed is a priority.
Your first option is paying suppliers by credit card. Some wholesale platforms also offer options of processing payments for you.
The other, different type of payment is net terms.
This is a form of delayed payment. For example, you purchase a product and the supplier gives you a certain timeframe in which you have to pay them for that product.
If the supplier offers this option, they may ask you for credit references because they’re essentially trusting your word that you’ll pay them.
How to Pick the Best Dropshipping Products
Your dropshipping products are, quite literally, your bread and butter.
And if you’re not going into business with a clear, validated idea of what you want to sell online, you’re going to need to conduct extensive research.
Fortunately, even if a product doesn’t sell, you won’t be losing much but time. That’s the charm of starting a dropshipping business!
It’ll show you the monthly search volume and competition for a certain keyword. Just make sure you focus on the right location, and don’t forget about long-tail keywords and synonyms.
You can also use Google Trends to evaluate interest over time and the seasonality of a product.
For example, a new product might have appeared on the market two months ago, and now the demand for it is steadily growing. It could be a great opportunity for your dropshipping business.
At this point, you should also stake out the competition.
First, you should define the volume of the competition.
How big is the market? Plenty of competitors could undercut your ability to run a profitable business. Too few competitors may mean a niche that looks profitable but isn’t.
At the same time, evaluate your competitors’ pricing.
As a rule of thumb, the best way to start a dropship business is by offering something at a reduced price.
However, it can be a race to the bottom if you can’t get decent margins.
Markup Opportunities and Sales Potential
Here’s the thing – running a successful eCommerce store for dropshipping isn’t nuclear physics. There are a few formulas that always work:
If you can offer people something at a reduced price (while still getting decent profit margins), they will buy.
However, the scenarios in which this doesn’t mean a race to the bottom is very rare. You’re competing with small businesses and huge corporations alike. Amazon carries pretty much every product. Plus, once you start lowering the price, so will everyone else.
Even if they’re not making money.
This is where it really pays off to dig deep, all the way to page 57 of Google.
If you can find a manufacturer you can strike an exclusive deal with, a manufacturer who produces something customers sorely need but can’t get, you’ll be golden.
The most realistic scenario is to drop ship a product that’s not easily available in a certain area or country.
Offering high-quality products is one of the most long-term sustainable ways to run a profitable online business.
The quality of your products will be there for you even when you can’t reduce the price to match your competitors.
And it will make people refer their friends to you, giving you more customers and profits.
Offering value with your service
Information is the key to success.
Plenty of businesses sell products, but only some of them are able to inform their customers about which products are best suited to their needs.
This is especially true for complicated products. For example, products with a lot of components or products that aren’t universal fit.
If you don’t have competition but there is a demand in the market, you can swoop in and satisfy it. However, keep in mind that this is only short-term success. As soon as potential competitors see you’re running a profitable business, they’ll do the same thing, too.
Niche Products for Dropship Businesses
The money is in the niche – or so they say.
Generally, the narrower you can go with your target audience, the better. This is as true in sales as it is in marketing.
When you run a generalized dropshipping store, you’ll be able to serve all kinds of people. However, ultimately you may serve no one.
Conversely, if you run a dropshipping website that offers products specific to a niche, you’ll be able to personalize more and target people more accurately.
For example, when you sell generic clothes, you’ll be targeting humans. That’s all you know about them.
But if you sell baby-proofing systems, you’ll know exactly who you’re targeting: new parents. You’ll know what they’re motivated by, and you can easily understand why and when they’ll buy your products.
If you are also interested in your niche, that’s even better!
In the beginning, it’s much easier to stick by what you know. You’ll know how to serve your customers better.
Things to Keep in Mind When Choosing Products
To sum it all up, the ideal dropship product is a product that’s in high demand, but there’s not a lot of competition (or there is competition but there’s not enough supply). And its wholesale price (pre-order fees and operating costs included) is low enough to give you a decent profit margin.
As a rule of thumb, try to price your product at or below $200.
This is especially beneficial if you’re starting out.
You’ll need time to build your credibility, and people are more willing to make spur-of-the-moment purchases of products that are not more expensive than $200. Everything above that will require some convincing (and time).
You should also keep an eye on MAP (minimum advertised price). If the manufacturer doesn’t let you set a price that’s lower than their limit, you should factor that into your calculations.
Finally, be aware of how the size of the product can affect delivery to the locations you’re targeting.
Pricing changes depending on the size, so factor that into your margin calculations to know exactly how much revenue you can expect per product.
How to Run a Dropshipping Website
Once you’ve set everything up, it’s time to actually run the business and make it as lucrative as possible.
The Dropshipping Order Process (Behind the Scenes)
So, what can you expect to happen once a customer clicks on “Order”?
The customer places an order on your site.
The main prerequisite for this is to know (or automatically update) if the products you’re advertising are available at the moment.
The majority of dropshipping platforms integrate with wholesale platforms like Modalyst to make sure all of your listings are up to date.
If they’re not, your system will process an invalid order for the customer. You’ll need to either notify them that the product is not in stock, or issue them a refund.
You want to avoid that at all costs.
Your store places an order with the supplier.
If you’re doing it manually, it’s going to get tedious and nerve-wracking soon. However, you can use integrations with dropship platforms like Modalyst to streamline the process.
As soon as the customer places an order and pays for it, your system will “ping” the supplier’s system and the order will be processed on their end, as well.
Dropshipper ships the order to the customer.
Once they receive the order, the suppliers will ship the product to the customer.
Again, it’s good to know how much time it’ll take them to process the order. If it’s shipped within one day, that’s perfect. But if your customers have to wait a week for the order to ship in the first place (and the supplier is thousands of miles away from them), it could become a nightmare.
The customer is notified by the online store.
It’s important for you to know that your business will be handling all customer communication.
Essentially, they shouldn’t be aware that you’re a dropshipping business at all. Your process shouldn’t show it.
