In this chapter, we will discuss the common issues, which you will probably face when you are running an online Dropshipping store. In the beginning, you can handle everything by your self without any problems. But, as your business grows, you will come to a point where you run out of your capacity or time to handle everything. So, you need to find other avenues to solve and manage these issues to assist the growth of your business.
This guide is the last guide of the beginner’s guide to learn Dropshipping.
How to Grow your Dropshipping Business
- Managing the Store’s Inventory
- Managing the shipping issues
- Shipping rates
- Selecting a carrier
- Managing Customer Support
- Tracking the support requests
- Handling returns and refunds
- Handling chargebacks
- Building a Support Team
- Customer support representative
- SEO experts, Copywriters, Graphic Designers and Marketers
1. How to manage your Dropshipping store’s inventory
One of the most significant advantages of Dropshipping is that you don’t have to stock physical products at your site. But that doesn’t mean you can avoid maintaining a record of the product listings you have. As an online Dropshipping store owner, you must have to manage an inventory record for your product listings.
Keeping track of the stock levels, and price changes are essential as cancelling orders for out of stock products can harm your business reputation. Also, if you do not track the price changes for products, you may end up losing money on products with small markups.
When I started my first online Dropshipping store, I kept all the information for my product listings on an Excel sheet. There I had links to the product pages, supplier contact details, supplier stock levels, product cost and selling prices. I have updated the stock levels on a daily basis, and I have re-evaluated the product prices on a weekly or monthly basis. Even though these works fine at the beginning, when I add new products, it was a real hassle to keep track of everything.
But, that effort let me learn lots of the ins and outs of my business. Still, I prefer to have an Excel sheet of my best-selling products and do the same process all by myself. So, my recommendation is, in the beginning, even you decide to use an automated inventory control tool, try the excel sheet process too. Once you have gained enough experience and knowledge, you can seek different inventory management solutions. Also, if your suppliers provide any solution for inventory tracking, you can readily use their solutions too.
2. How to manage Shipping for a Dropshipping store
E-commerce Dropshipping is often operating with global markets. When you start handling international shipping, it can bring in a lot of complications. But, thanks to the Dropshipping business model, you only have to manage the tip of the iceberg. The supplier usually handles hardest parts of the shipping complications.
Shipping rates for dropshipping
So, what are the issues which you would have to solve? First, let us see what the different shipping rates which you can offer are.
Flat rate shipping is the most common type of shipping option offered with dropshipping stores. It means that the customer has to pay a fixed flat shipping rate for any item(s) he or she purchases, regardless of the price, size or destination. Also, for small products, you can include the shipping cost to the product price and list your products with FREE shipping option. Offering free shipping would help you to attract more customers, and increase your conversion rates. Flat rate shipping can be easy to implement without any complications. But you have to carefully try this shipping option for a few numbers of orders, and re-evaluate your profits. Especially if you sell items, which vary in size and weight, offering flat rates can incur losses.
Per category rate is another easy, but much safe way of implementing shipping rates. This method can be bit complex than the previous method, but it offers you control to implement different shipping rates for different categories of products. So, you can calculate the shipping rates for different products and create categories with varying rates of shipping.
The real-time rate is a complicated method of calculating and implementing the shipping rates. But, if you sell high-value products or products which are larger in size, and with a higher weight, it is better to implement real-time shipping rates. In real-time shipping rates, you have to generate a customised shipping quote for each of the products you sell. There you can consider the size, weight and destination factors to provide an accurate shipping rate.
Selecting a carrier for dropshipping deliveries
You dropshipping supplier can offer different shipping quotes with varies supplier options. If you are new to the Shipping, you might get confused when selecting these carriers. Some of these quotes can be expensive, and some can be really cheap. So, how can you decide which is the better option?
Below I have listed down the most common shipping options you would see in this business.
In Dropshipping it is always better to select a shipping option which provides a tracking ID. So, you can readily provide this tracking ID to your customer with order confirmation, and also you can use this ID with any dispute handlings.
The quotes from the above carriers differ based on the destination country, package size and weight. For example, E-Packets from China is a cheap and fast method to send envelope size packages to the USA. If you have large packages, UPS/FedEx quotes can be better than the rest of the services. But if your destination is outside the USA, their prices can be costly. Likewise, the best shipping option depends on the product you sell and your market. In the beginning, you can try different shipping options and evaluate the costs and benefits to identify which works for you.
3. Managing customer support for a Dropshipping store
When your business grows, and when you start getting a higher number of sales, it is inevitable that you would get more and more customer support requests. Your customer would begin asking for delayed shipments, refunds, wrong products etc.
