7 Key Considerations Before Starting a Drop Shipping Wholesale Business

Whether you're looking to start a dropshipping wholesale business that sells directly to customers or if you're planning to sell to retailers, drop shipping is a great way to give options without paying for warehouse space. The biggest retailers on the planet are using drop shipping for order fulfillment. There's no reason a wholesale business shouldn't as well. It can be challenging not having the physical product on hand but it can also be a relief to not have to deal with the headaches of shipping and inventory management. The main task as a wholesale business owner is to attract an audience, leaving the drop shipping company to handle the product. Here are 7 things to keep in mind before starting a wholesale business.

1. Have a User-Friendly Website

The first job is to take a look at the main competitors' websites. Make a list of things that work and things that need to be improved. The way images are laid out and the format of their descriptions can do a lot in service of sales. Make sure the background has been eliminated in all product images. List the features customers might be looking for. Include links to social media profiles so that users can connect through their favorite channels. Make banner images relevant to the product niche. Showing something relevant helps users imagine products in their life. Organize products into a series of relevant categories. Cross listing is okay, so long as users can find products easily. Organized websites will bring users back and earn their trust, whether or not products are shipping from a third party distributor.

2. Price Intelligently

Drop shipping is a great way to offer products because it eliminates a lot of overhead and keeps businesses from investing in overstock. It can help keep costs and prices low. Since profitability is one of the reasons to use drop shipping for order fulfillment, be sure to actually make one. Leave room for returns and unseen costs when deciding on prices. A rule of thumb could be that if a product costs $5, it should be priced near $20. With marketing, expenses, and paying employees, that should leave just enough for a profit. Don't undercut prices just because other brands are making that move. Stay within fair market value and customers will respect the value of the products. Brainstorm strategies to increase the average amount that customers order. Include low-price add-ons and a minimum order amount for free shipping. These incentives will give buyers a reason to order from the wholesale business over other competitors.

3. Keep the Business Flexible

Tastes change and it's important for businesses to be prepared. The items that are flying off the shelves today aren't guaranteed to be selling as fast tomorrow. A supplier could pivot away from current inventory, affecting the ability to get customers the products they want. Don't be afraid to keep an eye on trends but remember that they can change in an instant. One ad might suddenly increase sales on a given item, so ensure customers can get enough of the product in a timely manner. Stay in touch with the distributor to be sure that they will also inform the business of product shortages or long restocking waits. It may become necessary to rebrand altogether. Allow room to grow and change. Prepare the team and prepare mentally for shifts. Many great businesses have pivoted to increase their growth potential. Change is a good thing.

4. Offer Great Customer Service

Since there's no product on hand, it's important to offer something extra to customers. The obvious things like offering refunds and responding to customers quickly should be essentials. By being a smaller brand, things can be handled in a more personal way. Use social media profiles to make jokes with customers. Give special offers to customers who've been faithful. And give a little something extra to good customers who have problems with the services. Without faithful customers, success wouldn't be possible. Whether they're retail or direct buyers, offer something during the holidays to say thanks. Have the drop shipper add a little extra something with orders from certain customers to let them know they're appreciated. If there's trouble doing this through the warehouse distributor, be sure to stay in touch online.

4. Do Something Every Day

Taking weekends off is fine, but putting some small effort into the wholesale business every day is important. Whether it's updating social media with new products or just checking in, showing up on customers' radar on a regular basis is good for business. Look into services that allow scheduling social media posts so that everything can be set up on Monday and then forgotten about during the weekend. Make sure orders are being processed on a daily basis and customer contact gets a response. Making sure they can depend on the business will make the drop shipping company look as highly functioning as intended. Set up alerts to make sure ads are running.

6. Watch the Competition

It may sound counterintuitive but the first move on social media should be to “like” other companies, even competitors' pages. This way, it's easy to keep an eye on which products are hot, see what's in the conversation, and recalibrate marketing accordingly. Watch their posts and see which products get the most engagement. Don't copy them directly but see if it's possible to move in their direction. Within the niche that the wholesale business operates, staying on top of trends is essential. Social media is a public facing opportunity to stay in the loop. See if it's possible to track down which drop ship services competitors use. If the current service isn't one of the best around, this research can give an additional boost to the customer service side of the operation.

7. Keep in Touch with the Warehouse

As most business owners understand, moving fulfillment to a third party location comes with risks. There can be errors, missing orders, or damaged materials. Warehouses know their reputation is on the line, so they're likely going to want to keep the business and its customers happy. The best way to make sure there's a great working relationship with the drop ship distribution warehouse is to stay in touch. Have phone numbers and email contacts handy. Check in for updates, share great feedback from customers, and send candy during the holidays. If they're located nearby, drop in and get to know who works there. Having a face to a name makes people think twice before they cut corners.

Using Drop Shipping Is a Smart Move for a Wholesale Business

It's a smart decision to partner with a fulfillment center. Expect overhead to go down and the capacity to fill orders to increase. Still trying to figure out the best drop shipping solution for the business? Contact us today!

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