You’ll notify them about the processing of their order, about the shipment, and about tracking codes and everything else.
Similarly, if something goes wrong, you’ll be the one who has to handle it so make sure you have reliable suppliers.
Even though you don’t have physical inventory, you have digital inventory.
And when it comes to any kind of sales, the most important rule is: never go out of stock.
You should always have backup dropship wholesale suppliers in case your main suppliers go out of stock.
And in order to stay updated on their inventory levels, you can use Modalyst and integrate it with your drop shipping website.
You should also understand the dropshippers’ stock rates for the products you want to sell online. Do they carry it consistently, or do they only carry it periodically?
And if you ever get into an “out of stock” situation: don’t panic. Instead, get in touch with the customer and offer them something in return.
Try to preserve the relationship as much as possible.
In most cases, customers won’t mind if you offer them a better substitute, and you’ll save your face.
Be Smart about Routing Orders
Now, you definitely want to have multiple dropshipping suppliers – even if they’re just backup ones.
But as you scale, you’ll need multiple suppliers because of a variety of reasons:
And so on.
And in order to avoid having to manually route orders or risk routing orders to the wrong supplier, you can automate the process.
For example, if you’re selling to customers in both Canada and Belgium, and you have suppliers from the US and the Netherlands, you’ll want to route Canadian orders to the US supplier, and Belgian orders to the supplier from the Netherlands.
You can execute the same method for other types of orders, as well.
And it’s completely fine to play favorites – route the majority of your orders to your preferred supplier and keep everyone else on the back burner.
Marketing Your Dropshipping Business
Since running a store with dropship products doesn’t cost a lot in overhead and operating costs, marketing is where you should focus the majority of your investment.
First, know (and understand) your target audience.
This is much simpler if you’re selling niche dropshipping products.
You can create buyer personas for your customers and define what drives them to buy, and which channels they use to get informed.
You should never go in blind.
Second, choose your methods wisely.
The majority of people with the intent to buy will Google what they’re interested in. And since more people click on organic results than paid ads, you should really focus on improving your SEO.
You can use paid social media advertising, but know that you may not always reach the people who are ready to buy.
It’s a long-term advertising strategy.
For immediate results, go with Google Ads.
Third, don’t just attract customers – retain them.
While we all talk about ads the most, you can get plenty of business from referrals of satisfied customers.
Your goal should be to retain customers and maximize their value. The majority of eCommerce platforms offer up-sell and cross-sell add-ons that will help you sell more products to the same people, or sell complementary products.
You should also invest in email marketing to reactivate the people who have already bought from you.
Finally, just because you’re drop shipping doesn’t mean you don’t have to handle customer support.
You’re marketing your online shop like a business, and you should communicate with your customers just like a business does.
Now, when everything’s going great, you can focus on improving the customer experience.
However, when things go wrong, you may wonder if it’s worth it.
The trick is in staying cool and handling the situation wisely.
First of all, you need customer support tools.
You can use ZenDesk, Help Scout or any of the other tools that allow you to help your customers by phone, email or live chat.
If you’re processing returns, be aware of the process.
Every dropshipping supplier has a different way of processing returns and as an online store, you have to keep both them and the end customer happy.
Make sure you’ve defined the process with the dropship wholesaler so you know what to expect.
For example, some vendors charge a restocking fee.
In some cases, it may not even be profitable to return a product for a few dollars in credit (or no one at all) + shipping fees. It’s much better to send the customer a new product if their previous one wasn’t functioning properly.
If you get a chargeback, respond to it as soon as possible with original documentation.
Sometimes, a customer may just forget that they ordered something. However, chargebacks are typically caused by fraudulent situations.
This is why it’s good to have an ATS (Address Tracking System) that verifies that the address provided is the address on the payment file.
Dropshipping Best Practices
If you’re wondering how to get your eCommerce website off the ground as soon as possible (and make it profitable even sooner), here’s what the majority of successful ecommerce businesses recommend:
Find your niche and build your credibility
If you’re in it for the long run, it pays to specialize and build your credibility.
Things can always happen. You can run out of stock, someone may leave a negative review, and it’s all completely natural. However, once you’ve built up a reputation, you and your customers won’t even notice it.
Now, this is easiest to do if you’re operating within a niche. When you’re a generalist, it’s easy to get lost in the crowd.
Focus on cost-effective marketing
Paid ads can be great, but they’re not sustainable in the long term.
If you’re getting a spike of traffic when you’re advertising your products, and then nothing when you stop running the ads, it’s a problem.
This is why it’s much better to invest in SEO for the long run, as well as email marketing, and use paid ads as a “booster” to your standard methods.
Offer Excellent Customer Service
People buy for the products, yes. But they also buy for the experience.
Even if you have a lot of competition and a higher price, people won’t mind as long as they love the journey.
If you draw them in with useful resources, encourage them to communicate with you, and invite them to recommend your business to their friends, you won’t just be a business to them.
You’ll be someone they can rely on.
And that’s the best way to build a profitable e-Commerce business with dropshipping.
The holiday season is rapidly approaching and holiday dropshipping professionals are gearing up for the 2019 season. Gifts, decorations, and other goodies are readily available online, which means that it’s the biggest time of year for e-commerce sites to grab a sizeable portion of budget share.
Most holiday shopping efforts begin after Thanksgiving for most consumers. In fact, America has an entire weekend blacked out for shopping: Black Friday, Small Business Sunday, and Cyber Monday. However, the dropshipping holiday season starts much earlier for store managers.
Gain the Upper Hand with Early Preparation
Retailers tend to offer their best deals of the year during this time. Successful campaigns generate revenue, clear out old inventory, and establish brand awareness with customers.
As competition increases, stores are preparing themselves earlier every year. While some people hem and haw at the thought, it really gives holiday dropshippers the chance to gain the upper hand with thorough planning at the start.
5 Tips for Prepping Your Store for the Holiday Season
So, if you are thinking about how your store is going to prepare for the dropshipping holiday season, then it’s time to get started. Time is upon us, friends!
