What is Drop Shipping? The Ultimate Guide to Creating a Drop Shipping Business
If you’ve ever wanted to dive into a drop shipping business and change your life through eCommerce, you’ve arrived at the right place. In this article, I will cover the basics of drop shipping and give you an outline for how to drop ship successfully.
I’ve spent close to 10 years in eCommerce and have discovered a process that anyone can use to build a profitable drop shipping business. Throughout this article, I will be walking you through what drop shipping is, a 30,000 foot view of this process, and how you can get started on your drop shipping business.
My goal is to give you a strong foundation on how to be successful. And to maximize your results once you move into the details of setting up a drop shipping business.
What Is Drop Shipping?
I get asked this question all the time, and it deserves an explanation…
A lot of people who land on this article searched around the internet and found the term ‘drop shipping’. They heard about me, or my award-winning course Drop Ship Blueprint. But they don’t understand the high level overview of what drop shipping is and how they can do it themselves.
If you’re new to eCommerce, you may not know that there are a few types of drop shipping. One drop shipping model will generate consistent revenue and net you a few hundred dollars per sale minimum. The other models will make you far less money, or none at all.
The confusion between these types of drop shipping also generates bad press for drop shipping overall. So before you buy into the idea that drop shipping is a scam and that it won’t work for you, let me breakdown the different types.
I’ll also explain which one I teach. It’s the type of drop shipping that can make you six or seven figures in yearly revenue.
The basic model that applies to all the different types of drop shipping goes like this:
First the customer will visit your online store and order a product from you.
Then you’ll order the product from the supplier after you’ve been paid.
Lastly, the supplier will ship off the product directly to the customer.
eCommerce Business Models
Before we dive into how drop shipping works, I want to walk you through a few different ways to make money online with eCommerce. This will give you an understanding of how drop shipping is different and why I think it’s the best option for your eCommerce business.
When it comes to running an online store, there are a few major business models and a few major platforms.
The first thing to consider is where you are getting your products from. Also, are you warehousing the products yourself?
One of the methods that people use to get products is called arbitrage. This basically means that you will buy discounted products at thrift stores, garage sales, Walmart, or Amazon… Then you mark-up the product and resell it.
This is how the people of the A&E show Storage Wars make their money – that and reselling at physical locations.
The problem with the arbitrage model is…
- It usually has very low profit margins.
- You have unpredictable product stock.
- It’s unsustainable in the long run.
This method involves you getting products from a manufacturer and then labeling them as your own. It does have higher profit margins than the other types of eCommerce models but you also need a lot of upfront capital.
This method lets you start an online business with almost no upfront cost, while giving you a reliable stock of products. It’s the easiest way for someone to get into eCommerce.
Your Drop Shipping Platform
The next part of the eCommerce model is where you will be selling your products. There are many choices but the big three are Amazon, eBay, and building your own store on services like Shopify.
A lot of people don’t realize that you can become a seller on Amazon. It’s called having an Amazon store and it is a pretty good business model.
One of the most attractive parts of selling on Amazon is that you have millions of people on the site without having to pay for traffic. This traffic has a lot of potential but doesn’t guarantee that your store will get a lot of traffic.
You also don’t have to custom build your store, it’s actually pretty straightforward to setup.
But with that ease of use comes downsides – mainly that you don’t have much control over a lot of the sales process. Since you’re selling on their platform, Amazon has control over the sales process and they keep all the customer data for themselves.
So if you wanted to scale your business by marketing to previous customers, you won’t be able to with Amazon. Plus, if Amazon decides they want to start selling in your niche, you will not be able to compete with them. This leads to a lot of stores going out of business overnight.
The world’s most popular auction site is also a place you could build an eCommerce store. Much like Amazon, you would have your own space without hosting fees. You’ll also be exposed to all the website’s traffic.
But not only does eBay suffer from the same downsides of Amazon, it’s very saturated and often devolves into pricing wars with competitors.
Building Your Own Drop Shipping Store
There are a good amount of options when it comes to building your own store, and I will cover more on that later in the article. But for the moment, I will use Shopify as my main example.
Basically, Shopify is a service that lets you build a very basic eCommerce site in about an hour – without needing any experience in coding or web design.
