What is Drop Shipping?
Drop shipping works differently from the usual retail outlets or storefronts and there are a plethora of drop shipping companies to choose from. A drop shipper sells items from third parties directly to customers. Think of it as a modern door-to-door sales person, but working online. The great part about this gig is that you never have to lug around your sales inventory. The companies you sell for are in charge of all the inventory management and problems that come with it. Your job is to sell and make sure the items ship to the customer. Sound easy enough? If you're looking to get started, we highly recommend taking a look at this amazing guide on getting started dropshipping.
Why Should You Start a Drop Shipping Business?
One of the biggest advantages of drop shipping: you don’t need a lot of capital to start a drop shipping company. Forget about spending thousands of dollars to build your inventory. With drop shipping, you get to skip over the need to find retail space, construct a store, and employ staff.
Getting started is easy. With drop shipping, you don’t have to worry about managing or paying warehouse employees, packing and shipping orders, tracking inventory, handling returns or managing stock levels. With vast catalogs at your fingertips, you can market to different kinds of customers, too.
Worried about costs? Overhead for a drop shipping company is extremely low. If you’re reading this on a laptop or desktop, you’ve already covered one of the few costs associated with drop shipping. In fact, many drop shipping companies operate on less than $100 a month. As time goes on, you can expect an overhead increase, but fortunately the same is true for your profits!
Drop shipping is all about scale, and scaling your business is simple since you don't have to worry about your inventory size or order volume. All the pressure of delivery rests with your drop shipping company, meaning you can focus on selling as many products as you can.
What Are the Risks of Drop Shipping?
First up: low margins. Dropshipping isn’t new, and that means you've already got many competitors out there. Thanks to these high levels of competition, you'll need to sell more items to make a decent profit.
That's why you've also got to put time and energy into building yourself as many advantages as possible. Whether it’s your killer website or great customer service, you should aim to display polished, professional conduct in all aspects of your business. You might be operating on the same shoestring budget as your competitors, but you don't have to let it show in the quality of your service and product!
Next, you should be mindful of your warehousing. With drop shipping, you'll often have to work with multiple inventory details. This can quickly lead to lots of shipping headaches. You'll often have to call up warehouses to check that products are en route to your customers or to iron out order processing errors. The key is to stay on top of your market. If you let the slip-ups build up, you can quickly drown in a sea of shipping orders.
Is Drop Shipping Worth It?
Sure! Drop shipping isn't for the faint of heart, but if you're proactive and organized, you'll find it to be a rewarding business. Always prioritize product quality and customer satisfaction, and you'll get far in the drop shipping world. Also, we highly recommend that you cross reference our list of dropshipping companies with this fantastic website!
How Do You Find the Best Drop Shipping Company For Your Business?
There are plenty of things you need to look for when finding a drop shipping company to help you push your business to greater heights. After all, most of these services come with a decently-sized price tag.
To come up with our rankings, we had to take into account different criteria to determine which drop shipping companies truly shine. So, in no particular order, here are the things we looked at to find the best drop shipping companies for your business:
- Size and diversity of their product catalog: One of the first things we look at is the catalog of products they have available. You want to find a drop shipping company that boasts a large selection of items from multiple categories. With that in mind, a navigable directory - fitted with sorting options, filters, and search tools - are a necessity.
- Credibility of the suppliers they work with: The quality of the suppliers they do business with has a direct impact on your brand. You want a drop shipping company that provides some sort of assurance that they only work with reputable suppliers. Look for a drop shipping company that screens suppliers before they feature their products.
- Efficacy of the drop shipping tools they offer: From product imports to order fulfillment and shipment tracking, there’s a lot of work involved in running your drop shipping business. Find a drop shipping company that provides powerful and automated tools to do most of the heavy lifting for you - allowing you to focus your energy into building your brand.
- Quality of their customer support: The best drop shipping companies provide reliable support for members and non-members alike. The nature of the drop shipping business means problems can occur at any time of the day, so you’ll want a drop shipping company that provides around-the-clock support with multiple ways of contacting their representatives.
- Coverage of instructional material they provide: Some drop shipping companies are very robust and may have features unique to their brand, so it can be difficult to get accustomed to a service. Find a drop shipping company that provides plenty of step-by-step tutorials to guide you through their service.
There’s a few others worth mentioning: the quality of their website, the presence of a money-back guarantee, the option for international shipping, and many more.
Each brand is unique and while we’ve taken the time to review them individually, it’s still a good idea for you to assess a service with these things in mind.
How to Start a Drop Shipping Business
The sizzle of online businesses continues up to this day. While some people are adamant on building everything from the ground up, others have chosen to drop ship their way into the entrepreneur world.
It’s no wonder why people from all walks of life are leaving their day job and trying their luck with drop shipping. Not sure what that is? Check out this article that explains what drop shipping is all about.
