Proponents of dropshipping make it sound like all you need to do is pick a product line, choose an ecommerce theme, market like crazy and get rich with next to no additional effort.
While some of that is in fact true, when it comes to the no additional effort part, well, that’s where reality veers sharply away from myth. Outsourced fulfillment must be managed carefully to return success.
Here’s what you need to know about avoiding dropshipping pitfalls.
Shipping Is Out of Your Hands
In a perfect world, a customer would click “Buy Now,” pay and the package would materialize right next to them a few seconds later. That may well be the case at some point in the future, but everyone knows it isn’t right now. However, that doesn’t mean customers are especially patient when it comes to waiting for their purchases to arrive. When you work with a dropshipping partner, it’s important to know how long of a wait for which to prepare your buyer. You must also keep your order management systems synchronized so you can avoid selling backordered items while keeping your customers duly informed.
You must provide a unique buying experience to stand out in the minds of your customers. This extends to the way the packaging looks when it arrives and what’s inside when the customer opens it. If you allow dropshipping to function with no branding, your customers might not even remember they bought from you—unless there’s a problem with the order.
To avoid this, choose a drop shipper capable of branding your packages to match your ecommerce theme. This should include packing slips with your name and logo on them, inserts thanking the customer for the order and materials touting additional products. Your logo on the tissue paper inside the package is another nice touch—as is a branded box.
Returns are a fact of life in ecommerce. However, when you’re dropshipping, you have to decide whether to have your customers return products to you or the shipper. The latter places you at their mercy when it comes to refunds and exchanges. Ideally, they’ll recognize the need for expedience, but you’re not the only customer they have.
Meanwhile, handling returns yourself kind of defeats the purpose of employing the dropshipping model in the first place. You’ll need room to process the returns, someplace to store the returned goods until they sell again, and you’ll have to refund customers—after you’ve already paid the drop shipper for the items—then wait for the shipper to compensate you.
All you can do here is decide which is the lesser of the two evils and work accordingly. With that said, taking great pains to ensure the customer knows exactly what they’re getting and doing everything possible to ensure they get exactly what they order will reduce your return rate considerably.
These are but three of the issues you’re likely to encounter with this business model. All it takes is one bad experience with a shipping partner to undo the goodwill you create with your marketing, branding and identity efforts.
With that said, one of the best methods of avoiding dropshipping pitfalls is to choose your partner very carefully. Ask questions related to the issues listed above to see how the shipper would behave in those circumstances. While this won’t tell you everything you need to know about doing business with them, it will at least give you some clues as to what you’re taking on with them.