You will have to customize your site, put in products, and do some work before it’s ready to be seen… But with all the templates and apps, you can have a pretty great store in under a day.
There are a ton of benefits to owning your online store, but the biggest one for me is owning the whole sales process. Mainly, being able to discover who your customers are and the ability to capture their information. That way, you can market to them and make more money on every customer.
The 7 Step Process For Drop Shipping Success
Because I want you to be successful with your drop shipping business, I’ve created a checklist with all the steps for building a drop shipping business. It’s the basic outline of my Drop Ship Blueprint that consistently gives my members great results.
- Choose a Niche
- Find “Future Competitors”
- Create Your Store
- Get Approved With Suppliers
- Optimize For Conversions
- Get Traffic
- Outsource & Automate
These are the steps that you should use every time you create a new drop shipping store, and it’s what has worked for 8,000 students.
Step 1 Choosing a niche
This step is all about choosing the right products to sell. It’s important to avoid ‘shopping mall’ type stores that sell unrelated products, like microphones and water coolers. What you want to do is choose a niche of related products.
This will vastly increase your conversions and the overall profitability of your store.
Step 2 Find Future Drop Shipping Competitors
You should be able to to find companies that are selling in a potential niche. This step allows you to see what they are selling, how they are selling it, and gives you a clue on their who their suppliers are.
If you find a niche with nobody selling in it, it’s usually a bad sign and I would suggest you avoid it.
Step 3 Create Your Drop Shipping Store
You’ll set up a Shopify account and build a store with this platform. With about a days worth of work each, we built these demo stores:
All these stores use our Drop Ship Lifestyle theme, but they are customized completely different. It’s important that each one is made for the specific audience.
Someone looking for a an elegant chandelier will want a different experience than someone looking to buy a dog crate.
And under no circumstance should you mention that you’re drop shipping on your website. To the customer, they will just see the product and they’ll put an order in. It’s just like any other retailer from the customer’s perspective.
Except on the backend, the supplier handles all the shipping. So you don’t have to carry any inventory.
Step 4 Get Approved With Drop Ship Suppliers
We’re not trying to build a short-term store. We want to work with legitimate brands. That means we need to get approved to work with excellent suppliers.
Having to form relationships with suppliers creates a barrier of entry because they will only work with people that get them results. This is actually a great thing. It means you will have a lot less competition than if you had used a middleman service like Oberlo or Alibaba.
Step 5 Optimize For Conversions
This step focuses on converting the most visitors into customers on your website. With over a decade of eCommerce experience, I’ve learned some amazing tactics for optimizing conversions. I share all of them in my eCommerce course Drop Ship Lifestyle.
Step 6 Get Drop Ship Traffic
After your store is built and your products are listed, you need to attract people to it. We do this by combining both paid and organic traffic sources, which I cover later in this article.
Just make sure that your store is 100% ready before you start driving people to it.
Step 7 Outsource & Automate
We want to have stores that can be managed in 30 minutes or less per day. To do that, we need to use different tools and apps that will automate most of your processes. This is the final step on your drop shipping checklist because you should have everything setup before you attempt this part.
Benefits of Drop Shipping
Before I go deeper into how to drop ship successfully, I want to make sure to cover all the benefits and downsides of drop shipping. That way, you have clear expectations of the good and bad parts that come with running a drop shipping business.
First I will cover the benefits.
One of the biggest upsides to having a drop shipping business is location independence. For the past 10 years I’ve been able to travel full-time because I run these eCommerce stores.
I’ve spent two years in Thailand, three years in Vietnam, and spent a lot of time in South and Central America. My home base is Austin, Texas – but because of these drop shipping businesses, I’m able to work from wherever I want to as long as I have an internet connection.
No Inventory Costs
A big benefit of drop shipping is that you have zero inventory cost, so it’s very affordable to get started. This low-barrier to entry is why I think it’s the best eCommerce model for beginners and experts alike.
No Warehouse Costs
Having no inventory means you don’t have to rent space for storing your products. Once again giving this type of eCommerce store a low barrier to entry.
Trust me, when you have to pay for warehousing, it’s very expensive.
No Handling Returns
One of the biggest questions I get is “what happens if your customer wants to return a product?”
The good news is that the return process is handled by the suppliers, not you. Each supplier will have their own return policy, so make sure you know it well. But overall It’s a pretty hands off process.
Gather Data While Getting Paid
While your store is live, you’ll be gathering information on the people that visit and buy from you. This gives you a deep understanding of the type of markets that buy in your niche.
You’re seeing what they buy and what type of questions they ask. Because of that, should you ever want to create your own product brand in that market, you’ll already know the audience intimately. And you were making money while discovering all this valuable information.
Very Easy To Scale
When I started in eCommerce, I was importing products. So whenever I wanted to expand my product line, I had to invest $10,000+ upfront and wait 45-60 days for the new inventory to arrive.
But with drop shipping, you’re able to find suppliers and quickly expand your product list without the upfront costs or huge lead time.
You Are Building A Real Asset
When you build your drop shipping business, you are building a sellable asset. Even if you are only generating an online store that makes $1,000 a month, you can easily sell it for $20,000.
And the truth is, it’s really easy for someone to make $1,000 a month with high ticket drop shipping.
Downsides of Drop Shipping
This model is fantastic, but it’s not perfect. That’s why, before you dive in, I want you to know all the bad parts of drop shipping.
When you’re importing, you’ll see around 50% profit margins but drop shipping is usually around 25%. That means you’ll make a lot less than importing. But drop shipping takes a lot less work than importing.
No Control Over Inventory
If you are selling for one supplier and their products are flying off the shelf, making you thousands of dollars a day… what happens if they run out of stock?
Then you are stuck waiting on the supplier to get back in stock. You have no control over this. There are a few things you can do to prevent this problem, like finding multiple suppliers, but it’s still a big downside to drop shipping.
Increased Risk Of Competition
Compared to selling your own product brand, selling for a supplier will naturally have more competition. That’s because you won’t be the only one selling those same products.
With your own product brand, you’d be able to get patents and trademarks to prevent people from selling anything too similar.
Competition isn’t necessarily a bad thing (up to a certain point), but an overcrowded market can be tough to sell in.
Is Drop Shipping a Proven Business Model?
My personal stores have done over $5 million in sales and many of my Drop Ship Lifestyle members make $20k+/month using the system I outline in this article.
With that being said, I believe high ticket drop shipping is definitely a proven business model.
The fact of the matter is that there are always going to be suppliers that need people to sell their products, which means there’s always opportunity to be a retailer.
And it’s not just my students that have found huge success with drop shipping. Wayfair.com makes $1 billion sales a year using mostly drop shipping.
Time and energy for building a profitable store
But most people want to know the practical side of drop shipping. That’s what my program is all about. Another commonly asked question is “how long will it take to get started?”
The answer depends on how much time you are committing per day and if you have a system you’re following. You can get up and running in a few weeks if you put in the work, or it could take you a few months.
We’ve also had people spend an hour per day and have a profitable drop shipping business in less than 2 months.
The best part is once you’ve gone through the process the first time, you’ll be able to do it quicker if you decide to build another drop shipping store.
What margins and profits you can expect
The average margin is around 20% after paying all of your costs. This is one reason I teach high ticket drop shipping with products that are expensive. My minimum is $200 items but I really think niches that have $1,000+ price tags are best.
When it comes down to it, it takes about the same amount of effort to sell a $200 dollar product as it does a $1,000 one, the major difference is you make less per sale.
A lot of people make the mistake of selling in scenario one and wonder why they aren’t successful. They are probably working with a middleman instead of a real supplier and are selling cheap products.
These middle men often don’t enforce MAP either, so you are looking at 5% profit margins as well.
This usually happens when you Google suppliers and think “oh i don’t have to call or do anything, I can just start selling.”
The second scenario takes you reaching out to companies and forming a relationship. But as you can see, it’s worth all that effort because you’ll make so much more for the same amount of effort.
Common Drop Shipping Mistakes To Avoid
As much as I love drop shipping, I find that it’s a little too easy to fall victim to some common mistakes. This can create frustration and lead you to quitting before you’ve ever made a sale.
To help you avoid these mistakes, I’ve laid out a few of the most common ones.
Mistake #1 Paying For Access To A Supplier
One huge mistake that people make when starting out is paying for access to drop ship suppliers. This usually happens when someone just Googles “drop shipping suppliers” or even a niche specific term like “Chandelier suppliers”. This method results in finding only middle men.