The great thing about this business model is that it’s easy to start and manage. You don’t need to purchase merchandise beforehand, and inventory management fall under the supplier’s responsibilities. Your main role is to simply sell the products.
If you're interested in how that sounds, you’ll find everything you need to know about starting a drop shipping business below. So get yourself a cup of coffee and get to reading!
Drop Shipping Business Plan
Before you get all excited over starting your own online business, you need to learn how to make a business plan first. This will serve as your guide in setting up, managing, and expanding your business.
Making a business plan is also a great way of focusing your strategy. It's also good to have handy especially when third parties enter the equation.
For a drop shipping business plan, the content should be as follows:
First and foremost, you need to pick the products that your online store will carry. Are you planning on offering a whole spectrum of items, from home products and consumables to appliances and electronics? Or do you have a specific niche in mind, where you will cater only to a specific segment of the market?
Prior to anything else, you should already be decided on the kind of items you will sell. It would be even better if you are familiar with what you will offer, so you can discuss its selling points to customers.
How well do you know your market? Which specific segment of the population will your products cater to? Is the market large enough for your business to be profitable?
Without proper knowledge of your target market, then your running your drop shipping business will be like tiptoeing in the dark.
Familiarizing yourself with your customers can help you implement strategies to grow your business. You should also be caught up with the latest product trends. And most importantly, you should know and analyze your competitors, so you can eventually match - and surpass - what they bring to the table.
Compared to other types of online businesses, drop shipping is much less demanding when it comes to finances.
With drop shipping, you don’t need a substantial amount of capital to start the business, nor will you need a big revolving fund for it. That's because you’ll only be billed by the supplier for items that have been ordered from your store.
Your most significant expenses will likely consist of the following:
- Store setup and maintenance fees. Just because your store is a virtual one doesn't mean it doesn't cost anything to operate. Depending on which platform or marketplace you choose, you'll have to pay for things like a member subscription, per-sale fees, web hosting, website design, and so on.
- Advertising and promotions. Driving traffic to your store is heavily dependent on effectively getting the word out. Prepare to spend at least 10% of your profits on advertising. This figure can be even bigger, especially if you choose to put up an independent store separate from larger marketplaces like Amazon and eBay.
- Payment processing. Since you'll have to rely on third party services to verify payments for you, avoiding the associated fees is simply not possible. Expect to cough up about 5-10% of a product's retail price to whatever provider you choose.
- Returns and refunds. Situations like these are something that a lot of eager drop shipping beginners forget to consider, which is unfortunate as they pose real dangers to your business. Always have some cash available to address these emergencies. You might have to take the loss sometimes, but it's the price to pay for maintaining a good reputation.
In a drop shipping business, you and your supplier work hand-in-hand to deliver a great experience for the customer to ensure that they visit your store again. But no matter how organized and eye-catching your store may be, if your drop ship partner fails in fulfilling orders, then your visitors won’t be converted to customers, and your profits will suffer.
Check out a more detailed discussion on how to pick a drop shipping supplier here.
This section goes hand-in-hand with the previous topic. You can’t decide on the prices without having a drop shipping partner first, since your prices will depend on theirs.
Obviously, you can’t set your prices at less than what you’re paying for them. Aim for a profit margin of at least 50%. Bigger is better, but may not be applicable in some cases.
Also check on the prices offered by your nearest competitors. You don't want to set your too high either. Stay competitive so that you're not missing out.
While finding the right price point can be challenge, doing so is a key element in success. Don’t stray too far in either direction. You don’t want to set prices too low and miss on having bigger profits, or too high and drive your customers away.
Website builders gives users more flexible choices in how they want to go about creating a website. You can opt to have them do all the work while you sit back and relax, or you can also have more control over the creation process and have the developers consult you along the way.
Enlisting a website builder service has actually become affordable nowadays, and they usually have different packages offered, based on the level of features you want for the website. You may want to check out our top eCommerce website builders list before you choose.
Marketing can make or break a business, no matter which industry it’s in. If nobody knows about your products and your store, how can you make a single penny? For this very reason, advertising efforts should have started way before your store goes live.
Social media has become the number one go-to for mass advertising. You should have your accounts set up before opening day for this very reason. There are also other types of marketing strategies which have proven to be effective - SEO, related blog features, and email marketing are a few examples.
Once your online store is up and running, the challenge is always to have visitors checking your items, so that their visits will hopefully be converted to sales. This requires your marketing efforts to be continuous and consistent. Promos and discounts fall under this umbrella as well. You may want to offer these to customers once in a while to encourage sales.
Assessing the Competition
Effective competition starts with knowing who you are competing with. A quick Google search will show you online stores that carry the same line of products that you do. Once you have the list of stores that you’re up against, it’s easier to do some research about their company’s background, product variety, social media presence, pricing, shipping options, and overall customer experience. Gauging the size of their traffic and searches may prove to be more difficult, but there are tools like SEMRush which can do the job effortlessly.