What should you do to prepare your store for the holiday rush? Here are a few things you can do to guarantee a profitable and merry shopping season for you and your customers:
1. Develop a Strategic Promotion and Advertising Plan
Before launching a campaign to promote your e-commerce store, it’s critical to your success that you strategize and outline how you are going to accomplish your goals. While it sounds like the last thing you may want to do, online stores, whose owner’s run them as a business, tend to be more successful than those who don’t.
Here are a few decisions to make before crafting your actual advertising message:
the holidays in which you’ll promote your products or services
your target audience based on your offerings
type of holiday special or sale offered
when you are going to launch your campaign
After drafting the strategic marketing communications plan for your online store, it’s time to start executing your ideas. Don’t wait too late, or you may not be able to find the people and resources to assist you in promoting your store.
2. Coordinate with Your Suppliers Far in Advance
It isn’t just your store that’s preparing. Suppliers and manufacturers are gearing up for the season as well. Most suppliers want to fulfill your order needs and can usually forecast what they’ll need to keep their customers well-stocked.
But it never hurts to cross your T’s and dot your I’s.
Contacting your suppliers is a great way to ensure that you have enough material and product to maximize your sales over the most significant shopping quarter of the year. This action is especially vital if you are ordering more than usual.
You never know what’s coming down the pike of dropshipping and things can go wrong all the time. You don’t want missing components or items to put the kibosh on your joy. Give yourself peace of mind by contacting your suppliers to ensure they have enough.
3. Consider Working with a Third-Party Logistics (3PL) Firm
As an e-commerce store owner, you know how critical transportation and delivery logistics is to your organization. From the warehouse to tracking deliveries, it can be a nightmare trying to manage it all.
If anxiety and a high-level of doubt set in after thinking about shipping, you may want to consider working with a third-party logistics (3PL) firm to take over warehousing and order fulfillment. While it’s an added expense, nothing can amount to the losses felt through customer shipment failures.
Working with a 3PL allows you to focus on managing your store while they fulfill, process, and deliver orders. It takes a ton of stress off your plate.
Keep in mind that instead of your supplies warehoused at its typical location, it now has to go to the 3PL warehouse for order fulfillment. This option may not work for everyone depending upon your geographic location and industry.
4. Communicate with Your Customers Throughout the Entire Shipping Process
Customers obsess over their items in transit. Understandably so. They want to know if their items are:
delivered on time
in good condition
in the requested quantities
able to be returned in the event of dissatisfaction
The most successful e-commerce store reduce this cognitive dissonance by communicating with customers about shipping before they make the purchase and then offering reassurance while the packages are going through the supply chain.
Be sure to point out things like:
your shipping timeframe guarantees
terms and conditions of payment
slowdowns or bottlenecks in production
In this situation, it is better to overcommunicate. Not in an unproductive way, but in a manner that reassures your buyers. They’ll remember how easy—or not easy—the shipping process was for their next purchase.
5. Avoid Making Non-Essential Website Changes During the Holiday Season
While it may sound like a great idea to refresh or rebuild your site for the holidays, we are going to advise holding off doing so. It’s a process that is rife with problems, not to mention the added stress of developing a new store while preparing for the busiest time of the year.
Plus, it’s possible for your website to go down entirely if something doesn’t function as expected. People code websites, but they also make mistakes. Allowing the process to unfold at a different time of the year is far less stressful.
Now, that doesn’t mean you shouldn’t update your site whatsoever. After all, you need to create adds, promotions, and list new products. Just avoid any non-essential website changes during this time.
Final Thoughts and Considerations on Holiday Dropshipping Preparation
The biggest takeaway from this article is this: you have an opportunity to make a ton of revenue over the holidays. However, maximizing your chances means preparing your holiday dropshipping store well in advance of the holiday season.
How are you going to make it happen? Comment below with your top tips for a smoother dropshipping holiday season experience.
Dropshipping on Amazon and eBay is one of the best ways to make money with an online business.
However, there are a few rules to pay attention to – especially if you want to dropship with Amazon and eBay.
In this article, we’re going to show you 5 great tips to make money dropshipping on Amazon and eBay.
Let’s take a look!
What Is Dropshipping on Amazon?
Dropshipping has become immensely popular in the last few years, mainly because it normally doesn’t require you to keep track of your inventory or pay for warehouse space.
Consequently, you’ll be reducing your overhead costs while maximizing your revenue.
In a nutshell, dropshipping is a fulfillment method in which you, as the retailer, don’t store or ship items.
Instead, you send orders from customers directly to manufacturers, who then ship the items directly to the customers.
Ultimately, you never even have to see the products you’re dropshipping. All you have to do is take the orders, send them over to the suppliers, and take your cut.
Benefits of Dropshipping on Amazon
When you’re running a business, you want to maximize your profits and reduce your expenses. Fortunately, Amazon dropshipping works like a charm for that particular purpose, in addition to other benefits:
Dropshipping reduces costs. You don’t have to design your products, nor do you have to store and ship them. All you have to think about is marketing and processing orders.
Dropshipping doesn’t come with high risks. Since you’re normally not ordering items before someone has purchased them, you’re not running the risk of overstocking.
Dropshipping is automated. You can completely automate your operations; from marketing to order processing and routing.
Is Dropshipping Profitable?
Let’s look at the numbers:
23% of online sales were fulfilled via dropshipping methods in 2017, which amounts to $85.1 billion (Source)
33% of online stores use dropshipping as their fulfillment method (Source)
And when you factor in the fact that you’re avoiding a lot of traditional overhead costs, it becomes pretty clear that yes, dropshipping is very profitable.
And with our tips up your sleeve, you’ll be on your way to running a very lucrative dropshipping business in no time!
Dropshipping Inventory Management
Just because your inventory isn’t in your hands doesn’t mean you don’t have it.
One of the main perks of dropshipping is that, with today’s technology, you can automate almost everything.
