Are you making these six dropshipping newbie mistakes? Read on to find out…
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I know: we all hate making mistakes.
But do you know what’s even worse than making a mistake itself? Being completely blind to it.
And with dropshipping, you can only go so far by ignoring it — before it slaps you red in the face.
Luckily, most mistakes can be easily reversed or avoided when you are aware of them.
That is why this gift — the gift of being AWARE of your mistakes — is one that I am excited to share with you in today’s blog post.
By reading this article, you’ll gain the new ability to “bulletproof” your store from these mistakes and grow your dropshipping store to incredible heights.
So without further ado, here are the six dropshipping mistakes you could be potentially making, and how to avoid them!
Dropshipping Mistake #1: Pricing Free + Shipping Items Too High
A ‘free plus shipping’ promotion gets super high conversions for the obvious reason that the item is free.
Well, kinda. The item isn’t actually “free,” as customers are required to handle shipping costs. But it’s a bonus for the customers to get the item at zero cost, and it’s definitely not the kind of sale you see every day.
This gives you, the dropshipper, freedom in how you choose to price shipping. But more often than not, newbie dropshippers take advantage of this power and price their shipping way too high.
This is a very, very costly mistake.
When you sell an item and put a price on it, it is often ambiguous what the true value of the item is, because the customer has not manufactured the item themselves. They can’t see how much you paid for it.
They don’t know the true cost of the time, materials, or expertise that went into creating the product. That means you have a lot of flexibility in the price you can put on an item.
But when using the free-plus-shipping model, you can only price your shipping so high until customers start to detect something fishy is going on.
And customer’s aren’t stupid — they have most likely purchased an item online before, so they have a general awareness of how much shipping should cost.
That means you can’t go and advertise an item as free plus shipping, then put the cost of shipping at $20. (Just for shipping? That’s insane!)
Of course, customers will give you some leeway for handling fees; but if you require them to pay $20 for shipping, your offer won’t even been considered a good deal anymore, and they will end up bouncing.
Plus, think about it: wasn’t your deal the reason the customer landed on your page in the first place? To price your shipping cost at an unreasonable price will only have customers bounce from your page, and leave you with no sale.
So how should you price the shipping? A good, safe price point for a free-plus-shipping promotion would be $9.95. This is a great price for shipping as:
- Shipping fees usually cost around $10
- It encourages customers to buy on impulse
Being greedy with shipping costs and pricing it higher than necessary only drives customers away, damages your store’s reputation, and removes the possibility of making a sale.
Dropshipping Mistake #2: Not Building a Brand
Most new AliExpress dropshippers focus simply on the initial sale.
This is the illusion most newbie dropshippers are fooled by — when in fact, the initial sale is NOT how most successful stores make their money: it is through upsells, cross sales, and promotions.
But none of this is possible without focusing on building a brand. This is the #1 priority every dropshipper must have if you want to build long-term success.
Your brand is what turns a one-off customer into a repeat customer; one that finds it hard not to return back to your store, because of the amazing value that you provide.
Building a brand earns your customer’s trust; the biggest deciding factor of whether or not they end up clicking “Buy.”
Ignoring your brand only hurts your ability to market new products to your customers since they won’t have any trust built in you: they only bought your item based on their initial emotion, not because they LOVE your brand.
In other words, you have ‘one-off’ business. Your store relies on new customers to survive, as you do not care enough to nurture your existing ones.
As you can tell, these kind of stores are very short-lived; they end up fizzling out sooner or later with nothing to show for it.
This obviously begs the question: How can you build a brand? A good brand is consistent in its:
When you think of unicorns, what colours come to mind?
Was it pink, purple, or a colour similar to these? It was for me. Now imagine you ran a dropshipping store that sold only unicorn-related items — but the theme colour for your site was black?!
That’d be pretty weird, as your theme colour is clearly inconsistent with your niche. You always want to make sure to use colours that customers can associate with your niche.
The same goes for images. Using our unicorn example again, displaying images of bats certainly won’t help express your brand, and it will confuse a lot (if not every) customer that comes to your store. Images of unicorns would be the ideal as that is what your site is dedicated to.
And, of course, the message must be congruent with your brand. You must make it clear in your copy what your store is about; whether that’s on the homepage, the about page, or on the product pages.
One tip is to use keywords that your niche is familiar with. What jargon do people regularly use in your niche? For example, if you’re into dropshipping, jargon like ‘upsell’ and ‘funnel’ are terms that make a lot of sense to you.
This also a sales weapon in disguise. By using familiar and buzzy words in your copy, your customers are able to connect with you on a deeper level, and this goes a long way in building trust.