For better monitoring of competitors, you may want to rank your top competitors so your countermeasures can be directed towards their efforts. Analyzing their objectives, strategies, strengths, and weaknesses can also help you prepare better for your own plans upon store opening. You can take the necessary steps to amp up your stronger store qualities that trump theirs, while actively avoiding elements and missteps you observed from them.
Aside from the more technical side of things, checking other elements in their store is also a good idea. Do they have a blog? Is their store enjoying backlinks from other relevant websites? Is their store mobile-friendly? These factors affect their ranking in SEO and taking note of these can give you an idea of what to do to match them and help propel your own store somewhere close to their SEO standing.
Drop Shipping on Amazon
As one of the biggest eCommerce platforms to date, Amazon is a great place to start your drop shipping business. It gives a lot of opportunities for you to be exposed to a ton of customers (76% of Americans shop at their virtual shelves), and there’s enough room for growth when your store gets traction.
If you’re not particularly ready to build your own store, or if you want to have more sales channels available, you can use Amazon to run your business.
Amazon’s Drop Shipping Policy
Before we get into the nitty-gritty of setting up a drop shipping store using Amazon, let’s first check their policy on the matter. According to their Seller Central section, drop shipping is generally allowed under the following conditions:
- You are the official seller of the products on record, including packing slips and inserts.
- You have the responsibility of accepting and processing orders.
- You should comply with all other terms of your seller agreement and relevant Amazon policies.
It’s important to note that Amazon doesn’t allow purchasing items from another online retailer and having them directly ship the orders to the customer. The workaround for this is you can purchase from an online retailer, then employ the services of a fulfillment center to ship the orders to your customer.
These terms seem absolutely reasonable, so compliance should pose no problem at all.
Listing Your Products on Amazon
Assuming that you already have a drop shipping partner, the next thing to do after creating an Amazon seller account and getting approved is to list products.
Since your drop shipping supplier is in charge of physical inventory, all you have to do is finalize the list of products that you’ll offer in your store and list them over to Amazon. Sounds simple enough, right?
Well, the thing with Amazon is that it works like search engines in a sense, but differs a bit when it comes to ranking the listings. Products will only appear in the result section if they contain all of the search term keywords, so it’s more challenging to get a hit.
Here are some tips to optimize your product listings and ensure that they get their fair share of exposure:
- Indicate the brand, quantity, size, color, material, and any distinguishing features in the product title.
- If there still is space, add keywords that can be of added value for customers if applicable (organic, eco-friendly, locally sourced, etc.).
- Make the most out of hidden keywords. These are indexed by Amazon for searches as well.
- Upload high-quality images with a minimum resolution of 1000 x 1000 pixels.
- Put the most important points at the top of the bullet list. Customers tend to skip over the others.
- Emphasize in the description what makes the product valuable, and why customers should buy it from you.
- Search for competitor’s negative reviews, then address those issues directly in the product description for an edge.
Here are the character limits per section:
|Primary Keywords||250 characters|
|Hidden Keywords||250 characters|
|Bullet Points||1,000 characters|
|Product Description||2,000 characters|
How to Choose Drop Shipping Suppliers
The success of your drop shipping business doesn’t rely solely on your decisions and efforts-- half of the story lies with your drop shipping partner. No matter how good you are at managing the store, if your drop ship supplier doesn’t restock their shelves enough, or fails to deliver orders, then all the time and energy you spent for the store is wasted.
Here are some tips on how to find the perfect drop ship supplier:
- Look beyond Google’s first page when searching.
- Don’t be afraid to look at suppliers with outdated website designs.
- Try your luck with manufacturers.
- Drop ship directories are a big help.
- Check for customer reviews on forums and discussion boards.
- Create a pricing and package comparison table.
- Free trials give you a preview of the service.
You can also read this guide to help you find a reliable and trustworthy drop shipping partner.
Drop Shipping Niche Ideas
In this section, you'll find some ideas as to what kind of business you can put up. These recommended niches show great potential for growth, so you may want to take advantage of that as early as now.
You may not notice it, but shapewear and other compression wear have started a boom in the market. By 2022, the shapewear industry is expected to reach $5.576 billion, thanks in part to a growing awareness for a more active lifestyle while still looking stylish.
It also caters to all genders - shapewear caters more to women, while compression wear to men. You also don’t have to exclusively offer lingerie for shapewear, since it can also fall under general apparel as everyday wear.
Dogs are man’s best friend. It’s no wonder why they are getting pampered, sometimes to ridiculous lengths. There are establishments that even offer pet acupuncture and pet psychic reading.
