Over the last few years, the online e-commerce community has been buzzing about dropshipping. Some e-commerce gurus consider this business model as the top choice for novice online entrepreneurs, and there are examples of people who’ve managed to get a six-figure income through dropshipping.
However, the reality of dropshipping is a bit different and you need all the help you can get to avoid numerous pitfalls along the way. The following sections outline the dropshipping business model and single out the features to look for when selecting the best dropshipping course.
Dropshipping is different from traditional online retail because it’s an order fulfillment business model. This means that an entrepreneur doesn’t need to keep any merchandise in stock. Okay, but how does it work then?
This kind of sales model involves three parties — the entrepreneur, supplier, and the shopper. The entrepreneur finds a third-party supplier or manufacturer and selects the products to promote at their e-commerce website. The important thing is that the entrepreneur doesn’t pay for the products beforehand.
Once a shopper orders a product, the entrepreneur forwards the order to the supplier and pays for the item. This is a super simple explanation of the business model. However, there are a bunch of actions you need to perform before you make the first sales.
If you are to succeed, a dropshipping course needs to lead you every step of the way. More importantly, it should point out potential problems and instruct you on how to overcome them.
How to Approach Dropshipping
Before it teaches you how to select a supplier and a product, the best dropshipping course should help you adopt the right mindset for the business. This applies to novices and veteran online entrepreneurs because the dropshipping business can be a boost to your existing e-commerce business.
The correct approach can be divided into four categories and some apply only to experienced e-commerce businesses and entrepreneurs. Nevertheless, a course should explain everything in great detail so you can easily grasp the big picture. Here’s a quick overview of each category.
Dropshipping as Market Research
Some e-commerce experts believe that dropshipping isn’t viable in the long run. This standpoint is arguable, but everybody agrees that it works like a charm for temporary projects. What does this mean to you?
If you’re just starting out, feel free to pick just one product, create a landing/sales page for it, and do a snappy campaign on social media. This will help you gauge if there’s a market for such a product and your motivation to push further is bound to go sky-high when you make first sales.
On the other hand, established e-commerce businesses can do the same when trying to expand their inventory. The dropshipping business model allows them to put an item on trial without stocking up their warehouse with a potentially volatile product.
As you might have guessed, this is easier said than done. A good dropshipping course should instruct you on how to select the product, shortlists top suppliers, as well as provides guidance on how to set up a landing or sales page. Some advertising tips and tricks should be included too.
Shipping That Doesn’t Drop
Shipping is one of the trickiest aspects of the e-commerce business. You need to choose the right carrier, take care of the packaging, and figure out which regions are profitable for your business. Should you decide to ship out of country or state, you might need to pay extra fees or overcome various tax issues.
One of the best things about dropshipping is that it takes most of these problems out of the equation. But there’s a fair share of challenges, even though you’re not handling the shipments. First of all, you need to be 100% confident about the shipping methods your supplier is using.
In general, a supplier should offer two or three methods with different pricing and shipping times. As an aspiring entrepreneur, you have two options. Go with one method that’s usually the fastest and most expensive or allow your customers to make a selection.
Either way, this is something a dropshipping course needs to cover and provide you with all the pros and cons of third-party shipping.
This approach applies to the already established e-commerce, but it also works as proof of concept for the benefits of the dropshipping business model for those who wish to get into it.
To explain, it can be hard to predict the market fluctuations in the online retail business. Some companies overstock to meet potential demand spikes, but this significantly raises the inventory cost and affects the product’s list price. Of course, this problem doesn’t exist with dropshipping because someone else is handling the inventory.
This is a simplified version of the overstocking concept and top dropshipping courses provide case studies, concrete examples, and bail-out strategies. These topics can be too complex for novices, but it pays if a course touches upon them.
Note: Some established e-commerce use dropshipping as a safety net in case a disaster strikes in their warehouse. This way, they can fulfill the orders that have already been made and avoid costly returns and delays.
The demanding products are those that require high maintenance and usually cost more to ship and stock. Dropshipping could be a perfect solution for such products because it can make them more profitable for you.
That being said, some dropshipping courses and experts advise against choosing a niche that features demanding products. But if this is where your passion lies, you should assess the risks and determine if the venture is worth pursuing or not. Here is a shortlist of products that belong to this category.
Heavy or Large Items
As a rule, bulky items are very expensive to store and they don’t really fly off the shelves, except for certain electronics such as smart TVs. With dropshipping, the shipping is usually a bit costlier, but you save a pretty penny on storage.
Big-ticket products such as antiques, jewelry, and art require special handling and security, plus they don’t sell fast. Therefore, you need to be super careful when choosing a dropshipping supplier to avoid potential scams.
