Drop shipping has become a big thing in online retailing with entrepreneurs sharing their testimonials how they were able to earn a five to six-figure revenue in just a short span of time. Soon, a lot of entrepreneurs are joining the dropshipping bandwagon. But what is it really?

In a nutshell, dropshipping is a type of retail model where the seller/vendor does not keep any stocks or inventory of the things they sell. What happens is when a customer orders through their store, they, in turn, order it to a third-party who delivers it to the customer.

Since the drop shipper does not have the stock at hand, they don’t need a big capital to start selling. All they need to have is a website where they can place all the products they want to sell.

Not because you don’t own inventory means you don’t have anything to risk. The risk involved is when the third-party you are in contact with is not reliable – they might not deliver the product or they might deliver low-quality and defective products. Therefore, if you are to start a drop ship business, make sure that you have researched about the manufacturers/factories well. It is much better if you can meet your suppliers face to face.

Which Sales Channel to Use

One of the biggest questions someone who’s doing drop shipping for the first time is the sales channel to use – which is the best one?

There are basically three kinds of sales channels to choose from – eBay, Amazon, and your own store – each of which has their own pros and cons. You can either choose one of these channels or combine them for more exposure.

Now let’s talk about each of their pros and cons:

eBay

eBay is the largest online auction site; thus, using this as a sales channel gives you access to millions of users all over the world. It’s also easy to start on eBay. All you have to do is create an account, have your products listed, and you’re ready to roll. You also save time, money, and effort for marketing and SEO because everything is there for you.

On the downside, listing your products on eBay subjects you to listing fees, which can be 10 percent or more of the sale price of your product. You also need to constantly monitor and re-list your product which can be time-consuming. Despite all this re-listing and monitoring efforts, you cannot customize your sales platform. In other words, you cannot promote and grow your brand – you are just another seller at the end of the day.

Amazon

Like eBay, you have access to a large audience on Amazon. You also don’t need to worry about marketing and SEO. Amazon, however, is a notch higher than eBay because it allows dropshippers to complement their dropshipped items with their own products without worrying about packing, selling, and storage.

Like eBay, you are also subject to fees when you use this channel. The amount depends on the kind of product you have but they are usually between 10 and 15 percent. You cannot customize your page as well because you have to follow Amazon’s policies.

Then, there’s also the issue of Amazon using the sales data to their own advantage. An article on the Wall Street Journal revealed that Amazon access vendors’ data to identify selling opportunities that are working well. Then they use it to strengthen their niche and monopolize it as they push other merchants away.

Creating Your Own Dropship Store

The third sales channel option you have is building your own dropship store. It gives you the advantage you cannot get from eBay and Amazon and one of those is the freedom to customize every element of your store. You can choose how you’re going to display your product, the pricing, and the layout. Most of all, you can grow your brand and your business.

Having your own dropshipping website means you can engage your customers in a more personal way which can lead to a long-term business relationship. Lastly, you don’t have to worry about paying fees every time you make a sale.

On the downside, however, you will have to work doubly hard in marketing and promoting your website to attract more traffic. You would also need to invest in SEO (much probably in the long-term) to ensure the search engines place you on the first page. The higher your ranking goes up in search engines, the more traffic to expect on your website.

Internet Marketing Strategies for Your Dropshipping Store

Once you have the basics – niche, supplier, website, products, pricing, sales channel – figured out and set up, it’s time to let people know about your business/store. A carefully crafted marketing plan will help you get the leverage you need to attract traffic.

The good news about marketing your dropship business is that you don’t have to shell out a big amount of money. In fact, you can do it yourself at the beginning. Here are some marketing concepts you can apply when creating your marketing strategy.

Creating a Buyer Persona

Before crafting any marketing strategy, you need to create a buyer persona first. A buyer persona is a fictional profile of who your target customer is. You get the information from the demographics and psychographics that you averaged together.

A buyer persona includes the following information:

  • Personal background – job, civil status, the place where he/she lives
  • Demographics – age, income, gender
  • Personality/Hobbies/Interests

You can get all this data from Google Analytics, a free tool that allows you to monitor your website traffic, the type of visitors that visit, how long they spend on your website, and more.

After creating a buyer persona, it’s time to get your hands dirty and put your marketing plan to work. Here are some tips on how you can do that:

  • Add testimonials, ratings, and customer reviews – With all the information readily accessible to anyone, consumers have become wary of products until they have proven its worth. If you are a new store, the first obstacle you need to overcome is skepticism. Build your reputation and establish trust by adding customer reviews, testimonials, and ratings of existing customers. If there is a negative feedback, don’t get caught up in it but use it as an opportunity to show customers that you are willing to improve your business and they can count on you.
  • Utilize the power of Facebook Ads – Facebook Ads allow you to run ad campaigns based on your budget. Reach the people you want to reach based on their age, gender, and location through this awesome Facebook feature.
  • Share social videos – According to a statistic from Cisco, social videos make up 81 percent of all consumer traffic on the web. Now, creating your own videos can be difficult and time-consuming, especially if you don’t have a team to help you at first. To solve this, you can either hire a freelancer to create videos for you or you can get videos that are already viral from Buzzfeed and other similar websites. After that, share them on your social media to attract attention to your store.
  • Use re-targeting techniques – A great number of your site visitors might just be checking out your store and not buy anything at first. Capture their attention again by retargeting them once again. You can use relevant ads to re-engage and recapture the customers who have abandoned your site. Retargeting usually captures 70 percent of those visitors back to your site and make them buy your products.
  • Use content marketing – When you regularly put out content that adds value to your target audience, you position yourself to become an expert in a particular field or niche. When people realize that what they get from you helps them, you become their go-to person. As that happens, you can position your product and use your content to influence their buying decision.
  • Create compelling popups – Convert visitors on your website through popups that offer them incentives or gifts. The gift doesn’t have to be expensive but it can be in the form of an eBook, a coupon, and other digital gifts.
  • Join forums and online communities – Find where your target audience hangs out and join their communities. Engage them by answering questions and sharing your opinions. You can also create your own community and start discussions. Through these kinds of customer engagements, you will learn more about your target customers and you can use those insights to improve your business. When people see that you are listening to them and that their opinion matters, you will gain their trust and soon, their wallets as well.
  • Upsell and cross-sell – To make more money from your dropshipping business, you have to maximize every transaction you have. Thus, you can employ cross-sell and upsell techniques, such as bundling your products together at a discount.

Final Thoughts

Dropshipping presents a lot of potentials to earn more revenue if you know how to play your cards right. Use the tips we gave you and do further research so you arm yourself for success. Soon you will earn the fruit of your hard work as you profit from your dropshipping business.