Although not exactly a new trend, it seems that demand for doggy accessories won’t go out anytime soon. Buying or adopting a dog entails purchasing supplies and other items to keep the furbabies happy, stimulated, and in good health.
Activewear has taken an interesting turn over the years. From being marketed as clothes that people wear during sports and gym activities only, it’s now perfectly acceptable - and even considered fashionable - to use them as casual, everyday wear.
The sustained demand can also be explained by the increased need for an active lifestyle. You can sell these products under fashion or fitness apparel. Or better yet, tag them under both categories for more exposure and search hits.
In today’s tech world, it’s safe to say that convenience killed a lot of things; one of them is the trusty wire. Wired routers, headphones, and chargers are slowly becoming a thing of the past, replaced by their wireless counterparts.
Major mobile phone manufacturers like Apple and Samsung have introduced wireless phone charging a few years back. Bluetooth headphones are replacing wired headsets because of convenience - no need to untangle those pesky cables, after all.
The demand is increasing for these accessories. The wireless market is estimated to reach $22.25 billion by 2022, so you might as well go with the flow where the money goes.
Startup businesses with a huge demand usually find success through crowd-funding, where interested individuals can pledge donations to make the product a reality.
One such example is the Bobby anti-theft backpack, which started as a Kickstarter project with a goal of £20,000, ultimately receiving a whopping £640,923 from 10,000 sponsors.
The demand is huge, and while this specific brand was able to satisfy a portion of it, there’s still a growing interest for these kinds of bags from all points of the globe.
Moreover, bag manufacturers have noticed this trend as well and began offering their own bag designs in response. It's not very easy for you to find drop ship suppliers that carry them so that you can offer it in your store.
How to Build an eCommerce Website
Register your own domain name
Registering a domain is the first step you need to do before opening up your store. The domain is the name of your store; it’s what people will type into their browser to go to your store.
You need to register a domain so that no other website can use it, and this process has a certain fee. Some hosting providers offer domain names for free together with a subscription plan. Others give discounts once you are subscribed to their service.
You can also register on your own through domain registrars. If you prefer that route, make sure to select a domain registrar from our list of the top ones available.
Find a hosting service provider and website builder
There are 2 other things you need to have in place before creating an eCommerce website, or any website for that matter:
- A hosting service
- A website builder
A hosting service allows your website to be viewed via the world wide web. Providers basically let you use a server on their data center where your website will run.
Meanwhile, a website builder is a collection of tools for you to create the website’s pages, interface, design and other contents.
Think of it as a brick-and-mortar store, wherein a hosting service is like a mall renting out spaces to shop owners. You need this space in order for customers to find you; otherwise, they won’t have any means of locating you.
Once you have space, you then use a website builder to create the foundation of your store. Think of a website builder as an architect, contractor and designer rolled into one. That is, except for the fact that many website builders make it incredibly easy for you to do everything yourself. That’s because, in addition to user-friendly site editors, they also have ready-to-use templates on offer.
Continuing the brick-and-mortar store analogy, the template you choose acts as the interior design and frontage of your shop. Meanwhile, the pages and content of your website are akin to physical store shelves. These are where you can showcase your products and/or talk more about your service.
Choose your shopping cart software
For the uninitiated, shopping cart software acts like its real-life counterpart. It keeps track of the items that customers have chosen from your store, with a few other vital functions.
It also allows the customers to select products, add and/or remove items, and most importantly, pay for their items. It’s essentially the store shelves, item list, shopping basket, and the cashier in one.
Similar to domain registration, many eCommerce platforms also offer shopping cart software in their subscription plans. When you purchase a subscription, you’re basically getting everything you need to run your online store. You don’t need to go through the hassle of subscribing to a website builder then gathering every single requirement for a shopping cart.
Shopify is one great example of this. Their platform is used by a majority of online shops because they include both web hosting and shopping cart software.
On the other hand, if you want to have more customization, a self-hosted shopping cart would be a better fit. You don’t have to settle with pre-made themes. You can be more hands-on with the design as long as you know how to code, or if you have a developer.
Magento is possibly the most popular self-hosted shopping cart out there. You do have to pay for your own hosting provider in this case.
Set up a payment gateway
In order to process payments within your website, you need a payment gateway. If you’ve ever paid for something online, you’ve already used one. It’s a software that communicates transaction information from your store to and from banks.
Since your customers will pay for their items online, their payment details need to be verified via the bank, where it will also be approved or otherwise, before the transaction is completed.
As usual, eCommerce website builders readily offer these within their packages, and you only need to configure which payment gateways you want to be available in your store. This will determine if it can accept debit and credit cards, other alternative methods of payment, and which currencies it can support.
Take note, payment gateways usually have fees in order for them to process transactions, so you may want to check on the costs first before adding them up into your store.
