Time to get a little OCD…
Location: Little village apartment in Forli, Italy. I have been spoiled by a friends family here for a week, and managed to spend time at the seaside, Sienna, Venice and every nice little village in between.
Plans this week: A week in Denia, Spain, with a big French family (and their friends) who have invited me to come and crash for a week. Not sure how much blogging / business set up will be done, but I will definitely be trying to follow my own rules of using the mornings to get the important tasks completed.
Time to Choose Your Supplier:
So you’ve got a product (or a few) in mind, you’ve scrolled through your Dropshipping or manufacturer hubs and noticed a whole bunch of suppliers offer what you’re looking for.
Don’t rush. Just because the first supplier may have seemed like ‘love at first sight’ it is worth delving deeper, and thinking about ‘your future’.
Don’t leave 50 tabs open
The smartest thing to do at this stage is keep clear records. Start an Excel table and for every product, every variant, and every supplier you look at – record their name, their URL, their price, their reviews, the date you ordered any samples, the date you contacted them, the date they replied and so on. (Disclaimer, maybe don’t actually do this for relationships, that’s pretty full on).
Not only will this make it easier for you to decide on your supplier, but if down the line your supplier seems to vanish into thin air, you have records to go back to so you can quickly find your next best replacement. It happens, so best be prepared. (Again, let’s stop the relationship comparisons now, it was just a bit of click bait, and it got you!)
In general, to try and reduce the overwhelming amount of options of suppliers available on platforms such as Aliexpress, I place emphasis on 4 main factors. I usually try to give each of the factors a score out of 10, and then use that to help decide on my almighty ‘chosen one’.
- Communication with the Seller
- Product Price
1. Product reviews:
For me reviews are probably the most important factor to check. It is possible you can start a business selling average quality products from an average supplier, and you might earn a few quick bucks if they initially start to sell.
However, the reality is your ongoing business is going to come from satisfied and happy repeat customers. With a crappy product, you will only end up with complaints, refund requests, bad reviews, and a business that turns into a constant headache.
The point of these businesses is minimal work, not 4 hours a day responding to complaints from the likes of ‘Suzie’ in Nevada who wants a refund of $6 and a full written apology from the CEO of your company because the product only lasted 2 weeks…
Should you be testing the products yourself?
In addition to product reviews, I have actually ordered samples from a number of suppliers myself. This has been the biggest ‘start-up cost’ for the business thus far (PS, I’ll be revealing all of my start-up costs in a blog soon – it’s not much).
As I am constantly moving and have no postal address, I’ve had the samples ordered to friends and family to test out for me. This is not necessarily required if you are wanting to get the business up and going straight away. However for me, as there is a good chance that the majority of my first customers will be friends and family, I wanted that extra confidence that the product people were buying from me wasn’t going to be complete crap.
On top of this, it means I will have the opportunity to get professional product and promotional photos which will help increase sales in the long term rather than using the average photos provided by your supplier.
Again however, if you’re wanting a quick start, and want to just test the market and demand, there is nothing wrong with checking the reviews, taking a risk, putting the product online and waiting to see how it goes. If the product turns out to be crap, no stress – apologise, take it down and find a new one. (One of my favourite pieces of advice: Don’t wait for permission: Act first, and apologise later. Matches up pretty well with “The biggest mistake you can make is to take no action at all”)
2. Product Price
This one is obvious. You need your product to be competitive. Search your competitors, analyse their quality, price, and product value. Keep in mind all costs when working out your profit margin, for example, the fact it may cost you $5 on Facebook/Google Ads to acquire each sale.
Tim Ferris, in his book Four Hour Work Week, suggests that you should always aim to find a product which you can apply an 8-10 times mark up. Personally, as much as I’d like to follow this advice, I don’t think this is quite so feasible anymore, largely due to the huge increase in online commerce competition since suggesting it.
If you can find a product you can buy for $10 and justify selling for $100, well then, don’t wait, go! With solid branding, really anything is possible.
Less sales, equal less customers, equal less crap to deal with in customer service. Would you rather deal with 1,000 customers a week at $1 profit per customer, or 10 customers a week at $100 profit per customer. Makes sense.
However it is very difficult to find a product where the quality is so high, and the competition is so low, to be able to justify such a mark up – this is where you will really need to find that sweet spot in the world of ‘long-tail niches’ (blog for another day).
If (in the likely situation) you are not able to sell your product for such a price, you should still be aiming for a sale price that is as high as possible with your category of product. This will also allow you some flexibility in your margins to offer discounts, and will also hopefully simultaneously give your brand more ‘perceived’ quality than the competitors.
3. Communication with the seller
Prepare the aspirin, because here come the notorious headaches of Dropshipping.
Communication with your sellers is rarely easy, and to be honest, it is more often than not a complete nightmare. Don’t expect to receive emails with clear and succinct offers on wholesale prices, discounts, and guarantees of quality and service. Expect the opposite.
You are dealing with companies who serve many customers just like you, and you are yet to prove you are going to provide them with any significant value at all.
If you can find a supplier who can communicate effectively, both with sufficient English skills and also who understands your wants and needs, it will be extremely helpful if there are ever product or order problems.
Sometimes the supplier will not understand you at all, and you will be left tearing your hair out at the fact they offer the perfect product and price, yet they cannot respond to you with anything more than “Hi Friend, Yes, Place Order And We Send You Via China Post. Thanks Dear’. (Real example)
This is expected: persist for a while, accept defeat if you cannot get the assurance you need and then move on.
Below is an example of one average response received (partly caused by my overly ambitious message with too many questions) and in contrast, an ideal response I received (in fact, the most promising response I have ever received).
Compared with Good Response
And finally, Shipping. The biggest frustration with Dropshipping is often that the shipping will take longer than desired. Unlike if you were packing and shipping the items out yourself, you will not be able to guarantee your customers next week, let alone next day delivery.
This is part of the deal of Dropshipping. If you want to run the business from home, order bulk items (increase your risk), spend hours picking and packing small value orders, and line up at the post office twice a day to ensure your customers get the order on time, go for it. (Not meaning to be overly pessimistic, just highlighting that this model is all about setting up a lifestyle based business).
Alternatively, you can choose your suppliers based on the shipping methods they do offer. If searching on Aliexpress, search for suppliers who offer ‘Epacket’ shipping to the countries you intend to target. This is the most reliable form offered, with full tracking, and often will arrive within 14 days if the supplier is quick with the processing times.
Many suppliers may charge for this, but in my opinion, it is worth it. When we are small businesses trying to compete with the mega-giant of Amazon who uses its army of metal and machines to zap your order in front of you before you can look up from your keyboard, we need to at least try to offer some value in terms of waiting times.
It’s not perfect, but with some creative copywriting on your website, and responsive and assuring customer service, you can make it work.
It was time to get some social media traction rolling, and I will be blogging about the best ways (and the worst) to do that soon.