STOP Drop Shipping!!! And Here’s What to Do Instead
Are you tired of failing with Shopify drop shipping? Struggling to get drop shipping suppliers to take you and your new drop shipping store seriously? Then STOP saying "drop shipping"! And start getting into the mindset of an internet retailer instead.
I know you're probably thinking...
Is this clickbait? Why would you want me to stop drop shipping? You have been talking about this stuff for the past five years. Your website is called DROP SHIP LIFESTYLE.
Well, understand that today’s blog is for the beginners. Rest assured that I’m making a point when I say to “stop drop shipping!”
Let’s dig in!
Finding Drop Shipping Suppliers as an Internet Retailer
Tell me if this sounds familiar:
You are new to eCommerce. Maybe you once saw a video, read an article, or came across an ad about drop shipping. You quench the curiosity and Google "drop shipping" or "drop shipping suppliers". Google gives you a bunch of results - mostly ads from different companies that say, “hey, we have millions of products for you to drop ship. All YOU have to do is sign up for your account.” You give them your information, and they give you access to products to sell.
Now, you are going to find one of two things, right?
- You're going to find the drop shipping suppliers that are in China or overseas. I use China as an example, since most drop ship products are from there. Just understand that drop ship products can come from anywhere in the world.
- You’re going to find middlemen that are based domestically. This means that both you and your supplier are basically in the same place.
Now the reason I am referring to those directories - companies that act as drop shipping middlemen - is because they are not the actual brands you are going to be selling for.
As an example, let’s say I buy a pack of Sharpies. If I found a website online by googling “drop shipping suppliers that have Sharpie markers”, it wouldn't be Sharpie (if I use the term drop shipping). The term for these suppliers would be middlemen.
Because “drop shipping” is code for newbie in the eyes of anyone with business experience. The person who is trying to use the term “drop shipping”, is perceived as inexperienced.
And if you are thinking, “Anton, then why do you always say drop shipping?”
Know that I use the term because I want you to read this. I use the term to reach those trying to get more information on eCommerce - those who actually want to build a business with this model.
Falling into the trap of relying on Chinese drop shipping suppliers or middle men IS NOT a good place to be. Instead, I want you to find a legitimate solution that works for anyone.
...a solution that gets you away from using the term “drop shipping”.
So when I say stop drop shipping, I literally mean, DON’T USE THIS TERM EVER AGAIN.
Don’t do it.
You are not a drop shipper. What you are is an internet retailer.
Be an Internet Retailer, Not a Drop Shipper
We know that an internet retailer can have inventory, but they don’t need to.
This means that you, as an internet retailer, are a non-stocking retailer. An internet retailer doesn’t stock products. Again, you ARE NOT a drop shipper. You shouldn’t go on Google looking for drop shipping suppliers. All you’ll find is middlemen and drop shipping companies in China.
If you use the term “drop shipper”, real companies are going to think that you are a complete newbie. They’ll view you as complete beginner, and they are not going to do business with you.
Honestly, drop shipping has a really bad reputation. Just look at the past month. Drop shipping has been getting slammed by mainstream media outlets such as The Atlantic, Inc., and others.
As an internet retailer, you need to be wary of how your potential clients feel about drop shipping.
Who are the Haters?
Let’s take a look at who will see drop shipping in a negative light:
- Well, first you have your future suppliers. So the good drop shipping suppliers, the one you want to work with, will instantly see you as a beginner. They’ll think “we don't want to do business with them because we want legit retailers.” If you use the term “drop shipping” with these suppliers, you're going to have a bad time...and you won’t attract good suppliers.
- Payment processors. For the most part, big payment processors say that they don't work with drop shippers. They know that beginners and newbies have no idea what they are doing. For all they know, you could be drop shipping products from China - products never getting to customers, arriving late, or even being defective. Payment processors know that many drop shipping businesses are fly-by-night operations. We’re talking low margins, and unreliable service. Payment processors will either have high reserves (meaning they hold a percentage of your money), or they will just shut down your merchant account.
- Google… and I know this sounds crazy, but understand that if you want to advertise on Google with Google product listing ads - which we love by the way - it's all about Adwords (not even just PLAs). In Google’s terms of service, it say s you can't drop ship products. What they mean by this ISN’T that the whole method of drop shipping and fulfilling orders is bad. Google is thinking about all the newbies out there employing drop shipping suppliers from China. Google is concerned for a couple reasons here:
- Drop shippers aren’t making any money because they have no margin.
- Customers will get pissed and file charge-backs because middlemen won't get products to their customers, fostering bad customer experience.
- Customers. Customers are catching on to the fact that companies ship low quality items from AliExpress… and they are not happy about it. That's why the Atlantic and Inc. have both been giving drop shipping really negative press.
