We know that there are a number of sellers using inkFrog who count drop-shipping as an important component of their business model—and that at any given time, new sellers are considering entering e-commerce via drop-shipping.

Drop-shipping is a constantly moving target, however—particularly with the speed at which e-commerce is evolving today and the number of new entrants who are always looking to give drop-shipping a go.

Here are five timely tips for those looking to start drop-shipping in 2019.

Competing on price is no longer a winning strategy for most drop-shippers. Instead, try competing on value—the value of the entire experience that you provide. (Image: © gustavofrazao / Fotolia)

1. Basically forget about competing on price.

Not so long ago, drop-shipping direct from China was a key strategy that sellers used to undercut domestic competitors on price. Long shipping times and worse customer service were offset by direct import pricing that was significantly less expensive, enabling both high margins and happy shoppers.

Those days are over.

The China wholesale supply chain is now firmly in place for sellers of virtually every size, meaning that drop-shippers are now competing not against sellers that pay much more for their inventory, but sellers that pay less—and can often deliver faster thanks to on-shore inventory.

If you're looking for drop-shipping product(s) that will enable you to undercut the market with a reasonable margin, you're going to look for a very long time—and if you discover one, other sellers will soon jump in and undercut you, destroying any margin you had.

2. Instead, compete on aspiration, lifestyle, personalization, and marketing.

Take a look at our previous post on e-commerce trends and note the mention of personalization.

For drop-shippers, this advice counts double. You can still earn the sale as a drop-shipper, but you'll have to offer something other than lower prices. In most cases, this something will be an appealing "bigger picture" that it's your job to assemble:

Want customers at any price? Delight them with who you are, what you do, and the pleasure that you take in serving them. Preferably on social media. (Image: © Photographee.eu / Fotolia)
  • One-stop shopping for shoppers that fit a particular profile and have particular interest(s)

  • Aspirational marketing and branding that speaks to lifestyle and personal identity

  • Convenience and ease—both in finding your products and in completing the purchase

  • Anything else you can do to build trust and excitement

The last bullet point matters and is really what we're talking about with our next two tips.

3. Build your brand and audience relationships on social media.

As a drop-shipper, you're probably small—a one- or two-person operation. You're less well-positioned to buy and warehouse in quantity or to compete on price, but as a sole (or small band of) decision maker(s), you're better-positioned to nurture a brand and speak directly to your audience.

In the era of social media, this is no small thing.

Don't think of your business as the collection of products that you sell. Your business is your brand and your voice; the products are a part of your offering, but not all of it.

Begin to build and nurture an audience by reaching them on YouTube and other social media channels. Nurture a relationship with them. Show your work and invite them to see and understand your business—and the fact that you want to serve them.

This personal relationship is more than able to pay off in trust, loyalty, and sales.

4. Focus on making your shipping policies passable.

Shipping times are becoming more and more important in e-commerce, with larger retailers and marketplaces now angling to reach same-day delivery and "economy" 5-7 business day methods now seen as "slow."

Paying customers waiting a month or more for products stuck in shipping yards? They're not going to be repeat customers. Find products and suppliers that can get reach your customers in less than seven business days if you want to compete. (Image: © Idanupong / Fotolia)

So where does this place you if you're offering 28-40 day delivery from overseas? Directly in the crosshairs of shopper impatience. When shoppers could save 50 percent or more by waiting a month, some would. With the lower margins of today's market, unsuccessful sellers ask shoppers to pay nearly as much, or in some cases more, to wait months instead of hours.

That's not a winning proposition.

You're rarely, if ever, going to be able to compete directly on shipping policies with sellers that have on-shore inventory. But what you can do is work harder to hide some of drop-shipping's dirty laundry. Go through your product and provider list and:

  • Eliminate or consider backgrounding any instances of extended shipping times, focusing instead on those that can be fulfilled via air in domestic "economy shipping" delivery windows of a week or so, where at least you'll be in the ballpark

  • Eliminate shipping costs to the buyer by labeling everything as free shipping, then marking up prices as needed, relying on the strategies above—instead of price—to generate sales

Again, as a drop-shipper, you're never going to win on shipping overall, but there are steps that you can take to at least avoid losing entirely on shipping, and 2019 is the year to take them.

5. Make customer service a top priority.

In the days when price was the key benefit to drop-shipping, customer service was also seen as a bit of an afterthought. After all, consumers came to drop-shippers to save, and part of what they were willing to sacrifice was a smooth experience.

If you're sensing a pattern here, it's because there is one. Those days are gone.

Do your best to take joy in customer service—these are your customers, after all—and to bear the costs and delays yourself, rather than pass them on in each individual case. You'll be rewarded with loyalty, word of mouth, and repeat sales. (Image: © zinkevych / Fotolia)

With Amazon in particular providing stellar customer-centric service at stellar prices—and eBay trying hard to follow in Amazon's footsteps—customers have come to expect an online buying experience that challenges the in-store buying experience for convenience, trust, and safety.

They expect:

  • No-questions returns for weeks after the sale

  • Immediate refunds or exchanges without restocking fees

  • The ability to reach someone right now, as they type or call, to address concerns and solve problems

  • A pleasant and cheerful interaction throughout all of these things

Our advice? Provide these things with confidence. Yes, it's more painful for a drop-shipper up front. No, you're probably not going to build a sustainable drop-shipping business in 2019 by skimping on them.

Grit your teeth and eat the costs in time and dollars.

Remember that you're no longer focusing on pure price competition, and you will have to adopt the other strategies discussed here to make these kinds of costs bearable for your business. Do it and consider the change to be an investment in the viability and profitability of your future.

You Can Do It!

Yes, drop-shipping is changing. No, it's not the same low-touch, set-it-and-forget it business model that it once was. It's hard work.

But those who say that drop-shipping is dead are wrong. It isn't—instead, drop-shipping is growing up. It's not an also-ran any longer; it's an established retail business model—requiring you to provide all of the things that an established retail business provides:

  • A clear target audience

  • A story about why people should buy your product(s) and do so from you

  • Quality, convenience, and value (which, note well, is not the same thing as price)

  • Good customer service

  • The flexibility to grow and adapt to changes in the retail landscape

If you're able to find a way to do these things as a drop-shipper, you'll thrive in 2019—and beyond.

Want tips + tricks?
Join the Newsletter

Get started for free today!

Try it free

Join the 200,000+
using inkFrog!