What Is Dropshipping Business?
Dropshipping refers to a retail supply chain system where the store need not have products in stock, yet can sell products using this model; the dropshipping business get orders on its site, buys the product from another party, and gets it shipped to the buyer directly. So, as a seller, you will not need to handle the product. The key difference between a standard retail system and a dropshipping model is that a seller does not have inventory. He buys inventory from third parties and fulfills buyer orders.
When you have understood what is dropshipping and have successfully set up a business for the purpose you must also understand the nuances of the marketing model and what you need to do to make sure you can run this enterprise smoothly.
Marketing The Store:
You may think you know what is dropshipping and that you have the means to make this business work. But you have to make sure others know what you do. So, you must start off by taking steps to market your store using Shopify. Depending on customer reviews you can get orders; so, you must get good reviews.
How can you get good reviews?
- The easiest way is to sell good products from high-quality suppliers
- Offer excellent customer care supports
- Ensure faster delivery times
- Get reviews from your customers and social media
Besides, you can also use some more tactics like contacting the top Amazon reviewers for help or giving away products for free to get unbiased reviews in exchange. Social media marketing is now an integral part of everyone’s life and you can focus on a couple of sites to get started. For instance, Facebook enjoys a large audience that can help all businesses. Pay-Per-Click or PPC advertising is another classic medium for marketing but you must test this well before you invest a lot in it. Email marketing can be considered one of the key marketing strategies perfect for all businesses.
Handling Refunds and Replacements:
When you run a store online you will have to be prepared well to handle issues of refunds and replacements. Customers can ask for refunds or exchanges when the product is not to their liking. You may request an RMA or Return Merchandise Authorization number from your supplier. The buyer then sends back the product to the supplier with this RMA and the supplier refunds the money to your account. This is the wholesale price and not what your buyer has paid. You, however, have to repay the buyer with the amount he had paid.
Things to know when handling refunds or returns:
- Suppliers can charge you restocking fees but this should not be passed onto buyers. This may amount to your loss but it helps to keep your customers happy; else, they will go to another site where such fees are not demanded.
- When an item is defective you may have to pay for the cost of returning that item to the supplier. If you ask your buyer to pay for this you can be sure he will never return to your site.
- If the supplier makes a mistake and sends the wrong product to a customer, you have to contact this supplier and explain what has gone wrong. When the supplier is genuine he will reimburse.
Management Of Inventory When You Have Many Suppliers:
In inventory management, you need to check the supplier’s website every time you have to place orders. This is a tedious task, and investing in good inventory management software can be a big help.
- When you find that there is an order for an item not in stock you may place the item on “backorder”, informing the buyer right away. It is best to give them an option to either wait or take a refund.
- When you get orders you have to see who your suppliers are for that order, their location, availability, and costs. You may choose to handle the order fulfillment personally or use automation. Emails have to be sent mentioning the order, product title, quantity, SKU number, and shipping information. Sending orders to your suppliers depending upon their locations is hard to automate but more effective and will ensure faster deliveries.
- You have to be on the lookout for fraudulent dropship orders.
This can actually make or break your dropshipping business. With excellent customer service, you can be at the top in no time at all. For great customer care:
- you need emails for communication with buyers
- phone supports which are both helpful and enlightening as they give you an idea of your customers’ concerns
- live chats for those who have not time to call or send emails
- social media for addressing customer care concerns and queries
- help desks for tackling customer comments, questions, and concerns
- Virtual assistants