Although there are doubts about dropshipping success, it’s actually one of the most successful eCommerce business models. In 2018, the global drop shipping market size was valued at $102.2 billion. It was projected to grow even more by 2025.
In 2021, retail eCommerce sales were estimated at $5.2 trillion and are forecasted to grow by 56% in the next few years. According to Fundera, dropshipping is a fulfillment model for 33% of online stores.
If you still think dropshipping isn’t successful, these numbers may prove you wrong. Successful business owners also estimate a 10% dropshipping success rate during their first year of operations. Quora users even say it’s between 10% and 20%.
Although it is a low-risk business model, you still need proper planning and enough knowledge to attain success. To help you, I’ll provide some tips and discuss how you achieve your own dropshipping success story.
Define Your Ideal Lifestyle
Describe your success by defining your ideal lifestyle. Figure out what you want out of life and add up all the actual expenses. This way you’ll realize that the cost of what you really want is a lot less than what you think you need.
For instance, you might think that you need $100k net profit per month for your ideal life. But then if you add all the actual prices, maybe you just need about $10k a month.
This works the same way in evaluating your business. Think about your ideal lifestyle by answering these five questions:
Tips To Achieve Dropshipping Success
If you’re ready to start your business or if you’re already running one, here are some useful tips on how you can achieve dropshipping success:
1. Select a Niche
When doing business, you should always start with the idea of what you’re going to sell first. Although it might be tempting to simply try and sell all kinds of products from different niches, it will be harder to be successful that way.
You need to choose and focus on one dropshipping niche. Remember that no company can sell everything to everyone. You also have to be genuinely interested in the niche you choose so you will be more encouraged in doing business.
It can be anything. Niches also have sub-niches so you can narrow down your products more. You can also determine your niche based on demographics.
Here are some points to consider when selecting a niche:
Niche is important so you can distinguish yourself from the competition. Remember that when you choose the right niche, you can:
With a specific niche, you won’t have to compete on price. You can simply focus on marketing to the right audience for your products.
Lastly, it’s best to avoid food and electronics as products. You’re not sure about the quality of food from your suppliers and electronics can easily break, which can lead to poor customer feedback and a lot of returns.
2. Add Value
Once you have a niche and a product line in mind, it’s time to add value. You need to have a solid plan on how you’ll add value to your customers. This is crucial since it will help you compete with other stores in the same niche industry as yours.
In dropshipping, most people think that it’s only the product you’re selling to the customers. But successful drop shippers know that it’s not only the products. You would also be selling information, insights, and solutions.
Think about how you’re going to add value and help solve the problems of your customers. If you’re struggling to answer this, you may want to consider choosing a different market.
If you can’t add value through quality information and guidance about your products, you can only compete for the price. Although some businesses have been successful with this, it’s not going to help you achieve dropshipping success.
3. Prioritize SEO and Marketing
Another key success factor is driving traffic to your website. Traffic is one of the most common problems new drop shippers struggle with. Many merchants spend months making the perfect store only to launch it without the world having no idea it exists.
Marketing and driving traffic are undeniably essential to ensure a high dropshipping success rate. You need to take the initiative to develop your own marketing, SEO, outreach, and guest posting skills. Or, if you have the budget to spare, you can outsource this.
Nevertheless, you have to prioritize SEO and marketing when starting your business. It’s especially crucial during the first 6 to 12 months when people still have no clue about you.
After launching your store, dedicate at least 75% of your time to SEO, marketing, and traffic generation. Do this for at least 4 to 6 months to establish a solid marketing foundation.
There are different types of marketing strategies you can use:
4. Have a Long-Term Perspective
Building a dropshipping business takes a lot of commitment and investment for a long time. Although some people assume that they can easily build a passive six-figure income after a few months with just part-time work, that’s not how success really works.
As I’ve mentioned in my other articles, it will realistically take at least 12 months to build a business and generate your first income. You need to understand that the first few months are the most difficult.
You may doubt your business and run into issues with your websites. Keep in mind that this is normal. No successful dropshipping business is built in a day.
If you keep a long-term perspective and prepare for a challenging beginning, you’re more likely to stick with your business until it becomes successful.
5. Secure a Reliable Supplier
Another crucial factor to have a high success rate of dropshipping is having a reliable supplier. Partnering with the wrong supplier can ruin your business. Make sure you do due diligence.
Since most dropshipping suppliers are located overseas, you need to ensure proper communication so you can understand each other. If you’re not fully confident in the communication abilities of a potential supplier, look for other suppliers.
When communicating with a potential supplier, make sure to ask a lot of questions. This way you can learn about their production capabilities and you can determine if they can scale with you.
Another reason why you need to find reliable suppliers is that doing business with the wrong one will take a toll on your business. If customers have issues with the products, it’s not the suppliers who receive the damage, it would be your business. Having a reliable supplier means protecting your reputation and reliability as a business.
6. Analyze and Optimize
Once you’ve got your business and site running, you need to track all of the data and metrics available. This can include Google Analytics traffic and Facebook conversion data.
When you’re able to track every piece of data, you know where your customers originated from and what path did they take that led to a purchase. With this information, you can scale and optimize what campaigns and strategies work and eliminate what doesn’t.
There are no set-and-forget marketing solutions. You need to constantly test and measure opportunities and improve existing campaigns. This lets you know when to optimize or change where you spend your campaign budget on.
7. Provide Outstanding Service
Your business reputation is always important to ensure your dropshipping success, especially now that we have social media. One wrong move and the entire world can easily know. If you don’t treat your customers well, they’ll surely let others know, especially your potential customers. This would drag down your business.
You need to understand that you might spend money to clean up some mess and not leave your customers to deal with it. If you’re not willing to lose money to keep your customers happy, you won’t be providing outstanding service.
Keep in mind that the best form of marketing is having happy customers. It’s easier to sell to a satisfied customer than to try to convince a new potential customer to buy your product. If you treat your customers well, they’ll surely spread the word and refer more potential customers to your store.
If you provide top-notch service, you can have a business with revenue mostly generated from repeat customers. This is why you need to prioritize making good customer service experiences for your customers right from the start.
Achieve Dropshipping Success - Conclusion
Dropshipping success is easy to achieve if you know the right things to do. By knowing your ideal lifestyle, you can build a strategy around it that would help you achieve it. Keep in mind that success doesn’t happen overnight. You need to work for it.
Follow the tips above and go through some of our content to learn more about how you can achieve your own dropshipping success story.