Install an SSL certificate
Since customers will enter their payment details in your website, usually in the form of debit or credit card information, a security protocol should be in place to prevent the data from falling into criminal hands.
An SSL (Secure Sockets Layer) ensures that the connection between a visitor’s browser and your website is safe with encryption. Therefore, an SSL certificate is a must for an online store that processes multiple transactions day in and day out.
Some eCommerce platforms like Shopify offer SSL certificates without a cost. In Shopify’s case, a 256-bit encryption SSL certificate is included. This is the same encryption level used in major banks and financial institutions, so you’re getting the highest level of security.
You also have the option to purchase an SSL certificate on your own. They typically range from $17 to $69 for 1 year's validity. You’ll save more if you buy multiple year packages, or if you buy for more than one website.
Some providers even go beyond 256-bit encryption, although this will set you back a hundred dollars more.
How to Perform Customer Acquisition
Before we delve into the different channels and tactics for you to gain new customers, there are 2 concepts you need to learn first. Customer Acquisition Cost (CAC) is the total expense to convince a customer to buy from your store. It is calculated by dividing all marketing costs towards acquiring new customers with the actual customers acquired during the period that the money was spent.
To give a more concrete example, if you spent $50 to gain new customers and got 50 customers purchasing from your store, then your CAC is $1.
Monitoring your CAC is a must in any business. You don’t want to overspend while getting only a few customers in return. It’s not a bad idea to spend money to entice customers to visit and make a purchase. This concept is the very foundation of marketing, after all. The trick is to find the balance between the two.
Customers love to get more value out of their money, which is why discounts, vouchers, and loyalty programs are almost always a great hit for stores.
Even online stores that are long established and have millions of customers offer some sort of promotion, to entice even more customers to their store and hit target sales.
It’s not hard to create a promo, too, since you are in control of its mechanics. Some of the promos which have been proven to drive more customers and sales are:
- Free shipping offers
- Discounted prices
- Buy one get one (BOGO)
- Bulk discounts
- Reward systems
The specific type of promo that you offer should depend on the kind of branding that you are pushing for the store.
High-end brands usually offer loyalty reward programs to reel in customers to keep returning to the store, despite the items having an expensive price tag.
On the contrary, if you already enjoy larger margins and your items have lower price points, then coupons, vouchers, and general discounts are your best bet.
Social Media Marketing
When you are sure that your drop shipping business is going to open online, one of the next steps that you should take is setting up a social media account.
There are currently 3.296 billion active social media users, increasing by 13% from 2017’s numbers. Social media posts are one of the quickest and most effective ways to reach out to a multitude of people within a short period of time.
Just count the number of memes and viral videos that arose from Facebook, Twitter, and Instagram these past months, and you’ll quickly realize the power of this platform.
For an online store, regardless if you drop ship or not, there are a handful of must-have social media accounts where you can post your products and entice customers to check out your store:
- Facebook: As the largest social media network to date with 2.2 billion active users, having a presence on Facebook provides a massive opportunity not just to market the items and the store itself. It also serves as a communication channel where you can instantly read and respond to customer’s inquiries and concerns. Facebook Ads makes it even easier to promote posts by setting parameters and interests for your target market.
- Twitter: A goldmine for marketing efforts, the Twitter community values responses just as the actual post content when it comes to businesses. You can be formal and appropriate, which is exactly how a business’ tweets should be. But you can also be like Wendy’s, whose Twitter account has earned popularity from witty tweets, all while still marketing the brand.
- Instagram: Although Instagram is focused on visuals, it can still be a platform for customer acquisition - given that you're good at capturing photos of your products. With the boom of social media, customers have an increased tendency of following the brands they purchase from. You can also entice potential customers with photos of your items. You don’t necessarily need to have a lot of followers, but you do need to be as responsive as you can to inquiries. Hashtags are also powerful little tools for exposure, as your post can appear in multiple search results. You can also use tools to follow hashtags that are related to your store.
If you're in need of tools to stay on top of your social media program, we reviewed a bunch and ranked them accordingly based on a handful of factors; with social network compatibility as a priority. Head on to our list of the best social media management tools for more information.
If you have not yet built an email list of your customers, stop whatever you’re doing right now and make one, immediately! You can utilize the email addresses that you have on hand from your customers to market your shop. You can send emails to welcome them to your shop upon registration, thank them for a purchase, and entice them with discounts, new products, and special offers.
It may be ideal to rely on recurring customers, but unless you actively seek out their attention, chances are they won’t return to your shop if you don’t make an active effort to reel them back in. Moreover, it’s a lot easier convincing customers who already had a purchase experience to buy again compared to new customers who have zero knowledge and interaction with the store before. Plus, recurring customers have the power to share their experience with family and friends and actually bring in more buyers with them basically doing the marketing by word of mouth. We’re not saying recurring customers are more important than new customer acquisition, but they are of equal importance for your shop’s success.
