7 Key Considerations Before Starting a Drop Shipping Wholesale Business

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 your 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. Your main task as the 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 you start your wholesale business

1. Have a User-Friendly Website

Your first job is to take a look at your main competitors' websites. Make a list of things that you think 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 you've eliminated the background in your images. List the features your customers might be looking for. Include links to social media profiles so that your users can connect with you through their favorite channels. Make your banner images relevant to your product niche. Showing something relevant helps users imagine products in their life. Organize your products into a series of relevant categories. Cross listing your products 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 or not.

2. Price Intelligently

Drop shipping is a great way to offer products because it eliminates a lot of overhead and keeps you from investing in overstock. It can help you keep your costs and prices low. Since profitability is one of the reasons you chose to use drop shipping for order fulfillment, be sure you're making one. Leave room for returns and unseen costs when deciding on prices. A rule of thumb could be that if you're selling a product that costs you $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 your products. Brainstorm strategies to increase the average amount that your 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 your wholesale business over other competitors.

3. Keep Your 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. Your supplier could pivot away from your inventory, affecting your ability to get your customers the products they want. Don't be afraid to keep your eye on trends but remember that they can change in an instant. One of your ads might suddenly increase sales on a given item, so ensure your customers can get enough of the product in a timely manner. Stay in touch with your distributor to be sure that they will also inform you of product shortages or long restocking waits. You may find yourself needing to rebrand altogether. Allow room to grow and change. Prepare your team and prepare yourself. Many great businesses have pivoted to increase their growth potential. Change is a good thing.

4. Offer Great Customer Service

Since you don't have product on hand, you need to offer something extra to your customers. The obvious things like offering refunds and responding to customers quickly should be essentials. By being a smaller brand, you can handle things in a more personal way. Use your social media profile 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 your services. Without your faithful customers, you wouldn't be successful. Whether they're retail or direct buyers, offer something during the holidays to say thanks. Have your drop shipper add a little extra something with orders from certain customers to let them know you appreciate them. If you have trouble doing this through your warehouse distributor, be sure to stay in touch online.

4. Do Something Every Day

You're allowed to take weekends off but you should put some small effort into your wholesale business every day. Whether you're 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 you to schedule social media posts so that you can set everything up on Monday and then forget about it during your weekend. Make sure you're processing orders on a daily basis and responding to customer contact. Making sure they can depend on you will make your drop shipping company look as highly functioning as you want it to be. Set up alerts so that you can make sure your ads are running.

6. Watch Your Competitors

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

7. Keep in Touch with Your Warehouse

As you probably understand, moving your 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 you and your customers happy. The best way to make sure you've got a great working relationship with your drop ship distribution warehouse is to stay in touch. Have phone numbers and email contacts handy. Check in for updates, tell them when you get great feedback from your 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

You're making a smart decision when you decide to partner with a fulfillment center. You'll see your overhead go down and your capacity to fill orders increase. If you're still trying to figure out the best drop shipping solution for your business, contact us today!

To learn more about how Dropified can help your dropshipping business thrive over the coming months and years just click the button below and get started with a FREE TRIAL today!

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