Learning what’s coming before getting there is the best way to avoid losing money. Here are 10 things you NEED to do before you start your dropshipping business!
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For some, trying to build a dropshipping store looks a lot like this graph.
At the start, you’re making good progress. Maybe you’ve setup your store, or started generating traffic, or even starting to see some sales…
…until you hit a roadblock.
These “roadblocks,” however, are things that can be easily avoided—regardless of whether you have some experience or have never built a store in your life.
Thankfully, most of these roadblocks are pretty common, and you will likely find whatever is blocking you from moving forward in your journey on this very list.
Here are 10 things to do BEFORE dropshipping to help you overcome the most common stumbling blocks we see newbies make.
#1: Check Shipping Times BEFORE Choosing Which Countries to Sell to
A lot of beginners simply put “worldwide” shipping on their product listings because they know that most AliExpress sellers will ship pretty much anywhere.
As a beginner, though, this is probably one of the worst decisions to make.
Why? Well, when it comes to shipping, not every country is equal.
Let’s compare the UK and the US as an example. Shipping to the UK typically takes up to 20-40 days before the product arrives.
Compare that to ePacket shipping to the US, which is 10-20 days. This means that shipping to the UK is DOUBLE the time it takes to ship to the US (or even longer).
That’s why, as a beginner, I recommend focusing on countries that have shorter shipping times, usually around 2-3 weeks. By focusing on these countries you’re cutting out unnecessary hassle — and, even better, avoiding customer complaints.
#2: DO NOT Dropship on Amazon or eBay
This is a question we get asked time and time again: “Can I dropship on eBay or Amazon?”
I get the desire. You can save money or what not, plus you don’t have to put up with having to build your own store.
There is a catch, though: buyers on Amazon and eBay have high expectations when it comes to shipping.
When you buy something on Amazon, when do you expect your order to arrive? Seven days? Maybe 10?
Hell no! You would expect it to arrive pronto, within a day or two.
So, as a dropshipper, it wouldn’t be wise to sell your product on Amazon, because your customers will expect it to arrive the next day. And, as mentioned above, delivery on AliExpress orders will take a lot, lot longer than it does with Prime delivery on Amazon.
Now compare this to building your OWN store; a store that gives you full control over what you sell, how you sell it, and even what type of customers you want to attract.
To guarantee success (or even survival) as a dropshipper, focus on building your own store and driving your own traffic.
#3: Set Up an LLC (Company)
A very common question we get asked at Wholesale Ted is whether you NEED to open an LLC before starting a dropshipping store.
The simple answer is no — you can sell without any legal paperwork. If you do this, you are by default a sole proprietor.
However, while you don’t need to, it is still a good idea to set up an LLC. By setting up an LLC, you protect yourself legally in case you get sued. This is especially important for people that live in the USA.
But of course:, creating an LLC costs money, which not everyone will be able to afford at the start — and that is okay! If you can’t afford to create an LLC right now, focus on creating your store as a sole proprietor, then look at switching to an LLC when you start making good money.
#4: Make Shipping Times VERY Clear
When reviewing a subscriber’s store, one common mistake people make is forgetting to add a shipping disclaimer.
A shipping disclaimer—if not the most important—is an integral part of your store that every seller MUST have.
People HATE uncertainty, whether it’s uncertainty around meeting next month’s rent, or whether they did a good job with that interview, or in this case, whether or not their order will arrive on time.
That is why it is essential you make shipping times clear. How? Well, simply copy this text:
‘NOTE: Due to high demand, please allow 2-4 weeks for delivery.’
Then paste it into your product page description, checkout page, and your purchase confirmation email. And on every page, make sure you bold the text.
That way, customers cannot make the excuse that they didn’t notice it — which saves you a lot of hassle when it comes to customer support emails and complaints.
#5: Create a Strong Refund Policy Page
Having a refund policy protects you from things like chargebacks and PayPal disputes — which, trust me, you do not want.
For members of The Dropship Club, our premium step-by-step video course that teaches you how to build a dropshipping business from scratch, we actually offer a word-for-word template that you can copy and paste into your store.
But essentially, when creating a refund policy, make sure it has been written in a way that the customer is only allowed a refund if the item is faulty or broken.
Why set it up this way? Well, we already know the “cheek” some people have — they might just want a refund because they “apparently” don’t like how the item looks, or shipping times were “too long,” or any other weird excuse.
And by having a clearly stated refund policy, people can’t request a refund for just any old excuse. To also add another layer of protection, have it a requirement that customers ship the item back to you for a refund at their own expense.
#6: Set Up a Follow-Up Email Sequence
While email marketing is a powerful way to increase sales, it has another bonus: it builds a relationship with your customer.
And what better time to build this relationship than the “waiting period” before they receive their package? Don’t just send them newsletters and emails promoting products; reach out and keep them happy while they are waiting for their items to arrive.
