Drop shipping isn’t all fun and games. There are a fair few issues that could possibly arise. Here are some problems and their solutions that will help you in your business.

Customer service

The backbone of a successful business is good customer service. Responding to client queries on time is key in building a positive brand image. Unfortunately, the nature of drop shipping doesn’t allow this. You will be answerable to your customers without having first hand knowledge yourself. You won’t know when exactly the order will ship, when the order will arrive, why is there a delay, etc. You’ll have to forward the queries to your suppliers, wait for a response, and then answer your client. To handle this, all you can do is make sure you choose a trustworthy supplier. Other than that, there isn’t much control you have here.

Not so wholesale

Drop shipping businesses run on the concept of buying at wholesale rates and selling at regular prices. This is how drop shipping businesses earn profits. However, if you look from the suppliers’ point of view, this method is rather unprofitable for them. You’re not technically buying products in bulk. Instead, the supplier is sending out one or two items at a time. Finding suppliers who are okay with this model and still agree to sell on wholesale prices is hard. The solution here is to research hard. There certainly are wholesale suppliers who work happily with the drop shipping model. Wholesale2b is a good option to consider. You won’t have to face this challenge as such if you choose them.

Product returns

Online shopping has earned the trust of people due to one basic feature; guarantee of return. If people don’t like the quality of what they chose unseen, they can return the product to get their money back. Similarly, this process also covers the cases in which the product is faulty or damaged. In drop shipping, the client will demand the refund from you. However, you’ll have to make sure you get your money back from the supplier too. The chain of communication is longer and the process is slower. Once again, your solution is to opt for a supplier who’ll deal with such situations professionally.

Competition

The suppliers you bag won’t be providing the items just for your online store. There will be tens, sometimes even hundreds, of other stores selling the exact same product as you. This high competition may force you to narrow your profit percentage. Sometimes, you may even find competitors who will be selling the product at a price that would bring a loss to you. To tackle this challenge, you need to do two things. First of all, decide a store niche that is relatively unique. You won’t have to worry about the excessive competition and people will be attracted to the different items on your store. Secondly, don’t compromise on the supplier. Choose the best of the best, and the best isn’t always the cheapest.

Dive into drop shipping businesses with these challenges in mind. Better cautious than sorry!

Drop shipping businesses can be a huge success if you partner with the right company. We’ve made things easy for you by compiling a list of the best companies out there that you can choose to work with if you start a drop shipping business.

1.    Sunrise Wholesale

This is a wholesale drop shipping company that has been awarded an A+ by the Better Business Bureau. Sunrise Wholesale work in partnership with another importer. Overall, you get the benefits of both along with a 600,000 square feet warehouse and distribution center. You’ll have 15,000 branded products to choose from. If you sign up with them, you get special tools that make eBay and Amazon marketing much easier for you. There is a limitation of 7 suppliers only but if they’re trustworthy, you don’t have to worry about the small number.

2.    Oberlo

Oberlo is a rather famous name in the drop shipping industry. It is loved for its user-friendly interface along with the technical facilities. You can create a free account on Oberlo to test things out. The direct link with AliExpress and Shopify makes things very convenient. However, the restriction is that this will only work with Shopify accounts. Other than that, the only suppliers they have for now are those on AliExpress. There is still a wide variety of options for you to choose from.

3.    SaleHoo

SaleHoo is a platform where suppliers meet website owners. People like you, who are starting a drop shipping business, get to connect with more than 8,000 companies. In total, these companies supply around 1.6 million products. The best part is that every single one of the suppliers on SaleHoo is verified. There is no risk of fraud or lack of quality. Other than that, this platform also offers market research tools that you can use to figure out which products will work out best for your business. If you want to try SaleHoo, you can’t do it for free. Although there is no free trial, you do get a 60-day money back guarantee so you can dive in without a worry.

