Three critical ingredients for the success of your Dropshipping Store
Posted On April 11, 2019
In the previous blog post, we discovered the fundamental apps and platforms for getting started with Dropshipping. Now we will go into details focusing on elements like marketing, pricing and customer support. Getting them right from the start will increase your success rate and allow you to learn what works best for you in order to avoid some of the mistakes that I made.
Before starting my own shop, my marketing knowledge was close to zero. I never paid much attention to this topic, since as an engineer you are most focused on the creation of the product. Lunching my first shop and seeing how hard is to make sales without an audience, pushed me to learn quickly and adapt fast, before spending all my budget.
Good marketing skills can make the difference between the success or failure of a business. You have to understand the target audience in a way that you can capture their interest, engage with them, and convert them to paying customers. This is much easier said than done, which is why it is important to learn different strategies and tactics, and know how to put them into practice. In doing so, you are able to weigh the cost and benefit of each option and choose the best one.
The products you sell are most likely not exclusive to your store and like you, there are many other stores who offer them. Giants like Amazon or eBay have similar products whose brand and reach is much bigger than any brand new store. Even if at the start the success rate is not that high, the way to compete and succeed in today’s markets is through ‘clever marketing’. You have to define unique ways that make buyers trust you more than other sellers. e.g. free shipping, excellent customer support, eco-friendly goals, to name a few. The tactic that works the best for me is personalized direct messages on Instagram. I ask potential customers for feedback on the store or on the products and in exchange, I offer a discount code for their time and effort. Implementing some of their feedback has helped improve my store, and to my delight, many used the discount code to make their first purchase.
In the e-commerce industry, two of the main channels for advertising products are Facebook and Google. I had zero experience with either platform. In my mind a budget of 100 euros would be enough to get me started on both platforms. However, reality hit me very soon when I saw not only how high the costs for each click were but also for customer acquisition. Needless to say, my budget was gone within a few days and I was left with one of my first, most valuable lessons learned.
I learned about the concept of impulse buying and how the discovery process differs between users on Facebook and those on Google. For example on Google, the potential customers are already searching for something specific. The key element here lies in selecting a targeted but variable set of key-words to define your product, increasing the chances of your website being suggested as a result.
On the other hand, Facebook is a completely different kind of platform. It allows you to target not only the interests of the audience but also uses people’s behavior like “engaged shopper” or “frequent traveler” to show related ads.
The first big mistake I made when I started advertising my shop was going directly to Facebook conversion ads. These costed me hundreds of euros and got me only two or three sales.
My naive thinking was:
“I want to make sales fast. Therefore, the type of Facebook campaign that made sense was: a conversion campaign that uses the purchase event for target optimization.“
My store was brand new, so the traffic was barely around 40 daily visits and unfortunately 0 sales. With this input, there was no way the Facebook targeting algorithm could ever work. As a result, I was getting frustrated because I had paid so much out to Facebook and I was not seeing any results from my investment. I came to learn much later, that in order for such a campaign to work, Facebook needs you to already have incoming traffic and multiple daily sales.
I learned another valuable lesson from this, so my advice when you are first starting out is:
Understand the differences between the multiple campaigns types available and their objectives. Work your way up. Start by building and increasing brand awareness then increasing traffic and finally increasing conversions. DO NOT go directly to sales.
When I started the store I was dreaming big, I wanted to keep the prices as low as possible while earning a profit of at least $5 per sale. After my first sale, I realized that I ended up only with around a $2 profit. This also made me realize that I had not taken into account some of the additional expenses in my initial price. (e.g. PayPal currency conversion fee, specific taxes for certain countries or regions.)
This turned into another valuable lesson learned.
The price of your products must take into consideration:
Shipping and acquisitions costs
Currency conversion fees
Promotions or special sale discounts like on Black Friday
Expect customers to have questions or issues that will require you to make them feel heard and happy. Be proactive; give the customers the information they need in advance so that they become recurrent customers. Create a dedicated FAQ page, a “Refunds and Delivery” page, a “Terms and Conditions” page and add detailed product descriptions.
I found it interesting that even with these pages being available to everyone, the majority of shoppers prefer to contact the seller directly, which is why a good customer service line is of utmost importance. We were most active on Instagram with 90% of questions coming in as direct messages. For us, the most common question was regarding shipment status. Even with having a dedicated system sending email updates to buyers, some still ask on a daily basis for the exact location of their purchase and the estimated delivery time. How we handled this? We proceeded to not only add a dedicated page for the “average delivery time” of our products but also added it to every product page to avoid disappointing customers that have a time-sensitive need, like a birthday or a special event.
If you want to get some practical experience in the world of entrepreneurship with a small starting budget and you like learning and trying new things, then I recommend giving Dropshipping a try. Even if you don’t make a six-figure business from the start, which you probably won’t, it will give you the insights and the challenges that you will need to understand in any business. Experiment, measure and most importantly have fun.
For more insight and deeper sources of knowledge check out this resource list: