Dropshipping sounds like a dream come true, right? Low start-up cost and no need to hold onto inventory. But here’s the catch, the competition is fierce. People think it’s a piece of cake to make money through dropshipping, but the reality is far from it. So, why do most dropshippers fail? It’s because they don’t have the right marketing skills.
Yes, finding the right products is important, but it’s not enough. You’ve got to be a marketing pro to stand out in a crowded market. Take your skills to the next level and fill the gaps where others are lacking. According to surveys, the success rate of dropshipping businesses is a mere 10%. And when they asked successful dropshippers what made the difference, the answer was always – their marketing skills.
It’s all about perception. With effective marketing, you control the perceived value of your product and that’s how you win the dropshipping game. In this article, we’ve put together some proven tips to help you become a successful dropshipper.
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Is dropshipping still profitable?
People thought dropshippers were all losing money. The fact is, dropshipping is still profitable. It’s a growing industry with a projected global valuation of $243.42 billion in 2023, that’s a 23.7% increase from the previous year. But let’s be real, if you want to be among the top 10% of successful dropshippers, you gotta put in the work.
It’s not just about making quick cash, it’s about providing value to your customers and becoming an expert marketer. To stand out, you need to build a killer store, source popular products, and invest time in improving your marketing skills – think branding, copywriting, and creating video ads.
So, what’s the secret to success in dropshipping? It’s all about picking trending products and making them look high-end through effective advertising. Optimize these areas and you’ll be winning more than losing.
And to answer the big question, yes, dropshipping can be profitable but it requires more skills and effort than it did a few years back. But hey, nothing worth having comes easy, right?
What’s the average dropshipping success rate?
Most polls show that only about 10% of dropshipping businesses succeed during their first year. That’s because a lot of people jump into this business without fully understanding the risks involved.
But, let’s not get discouraged just yet. Success is all relative, right? It depends on what you consider success. If you’re dreaming of becoming a millionaire overnight with your dropshipping store, well, it may take some time. But, if you’re more realistic and just aim for a six-figure income, there are plenty of dropshippers making $100k a year. The key is finding the right suppliers and building a strong brand.
Contrary to what you may have heard, dropshipping isn’t a quick way to get rich. You’ll need to put in the effort and time to make your business successful. So, don’t believe the hype, and get ready to work hard!
Dropshipping success stories
Starting a dropshipping business can be tough, but with the right strategy and determination, it can lead to huge success. Here are three of the top Shopify store owners who used dropshipping to make it big.
Tze Hing Chan: Making $19,000 in Two Months with Bubble Tea Plush Toys
Tze Hing Chan, a Malaysian entrepreneur, started the Shopify dropshipping store “Subtle Asian Treats” during the COVID-19 pandemic. The store became the go-to place for bubble tea plush toys and other cute merchandise, and Tze made $19,000 in profit in just two months of dropshipping.
However, Tze’s journey wasn’t without failures and lessons. He started by selling phone cases, then moved on to kitchenware and martial arts products before finally discovering his most profitable product idea: plush toys.
Cole Turner: $2 Million in Just Over a Year
Cole Turner, a young entrepreneur, learned about dropshipping when he was 18 and became obsessed with selling online. In just four years, he built an e-commerce store that made over $2 million in sales between March 2019 and May 2020.
Cole started with a general store to test various products, but eventually found success with a piece of jewelry. He scaled up his Facebook ads and turned his general store into a one-product shop, netting over $75,000 in sales before selling it to another e-commerce entrepreneur. It wasn’t until his third dropshipping store that he brought in over $2.1 million in sales in just over a year.
Sarah and Audrey: $1 Million in Sales through Influencer Marketing
Sarah and Audrey, two French ecommerce entrepreneurs, teamed up in 2019 and saw the potential in influencer marketing. While Facebook ads are a typical sales channel for successful dropshipping, they found success with influencer marketing and brought in over $1 million in sales in just a few weeks during US lockdowns.
The pair met at an entrepreneur event and worked hard to expand their brand into the US market. They collaborated with influencers on Instagram and utilized product placements to achieve their success.
How to be a successful dropshipper?