This means that you can integrate your inventory management software with your order management software, as well as your marketing tools, to make sure you’re running a tight ship.
The main goal is not to go out of stock.
Now, this is easy when you physically handle your products. However, when your products are in the hands of suppliers, you want to make sure you’re using the same systems.
Integrate your software with your manufacturers’ inventory management software so you always know how many products are available.
Inventory management is particularly important when you’re dropshipping on eBay.
All sales on eBay are effectively contracts, which can make out-of-stock order cancellations an absolute nightmare. In addition to that, some dropshippers used to buy products on Amazon and sell them through eBay.
You should also make sure that your manufacturers can ship the products within the specified time, as you can receive a seller nonperformance violation otherwise. A few of them and eBay could pull the shutters down on your store.
Amazon behaves similarly.
Amazon Dropshipping & eBay Dropshipping: Satisfaction and Performance
Two things lie at the very core of dropshipping on Amazon and eBay:
Amazon Seller account performance
eBay Seller performance
Both of these platforms depend on customer satisfaction. When people shop on Amazon or eBay, they expect much better service and a degree of protection.
So if your shipments are being delayed, you won’t only get in trouble with payment processors such as PayPal, but you’ll also get in trouble with Amazon and eBay. Additionally, Amazon dropshipping values the authenticity of products you sell.
Your products have to be high quality in order for you to get good seller account ratings and continue dropshipping through the platform. If you haven’t inspected the products for quality (as is usually the case with dropshipping), you could be at risk of having your account suspended by the platform.
However, you can avoid suspensions with bundling.
Simply buy a few copies of the ASIN item you will be listing.
You’ll speed up the review process when Amazon dropshipping decides to check for authenticity.
Conversely, if Amazon has reasons to doubt that your products aren’t authentic, it will send you an invoice request. You’ll have to send them the product invoice to confirm that you’ve purchased and inspected the quality of the item.
Amazon will give you between one and two weeks to send them the invoice, and if you don’t have one, your account will be suspended.
Again, both Amazon and eBay allow dropshipping in terms of purchasing products from third parties and reselling them.
However, in theory, you should inspect the quality of the products by physically handling them before you process and fulfill the order.
How to Dropship on Amazon using Amazon FBA
It didn’t take a long time before Amazon caught up with the business of dropshipping.
After all, reduced costs and no need to keep track of inventory are what every business owner dreams of.
One of the main benefits of dropshipping is the fact that you don’t have to pay for storage.
And with Amazon FBA dropshipping, Amazon will pick, pack and ship your orders to your customers.
How does Fulfillment by Amazon work?
You purchase the products and ship them to one of Amazon’s warehouses.
Amazon stores your products.
When a customer buys your product, Amazon ships it.
Amazon handles complaints and returns.
You get paid bi-monthly.
While FBA is useful, you should also note that if you do choose to dropship by having Amazon ship your products, you will have to manage your inventory yourself to make sure you don’t go out of stock.
Amazon FBA comes with fees, and you’ll have to carefully package your products (or have the manufacturers pack them for you).
However, FBA can be a good option if you want to scale your business quickly and don’t mind paying for products before you sell them.
Amazon FBA is also available even if you want to sell products through other channels. They offer multi-channel fulfillment services.
Expert Tips for Dropshipping with Amazon & Amazon FBA
When you create bundles, you’re actually creating unique listings that have higher chances of appearing to more people than your regular listing would through the so-called buy boxes.
Additionally, when you offer complementary products, you’re not only getting more profits, but you’re also offering something extra to your customers.
Everyone likes added bonuses (even if they do pay for them).
Optimize your listing and answer questions
Amazon is actually one of the world’s biggest search engines.
This means that keywords, title optimization, and other search engine optimization techniques still work.
In fact, if you use Amazon and eBay SEO techniques right, you’ll be able to attract more customers to your listings.
Use related keywords, and keywords your customers use to search for products like yours.
Create a FAQ section where you’ll respond to common questions to address the customers’ objections, and get that sale.
Because prices frequently fluctuate on Amazon, it’s best to use repricing tools instead of trying to do it manually.
This way, you’ll be getting the most profits, and ensure you’re not losing out on valuable sales because you haven’t updated your price yet.
Reviews on Amazon are everything
Customers want to see reviews before buying a product, so if you don’t have any, it may put off prospective customers from buying your products.
The best way to avoid it is by using email drip campaigns and asking your customers to leave feedback. To automate this process, we recommend AMZFinder.
AMZFinder is email automation tool which helps sellers to send out review requests emails and gain more reviews.
If someone leaves a negative review, don’t panic.
Contact the customer to resolve their complaint, or write a public reply. Avoid confrontation. Instead, apologize and rectify the situation.
If it’s a spam comment, you can ask Amazon to take it down.
Win the buy box
Having your listing appear before other listings with a CTA asking customers to buy your product is the goal.
However, getting the buy box isn’t easy.
In order to win the buy box, you should:
Reduce your landed price
Improve your Perfect Order Percentage score
The first two are relatively straightforward.
However, if you want to improve your POP score, you should make sure you receive positive feedback and have a stellar Amazon seller reputation.
If you often deal with claims, returns, and your shipments are late, your chances of winning the buy box won’t be as high.
Automated Dropshipping on Amazon & eBay
When you’re starting to dropship with Amazon and eBay, you have to be aware of the fact that both of these platforms are huge, and as such, they have their own algorithms and ways of doing things.
If you want to scale your business quickly, you need to play their game.
Now, a regular human can’t do it. Sellers change their pricing often, and you have to keep up. Algorithms prioritize certain listings over the others, and everything can change in the blink of an eye.
When you also consider the fact that you have to manage orders, marketing, and keep manufacturers informed about shipping, things can get confusing fast.
This is where automation tools for dropshipping come in hand.
There are a lot of ways to make it by dropshipping on Amazon and eBay, but there’s no quicker way than with tools that help you streamline your order processing so you can focus on the truly important aspects of running your business.
Automate Product Listing Creation
Some dropshippers build their brands based on listing a few dropship products.
However, success is usually in the quantity of products of products to sell on Amazon.
With a lot of new products, you’re going to need a lot of new listings.
Some Amazon sellers use automated listing creation tools.
However, we’d advise against doing that.
Bulk listing items means you could end up with a lot of mistakes, or at the very least, your listing won’t be properly optimized.
Instead, it’s much better to hire a virtual assistant who can do it for you, while making sure that your listings are still enticing to your potential customers.
Stock Level Tracking
As a seller, you have got to be in tune with your manufacturers’ stock levels.
If you’re shipping with Amazon FBA, then the need to monitor stock levels is even more important.
The best inventory management automation tools help you not only monitor levels from product sources, but they will also:
Set up and update markups
Update listings according to whether the products are in or out of stock
Your inventory management tool should automatically update your listings as it gets information from your manufacturers and customers in real-time.
If you’re shipping globally (and you have suppliers all over the world, as well), you want to minimize the costs by routing intelligently.
For example, it’s always going to be cheaper to ship to German customers from a French factory, than shipping from China to Germany.
If you routed orders on your own, it would take a lot of time. However, with order routing tools, everything will be taken care of automatically.
The majority of providers now offer intelligent order routing.
This approach ensures that your customers get their items quickly while increasing your profit margins by reducing shipping costs.
Daily Workflow Automation
Finally, as you scale, you’ll see that even simple processes take a lot of time.
Fortunately, you can automate the majority of them, especially with software that offers complete automation; from marketing to order routing.
Of course, you can opt for individual tools.
For example, if you want to attract more customers and generate reviews with email marketing software, you can opt for tools that help you create automated drip campaigns.
It all depends on the needs and the size of your business.
Keep Seasonality in Mind
In dropshipping, seasonality matters when applied to the following three aspects:
Some months are simply slower than others. Many sellers (and other business owners) experience slow periods in January and February.
However, slow periods depend on your niche.
Seasonality on the Dropshipping Suppliers’ Side
Again, your experience will depend on what you sell, who you sell it to, and whose products you resell.
When it comes to dropship wholesale suppliers, make sure you conduct research about the country they come from.
For example, Chinese New Year is at the end of January, so all operations are paused (or slowed down) during that period before suppliers resume their activities.
This means that you won’t be able to dropship products during that time, especially if the manufacturers are packaging and shipping them.
If you use third-party storage services such as Amazon FBA, you should make sure you stock up on products that are popular at the time so you don’t run out of stock.
An alternative route is to have a network of suppliers who dropship.
For example, if you have Chinese wholesalers, have a US supplier as a back-up so you can keep churning even when your main vendors can’t fulfill your orders.
[UPDATED] Many ecommerce businesses after only a few months fizzle out and never amount to anything special.
There are several reasons why these businesses fail fast, and one of the major culprits is the inability to find profitable products to sell online.
Finding just any kind of product to sell isn’t the hard part.
There are millions of products available in the marketplace. However, it’s not always clear which products are trending or are best sellers.
[lwptoc numeration=”decimalnested” title=”List of Top Trending Products” smoothScrollOffset=”24″ colorScheme=”inherit” skipHeadingLevel=”h1,h2,h4,h5,h6″]
Characteristics of Trending Ecommerce Products in 2019
You should stay current with the trends and the products which are winning in the market.
Use Google Trends and real-time social networks like Twitter or Instagram to discover what products are bestsellers.
With that idea, carve out a place for your brand or product offering in the market.
Launch your eCommerce website at the right time to capitalize on the sentiment of consumers in the marketplace.
You have to make sure that the products you sell have unique appeal and are eye-grabbing. If comparable products are available, consumers will research those products as well. When a consumer does comparison shopping, they will usually buy from the seller with higher ratings and better pricing.
That gives you the advantage.
Low visibility in Search Engines
If the product is unique, people will definitely try to search for it.
This means the demand will be high. Many ecommerce store owners will try to introduce the product on their stores. Now, you have to take the lead and start marketing it.
Unavailable in your target market
You should make sure the product is not available in the market you’re targeting.
If the product is available in the market you’re targeting, you’re going to face more competition when you sell it.
Actual price is hard to find
Ensure that the actual price of the products you are planning to sell is not easily discoverable on Google Search.
Many drop shippers source products from sites like AliExpress and Wish.
To avoid any loss of trust, you should verify that the prices are not easy to find.
How To Find Trending Products To Sell
You should follow these steps to find popular products to sell online:
Research product ideas in Google Trends
Find market data to understand the trajectory of the industry
Widdle down the product categories to explore based on Google search volume
Review blogs and influencers to find topics people are passionate about
When June rolls around, it’s time to have fun. Summer is the perfect time to source unique beach towels and help your customers show off on the beach.
You can get high-quality, Turkish cotton beach towels on Modalyst starting from $29.
Journaling is an incredibly soothing practice. More and more people flock to it in search of some peace and quiet. How are you going to use that need to build a profitable dropshipping business?
By dropshipping beautiful leather journals, of course!
No one can actually pack into a small suitcase, can they?
Everyone needs a sturdy and stylish backpack in their lives; from adventurers who don’t mind camping, to fancy-pantsers who prefer glamping.
Reselling designer apparel makes for a really profitable dropshipping business idea.
From Gucci dresses to Versace sneakers, customers are always on the lookout for a great deal.
And with Modalyst, you’ll have access to suppliers with unparalleled discounts!
There’s nothing that says elegance more than a tea blouse.
From garden parties to a day spent brunching with their friends, your customers are going to need something stylish and unique to wear.
Earrings are so easy to ship, reducing your costs, and they provide excellent markup opportunities.
Modalyst’s supplier marketplace is full of vendors with products your customers are going to love! Don’t forget to add these to your store to set your dropshipping business apart from others.
Bowties are making a comeback and we love it!