4.    Megagood

Unlike previous options, Megagood isn’t a platform for wholesale companies. Instead, Megagood itself is a supplier. You get 45 categories of products. The variety is great but the product count is still very low. But, then this service is one of the cheaper ones too. There are pros and cons but it’s up to you to decide if it will work fine for your business.

5.    Wholesale2b

Wholesale2b is a platform that provides 1000s of product options. With trustworthy suppliers, you don’t have much to stress about. You’ll get the cheapest rates here in terms of platform subscription as well as product prices. Another convenience offered by wholesale2b is that they allow you to access product information so that you have a guarantee of quality.

You can further look into the subscription details of each of these wholesale platforms. Choose the one that fits your budget, scale of business, and niche.

Drop shipping businesses are expanding all over the world. They are super easy to set up. In the excitement and hurry to start your own drop shipping business, don’t forget that there are a few legal requirements you must fulfil. Fulfil these requirements to keep yourself from any trouble in the future.

Licenses

Any business that sells tangible products requires a number of licenses. Even if you’ll be operating the business from a single website from within your home, you’ll need a registered office location. You will have to decide a business name and get that registered. Then, you’ll have to go to your local county. This will be the county that is connected to the office address that you registered. After getting the country license, you’ll have to get the city license. Unless your registered address is in an area that comes under no city, this license is a must have to operate a legal business. Lastly, you will need a reseller’s license. This will allow you to sell products via drop shipping which is basically reselling in the simplest terms. These licenses can be obtained rather easily. Make sure you keep getting them renewed whenever they expire to steer clear of legal trouble.

Tax ID Number

A tax ID number (TIN) or Employer Identification Number (EIN) is a must have document for any business that is going to hire employees. You might not need it if you plan on running the business on your own. However, we would recommend you to still get one for future safety. This number will be needed for business bank accounts too. You can get your TIN from IRS.

Business account and credit card

A lot of people tend to forget this basic requirement. You’ll need specifically a business account for all your transactions. Opt for a bank that offers online banking for your convenience. Moreover, keep preparing your account to meet the requirements of a business credit card.

IP alteration

Opening a bank account will be troublesome if you’re not a US resident. They usually approve the opening of the account but later on, under Patriot Act, FBAR, FATCA, BSA, and hundreds of other laws, they might close your account. There is nothing illegal about your accounts yet, you may have to suffer loss. You can use VPNs while logging into your accounts from abroad to prevent this issue.

Deposits

After every sale, the ecommerce company you partnered with will deposit money in your account. By default, this money is deposited in your name even though it is not all yours. Overtime, such huge amounts of transactions will become red flags for the authorities. To keep yourself from legal trouble and baseless suspicions, make it clear with the ecommerce platform to deposit money in the name of the company.

Originality

Lastly, make sure in the process of building your own business, you don’t intentionally or unintentionally replicate someone else’s website. From branding to design to aesthetics, keep everything original no matter how hard you have to work.

Selling products used to be a simple process. The business owner bought the products in bulk from the manufacturer. Due to the massive purchase, the business owner got a bargain deal. He then sold the products individually at the average price. This led to a successful business with huge profit margins. Then what exactly happened that evolved this basic purchase and sell model to drop shopping?

Product catalogs

In the 1950s, some business owners started facing issues of storage. They had to pay rents for warehouses to store products that weren’t to be sold in the near future. Eventually, the storage cost exceeded their profits. They figured out that they won’t manufacture and store their products. Instead, they sent out catalogs that had pictures and details of every single item. These catalogs were mailed to potential clients. Interested people could place an order. Once the company received confirm orders, they began the process of manufacturing. This way, they only had to pay the expenses of raw material, storage, processing, etc. of the final products that had already been sold. It was a win-win situation which is why the trend extended further.

JIT

JIT manufacturing is just in time manufacturing. This was the next step in the business world. After the method with the catalogs was successful, business minded people took it a step further. Now, a third party was involved. Instead of the company sending out direct catalogs, independent people started doing the job. They would promote products to people and get orders. These orders were then forwarded to the manufacturer. The product was manufactured ‘just in time’ for the delivery. This method was the most advance drop shipping method for that time. The JIT manufacturing was also a pretty fast service so there was no inconvenience as such. The manufacturer would produce the item within 3 to 4 days.