You can tell that these suppliers are middlemen because they will ask for you to pay upfront for access to their products. If they ask for an upfront fee, that is most likely how they make their money.
We want to work with legitimate suppliers and build relationships with them for the long term, acting as retailers for them.
Mistake #2 Working With Suppliers Calling Themselves Drop Shippers
This may sound counter-intuitive, but any suppliers that label themselves as “drop shippers” should be avoided. I only use this term to attract people when they are searching for this model, but suppliers that use it are likely middlemen.
You want to sell for suppliers who want legitimate retailers to sell their products.
Mistake # 3 Working With Suppliers Who Don’t Enforce MAP Policies
MAP stands for minimum advertised price. This means that when you’re approved for a supplier, they will tell you the lowest you can sell their products for.
This helps you avoid pricing wars with your competition, because you can only go so low. This ensures that you have a decent profit margin on all your products.
Without MAP, competitors will charge just above costs to beat you. This leads to having no profit margin and making very little revenue with your store.
Mistake #4 Trying To Compete With Offline Retailers
You can be profitable in drop shipping by selling for brands that make great products that people want. But you should never compete with brick and mortar stores because they will have better pricing and lower map policies.
Also, brick and mortar stores add more value to their customers than any eCommerce store, so avoid competing with them.
Mistake #5 Buying A Turnkey Drop Shipping Store
There are a lot of websites that sell turn-key businesses loaded with a bunch of products already. That sounds great, but you should never buy these sites. They are all clones made just to sell, instead of being legitimate stores.
If you find a store for a few hundred dollars, then it is a scam. Remember that a legitimate drop shipping business that makes $1,000 per month is worth about $20,000. So if you find a store under that, it’s probably a clone store that’s a waste of money.
I talk more about buying drop shipping stores in this video, check it out…
How To Sell Drop Shipping Products
There are three major platforms for selling your products. I’ve mentioned them above but I will reiterate here.
First there is eBay
One of the first issues with eBay is that most suppliers won’t let you sell there because it lowers their overall brand value. I think that this is a poor place to drop ship from.
Then there is Amazon
I personally don’t sell on Amazon because it’s risky. A lot of suppliers also won’t let you sell on Amazon. Your store can be crushed by bigger players coming in overnight. It’s hard to predict, and when a bigger brand moves into your space, there’s little you can do.
Lastly there is building your own store.
This is the eCommerce platform I suggest and here’s why…
Not Competing Solely On Price
When you have your own store, your visitors aren’t seeing your competitor’s price, only yours. Unlike Amazon or eBay where they can easily see everyone’s prices.
Additional Traffic Sources Become Available
When you’re selling on Amazon or eBay, they have their own traffic. But with your own store, you can use a bunch of different traffic sources. This gives you more flexibility with your marketing.
You Own The Customer
When you have a store on eBay or Amazon, you don’t capture information about your customer. So you aren’t able to market to them at all, you’re just hoping they return to your store.
With your own store, you can capture their information. That means you can send them emails about new products, promotions, and products they left in their cart.
It also means you’ll build an understanding of who your customers are so you can tailor your business to them, resulting in more sales.
You Control Retargeting And Remarketing
Once someone has already bought from you, they are more likely to purchase from you again.
And with customer information, you’ll be able to deliver ads to your customers across many platforms like Facebook, Google, Instagram, and Youtube.
That way, you can offer them the same item they abandoned in their cart or another offer.
Target Your Specific Buyer
You’ll find who your ideal customer is and tailor your store to that audience.
Unlike Amazon or eBay who have a wide array of items, you can focus down on the needs of your customers.
With this focused marketing you’ll have a much higher conversion rate.
Where To Build Your eCommerce Site On
Since my program is centered around having your own store, I want to go a little deeper into you options for where you can build it.
WordPress – WooCommerce
I’m sure you’ve seen plenty of WordPress stores because over 60% of websites are powered by them. But you may not have known that a lot of eCommerce stores also use this platform.
There a few different plugins that help you with eCommerce, but one of the most popular options is WooCommerce.
The issue with this option is that it’s self hosted, so you pay for a server and are responsible for the security of your site.
I started out on Yahoo Stores but can’t recommend it now. This platform is outdated, and I no longer use it.