Your stylish customers are going to love the accessories instantly lifting their outfits; regardless of their gender.
Bowties were made to be worn by everyone.
From fitness and yoga to leisure, leggings are everywhere. They’re comfortable and loved by customers everywhere, making them one of the best products to add to your dropshipping business.
They come in a variety of colors and present a great markup opportunity!
Come New Year, everyone will be on the lookout for matching fitness sets they can wear to their first gym sesh.
As an owner of a dropshipping business, you should make use of it by adding a few sports bra & leggings sets to your Modalyst import list.
Straw bags started taking the world by storm in 2017, and they haven’t stopped ever since.
Influencers are proudly posing with them, and your stylish customers will appreciate you giving them the chance to be as trendy as their idols.
Fitness apparel is one of the most profitable dropshipping product ideas. Everyone needs to work out every once in a while and they want to do it in style.
With relatively low sourcing costs and plenty of ways to be customized, sports bras are the right product option for your dropshipping business.
Speaking of trendy product ideas, self-tie skirts are both stylish and practical.
They can even tie into your fitness dropshipping business!
When your customers lose weight, they don’t want to lose their clothes. An adjustable self-tie skirt is a great option.
Is it a shirt, is it a corset?
No, it’s a bodysuit!
Bodysuits are the ultimate versatile pieces every woman needs in her closet. Help your customers look more fashionable (and your business become more profitable) by adding bodysuits to your store.
Regardless of whether your customers want to go outside without getting sunburnt, or channel their inner bros, snapback hats are a great solution!
Snapback hats are profitable products for your dropshipping business because they’re universally loved (and needed).
Joggers no longer even wear jogger pants, but they sure are comfy!
When you add a few pairs of jogger pants to your store, you’ll see them flying off the shelves. Everyone wants something comfy and practical!
Two-Piece Sets with Skirts
Ever since Kim K started rocking them, the world has gone crazy for hot two-piece sets with skirts.
Choose animal prints or solid colors, knowing that all your stylish customers who follow popular influencers will whip out their credit cards in an instant.
Two-Piece Sets with Pants
For all of your customers that don’t want to sacrifice comfort for style, offer them the best of both worlds with two-piece sets with pants.
On Modalyst, two-piece sets with pants start at $29, giving you ample markup opportunity. Your dropshipping business will be profitable in a second!
Bodysuits for Kiddos
Stylish mommas want their kiddos to be stylish, too! Fortunately, you can both improve families’ style scores and your dropshipping profitability by selling infant bodysuits.
You don’t even have to worry about communicating with vendors; it’s all so simple on Modalyst!
In these fast-paced times, your customers want a reminder that things will calm down. Why not provide it with beautiful jewelry reminding them of ocean waves and cotton candy skies?
Puppy Care Products
Everyone has a soft spot for the furrier members of their family. Dog owners are passionate about providing their pets with the best care products, including herbal shampoos.
Give your customers a chance to spoil their pets rotten!
A scarf is the perfect addition to every outfit, casual and glamorous alike.
And with the majority of customers being more likely to whip out their credit cards for an accessory than a full-blown clothing item, scarves are great products for your dropshipping business.
Which woman hasn’t spent her Friday night shopping for new clothes that will help her be the boss lady she wants to become?
Clothing shapes the way we perceive ourselves, and it has the power to improve your customers’ lives (while improving your revenue).
When we were kids, getting socks as a present was the worst thing. But as we grew older, socks became the best possible gift.
From zebra-striped to dotted socks, you can’t go wrong with selling products that keep your customers’ feet warm. And since they’re cheap to source, socks provide a great markup opportunity for your dropshipping business.
Warm and Cozy Jackets
People may be able to tolerate discomfort in summer but during the winter, staying warm (and stylish) is a priority.
Parkas are a great, profitable dropshipping product choice since they’re indispensable. And if they’re stylish at that, you’ll have struck gold!
The money isn’t just about selling practical products. Gifts are a great way to attract a lot more customers to your website.
This whiskey glass & ice cube set is a great gift for the hedonists in your customers’ lives.
Charging on the Go
We’re all using our phones more than ever, your customers included. So when the battery runs low, wouldn’t it be great to charge it on the go?
Practical tech products such as this bag that comes equipped with a charger are absolute winners in 2019!
Gifts, treats, or just indispensable items to enhance an outfit… Necklaces can be used in every situation. It’s time to add them to your product list.
With a significantly lower price point and the ability to make or break an outfit, necklaces are extremely profitable eCommerce products.
You don’t have to have anything in your makeup bag, but you’ve got to have a BB cream.
Unfortunately, finding the right one is pretty hard.
Chances are, your customers have often wanted to buy a BB cream that wasn’t readily available in their local department stores. Cue, dropshipping popular cosmetics.
Life is better with music.
Portable wireless speakers are one of the most profitable products today. As tech gadgets, they’re absolutely indispensable to any store that wants to attract a millennial audience.
With the holiday season approaching, your customers will be looking for the perfect outfits to spend their Christmas and New Year’s Eve in.
Jumpsuits are an exquisite choice; timeless and elegant for your customers, and profitable for your store.
Everyone needs a comfy sweater. If you’re selling apparel, it’ll be a perfect fit for your store. If you can also incorporate some brand identity to it, you’ll have plenty of new customers looking for your products.
There’s nothing that says “treat yourself, you deserved it” like an aromatic facial oil. Adding these products to your health & beauty store can go a long way towards increasing your profitability!
Products like pajamas are always profitable; everyone needs them. A comfy pajama or onesie to wear at home is going to be the perfect product for your customers to put in their carts.
Headbands aren’t just stylish; they’re in demand.
Accessories, which are always at a lower price point and thus more likely to be purchased, are a great option if you’re selling to a female audience.
Plus Size Apparel
There’s a serious shortage of cute plus size clothing on the racks of high-street brands.
Fortunately, women and men looking for stunning clothes in their size make up for a significant portion of all our audiences.