The market was very limited with these methods. With the introduction of the internet services, the exposure increased to a whole new level. The idea of these previous methods was improvised with the latest advancements.

Ecommerce

The drop shipping model that is implemented today is at such a huge scale all because of ecommerce. The idea of online businesses encouraged retailers and manufacturers to connect with each other as well as with a wider consumer community. This has increased the market by huge percentages. At the same time, this model of drop shipping has expanded the options too.

Till a few years ago, drop shipping wasn’t very widely known. But, as shipping facilities have improved, so has this business model. Moreover, exposure to this new business model has encouraged better software options as well. All in all, every aspect has been polished and improved one at a time. The drop shipping business model we know today actually started as a simple idea decades ago. Gradually but successfully, it adapted to the needs and technologies of time to result in such a successful business model!

Adapting businesses to the latest trends is what keeps them going. If you stick to traditional methods, your business will sink in no time even if those particular strategies boosted your business previously. Drop shipping is a model that has been around for some time now. Some would say it is the best thing for their business while the others would totally disagree. The reason being the difference of nature of businesses along with the varying approaches. Here are a few factors that will help you determine if drop shipping is for you or not.

High competition scale

One thing that makes drop shipping very attractive is the fact that such a business requires almost no investment. This opens the gates of the drop shipping business world to everyone who wants to start a business. Since things have been made easy, you’ll find hundreds of thousands of people in pretty much the same business category as you. There is high competition and the truth is, some of these people will be better than you. They’ll be selling the same products in cheaper prices just because they have direct links with the supplier. If you can cope with such a high scale of competitors, you’ll definitely be successful.

Risk of frauds

There is practically nothing in the world that won’t have loopholes. These loopholes are taken advantage of by frauds to scam people who have little knowledge. A lot of suppliers will do the same. Small startups will usually be attracted by cheaper rates without considering the risks. If you’re not so amateur, drop shipping is successful for you.

Low input, low output

As previously mentioned, people love the fact that drop shipping businesses require zero investment. However, they don’t realise that minimal input will not bring them huge profits either. There is a very tight profit margin in drop shipping businesses. The suppliers generally offer a 20% discount. That is your ultimate profit. But, there’s a chance you’ll have to lower your cut and offer minimal prices to attract customers. This is specially important in case of high competition niches. If you’re okay with that, drop shipping will be a success for you.

Branding issues

You’ll always be just the platform where another brand’s products are being sold. Since you’re not the manufacturer, you can’t really develop a specific brand identity. The only thing you can do is build an image for your service. If you’re successful in that, drop shipping will be a win for you.

Dependence

Your business isn’t only run by your clock. Yes, you deal with the clients but the ultimate product shipment and handling is done by the supplier. This makes you highly dependent on the supplier in case of return policies, shipment timing, etc. The process of communication also elongates. Hence, you can’t offer instant response to the queries of your clients.

Like anything else in the world, this business model has challenges too. If you find strategies to cope with them, drop shipping will definitely be successful for you.

Retail business can grow bigger in a number of different ways, including expansion to other markets or opening stores in new locations. However, launching an online commerce is the single most productive way to grow your company quickly.

According to the report, the global online retail sales should reach almost $2.5 trillion in 2018. It’s a gigantic market and grabbing just a tiny portion of the cake could give your company a major boost. But how can you expand a retail store with eCommerce?

In this post, we will show you practical tips to combine offline and online retail business. Let’s take a look!