This service is very powerful. It’s designed for more advanced eCommerce stores and is too expensive for what I teach. With niche specific stores, I wouldn’t recommend this option.
BigCommerce is a good platform, but I’ve run into some issues with their customer service, so I can’t recommend them.
This is the best platform and I like them for these reasons…
- You can build a gorgeous store.
- It’s super easy to control.
- They have great customer service.
- They’re extremely secure.
- They have an amazing app store that allows you to control how your website looks and functions.
- They take care of payment processing.
- Their plan starts at only $29 a month.
It’s for these reasons that I only recommend Shopify when building your store.
Just take a look at what you can do with Shopify.
This store was built in a day by our web designer. So you can see how great a Shopify store can look in a short time.
How To Find Content For Your Product Pages
No matter which platform you decide to use, a big part of creating an amazing online store is with awesome product pages.
But how do you generate product images and content without having the product or even having a supplier yet?
Thankfully, there are a few easy ways to find this content for your product pages.
Use YouTube Product Reviews
One of the richest sources for product content is on YouTube. All you have to do is search for product reviews and you’ll find a few common results.
First there are general reviews that give you the good and the bad of every product.
Next there are ‘unboxing’ videos, where they record opening the product and you get to see their knee jerk reactions.
Lastly, there are comparison videos. These are side-by-side comparisons of like products.
You can take the best part of these videos and post them on your website for instant content. It’s also a great place to get details and messaging for your copy on product pages.
Attend Industry Trade Shows
Another awesome source of website content is to attend industry trade shows. This is more for after you have your business running, but if you have the chance to attend a nearby event, you can get a ton of unique photos.
That way, when a supplier or your customers look at your store… it’s not just the same pictures that are on every site in that niche.
Ask For Testimonials And Pictures From Previous Customers
Once you start getting sales with your store, you should contact those customers and ask for pictures of them with your products. It’s also a great time to ask for testimonials!
That way, future customers will see that you have real customers that love your products. This is one of the best ways to build instant trust with your website visitors.
It’s also an awesome way to stand out from your competition with unique content, which will net you more sales overall.
Getting Drop Shipping Suppliers
I’ve covered a little on what type of suppliers you want to avoid, but I want to cover what type of suppliers you should try to work with.
How To Find Drop Shipping Suppliers
The first step is to pick a niche that you’ll be selling in. With this niche, you should be able to find competitors that are already selling those product types.
To find your future competitors, simply use Google and search your niche. Then you can look at the top websites and see who their suppliers are.
Once you find their website – look for a page called brands, suppliers, or manufacturers. These will be their suppliers and will become your suppliers once you have your store set up. Make sure to keep a supplier list as you go through the top results with Google Sheets.
Once again, when you are looking for suppliers, make sure to avoid these things…
- Don’t use supplier directories
- Don’t pay for access to suppliers
- Don’t buy a ‘turn-key’ store
How To Get Approved By Drop Ship Suppliers
Create An Online Store
The first thing you do is build your store on Shopify. The reason you do this is because no legitimate supplier will work with you without seeing where you’ll be selling their products.
This store is basically a demo store to show the supplier that you’re serious and have a platform to sell on.
Explain Marketing And Customer Service Plans
Make sure you can explain how you’re going to be marketing their products. It doesn’t have to be the most in-depth plan, but it needs to be competent and sound like you know what you’re doing.
Take time to explain how customer service is your priority and how you go about treating your customers right. Suppliers want to work with retailers that will help their brand, and having great customer service is a key component of that.
Follow Up Regularly
Suppliers are busy with their other retailers and managing their business, so don’t rely on them to get back to you. Persistence is important and shows them that you are serious about working with their brand – committed to being partners.
You may have to follow-up in a month or a week, or wait for them. The most important part of this process is to keep great notes. This way, you can keep track of who you need to get back to and when.
Also, if they say they’re going to call or send you something, always ask for when you can expect it.
Selling Products Without Inventory
When I say that I’ve sold millions of dollars in products without ever touching them, it can seem a little weird…
The idea that you aren’t an expert in the products you’re selling makes some people anxious. But it’s not as hard as it may seem.
How To Answer A Customer’s Questions
The first issue people run into is how to answer questions about your products. A lot of customers will ask questions about your products, but how do you help them if you know very little about your products?