From briefs to seductive lingerie, intimates are always in demand.
Since we love knowing that we’re wearing cute underwear under amazing outfits, intimates are a must for any dropshipping store that sells clothing.
Faux Leather Clothing
Leather looks stunning on everyone. And even if a lot of contemporary consumers don’t want to wear real leather, faux leather items are a great solution.
Support your customers’ New Year resolutions by offering them a wide selection of cute and funny gym shirts. Everyone’s on the lookout for great fitness gear, so why not add a few select pieces to your store?
Increase your store’s exclusivity by shopping for the most unique products. Signature pieces like extravagant dresses or even statement necklaces are one of the best dropshipping ideas.
Some of the most successful dropshipping brands have been built on providing stellar clothing for special occasions.
From proms and weddings to nights out and New Year’s Eves, your customers will recommend your store to all of their friends!
Puma is one of the best known sports brands out there.
And just because you’re dropshipping doesn’t mean you can’t source products from name brands.
Mini, midi and maxi are all perfect variants of every woman’s favorite pieces of clothing: dresses. And if you’re hoping to attract a stylish female audience, make sure you add them to your product list.
Accessories are extremely profitable dropshipping product ideas, but they’re not only meant for women.
Elegant men will love customized pocket squares made in the US. And the best part is that you can source them at a great price on Modalyst.
Bags for Men
We’re all carrying too much stuff around. However, men need a bag that shows off both their manliness and their practical nature.
Find the perfect products to dropship on Modalyst.
Foldable Solar Panels
Renewable resources are the future.
A lot of people want to go green, even if they’re living in small houses or rented apartments. This is what makes foldable solar panels a great dropshipping option.
Smart Watch Straps
A smart watch becomes even smarter with an elegant strap!
Another profitable eCommerce product is certainly mascara. With plenty of options, customers are always on the lookout for the next best product. Be the store owner who gives it to them.
Blazers are the perfect addition to almost every outfit; elegant and casual alike. Modalyst vendors offer plenty of options for even the pickiest of customers.
In an age where furry sandals exist, some customers just want a blast from the past. Integrate 70s, 80s and 90s collections in your store offering, and watch your profitability increase!
Who wants to put a pause on their favorite song just because they’re going out? Wireless headphones are a great choice for techies and regular customers alike!
Himalayan Salt Lamps
Renowned for their healing and calming properties, Himalayan salt lamps are a great addition to your health & beauty store.
Top & Bottoms Sets for Kids
Getting kids dressed properly can be a nightmare.
Make sure your customers’ tykes are stylish and comfortable with top and bottom sets for kids.
Natural Body Mists
There’s nothing like a drop of lavender to instantly calm down even the buzziest minds.
Help your customers unwind with serene body mists.
Beards are back in style and with them come the products necessary to make them look good.
Among other products, you’ll find some of the best beard oils for your stylish male customers on Modalyst.
Speaking of going green, more and more people are thinking about installing solar panels.
And the best part is: no one expects them to be cheap.
However, you (as the store owner) can source 100W panels for as little as $72. The rest of the profits are all yours.
What is better than Oxford shoes and ankle boots? Oxford ankle boots!
Endlessly classic and timeless, they’re a great addition to the closets of female and male customers alike.
Your customers’ skin withstands so much. Why not give it a little love by helping them buy incredible skincare products?
There’s nothing that says “luxury” as much as velvet does.
The products made out of velvet are flying off the shelves in high street stores and online stores alike. Why not get some of those profits to yourself?
Armani Jeans is one of the most popular casual brands for customers that want to wear the best Italian fashion has to offer, even when they’re grocery shopping.
Men’s Grooming Kits
It’s men’s time to shine.
Equally passionate about aesthetics, the manlier parts of our society are constantly on the lookout for grooming kits that suit their style and their skin.
Boho is the new chic.
Help all those potential customers looking for ways to emulate their favorite influencers’ aesthetics with effortlessly elegant kimonos.
Vases are the perfect additions to your customers’ homes, and they provide an excellent markup opportunity!
Pugs & Mugs
There’s no gift better than a cute mug. Bonus points if it’s with a pug!
Women can’t part from their favorite bags.
Unfortunately, bag straps are prone to breaking apart from the wear and tear.
Add stylish bag strap options to your store; on Modalyst, you can even get Fendi bag straps for your fashionista customers!
There’s nothing like coming home and sliding into a bath smelling like your favorite aromas.
Add bath bombs to your offer, and you’ll instantly increase the profitability of your store!
Temporary tattoos have always been fun, but they’re all the rage nowadays.
They’re really cheap to source, and they’ll fly off your virtual shelves!
Sometimes, your customers just want to flaunt their lifestyle.
Give them the opportunity to do so tastefully, and they’ll love you forever!
If you’re catering to an audience that loves looking like they came straight out of a movie, you’ll love the selection of exclusive European products on Modalyst.
Sugar, Spice and Everything Nice
It’s October which means – it’s pumpkin season! Stock up on pumpkin-spiced candles, and help your customers create the perfect autumnal fantasy.
There’s nothing that says “I’ve got places to be” like a messenger bag.
They’re customer favorites, and they’ll increase the profitability of your store in an instant.
Finally, if you want to source a cheap product and get a great markup opportunity to jumpstart your success, look no further.
Beauty blenders are the key.
From makeup artists to women wanting to emulate them, beauty blenders are everything you need to increase your profitability.
Defining the pricing strategy for your dropship products is not easy.
You want to maximize your profits by jacking up your prices, but the result may be decreased sales volume. On the flip side, you don’t want to lower your prices so much that your volume kicks up, but you’re creating more work and less profit.
How do we find that perfect balance of how to price a product? What if we don’t have anyone or anything to compare our product? How can we come up with the perfect dropshipping pricing strategy?
Let’s find out!
