How to run a dropshipping business? Dropshipping step by step!

This article by the Internet Income Guru helps you understand how to run a dropshipping business. By the time you reach the end of this article you will have more clarity on how to run a dropshipping business. If you want to understand dropshipping step by step, please enjoy reading all our articles on dropshipping.

How to run a dropshipping business?

Once you have setup dropshipping business, the next exciting thing to do is to run your dropshipping business successfully. You might have had really wonderful experience creating your dropshipping niche, finding products to sell online and finding the best dropshipping suppliers. Even development of your dropshipping website might have been a great experience so far. So, let us now see what it takes to run a dropshipping business on a day to day basis.

By the way if you want to find out more about the benefits of dropshipping, please read our article ‘Why dropshipping?’ by clicking here.

Marketing strategy is the key run a dropshipping business well!

Getting your dropshipping store ready for business is one thing and making it work is another. There are many tactics you can use to run a dropshipping business successfully. You need to have a sound marketing strategy for your eCommerce dropshipping store. Your marketing strategy needs to have tactics to drive targeted traffic to your dropshipping store website and then convert them. You also need to have tactics in place to build a strong relation with your buyers so that they regularly make purchases from you.

You may choose to run a dropshipping business by selling on big eCommerce websites such as Amazon or eBay. However, even if you are selling your products on eBay or Amazon, you still need to have a strong marketing strategy. You will find serious competition on market places like Amazon and eBay too. A good marketing strategy will help you stay ahead of the competition.

Great reviews are vital to run a dropshipping business well!

Online shoppers rely to a great extent on reviews posted by other buyers on your dropshipping website. So when it comes to good reviews, it’s more the merrier. To boost your dropshipping sales, you will need as many great reviews as you can get.

Once you start your dropshipping business, you need to get as many positive customer  reviews as possible. You also need to do this as quickly as you can. Having great reviews on your dropshipping website boosts your sales. Your website visitors will be more willing to buy your products when they see the positive reviews.

If you run a dropshipping business by selling on eBay or Amazon, customer reviews are even more important. There is a very serious competition on eBay and Amazon. Most of the times, buyers decide whether to buy your products or not based on customer reviews. So, to run a dropshipping business well, you need to have great reviews. The competitive edge with great reviews makes it easier for you to run a dropshipping business.

Here are some tactics that can help you get great customer reviews quickly.

Sell high quality products to boost customer satisfaction

The best tactic to get great customer reviews is to sell great products. Quality is a huge factor in any business. This means, to run a dropshipping business successfully, you need to take quality very seriously. As you run a dropshipping business,  you need to make sure you sell high quality products. To get the best quality products, you first need to find the best dropshipping suppliers. in the best dropshipping niche.

When you sell products of great quality, naturally your buyers will be very happy with your business. When buyers are happy, they willingly post good reviews on your website or Amazon or eBay.

It is thus important to enter a highly profitable niche and select great products to sell online and dropship. You need to associate with legitimate and reliable dropshipping suppliers for your products. SaleHoo is a great place to look for high quality products and suppliers for your dropshipping business. Internet Income Guru has written a honest review on SaleHoo for you. The SaleHoo review will be very helpful for you. You may read the full SaleHoo review by clicking here.

Provide great customer service

As you run a dropshipping business, you will interact with buyers virtually. When you interact with buyers you need to make them feel special. You need to listen to your buyers carefully and help them as much as possible. If you provide great customer service before, during and after the purchase, you are sure to get great customer reviews.

Deliver products fast

There are many individuals and businesses that run a dropshipping business in any given niche. As a result, there is fierce competition out there. Delivery timeline is one of the critical factors to run a dropshipping business well. Speed of delivery sometimes decides who wins.

So you need to find dropshipping suppliers that understand this and always deliver as agreed. It might be even better if they deliver products sooner than agreed if that’s okay with the buyers.

Encourage buyers to post reviews

Buyers are generally more than willing to post a good review about your products if you ask them. So do not be shy, just go ahead and request the buyers to post reviews about your products.  It really helps if you encourage the buyers very tactfully to post as many good reviews as possible about your products.