This is a demanding category a lot of dropshippers go for. Gadgets such as cameras, off-brand tablets and smartphones, and projectors are just some of the items that belong to this tier.
Some products need to be shipped frozen, while others might be light-sensitive which requires special shipping conditions. These items are more profitable when dropshipped, but novice online entrepreneurs should steer clear from them.
Whichever way you look at it, one of the main goals of a dropshipping course should be to help you zero in on a niche and find the right product. At the same time, it needs to provide you with tips and tricks on how to select a reliable supplier.
Dropshipping: Product Selection Criteria
As indicated, product selection is one of the key steps when setting up a dropshipping business. The course’s curriculum needs to focus heavily on this aspect and this applies to novice and veteran entrepreneurs.
But beware — there’s no such thing as a perfect product and the course needs to teach you to look for the right features that can make an item worth your effort. Check out the most important criteria below.
Needless to say, the idea is to get the product as cheap as possible without compromising quality and sell it for a decent margin. But you shouldn’t get your hopes high because dropshipping margins are usually between 15 and 45%.
Similar to other retail businesses, you have two options — increase the margin and sell fewer items or lower the margin and sell more. There are pros and cons to each approach and this is something a course should explain in detail.
Weight and Size
Yes, big and heavy items can be great for dropshipping but novices should still avoid them. Smaller products are easier to package and ship, thus being much cheaper. When you are just starting out, this has twofold benefits for your business.
First, the relatively low price allows you to ramp up the margins and potentially earn more. Second, smaller items may ship faster which builds trust with your customers and allows you to get the feel for third-party shipping methods.
Fun Fact: Some suppliers ship clothes and accessories via airmail in a protective envelope. This is usually the fastest and least expensive way to send small items to your customers.
A product’s lifecycle refers to its durability and turnover rate. For example, if you opt for a niche that features renewable or disposable products, there is a greater likelihood of attracting recurring customers. This opens doors for setting up a subscription-based dropshipping business and this topic is often covered in intermediate or advanced courses.
As for the product’s turnover rate, it’s the time it takes for an item to get updated, changed, or discontinued. Items with a high turnover rate such as electronic gadgets require more attention and maintenance. You’ll need to update the product pages, get the latest images, and make sure the copy matches the latest version.
Cross-sales items are one of the most important aspects of e-commerce and this doesn’t only apply to dropshipping. A cross-sales item is a product that adds more value to your main product and it can even be bundled with the main product.
For example, if your main item is wireless headphones you can encourage your customers to get an eye-catching case for them. But cross-sales are both science and art and a good dropshipping course should dedicate one full-length lecture to it.
Plus, there are specific sales strategies that revolve around finding the right balance between main and cross-sales items. This may seem a bit overwhelming, but a quality course should point you in the right direction.
How to Set up the Shop
Once you have a good understanding of the dropshipping business model and find the product (or products) to promote, it’s time to put it all into action. Similar to other online retail businesses, you need an e-commerce website or, at least, a landing page.
This is something you can create on your own and there are a bunch of services that offer drag-and-drop website design interfaces. The job of a course is to give you a list of easy-to-use services and provide pointers about online store design that attracts customers.
Then there’s advertising and promotion and you shouldn’t hesitate to use all the available channels. But your ads, banners, and infomercials need to be compelling. It’s best if the course covers copywriting basics that can help you create high-converting ads and on-page content.
Some intermediate and advanced courses also include the use of analytics tools to gauge customer behavior and online store performance. These may prove invaluable and it wouldn’t hurt to get acquainted with them early on.
Course Platform and Instructor
When it comes to the course platform, it might be best to look for options outside Udemy and Skillshare. Don’t get this wrong, the courses hosted on these platforms provide enough knowledge to get you off the ground, but it might not be enough for success.
On the other hand, independent courses are usually the best choices. These may be more expensive, but they offer a superior curriculum, access to special tools, and you may even contact the instructor.
Speaking of the instructor, they need to be a reputable expert in the field with a proven track record of successful dropshipping e-commerce endeavors. Do a quick Google search to determine the instructor’s credentials. Bonus points if there are free videos to see the instructor in action.
From Zero to Dropshipping Hero
You should know that more and more people are getting into dropshipping and the competition is getting fierce. The best dropshipping course helps you avoid trial and error and teaches you how to stand out from the crowd.
At this point, you know exactly what a course should cover. The combination you are looking for is a killer curriculum plus a great instructor. Nail these and you shouldn’t have any problems to put the knowledge you obtain into action.