About three or four follow-up emails over this period would be ideal — and for each email, make sure they have these themes (in order):
- Remind them about the 2-4 weeks shipping time that they agreed to when they purchased the item from you.
- Inform them that they can always email you if they are having any issues.
- Remind them that they can track their order online, and give them a link to how they can do this.
#7: Run a Like Campaign to Your Facebook Fan Page
Social proof is one of the biggest factors to make someone buy from you. And a great way to exercise this is to build some credibility on your Facebook fan page. Even though it may not seem important, it goes a long way.
How? Well let’s put this into context. If people see you (the dropshipper) promoting one of your items on Facebook, but your Facebook fan page has zero likes, people are going to be like “Wait a minute, something doesn’t add up here.” And in the end, they will just ignore your ad. (This also explains why 95% of people check reviews on Amazon before buying)
But having a substantial number of likes—say, 100 to 200—goes a long way to positioning yourself as an authority in the eyes of the customer.
The best method to gain likes on your Facebook is by boosting a post on your fan page to gain a few hundred likes to your store’s Facebook fan page. It will cost you a little, but well worth it end. The main aim of this is to gain more exposure, thus more like shares and likes to your page as a result.
When people see you have a lot of likes, they won’t question your authority, nor would they have any reason to. In fact, they will trust you even more! And, as we covered earlier, the level of TRUST between you and a customer will determine whether or not they will buy from you.
#8: Add 20 Products to Your Store BEFORE Testing Products
Running ads are great, but if you only have three or four products in your store, you’re gonna have a tough time making a sale.
Why? Well, let me even ask you: Would you buy from me if I were only selling three products in my store? 99% of you would probably answer no to this question. And the reason why is because it makes your store look illegitimate. With only a handful of products, people will think your store is half-finished — and who wants buy from a store where the owners don’t even take care of their site?
Instead of getting impatient and adding only a handful products, focus on adding multiple products — at least 20 — before you start running ad campaigns on Facebook and drive traffic to your store.
This immediately builds trust been you and the customer, while also giving you more room to test a range of products and find a “winner.”
Helpful link: How to pick money making products to sell and dropship
#9: Have Either a Credit Card or Money Set Aside to Purchase the Items Bought by Customers
A common newbie mistake is assuming the money you receive from a purchase lands in your bank account instantly.
Sadly, this doesn’t happen.
For example, Shopify use two payment processors: Stripe and PayPal. When customers pay through Stripe, you don’t receive that money until 7 days later. In fact, PayPal takes even longer — they are likely to hold your money for three weeks (or more) until they trust you.
Seven days is super long for a store to DISPATCH an item, let alone have it delivered 2-4 weeks after the day it has been shipped!
The workaround? Have money prepared in the meantime to pay for items until the money the customers paid you has cleared.
And you could do this with one of the following options:
- Have a credit card. You will get the money the customers paid you well before when your payment will be due. Plus you’ll get bonuses too (such as free air miles and cash back rewards to offset fees).
- Have a debit card. Use one with $200-300 prepared in advance to purchase the items from AliExpress.
Both methods work equally well and put you in a “safe haven” while your money arrives.
#10: Be Prepared to Spend Money to Make Money
Ever heard the saying, “Scared money don’t make no money”? This couldn’t be any truer when it comes to dropshipping (or any other online business).
To truly succeed in dropshipping, you’re going to need to spend money to make money — no ifs, no buts.
There are a number of expenses you’ll need to pay for, but most are broken down under three major areas:
- Building your store
- Marketing your products
- Money to purchase items in-advance
We’ve already created a video detailing the exact costs for each area, but when creating your budget, simply focus on these three areas and ignore any other fancy apps or software people are trying to sell you.
If you plan on running paid Facebook ads, be prepared to test a lot of products. Don’t run a few tests and then give up if they don’t make you money immediately — set aside a budget of a few hundred dollars and be willing to spend that while running lots of tests to find your winning products.
Helpful link: How much money do you need to start dropshipping?
Want to learn the blueprint wildly successful dropship stores follow to make six-figures?
Six steps to building a six-figure Dropship store
In the eBook, I’ve included:
- How just one “winning item” can earn $10k/month. Yep. A lot of people don’t realize this, but most stores make the majority of their money from just a handful of items!
- The right way to choose AliExpress suppliers. Picking the right AliExpress dropshipper is crucial to drastically reduce things like refunds. Learn how to pick the right suppliers.
- Why long shipping times DON’T matter. A lot of people are scared to start Dropshipping because of “long” shipping times. You’ll learn why this doesn’t matter.
- Why six-figure stores take ONLY two hours a day to manage. You’ll learn how they utilize apps like Oberlo to make their stores semi-automated, making managing orders super simple!