You can use emails, social media etc. to get more reviews. You may even offer lucky draws or some freebies for buyers that post reviews. To run a dropshipping business successfully, you need to constantly engage with buyers and encourage them to write reviews.

Upgrade your eBay listing

To run a dropshipping business, sometimes you may list and sell your products on eBay. When you list your products on eBay, you should know how dropshipping works on ebay. On eBay and other eCommerce websites, attractive product listings sell better. You need to make sure your product listing looks very attractive and persuades visitors to click on your listing.

eBay offers you various upgrades for your product listing. These include subtitles, bold font, extra images etc. You need to try and experiment with some of the upgrade options and see which ones work the best for you. Once you are sure, you can buy the upgrades that work for you. Having bold text or extra large images for your product listing on eBay can increase your conversions. Gallery plus is an eBay upgrade option for example, that works great for many product listings in any dropshipping niche.

Use social media marketing

As social media is very popular and most people are on social media, you need to be there too. If you are on social media with your product listings and advertisements, many people will know about you. When more people know about you, you will have more buyers. You need as many buyers as you can find to run a dropshipping business well.

However, you do not need to be on every social media platform to sell your products. Social media marketing needs your time and effort to succeed. Sometimes you may need to invest some money too. So instead of being on every social media platform, spreading yourself too thin, you will be better off being on 1 or 2 popular ones. This way, you can put more fire and fuel into that one social media account and make it grow.

Most dropshippers find being on Facebook gets lot of new visitors. So go ahead and create your Facebook business page in the dropshipping niche of your products. Being active on social media is a great way to run a dropshipping business.

Use paid advertisements

Targeted traffic is very important when you run a dropshipping business. If you want to see targeted traffic arriving on your product listing, paid advertisements are great. For example, you can use pay per click or PPC advertisements. In paid advertisements, you pay a platform to advertise your brand or products and the platform displays your advert to your target market. Every time someone clicks on the advertisement to arrive on your product page, you pay a small fee.

Google Adwords is a great platform for paid advertisements. When using Google Adwords, you need to start experimenting with few keywords from your dropshipping niche to see which ones work better for you. Once you are sure which keywords can get you the most targeted traffic, you can invest more money into Google Adwords for paid advertisements.

Social media marketing we discussed above is also a form of PPC. If you are new to PPC, you can start with Google Adwords and Social media marketing. Once you gain some experience in PPC, you can explore other platforms too.

Build your dropshipping website and start email marketing

Of all internet business models, email marketing gives you the maximum return on investment. Building your own email list helps you a lot to run a dropshipping business well.

If you list your products on eBay and Amazon you will not have access to any emails from buyers. So you never get your buyers’ email contacts. The best way to start email marketing is to build your own website and build your own email lists. You can start with free versions of popular email marketing tools like MailChimp or Aweber and have a great email marketing strategy.

Go for creative, inexpensive and highly effective tactics

In dropshipping business, it is important to always look for options to  cut down on expenses and increase profits. You do not need a huge budget to run a dropshipping business.

Tactics like content marketing, guest posts on popular blogs, re-targeting your visitors and buyers are some inexpensive but highly effective tactics to boost your dropshipping sales and revenues quickly.

How to process dropship orders?

Once you set up your dropshipping business and start marketing your products, soon your first buyer will place an order. You will be very excited when the first order arrives. That’s really a turning point in your business. The first order kick starts your long and exciting adventure of running a dropshipping business.

But what do you do when orders start coming in. You need to process the orders and arrange for delivery of the products. But how do you run a dropshipping business that processes orders efficiently? Let us see how to run a dropshipping business once you start getting orders. 

Transfer the order to dropshipping supplier

Basically when an order comes in, you need to create a record for that order and pass it on to your dropshipping supplier. In the initial days you can do this manually. But as you run a dropshipping business, you will start getting many orders every day. With more orders, you may find it difficult to run a dropshipping business manually.