One surefire way to engage customers is via email marketing. Although social media marketing has proven to be an effective channel when it comes customer acquisition, it seems that email marketing is still a relevant method.
That said, perfecting an email campaign can be extremely challenging. Several factors are at play which can make or break your efforts. Content, timing, and frequency all come to mind. This is why you need a structured approach when creating a campaign.
The first thing that you’ll need is reliable email marketing software. It doesn’t need to be overly expensive, but it should be able to create campaigns with ease. If you haven’t chosen one yet, we recommend reading this article that reviews the best email marketing software to help you weigh your options.
Once you have you email marketing software up and running, the next hurdle is creating the campaign itself. While most email marketing tools have guides and templates, most of the content will still come from your own creative input. In this regard, there are several tips that you can keep in mind:
- Send a welcome email upon subscription with a coupon to encourage a purchase.
- Group your email list by interest so every email they receive will be relevant to them (segmentation) and prevent unsubscription.
- Offer freebies and discounts when they sign up for your email blast.
- Provide a catalog of your products so they can see featured items without having to go to the website, with links to the item’s product page.
- Send out greetings during holidays and special occasion together with relevant items for the event.
- Cart abandonment email campaigns help recover forgotten purchases.
- Reward loyal customers with a thank you message and a gift card.
If you’re still in the dark on how to use email marketing for your store, Shopify has a dozen articles dedicated to the topic, so you can arm yourself with knowledge and strategies which will hopefully result to successful email campaigns.
Have you ever seen YouTubers collaborate where one of them appears in the other’s video? This strategic relationship benefits both parties. The crossover video gives exposure of one creator to the other’s followers. This kind of networking works even in drop shipping - via co-marketing.
Co-marketing happens when 2 different companies work together for a single project, content, or offer. By doing so, both companies are able to reap the benefits of their efforts and enjoy the results with less the effort.
Expenses are cut down since you’ll be sharing the cost of marketing campaigns. The connection that you’ve built with the other store can also become a long-term connection where you collaborate on projects on a regular basis. And more importantly, the increased exposure to each others’ customer base can bring in more purchases and introduce your shop to previously untapped markets.
How do you find the perfect co-marketer? First and foremost, they shouldn’t be a competitor, but rather, a shop that complements what you have on your shelves. It can also be a totally unrelated brand, but with an owner that possesses certain marketing skills which you currently don’t have.
The trick is presenting them the value that you will bring to the table, and the benefits that they will gain from the partnership. Co-marketing is about mutualism for both parties, after all.
Another factor that you should consider is the number of customers and followers of their shop. Since it's unlikely they’ll disclose the number of their customers, you can look into their social media accounts, and check their ratings on eBay, Amazon and other marketplaces. These should give you a pretty good estimation.
Last but not the least, when you are looking for potential partners in marketing, try to target the ones that are the same scale as your shop.
There is a bigger chance that they will want to collaborate since they also need the boost, unlike more popular names who’ll probably decline the offer since they are at another level already.
Analytics and Optimization
Wikipedia defines web analytics as the measurement, collection, and analysis of website data to understand and further optimize usage. The most popular data that comes from web analytics are website traffic, and visitor activity and location. While these data are already useful, analytics offers so much more. You can harvest information which can give you a better outlook of your store’s performance. Let’s take a look first at some reasons why analytics is important for your drop shipping business:
- Basket analytics can help generate product recommendations that customers are most likely to add to their purchase based on their existing chosen items.
- Click-throughs and heat maps can show which sections and graphics get more attention.
- Purchase activity of a customer within the store can be monitored which can help predict potential future purchases.
- Geographic location data can help focus marketing efforts and promotions.
- The effectiveness of marketing channels can be gauged and strengthened depending on existing data.
- Top referrals and social traffic can show you which platforms are most effective in directing visitors to your store.
- Keywords and searches can reveal which items are sought after in your store.
These are just a few instances of how you can utilize the data from analytics. There are many other metrics that you can monitor and harvest, all depending on your analytics software- the most popular of which is Google Analytics.
Google Analytics is the most popular analytics software to date, and rightfully so. Aside from Google’s clout in the field, the program is easy to use and set up; it offers different tools to obtain a specific data; and most of all, it's 100% free.
It’s no wonder why a majority of websites and businesses use the software for their company. It gets the job done without any costs.
While setting up an account varies for different hosts, it can definitely be done by someone with less technical knowledge. You can check your hosting service’s help center for the exact procedure, most of them should have the steps for Google Analytics integration.
Aside from Google Analytics, there are several other free tools that you can use for your drop shipping business’ advantage:
- Facebook Page Insights: A built-in feature for Facebook Pages, this nifty little tool shows the general activity in your page, like total and page likes, total and most recent post reach, engagement, and others. You can effectively see which posts are creating noise, and engage your followers more to direct them to the website and convert page views into purchases.