Dropshipping Mistake #3: Selling to Customers Outside of the USA as a Newbie
Newbie dropshippers tend to believe that by selling outside of the US, they will reach more customers and make more money!
On the surface, it makes perfect sense, right? Instead of limiting yourself to the U.S, you can reach out to millions of potential customers.
But this comes at a cost that newbie dropshippers aren’t usually willing to make: a LOT more work.
You see, selling to other countries can be very lucrative — but as a newbie, it’s a lot easier to start in the US, then expand to other markets once you have more experience.
In the Dropship Club, our step-by-step premium dropshipping course, we recommend that new dropshippers focus on the U.S. market and then expand out from there — EVEN if you live outside of the USA.
Why? Well, first, the U.S. market is HUGE! There are over 323 million people that live in the USA.
What that means is that there are tonnes of niche subgroups within the country that are interested in lots of niche things. So when it comes to the point where you are running ads to your store, it makes creating a targeted audience much easier.
The second reason is that shipping to the US is very reliable and trustworthy. The ePacket shipping option is handled by the United States Postal Service, unlike the ePacket shipping option to other countries which is mostly handled by China Post.
As a beginner in dropshipping, the best path to take is the one with least resistance — and this a good thing! With more experience, you’ll gain more confidence and be in a better place mentally to consider expanding out to other countries.
Dropshipping Mistake #4: Forgetting About Your Previous Customers
As mentioned previously in mistake #2, most newbies assume getting new customers is what they should be focusing on to make money in their store.
And while it might seem this way, the realmoney is made in your email list.
To understand this, simply ask yourself: Would it be easier to make a sale from a new customer, or a customer who has already purchased from your store?
The answer is the latter. Why? You’ve already earned their trust! After all, they purchased from you before — what’s to say they won’t purchase from you again?
Most people completely neglect the power of remarketing even though it’s a skill all the top dropshippers leverage.
And what’s even crazier is … these customers are free! Remarketing does not cost you anything, as opposed to acquiring a new customer which requires a lot of advertising.
In truth, repeat customers are worth WAY more in the long-term. Remember, they are in your email list where you can promote other items to them from your store.
So they won’t end up just buying once, but several more times, which greatly increases the customer’s true value. (Imagine a customer buying $200 worth of items throughout the year!)
Don’t make the mistake of prioritising trying to get new customers. Focus on leveraging the customers you already have by promoting other products they might have interest in purchasing.
Dropshipping Mistake #5: Being Afraid of Taxes
A lot of people ask the same question: “What about taxes? I can’t start dropshipping because I don’t know how to handle taxes.”
Well, believe it or not, when you’re dropshipping with AliExpress suppliers, your sales tax obligations are very simple.
That is because your suppliers are based offshore in China. That means that you only have to collect sales tax in states where you have a big physical presence, which for many dropshippers will only be the state they live in (and if you don’t live in the USA, the chances are you won’t have to collect and pay any sales tax on USA-based sales!).
In addition, whether you’re selling with Woocommerce or Shopify, collecting sales tax is easy, as both platforms have settings which will collect sales tax automatically for you.
So don’t be afraid of this part — it’s really simple.
If you want to learn more about your obligations for sales tax, we wrote a whole blog post dedicated to this topic.
Dropshipping Mistake #6: Not Having a Plan on How to Upsell Customers
If you’re a regular reader of our blog, you know I can’t stress enough the importance of having upsells in your store.
You don’t want to simply make money from your front-end offer; instead, you want to earn the majority of your money through upsells.
In fact, upsells are so important that not having them in place can have a major impact on your store’s ability to scale to six figures. Why? Because in dropshipping, front-end items usually only tend to break-even; one sale would only be enough to cover both the cost of ads and the product itself.
For example, on average, your ad spend is roughly 50% of the sale price. So if you sold your item for $10, your ad spend would be $5. But don’t forget: you also have to consider the cost of the item, which usually falls between $2-5.
If you didn’t upsell a customer to additional items, your profit would be end up being very tiny. But imagine adding a $19.95 upsell to the equation. Can you suddenly see how your profit margins shoot right up?
The best part is, upsells are essentially ‘ad free’ — you don’t have to spend a penny on ads to promote them! And with the profit you earn from this sale, you can use it to scale your store even FASTER.
Think about additional products you can remarket or upsell to your previous customers to get them to buy more. This is what separates 5-figure stores from 6-figure and even 7-figure stores.
Want to learn the blueprint wildly successful dropship stores follow to make six-figures?
Six Steps to Building a Six-Figure Dropshipping Store
In this 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 inside.
· 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!