The Benefits of eCommerce

If you want to learn how to augment a brick and mortar store, you need to understand the advantages of launching an online commerce. Here are the four major benefits:

• Grow your reach: The Internet allows you to approach global audiences almost instantly. It’s not limited to local consumers, so you can create new audience groups.
• Lower operational costs: Online stores are extremely cost-effective in terms of business overhead, maintenance, and inventory.
• Multiple communication channels: While it is true that eCommerce lacks the privilege of face-to-face interaction, compensation comes in the form of multiple communication channels. You can address prospects via email, live chat, online forms, forums, and many other channels.
• Business analytics: As an online retailer, you have a full set of tools and apps that can help you analyze even the smallest details of your business.

Things to Handle When Going Online

With all the benefits we mentioned above, going online seems like the only reasonable thing to do. However, you still have to take care of various details in order to seamlessly integrate all of your sales channels. The fundamental components of eCommerce are these:

1. Website

A company website is the first thing users see when they start looking for products online. This means you’ll need a quality design with attractive themes and a friendly user interface. The purpose of online retail websites is to convince consumers to engage, so you need to highlight the products and calls to action.

Besides that, you need to optimize a website to rank highly in Google results. Since 93% of the entire Internet traffic comes from search engines, you have to implement the state of the art SEO strategy to be able to outdo competitors. For this reason, try to create top-notch posts because it’s the only way to build website authority and make it look credible in the eyes of the target customers.

Mobile optimization is another major issue. People prefer shopping through tablets and smartphones, so you must design a mobile app and make your website fully responsive.

2. eCommerce platforms

A website is an anchor of your online sales strategy, but the vast majority of eCommerce is done through digital platforms such as Amazon, eBay, or Etsy. A report shows that Amazon alone will take almost 50% of the eCommerce market share in the US by 2021. In such circumstances, you just have to create accounts on eCommerce platforms and focus most of your efforts on this sales channel.

3. Social media

Facebook, Instagram, and other networks have turned into genuine business platforms a long time ago, so you can use them for retail purposes as well. The secret is to perfectly combine high-quality content with the corresponding offers. If you can engage followers and inspire them with great images, videos, and entertaining comments, you can also expect them to take the final step and buy your products.

4. Digital campaigns

Digital campaigns represent a nice tactic to activate both the online and offline customers. The procedure is simple: boost your posts and give incentives. For instance, you can give a 10% discount for first-time buyers on your website.

At the same time, you can encourage offline shoppers to visit your store using online coupons they can materialize only in the physical store. It’s a win-win tactic for both sales channels, so you should launch digital campaigns every once in a while.

Essential eCommerce Tools

It’s almost impossible to run a profitable online commerce without automation tools. There are all sorts of software and apps out there, but here are the most important solutions:

• eCommerce platform: Platforms such as Shopify or WooCommerce will help you to quickly launch a credible online store.
• Domain name: It’s not easy to find a representative domain name, but Name Mesh and Bust a Name will help you find the most appropriate solution for your business.
• Website content creation: We mentioned already that you need a quality content to improve search engine ranking. With the help from A-writer.com and BestEssays, this job becomes much easier.
• Email marketing: Email is still one of the most important business communication tools, so you’ll need reliable automation software to handle the process smoothly. We recommend you test MailChimp and Constant Contact.
• Social media marketing: Keeping an eye on social media accounts while doing regular work can be a daunting task. That’s why we suggest you utilize the Hootsuite or Sprout Social.
• Proofreading and editing: Grammar and spelling errors could ruin your online business, so make sure to consult editing and proofreading services like Assignmentgeek.com.au or Bestessaytips.com.

Conclusion

Running a retail store can be a highly lucrative business, but why wouldn’t you expand it online? Digital sales give you a chance to reach out to the global audiences and build a brand new customer base.

In this article, we showed you the benefits of eCommerce and how to grow your retail store through online retail. It requires minimum costs and the setup process is rather simple, so you shouldn’t waste the opportunity to give your company a fresh boost!

Bio:

Warren is a marketing enthusiast and a blogger at UKBestEssays, who loves music. If he doesn’t have a guitar in his hands, he’s probably embracing new technologies and marketing techniques online! You can meet him on Twitter and Facebook.