- Clicky: Clicky offers some of the same data with Google Analytics (content, searches, referrals, real-time data) but adds basic segmentation and a customizable dashboard to boot. The tool is free to use for a single website with 3,000 daily page views, but you can opt for their paid packages once your shop scales.
- Bitly: Although Bitly is more popularly known as a URL shortener, it provides some insight as to how many people clicked the links, as well as the location from where the hits are coming from. Both data are valuable for identifying your market and targeting content and marketing efforts toward them.
- Cyfe: Meanwhile, if you want all the pertinent data in one place, then Cyfe is your best bet. This free tool is a god-send for starting businesses because of its features: social media tracking, marketing monitoring, web analytics, sales and financing reports, project management; even IT elements like network monitoring, website uptime, and end-user tracking.
- Heatmap: If you’re not yet familiar with a heat map, it’s basically a visual representation using colors to represent values. When applied on a website page, it can show which sections have been clicked by users, and how far down the page did they scroll to. Heatmaps show these exact data in real time, with the added convenience of content and media editing to see how the visitors react to your changes. The free version allows monitoring of 1 website with up to 5 pages, for 1 user.
Search Engine Optimization
Now that we’ve covered analytics, let’s delve into another important metric for your drop shipping business: Search Engine Optimization (SEO). It is any activity that tries to put a website’s search engine rankings into a better position. It also acts as sort of a quality checker for websites, with relevant content to deliver on specific search tags.
There’s really no single commandment when it comes to having better SEO rankings, although generally, there are three elements which directly affect its performance:
- Website Elements
Let’s start with possibly the most important SEO ranking factor: content.
Content has long been a major factor for Google and other search engines. But since you’re running an online store, how does it apply? You’re not writing articles and posts, so what kind of content do you need on your website for a better SEO ranking?
The first answer is keywords. Keyword research is one of the foundations of eCommerce SEO. Basically, you’re looking for search terms that your customers are using, and use them effectively in your website, so search engines recognize that you offer these items.
It’s a bit different from the usual website content for articles and posts. Those need to be comprehensive and informative. For eCommerce websites, the target is for searches looking for a specific product, meaning there’s a purchase mindset from the individual.
Before you even think of putting product titles and descriptions, you should first build a list of keywords that are relevant to what you’re offering. One quick way to do this is by taking advantage of Google and Amazons’ suggestions. Put your keywords in the search bar and check the list of suggestions. These can give you ideas for more keywords.
If you already have a keywords list, the next thing to do is identify which keywords will actually be useful. The first thing to check is the volume of searches for each keyword. Larger volume equals more people using it to search. Keyword tools are usually very helpful in this aspect by showing the search volume, competition level, search engine traffic, and many other pertinent data.
Next is the competition. If there are many other websites using the same keyword, you’ll have to compete with them for the top page of the results list. On the other hand, if only a handful of other websites use your keywords, then you can bet that you’ll rank nicely in those search terms.
Last, but not the least, is aiming for transactional searches. Your keywords should be specified in the sense that it’ll reflect searches of a buying individual, rather than one who is simply looking for more information about a certain topic, or searching for a specific website. Using the product name, brand, category, and other sales keywords will stir you towards searches with a purchase intent.
Creating a Blog
Even if you’re running an online store and not an informational website, you can enjoy both worlds when it comes to SEO by creating a blog.
Blogging is one of the marketing strategies used by numerous eCommerce websites to give their SEO ranking a boost. And it’s no wonder why. Blog articles are highly shareable on social media, they are very SEO friendly, and they create an avenue to connect with influencers and other bloggers.
How do you create a blog which can help your website achieve a better SEO rank? Answer this question first: Are you comfortable writing pieces on your own?
If yes, then continue reading below. If no, skip the section below and go straight to the non-writer's section.
For starters, it seems that long-form content is currently being favored than shorter posts. Articles with more than 1,000 words get more shares and links. While the average total number of words vary for top posts usually ranges from 1,500 to 2,500.
That said, it doesn’t mean shorter posts are a total waste. They can still be part of your content strategy. While quantity does not trump quality, regularly updating your blog with new content, regardless of its length, is a worthwhile effort in itself. Readers value fresh and updated content which drive up engagement.
Factors being measured by search engines when it comes to content seems to focus on relevance, comprehensiveness, and timeliness, so keep these in mind when writing your blog entries.
And of course, don’t forget internal linking. Link your product pages to the blog articles; not only to give them more exposure among your readers, but to also give them a little bump in terms of SEO.
For the Non-writers
On the other hand, If you haven’t tried writing articles yet and you don’t feel comfortable doing it on your own, you have two options: Hire someone to do it for you, or seek for bloggers who are looking for exposure.