It is also possible to automate this process. To automatically assign orders to a particular dropshipping supplier, you just need to add their email address to all your incoming orders. That way, they will receive  a copy of every order you get and they can qiuckly deliver it.

Sometimes as you run a dropshipping business, you may have more than one dropshipping supplier for the same product. In that case, you need to transfer the order to one of them.

Within your dropshipping niche, you may have some preferred suppliers whom you want to consider before other suppliers. There could be many reasons why you prefer some suppliers to others. It is possible that some suppliers are better than others or one may be located closer than others and so may deliver quicker.

So based on the reasons you think are appropriate, you first need to identify which dropshipping supplier from your list will get the order. Then you need to create a record for that sale and pass on relevant information like PO number, product title, quantity etc. to the supplier.

Dropshipping with multiple suppliers

It is  a good idea to have dropshipping arrangement with more than one supplier for the same product within your dropshipping niche. This way you can always have few options to choose from as you run a dropshipping business. This will avoid the risk of any failure to deliver if a supplier turns out to be problematic.

When  you have more than one supplier on your list, you also need to be fully aware of the suppliers’ day to day inventory. You may need to tie up with the suppliers to automatically get updated on latest inventory. SaleHoo offers a completely genuine and reliable directory of dropshipping suppliers. Please visit our honest review on SaleHoo by clicking here.

Unavailable products

Sometimes it may happen that the suppliers run out of stock and cannot ship the products you sold online. Often you may realise this soon after the order comes in. This is possible because your dropshipping supplier may be working for many other dropshippers like you. Everyone wants to run a dropshipping business these days.

If you realise the products you list online are unavailable when an order comes in, you need to check with the supplier to ascertain how quickly they can manage to deliver the products. Then you need to contact the buyer and explain the situation to them. You need to give them the options to get a delivery when it is available. In the unfortunate and unlikely event that you cannot find a dropship supplier that can deliver, you may need to cancel the order and refund to the buyer.

One way to avoid such a situation of unavailability of products you sell online is to regularly monitor the inventory with the dropshipping suppliers and update your product listing about the possible delay in delivery. This way the buyers will be well aware at the time of order about the delivery.

How to handle failed shipments?

Sometimes your dropshipping suppliers can mess up the order or shipment. This is one common problem you may face when you run a dropshipping business. Let us see below how shipments can fail and how to run a dropshipping business well despite few failed shipments.

Incorrect shipment

Ocassionally a dropshipping supplier may miss to make a delivery completely or deliver incorrectly. Knowing what to do with incorrect shipments helps you run a dropshipping business better. In such cases, you will normally learn about this from the buyers. So when a buyer contacts you with an issue with the shipment, you need to accept the complaint.

The best thing to do is take the complaint from the buyer and suggest that you will check the order from your end and get back to them. Then you need to contact the dropshipping supplier to find out their side of the story. Most of the times, the dropshipping supplier will accept if there was a lapse from their side and may right way agree to refund you. You can pass on the refund to the buyer.

Unprofessional suppliers

When you select dropshipping suppliers, you need to pay utmost attention to their quality and reliability. You may end up working with unprofessional suppliers if you do not chose them with care. Dealing with unprofessional suppliers can be a pain but it is part of what you need to face when you run a dropshipping business. In case the dropshipping supplier turns out to be unprofessional or does not cooperate with you, you can always request a charge back from your credit card company.

You can also inform the dropshipping supplier that you may initiate legal action if they refuse to refund you. You need to keep  track of all communications in such cases just in case you need to refer to them in future. Email is always the best.

Sometimes, such issues cannot be resolved due to many reasons and in the worst case you may have to absorb the loss yourself and note a lesson learned. Then you need to cancel your arrangement with the dropshipping supplier and look for someone else.

To avoid such disappointing and unprofessional suppliers, please subscribe to SaleHoo, the ultimate dropshipping directory where you will only find reliable and genuine dropship suppliers. SaleHoo has vetted many thousands of suppliers in many niches and listed only professional dropshipping suppliers in their supplier database. You may gain access to SaleHoo by visiting their official website. Internet Income Guru has also written an exhaustive review on SaleHoo. Please click here to visit the SaleHoo review.