Recap on Using the Term Internet Retailer:
If you use the term drop shipping, good suppliers aren’t going to work with you. If you're talking to payment processors, they aren’t going to work with you (or they’re going to impose a huge reserve). If you are trying to advertise on Google, and they see that you are drop shipping from China or from one of these middlemen, they are not going to work with you!
I’m not going over the entire list of places where you’ll have problems. Just know that problems stem from the use of the word “drop shipping”.
Breaking Negative Association with Drop Shipping
What are we to do about the negative association of drop shipping?
Well, we resolve it by technically running the same type of business - a drop ship model. Remember, “drop shipping” means that you are selling products and someone else (the supplier, aka your drop shipping supplier) is fulfilling the orders.
So I have used this example before:
Let’s say I sell something. Whatever company made it, ships it for me. The item I sold here was just drop shipped. That's not a shady business model. In this case, I acted as an internet retailer.
I could be a stocking retailer (I have a warehouse) OR a non-stocking retailer (which is what described in the example above).
But whenever I am talking to any of these partners in our businesses, I DON’T use the term “drop shipping”. They are technically one of my drop shipping suppliers, and I am a drop shipper… but I don’t say that.
And you shouldn't either.
Using the term “drop shipping” is only going to lead to not having a good supplier relationship. It's going to lead to payment processors not working with you. It's also going to lead to your AdWords possibly getting shut down. It's going to lead customers to not trust you.
On the other hand, you could build a legitimate business being an internet retailer.
Build a Real Business.
We don’t want to build a burner brand. We don’t want to build something that’s trying to catch on trends. We should focus on something that's lasting - something that will help you to make money online this month, next year, five years from now, even ten years from now!
Let’s talk about the process that we use every time we work with a new drop shipping store. It’s the same process I’ve taught to over 8000 students from over 20 different countries.
[By the way, if you are not a member of Drop Ship Lifestyle yet, you should be. I've been doing this stuff since 2007, and I've been helping other people do it since 2012. There are success stories from all around the world that follow this proven model.]
Here are the steps to actually doing this stuff the right way:
- Niche Selection.
Again, we don’t want a burner brand. With niche selection, you are picking something that's going to be around forever. You want to work with a niche that you can actually build a brand around.
This isn’t a physical product brand (making your own products), but it’s something that is a growing asset. As a trustworthy internet retailer, your website will be a place Google wants to send people to.
Your brand’s website shouldn’t be promoting fake scarcity, fake urgency, and fidget spinners that will not be important a week from now.
- Market Research
Market research is the real way to find good suppliers, in turn making them your drop shipping suppliers. These aren’t the advertised drop ship suppliers you need to stay away from. These are high quality brands.
You won’t find reputable suppliers by Googling “drop shipping suppliers” (you’ll only find middlemen). It's important to know that you should not use supplier directories and trying to find middlemen. You’re never going to make any money with them.
3&4. Build Your Website & Get Approved with Suppliers
As an internet retailer, you should build your website before you move on to step four - getting approved with suppliers. Your website is built before you start talking to good suppliers because, remember, they don't want to work with drop shippers! They want to work with you - an internet retailer.
They especially don't want to work with newbies, and people without experience. So build your website first, and then contact these suppliers. You present yourself as an internet retailer. THAT’S how you can get approved. Then you use them as one of your drop shipping suppliers!
Now, it’s time to have fun and make some money.
- Optimize for Conversions
- Get Traffic
Remember that we're not “drop shipping”. We are an internet retailer. As an internet retailer, we can use the best traffic sources and they'll actually look highly at us. They won't think “oh, should we ban this company?” or “should we not send them any traffic?” No, they'll want to work with a respectable internet retailer.
They'll send us good traffic. Again, I'm talking about Google and product listing ads. Once this is all set up, then it’s time to get our automations in place, turning this into an operation that's managed with maybe 15 to 30 minutes a day.
From there, it's just about going back to optimizations, making sure the site is doing as well as possible. Some people think they are going to get their drop shipping suppliers first, but that's not how it works if you want to do this the right way.
Stay on the Drop Ship Model
So remember, technically, you are working on the drop ship model. This means that other people are fulfilling orders for you, which is fine!
But don't use that term with anyone. Keep it between you, me, and Drop Ship Lifestyle.
When you are talking to drop shipping suppliers, banks, merchant accounts, ad platforms, customers, DON’T SAY DROP SHIPPING. (Say that you are an internet retailer instead) They will look down on you. They won’t want to do business with you, and unfortunately, you won't build anything lasting. Your drop shipping suppliers will be either bad or non existent.
I hope you all found this valuable.