There are several job search sites where you can post your needs and receive applications from people with a variety of skill set and experience. You can click here to see a list of the recommended job search sites.
As for bloggers, you can offer them exposure on your website. They can post more about themselves in the author bio section. You can even provide them a link to their blog -- this could benefit the both of you even more, as active backlinks are always great in the search engine’s eyes (more on this later on).
There are 4 important website elements that affect a page’s SEO rankings:
- Meta title
- Meta description
- Image alt text
The meta title is the clickable headline for a specific web page, which gives a short but accurate description of the whole page’s content. It also appears at the browser tab and certain social networks that allow web page sharing. The maximum length that a search engine could show varies, but it should ideally be under 60 characters to ensure that nothing gets cut off for the search engine result list.
Meanwhile, the meta description always comes after the meta title. It is a 155 character snippet that summarizes a page’s content, letting visitors know more about what they will find when they open the page. Although search engines claim that it has no direct impact on the ranking, it affects the page’s click-through rate.
If more people were to read the description and click on the page, then you can expect to have a better position compared to page results that people just scroll through.
The meta description is the perfect element to place a call to action statement. It should invite readers to go over your website and see what you have to offer. This is also where keywords would come in handy: listing the product’s brand, model, and other specifications, together with what its main purpose is and what sets it apart from others.
As for the URL, which is the address of the specific page (what you see at the address bar of your browser), organization is king. The URL needs to be reflective of the informational hierarchy of the whole website, from the main page, the specific category, and the page itself; while having a concise description of the page’s content. For reference, this is a good example of an optimized URL:
You’ll notice that the Layla mattress review is categorized under best mattresses reviews for the category top sleep products, so right off the bat, you know what the page contains: a review of the mattress.
It also does wonders for SEO, as the keywords best mattress reviews and top sleep products are common search terms.
Meanwhile, here’s an example of a URL that’ most search engines will ignore. If you’ve been paying attention, you can instantly pinpoint the wrong elements of the URL:
This is a classic example of an overstuffed URL. While you can see that the product is an office chair, the tags that follow it are filled with keywords that it just becomes a string of words that doesn’t make much sense. You can imagine how search engines will treat this page.
Last, but definitely not the least, comes the image alt text. It is the attribute in an image tag that helps search engines understand what the image contains.
It is completely different from the image title, which is the text that shows up when you hover over an image. The image alt text has 3 main purposes: as a substitute to the image if the image file does not load; for accessibility with screen readers for visually impaired visitors, as the tool can read out the image; and as the image description search engine indexing.
As with the previous SEO elements, having a descriptive alt text is always more favorable. To give an example, here’s a sample image of a t-shirt:
Using “shirt” as an alt text may not be as SEO-friendly compared to tagging it as “dark blue men’s shirt”, which effectively describes the item at hand. Moreover, if the product has a specific brand, you can include it in the alt text and let it do wonders for SEO.
Link-building is the process of gathering links from other websites and is an essential strategy when going up the ranks of search engines. That said, these backlinks are valuable in search engine’s eyes, but not all of them are treated the same.
Before you start a link-building campaign for your drop shipping business, there are a few concepts you might wanna get acquainted on. There are two types of backlinks: follow and no follow.
The former is considered more valuable, as this is considered an endorsement to your website from the source website. Both visitors and search engines are directed to your page, giving you both traffic and SEO rank boost.
On the other hand, a no-follow link only directs traffic, without giving a significant endorsement when it comes to rankings. This is a website telling its visitors that they think the page could be relevant, but they’re not endorsing it in any way.
Aside from the type of link, there are other other factors that affect a backlink’s value. For example, backlinks from quality websites with relevant content have more weight than one from a relatively smaller website with content that is not really related to your own.
Getting links from the same website over and over will also have less merit compared to getting one from a unique source. Keywords are also factored in when it comes to the backlink’s value. If the words where your site is linked uses focused keywords, then it adds even more value compared to generic tags such as “check it out” and “click here for more”.
Earlier it was mentioned that you can get backlinks from bloggers and guest writers who wish to post on your website. This cross-posting deal works for a lot of websites, not just specifically for online stores.
Keep in mind though, there are other ways to get backlinks, but they rely on having quality content that is both relevant and shareable, so you may want to brush up on your writing skills.
Another strategy that most online stores do is to have their products featured in review websites. Not only can readers know more about a specific item that you carry, you can also have a backlink to a specific product page in the review, for visitors who are interested in buying the item.
Just make sure first that you are offering a quality product. Otherwise, you run the risk of getting negative reviews and driving people further away.
There are many other topics to discuss when it comes to building a drop shipping business, but we’ve pretty much covered most of the basics. Hopefully, with the newfound knowledge brought to you by this article, you’ll make the right plans and decisions towards a successful drop shipping website. Good luck!