Returns by buyers

When you run a dropshipping business, you will place yourself as a link between the suppliers and buyers. We have seen above how suppliers can cause issues. However, the other source of issues can be the buyers themselves. Sometimes a buyer may not be happy with the products he received and so may request a return and refund. You may receive an email or  a phone call from a buyer saying so.

When this happens, you need to get in touch with the dropshipping supplier and get a return merchandise authorisation (RMA) code. You need to pass this code to the buyer and request them to ship the products to the supplier’s address.

Once the product arrives with the supplier, they will check it and confirm the same to you. In most cases, the supplier will immediately refund the wholesale price to you. Once you receive the refund from the supplier, you need to refund the sale price to buyer.

All suppliers listed on SaleHoo have robust processes in place to handle returns from any of your buyers. On SaleHoo, whatever dropshipping niche you have chosen, you can find great products to sell online. When you engage with suppliers from  SaleHoo to run a dropshipping business, you will have no problems with returns or refunds.

Defective products

You may have the best dropshipping suppliers to help you run a dropshipping business. But, at times there can be an odd defect in  a product. When a buyer  calls you to say he received a defective product, the next thing you need do is seek some evidence of the defect. If you are convinced that  there is indeed a defect, just send a replacement product to the customer. You need not even bother to request the buyer to return the defective product. It will be waste of buyer’s time for nothing.

In case your supplier needs the defective product to be returned to them, you need to arrange a free collection of the product from the buyer’s location and charge the return shipment to the supplier. Most suppliers will accept to pay the return shipment charges and refund you for the defective product too.

In case your supplier does not seem to be very understanding, you know what to do. Take the loss into your bucket and look for a different supplier. If you have the patience to follow up, you can follow up with legal means to get refund.

Internet Income Guru found that all dropship suppliers from SaleHoo are very cooperative when dealing with defective products. So to avoid problems related to defective products please make sure you engage with suppliers listed on the SaleHoo directory.

Take the restocking fees

When one of your buyers returns a product for any reason, you need to consider if your supplier is going to charge you any restocking fees. Restocking fees is generally meant as a fee to accept a returned product into the inventory, charges for storing the product again in the warehouse. It is one of the expenses to account for when you run a dropshipping business.

Even if your supplier charges you a restocking fee, you need to accept the charges yourself and not transfer the same to the buyer. Why? to keep the buyers happy and retain them as buyers. You may have to absorb the restocking fees yourself. While choosing your dropshipping niche, you need to consider restocking fee as one major factor.

Many dropship suppliers from SaleHoo are very professional in dealing with such issues.

Beware of fraudulent dropship orders

Fraudulent orders may cause a drain on your time and money if you are not careful. When you run a dropshipping business, the best way to deal with fraudulent orders is to identify them and avoid. You just need to use your common sense to figure out which orders are fraudulent and which are not. here are some telltale signs of a fraudulent dropshipping order.

Delivery address not same as billing address

One way scammers make dropshipping orders is by using someone else’s credit card. When they use a stolen or cloned credit card, they use the real card holder’s address for billing but delivery address will be different.

When you notice an order that has different billing and delivery addresses, the best thing you can do is call the buyer. By calling and talking to the buyer you can get an idea if it is a genuine buyer temporarily living elsewhere or buying a gift for someone or indeed a fraudster.

You may find it hard to win your case on a charge back with different billing and delivery address as banks do not support this. So you need to be very careful when someone orders with different billing and delivery address.

Also, when a scammer uses someone else’s credit card to have products delivered to themselves, the names on billing address and shipping address can be different too. But that could be a gift for someone too. You just need to use your common sense in such cases.

To run a dropshipping business efficiently, you may want to automate such checks to detect fraudulent orders.

Strange email address

When you receive an order from a strange looking email address, most likely it is a fraud. Sometimes scammers place orders from machine generated email address. So you need to stay away from email addresses that do not look normal.