I found that it comes down to one response, “That’s a great question, let me get that answer for you. I want to get you the best possible answer.”
This way you don’t lie to the customer. You’re going to contact the manufacturer and get an accurate answer.
I am a big fan of having a phone number on your site and it’s what I teach in my program. Having a number builds trust with your company, and taking time to find the correct answer will give your customers the confidence to buy from you.
I used to be anxious about putting a number on my site, worried that I wouldn’t be able to give my customers the right answers. But as soon as I did, my sales increased. So it’s definitely worth doing. It was the biggest conversion increasing optimization I’ve done to date.
How To Ensure Your Products Are High Quality
With low quality products, you’ll have a huge amount of returns and complaints. This will lead to your store failing. So how do you make sure that your products are good without every seeing or touching them?
The way I test a new supplier is to look up reviews on that company. I look on Google and see the reviews on both the products and the company itself. If they are overall negative and mostly talk about bad quality, I know to skip them.
This has cut down on most of my issues of quality. If I see that a potential supplier is poorly reviewed, I can avoid working with them and save the headache of dealing with bad products.
How To Handle Returns
Returns are a big source of stress for people starting out. They get caught up on how they will handle them and how to answer questions about the return process.
But there’s no need to be nervous about returns. All you have to do is follow your supplier’s return policies. When a customer wants to return a product just tell them, ” I’m sorry about your issues, let me double check the return policy and I’ll get back to you.”
Then you’ll see what the process is for returning products with that supplier. Sometimes there’s a restocking fee, or sometimes the supplier will ship it back or will have the customer pay for shipping. It all varies from supplier to supplier.
It’s unlikely that you’ll have this part of your business absolutely perfect from the beginning. Being able to adjust and grow as you build your business is one of the keys to success. If you’re unable to work in that manner, having your own business may not be for you.
How To Know A Product Is In Stock
With high ticket drop shipping, you’ll have a lot more people checking in on whether you have product in stock. They’ll want to know that after they pay $2,000, their product will be on the way.
Finding out if products are in stock differs for each supplier. The majority of your suppliers will give you access to a report on their inventory, usually in a spreadsheet. They’ll show you the stock keeping units (SKU) numbers and how many they have in the warehouse.
This sheet is the first place you’ll look when determining if the product is in stock.
In this scenario, all you have to do is open the inventory sheet and you’ll know if it’s in stock. Then you can just let your customer know right away.
Another common scenario is having access to the supplier’s database. They will provide you with a login, and get similar information to the sheet. This database is usually updated live, so you will have the most current information at all times.
Some suppliers won’t give you either of these options and you’ll have to call them directly. In that instance, you’ll just tell the customer that you’re going to check with your warehouse and that you’ll call them right back.
But with high ticket items, most customers are more than happy to wait for the right answer.
How To Know When A Product Will Ship
Congratulations! You’ve made a sale…
You’ve received their money, now what happens?
The next step is like any other online shopping experience, a confirmation email is sent and then shortly after, a tracking number for their package.
The type of suppliers that I recommend will automatically send you the tracking number after they ship it. Then all you have to do is send that number to your customer through Shopify so they know it’s on the way.
But the best customer service is achieved by being proactive. That’s why you should try to give your customer their tracking information before they even request it.
One of the best ways to get ahead of these customer calls is to actively track every order that comes in. I keep my customers organized in a Google sheet.
It not only has their order status, but it also includes:
- When they placed their order
- If it’s been shipped
- Their tracking number. If you don’t have it, who to contact for that info.
- The supplier for their ordered product
This sheet will help you to keep on top of all your orders and provide amazing customer service. And remember, customers are willing to wait for the right answer with more expensive products.
How To Handle Bulk Orders
In some product niches you may run into an opportunity to sell very large bulk orders. The biggest order that any of my stores ever received was worth $65,000, which is pretty rare.
In these scenarios, the customer can’t just visit your website and purchase with their credit card. If they want to put in a bulk order, they will usually call you up and ask for a bulk discount.
With an order that large, you can of course offer them discounts, but it’s a specific process.
Here’s how I handle it…
First, you will contact your supplier and check that they have enough products in stock to fulfill the bulk order.