1. Add value to your customers
Starting a dropshipping business can be an attractive idea, but it’s not as simple as just picking a product and setting up a store. With countless other merchants offering similar products, it’s important to differentiate yourself from the competition. This is where adding value comes in.
Successful dropshippers understand that they’re not just selling a product, but also offering insights, information, and solutions to their customers. If you can’t find a way to add value in your niche, it’s best to consider a different market. If you can, however, you’ll have a solid foundation for success.
Remember, if you can’t add value, the only thing you’ll be able to compete on is price, and that’s not a sustainable strategy in the long run. So, take the time to understand your niche and find ways to offer unique insights and guidance to your customers.
2. Improve your SEO and marketing
Once you have a solid plan for adding value, the next step is to drive traffic to your site. This is crucial to the success of your business, but it’s also one of the biggest challenges new e-commerce merchants face.
Marketing and SEO are essential and can’t be outsourced effectively, especially if you have a limited budget. You need to take the time to develop your own skills in these areas. During the first six to twelve months, you should dedicate at least 75% of your time to marketing, SEO, and traffic generation. Once you’ve established a solid foundation, you can scale back a bit, but early on, it’s impossible to place too much emphasis on marketing.
3. Specialize in a particular product or niche
If you’re looking to launch a successful store, you need to specialize. That’s right – focus on a specific product or niche, and you’ll see your store soar to new heights.
Think about it – do you really want to just sell any old backpack? Of course not! You want to sell backpacks specifically designed for globe-trotting travelers who are all about lightweight gear. And security cameras? Pfft, who needs them. You want to focus on gas station security systems.
Now, you might be thinking that narrowing your focus means you’ll miss out on potential sales. But actually, it’s the opposite. Specializing helps you communicate better with your customers, stand out from the competition, and go up against a smaller group of competitors. It’s a win-win situation.
Starting out in a new niche can be tough – you might not know which segment of customers to focus on. But as you get more experience with your customers, you’ll start to see which ones are the most profitable and where you can add the most value. Then, focus your business on meeting those customers’ needs and solving their problems. You’ll be blown away by how your conversion rates soar, even if you’re charging a higher price.
Remember, if you’re trying to be everything to everyone, you’ll end up being nothing to anyone. But by specializing, you’ll have an easier time differentiating yourself, charging a premium price, and targeting your marketing efforts more effectively.
Still have no idea what product to sell? Here is a list of the best dropshipping products to sell!
4. Be patient
Building a dropshipping business takes time and effort, just like anything else of value. Don’t expect to earn a six-figure income overnight or in a few months of part-time work. It can realistically take at least a year to build a successful business that generates an average full-time income.
The first few months can be the toughest, with doubts, website issues, and little to no sales. This is normal, so be prepared for the challenges and don’t give up easily. Successful dropshipping businesses take time to build, just like Rome.
5. Offer great customer service
In today’s age of social media, your business reputation is key to your online success. Poor customer service can quickly spread, damaging your business and reputation. As a dropshipping merchant, you may encounter fulfillment issues, but it’s important to provide excellent service to your customers, even if it means losing money on individual orders.
Happy customers are the best form of marketing, and they will likely refer others to your business. Making customer service a priority will set your business up for success and drive repeat business.
6. Don’t get stuck on the details
Your business’s name, logo, theme, or email marketing service are not the determinants of success. What makes a business successful are the core aspects such as value, marketing, customer service, specialization, and a long-term commitment.
New merchants often spend too much time on small decisions, such as choosing between two shopping carts or providers. Instead, focus on developing the core aspects of your business and make informed decisions based on research. Don’t let minor decisions paralyze you and keep you from making progress.
For more information, you can check out our guide “12 Best Dropshipping Tips For Beginners“.
Dropshipping isn’t dead, but it takes a little bit more to be successful in this business model these days. To be part of the top 10% of dropshipping businesses, you need killer marketing skills, a solid product, and a connection with your customers.
So, how do you make this happen? First things first, make your store look professional and have a clear plan of action. If you want to upgrade your customers’ experience and drive growth, consider pivoting from dropshipping to branded eCommerce. This will give your business a future by creating a valuable asset. And if you’re looking for help on this, check out Foundr’s eCom course Start and Scale. It’ll give you a step-by-step guide on building a successful ecom brand from the ground up.