Requests for urgent deliveries

Scammers often want to get their hands on your products as soon as they can. So more often a scammer will request for an urgent delivery. Some scammers will be willing to pay extra for urgent deliveries too. It is not their money anyways right? So watch out for unusually urgent delivery requests when you run a dropshipping business.

Charge backs from buyers

A charge back is a concern raised by a buyer with the credit card company. Basically the buyer tells the credit card company that there is an issue with the charges you made to the buyer’s card. A genuine buyer can make a charge back request when an order is made in mistake or duplicate orders or unhappiness on the product delivered.

But some fraudsters also request charge backs from banks claiming they never received the product or never made a purchase or received a damaged product etc. Thus a charge back can be a claim by a fraudster too and that’s a pain you may experience as you run a dropshipping business.

When a genuine request for a charge back comes to you, you would just accept it. If a genuine buyer has a problem with your products, you would just process a refund straight away. Making a refund is better than a charge back for you because a charge back comes with additional fee you need to pay.

But if a fraudster claims charge back, you need to respond to the bank with all records of the sale and make your case strongly. By supporting your case with documentation, and tracking data you need to prove that the transaction as genuine and get your money.

Provide excellent support to your buyers

A great customer service can give a real competitive edge to your dropshipping business in any dropshipping niche. Get your customer service right and you are at the top of the game when you run a dropshipping business. If you get it wrong, you are no where to be seen. Let us see how you can provide wonderful customer service by using some easy tools.

Email

Having an email address for your dropshipping business where people can send email for any queries is essential. Many people find email very convenient to contact businesses these days. So email is a great mode of communication between buyers and sellers. Email is essential when you run a dropshipping business.

You need to mention your email address with all your product listings and also on every communication you send to buyers. To make sure your buyers get proper information, you need to check your emails regularly and respond as soon as you can.

Phone

When you speak to someone on phone, you get a better understanding of what they are talking about. The tone of voice and intensity of speech are few examples you can only get to notice over phone but not in an email or a letter.

So it is a good idea to have a phone number for your dropshipping business. A Google voice number is a good idea if you want to keep your personal phone numbers private.

Live Chat

In a way live chat is a cross between phone and email and is a very smart way to run a dropshipping business. Like email, in live chat too you can type your message which is helpful if you are in a situation where you cannot talk over phone. At the same time, like a phone conversation, you get an immediate response and you can even sense the tone of the conversation.

As a result, live chat has now become one of the top customer support channels. You can offer live chat support on your website. With a live chat service in place, you have the ability to gather more customer feedback but at the same time. However, live chat puts a drain on your resources as you may need to recruit additional staff to respond to live chats online.

Social media

Every business in every dropshipping niche and every online shopper is on social media. So social media is a great place for buyers to connect with your dropshipping business. Having business accounts and business pages on as many social media platforms as you can is a great way to run a dropshipping business well.

However, with  social media, people expect very quick response and sometimes they may go public. So if your business is on social media and supports customers via social media, you need to pay attention to every mention of your business on social media. You need to respond to every post, comment or message etc. promptly and professionally.

Run a help desk

As you grow your dropshipping business, your customer base grows big and with that the number of enquiries  and customer calls will increase. At some point while you scale your dropshipping business, you will have to put in place some tools and procedures to track all customer queries, questions and the clarifications, answers.

That’s when you need a help desk. Being a digital collection of all your customer questions, comments and concerns, a help desk is vital to respond to customers. There are many softwares and tools available in the market to create and run a help desk for your dropshipping business.

Hire virtual assistants

In the initial days of your dropshipping business, you can comfortably handle all customer service tasks. But as you scale your dropshipping business, you may find it difficult to handle large volumes of customer service activities on your own. You will feel the need for some assistance.

You can start hiring full time staff to assist you with customer service. But, there is an easier option than real staff. You can hire virtual assistants online. Your virtual assistants can be from anywhere in the world and they can work from anywhere. They can also work for you round the clock.

So you can be assured that your customer service is taken care off. This gives you more time to focus on marketing and scaling your dropshipping business. With more time for yourself, you can grow your dropshipping business as much as you want.

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