Then you’ll want to work with your supplier on getting that discount for your customer.
This is also a chance to negotiate a profit margin specifically for this transaction. If you’re about to get a $60,000 order for your supplier, then it’s okay to ask for a bigger profit margin for getting such a huge order.
The final step is to coordinate a wire transfer with your customer. Because this order is so big, you can’t really use credit cards.
So talk to your customer, get their order size down and the timeline for delivery. Call up your supplier and ensure they have enough products to fill the order, then negotiate a profit margin and bulk discount.
Lastly, take those details and put together a custom quote for your customer.
It may sound like a lot, but for the amount of money you could make on an order like this, it’s worth it!
How To Attract Customers
After you’ve picked your niche, built your store, and secured your drop shipping suppliers… you’re ready to attract customers to your website.
There are a lot of different traffic sources that you can use, but some are better than others. I’ll give you a brief overview of some of the best eCommerce traffic sources, so you can attract customers to you drop shipping store.
The Most Profitable Mindset
One of the most important lessons for eCommerce beginners is that you are looking for quality over quantity when it comes to website traffic. You don’t need to have thousands of people visiting each day, you just need the people most likely to buy.
You’re never going to compete with huge stores like Walmart or Amazon and their millions of visitors. Remember, you are selling in a specific niche to be the best source for those product types.
A niche gives you a focused segment, which will help you precisely attract the people who want to buy your product. So again, focus on attracting the right traffic, not the most.
Maximize Your Profits With Efficient Traffic
Your goal is to attract visitors who have what’s called buying intent. By the time they see your ad, they should already be aware of your product type and have a desire to buy.
Starting out, it’s very common for people to get excited because they’re getting thousands of visitors.. Only to be disappointed, because most of that traffic was made up of random people that stumbled upon their drop shipping store.
How many people visit your website is an important metric for your business, but it is far from being the most important one.
Your main focus will be to target people that are about to make their decision to purchase. If you were 100% efficient, targeting only the traffic that would result in a sale, you would be happy with 10 visitors a day. Because if you follow my high ticket drop shipping model, you’d be selling things for $1,000 each.
You won’t be able to be that precise, but know that you can be very profitable with low traffic as long as it’s the right traffic.
Attracting Buyer Traffic
There are so many different ways to attract buying traffic to your drop shipping store. I could spend a few hours going over the ins and outs and how I use them in eCommerce. However, I want to focus on some of the best traffic sources for eCommerce.
This is one of my favorite traffic sources for drop shipping. Whether you realize it or not, you are very familiar with this traffic source already.
Whenever you search for a product on Google, I bet you’ve seen a bunch of pictures and prices show up above your results.
For instance, this is what I saw when I searched for ‘chandelier’ on Google:
When done right, Google Shopping is one of the most targeted forms of advertising (and the most effective). Your ad is only shown to those who are looking for your specific niche, which means they are likely in the buying phase. If they click on your ad, they are highly interested and ready to buy.
This search engine is less popular than Google, but these ads work just like Google Shopping. Your traffic will be looking for your niche terms while in the buying phase. The best part about it being less popular is you usually pay less for ads compared to Google Advertising.
For a side-by-side comparison, here are the results for ‘chandelier’ on Bing…
Facebook Advertising is a little dangerous for beginners because they use it completely wrong.
For drop shipping, Facebook Ads are a poor choice if they are used as the first contact with a potential customer. When you use this platform cold, you aren’t targeting people that are ready to buy. Instead, you are randomly exposing people to your drop shipping business who’ve shown some interest in the general niche.
While I don’t recommend Facebook Ads for your first touch point, I do think it can be a powerful tool when used correctly.
I personally use Facebook Ads to retarget people who’ve visited my website or abandoned a shopping cart. That way, I am targeting people that are close to buying and have a good chance of converting them into a customer.
If you want to use Facebook Ads to attract brand new customers, it’s a more advanced process. It involves building content or promotions that will capture their info. Then you can email them and build up your relationship. Finally, they will be in the buying phase and you can sell to them.
I’ve created a whole course about building this process out (aka building sales funnels). It’s a pretty in-depth process that allows you to automatically scale your business, but is beyond this guide.
This platform is an easy way to get a ton of traffic for free. All you need to do is consistently post pictures relevant to your niche and include your products.