Tracking the support requests
In the beginning, you can just track all these support requests on an Excel sheet, and use a business email to reply to them. But as your business grows, it makes really hard to track and handle the support requests on an Excel manually. So you might have to consider using Customer support software. This software can handle automated tracking process for all the raised tickets, and you will never miss and support request. It looks professional to use a ticketing system for customer support, and it can help you not to get any angry or bad reviews.
Customer support software can cost you some money. But, depending on the stage of your dropshipping business, using customer support software can be a perfect investment.
Handling returns and refunds in a dropshipping store
Most of the beginners use the auto-generated return, from their e-commerce store building platform. Sometimes they don’t even read this until they get an actual return. But as the students of EcommerceBuff, we are going to learn the correct way of handling the returns and refunds.
You can use an auto-generated return policy as a template to build your own policy. Apparently, your return policy should depend on your supplier’s policies. For example, if your supplier offers a 30-day return policy, unless you are ready to bear the loss, you cannot provide 40-day returns.
You have to be familiar with the return policy and conditions from your supplier before you start selling. Sometimes they might not accept returns. Or they might charge a re-stocking fee with returns. But I do not suggest to forward an unfriendly return or refund policy to your customers. Your return policy for your customers should always be customer friendly. Try to cover as much as possible from your supplier, but you have to eat the excess losses and make your customer happy. With a customer friendly return policy you might lose some profit with returns, but consider that as an investment to attract more returning customers.
In case of a damaged product, most of the suppliers might send a replacement without asking you to return the damaged product. If so, you can ask for some photos as proofs from your customer, and forward those photos to your supplier and claim a replacement. Also, if possible try to identify the cause of damage with such incidents. If the reason is poor quality packaging, you can inform the supplier and ask him to improve the packaging. If you have to face such incidents frequently, you may have to consider changing your supplier before you lose your reputation as a seller.
Handling chargebacks with dropshipping
Chargebacks occur when your customer makes a complaint to the credit card company, PayPal or whatever the payment service he or she used, claiming that he or she didn’t receive the product.
Having a shipping method with tracking information is essential to handle such issues. If you came across with such incident, immediately respond with all the information you have. You can provide the tracking information, and purchase invoices from your suppliers for the order in question.
Sadly some people fraudulently claim chargebacks. This can be a real threat to a start-up dropshipping businesses. Unless you keep all the information you to prove you right, you can get blacklisted from payment gateways for your business.
4. Building a support team
As your business grows, your workload of running the dropshipping business get increases. So, you will end up doing all the day to day work, without having any time to think or work on developing your business. If you do not change your game plan according to the new trends in the world, you will have to close down your business.
So, if you feel like you should hire someone, and if your profits are good enough, it is better to go ahead and do that as an investment. Below we have listed down some popular freelancer sourcing websites, where you can hire people in different fields.
- Design Crowds
Customer support representatives
Handling the customer support requests can be the most time-consuming task with a growing dropshipping business. If you are in a niche, where the customers need any assistance to set up, install or operate the products, this can be even worse (But, providing a such an extensive customer support can help you to compete with your customers too).
If you start spending a lot of time handling customer support, it would be a better solution to hire a dedicated person to manage the customer support for you. If you cannot afford full-time employment, you can even employ a part-time assistant to handle the customer support. You can find a freelancer, who is willing to take up a long-term work with your business.
Hire SEO experts, Copywriters, Graphic designers and marketers
Now, this is going to be a game changer for you. If you feel like you are ready to go to the next level, you can start outsourcing your work. But, this is a place where people start losing money too. Before you begin outsourcing these work, you have to understand the state of your business clearly. Only hire outsiders, if you can afford and it’s really worthwhile to do so.
If you cannot optimise your SERPs (Search Engine Results Pages), then you might need to hire an SEO expert to do one-time work, boosting your SEO and increasing your online visibility. As we have already discussed in Marketing guide for Dropshipping business, SEO is always a worthy investment to take.
Graphic designers and web designers can help you to get some professional touches to your dropshipping store. You can just hire a freelancing designer and work with him or her to make your site more attractive. Sometimes, even a good colour pallet in site design can help you to increase your sales. You can ask your friends and family for their feedback about the looks of your site, and decide whether you need a professional touch to your dropshipping store.
You can use the knowledge of an experienced marketer to develop a good marketing strategy for your business. Also, most of the freelancing marketers offer to create ad campaigns to boost your sales.
Is there anything else you would like to know more about and wish was included in this article? Let us know in the comments below!
Now what? Boost you dropshipping game with all new articles and news about Dropshipping business. Follow the blog at EcommerceBuff.