Each Pricing Strategy and When to Use It to Price a Product
There is no singular pricing strategy for dropshipping. In fact, there are many different pricing strategies, and they all have a time and a place. The one you choose will determine how you price a product and how you’ll market them to your audience.
Here are some of the most popular eCommerce pricing strategies:
A fixed markup is simple. You’ll figure out a set profit-margin that you want on all your products across the board. Let’s say you want a 20% markup on everything and you have an item that costs you $20. You would add $4 to the price of that product, and that is what you would sell it for.
With a fixed markup, it’s simple to set up and easy to manage, but your profits will dramatically increase or decrease depending on the retail price of what you’re selling.
Tiered markup is ideal when you’re selling many different types of products.
You can tweak your markup percentage based on the overall price of the item. This allows your pricing strategy to cater to each product individually.
For example, you may not want a 20% markup on a $400 product because that would jack it up to $80 per unit. That may be too much compared to your competition and what your audience can afford.
On the flip side, you might want a 50% markup on a $10 product to cover your costs. With a tiered markup strategy, you can set the percentage based on the retail price of the product.
MSRP (manufacturer suggested retail price)
If you’re not worried about the in’s and out’s of pricing and you want to find a safe middle ground to camp out, go with the MSRP. This pricing strategy keeps you out of the race to the bottom, and you price your products according to what they are worth.
You can pair an MSRP strategy with discounts to advertise your products and compete with people who may have lower prices.
Now you’re going to spy on your competition and see how they are pricing their products. There are many different tools out there like Prisync and DSM Tool to help you track competitor pricing.
The immediate thought is to undercut your competition so you can steal their sales. Keep in mind that all online stores are using these same tools. They’ll get notifications when someone beats their price and much of the time; their products will automatically adjust lower.
The result here is a race to the bottom where everyone loses their margins, and no one makes any money.
Another reason you don’t want to undercut your competition for the same product is they may think yours is of less quality.
If you’re basing your entire dropshipping pricing strategy around “beating your competitors,” you’re going to lose every time.
There are a few ways to go about pricing a product to appeal to human psychology.
We all know the whole $99.99 versus $100.00 debate. You always want to price a product using an uneven number because it makes it look much cheaper than the full number.
There is also a lot of debate over odd and even numbers. Many people say using an odd number helps your conversions, but there is no proof.
At the movies, you can choose between a small, medium, or large popcorn. The prices are:
Do you see the pricing strategy here? The small is priced so low that people immediately think, “that’s not big enough; I’m going to want more popcorn.”
Then they look at the medium and large, and they see how close the price is. They’ll figure “well, it’s only 50 cents more so we might as well go for it.”
In this situation, the medium popcorn is a decoy. In most cases, people either purchase the small because of their appetite or they get the large because of the perceived value.
You can utilize this pricing strategy in your dropshipping business with products that have multiple sizes or price levels. Try to push your audience to upgrade to the more expensive package or product by throwing a decoy at them.
Free Plus Shipping
Many people have a lot of hurt feelings over this strategy, but it’s used at such a scale that we need to talk about it.
Free plus shipping is the process of selling your product for “free” while increasing the shipping cost to accommodate the loss.
How many times have you seen a Facebook ad that said, “I’ll give this to you for free if you only cover the shipping.” This method is used by influencers and big names to sell books so they can move you into their funnel and sell you something on the backend.
You will only want to use this strategy if you’re doing the same thing. You don’t want to be one of those people who “bait and switch” their audience because it will hurt you in the long run. Don’t expect people to buy a free product that you’re charging $45 for shipping. Online shoppers are savvier than ever.
The goal of free plus shipping is to get people to your store so you can cross and upsell them on something else.
If they’re there for a free hunting flashlight, maybe you sell them a knife or binoculars. You’ll lose some money upfront, but you should generate a lot of attention to make sales on the back end.
Here’s another pricing strategy we’ve seen everywhere.
This method goes back to “perceived value” like with the popcorn example. How many times have you gone somewhere for one thing, but purchase two or three because of a sale?
“Buy two, get one free” “Buy one, get one for a dollar,” and so on.
You can utilize this method in your online store to pad your profit on low-margin items. Adding accessories to larger products is also a great way to bundle your products.
Something else great about bundling is it separates you from your competition.
For example, if you sell car detailing equipment and products. There may be a dozen other stores selling the same items.
You could create a bundle where you sell an entire cleaning package, and that would make you stand out from the competition.
Be sure not to overdo this though. There are stores where everything is marked down, and every product is bundled with something. People will start to catch on and get suspicious if you do that.
Other Factors That Impact Dropship Product Prices
While the price is important, you don’t want to let that guide all your decisions with your dropshipping store. There are many other things that are more important than price. These factors will impact your ability to price a product higher than your competition.
Why would someone buy Lysol cleaning spray from Amazon versus Bigjoescleaningsupplies.org?
They do it because Amazon has our trust.
We know that our payment info is safe, that our order will get to us, and that we’ll like what we get in the mail. The process works, and you need to realize that you’re at a disadvantage as an unknown retailer.
You can give yourself a leg up by using trust signals like payment security badges, reviews, testimonials, and lock symbols. Your customers should feel comfortable doing business with you.
If you can build trust with your audience, you’ll be able to charge more for your products because they’ll prefer using your store even if it means paying a few dollars more for the same thing.
Many online stores run to places like Aliexpress without realizing that they’re overpaying. There are many agencies out there that will work directly with online stores to help provide them a rock bottom price. These agents work with the manufacturers outside of Aliexpress, so you don’t get stuck paying the markup, and you can sometimes buy products “at cost.”
Don’t accept prices for what they are. Negotiate with suppliers and find the lowest price for the highest quality product.
Final Thoughts on How to Price a Product
The main thing to remember about pricing your dropshipping products is not to dwell on it.
Choose a strategy and roll with it. If it’s not working out, try a different one. Test different pricing strategies in your store to find the one that works best for you. We’re all in it to make money, and your dropshipping product prices are important, but not the most essential part of your store.