There is also a paid advertising component that you can use, but even if you organically post, you’ll attract a lot of traffic. One of the most amazing parts is that you can sell your drop shipping product directly through Pinterest, linking directly to your store.
Organic With Search Engine Optimization
Attracting organic traffic is another topic that I could spend a ton of time talking about. But in this guide, I’ll just say that having specific niches make it pretty easy to rank high on Google. The key is to focus on very specific terms likes product titles, manufactures, or SKU numbers.
With search engine optimization (SEO), we don’t want to go for highly competitive keyword traffic. That isn’t the traffic with the highest intent to buy.
If a customer is searching on Google for a generic term like ‘surfboard’, they are at the beginning of their buying process. They will likely do some research and then decide on what type of surfboard they want. We want to have the keywords covered for the second stage. So we will focus on product names, manufacturer names, and SKU numbers.
I cover this in much greater detail in my eCommerce course Drop Ship Lifestyle.
One great way to attract more traffic is by creating content for other companies or guesting on podcasts. You’ll want to find blogs and podcasts that fall into your niche. If you get the chance, these audiences are perfect to be exposed to.
Most of the time, you will create the content and they will link back to your drop shipping store. This will give you a lot more authority on search engines and generate more organic web traffic.
Advertising On Other Sites
Another way to generate some traffic for your drop shipping business is by buying banner ad space on blogs and sites in your niche.
First, you’ll research potential websites that fit within your niche. Then you’ll reach out and rent some advertising space. Finally, you’ll create a graphic to be placed in your spot.
This is a little oversimplified, but most sites will give you guidelines and you can get graphics made on sites like Fivver for pretty cheap.
Running A Giveaway On Social Media
Social media platforms like Twitter, Instagram, Facebook, and Youtube can be powerful tools for attracting buyers.
Just like I mentioned with Facebook advertising, this strategy is a longer sells process. It all starts with offering a free gift that gives $25-$50 off per order. That should entice the person who sees your social media post or ad to sign up.
Now you’ll know that they are close to buying, because they are looking for a discount on your products.
This strategy is only effective on items that are over $1,000. So make sure you specify that they can apply the gift card on items of that value or more. It will cut a little into your profit, but overall you will have increased sales.
Plus, you’ll capture the information of those who don’t buy, so you can continue to message them with email and retargeting advertising.
I particularly like this strategy for businesses that just launched. Try not to do this promotion that often or your audience will expect it and it will lose its effectiveness.
Those are some of the ways you can attract buying traffic. I dive into a ton more detail on traffic sources in Module 7 of my Drop Ship Blueprint… so if you want to know more, I recommend you join!
Now that you have an idea of how to attract customers to your website I want to cover a little about making the most out of your traffic.
Making The Most From Your Drop Shipping Traffic
You’ll be putting in a lot of time and effort to attract buying traffic, which is why you need to make the most out of every lead you capture.
The end goal is to get your visitor on the checkout page and for them to push that buy button. And if you want more people to click buy, you’ll need to focus on what’s called lead value optimization.
I give you all the tools to make the most from every visitor inside my eCommerce course, Drop Ship Lifestyle. Once you join, you’ll be able to see all tactics I’ve learned over the years. These tools will help you optimize and scale your drop shipping business.
My goal with Drop Ship Lifestyle is to give people the training to live a life of freedom through eCommerce. And now that you’ve reached the end of this article, you should have a firm understanding of my process for building profitable drop shipping businesses.
If you want the exact steps for building a profitable drop shipping business, then you should check out my full course Drop Ship Lifestyle. I show you the same process that my 8,000 members have used to launch successful eCommerce businesses.
- Drop Ship Lifestyle Blueprint v6.0
- Adwords for eCommerce Course
- Shopify Design Course
- DSL Shopify Theme
- DSL Shopify App
- Fast Business Forum Access
- Priority Support
- Selling Your Store Course
- Paid Social Traffic Course
- Supplier Directory
- Outsourcing Course
- Doing Business Abroad Course
Plus, we have an ‘Done For You’ option that includes an optimized Shopify website, social media pages, 12 months of private coaching, and a ticket to our annual retreat. All this adds up to you reaching your goals much quicker.
Have questions or comments? I would love to hear them in the comments below!