Building Blocks for a Successful Dropshipping Business
You want to build a successful dropshipping business. We get it.
But 99% of people who’ve heard of dropshipping are thinking about finding the next hot product and hoping to hit it big. (Usually with low ticket dropshipping.)
As a result, one of the questions we get most is, “How can I set up a business that won’t fizzle out?”
See, dropshipping often gets a bad rap for being short-lived. But it doesn’t have to be that way.
When we work with students in our dropshipping course, our goal is always to create substantial real businesses that bring in profits year after year.
As you grow your business, it’s essential for you to have a long-term vision. In our experience as dropshippers, we see a big trend: Business owners with a long view of success are wealthier than the ones that just went for quick profits.
In this post, we’ll go over the essential tips you need to follow to build a successful dropshipping business. We’ll also cover common mistakes that can throw a monkey wrench into your sales.
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Tip 1: Expand Your Traffic Channels
A successful dropshipping business can’t rely on just one way to attract customers.
Think about it: What if that single source of traffic fails? You’re setting yourself up for a costly fall.
This is especially true if your sole focus is Google Ads.
Running paid ads is a great way to kick-start your business and get some traffic and initial sales coming in.
But what happens when ad costs rise or competition heats up? Even worse, what if Google suspends your account? Your sales plummet, and recovery takes time.
You must diversify over time and get traffic coming in from multiple places if you’re going to run a successful dropshipping business.
Prioritize Organic Traffic
After you start your paid ad campaigns, focus on search engine optimization (SEO). Write blog posts that serve your customers and answer their biggest questions, and make sure to optimize those posts for search.
Remember: Organic traffic is free, so if you play your cards right, you could bring in a substantial number of visitors without needing to pay for every click.
Having a balanced approach to traffic-building and knowing exactly how to market your dropshipping store can make or break the longevity of your dropshipping business.
Tip 2: Don't Rely on Just One Supplier
Diversification isn’t just for your stock portfolio (or traffic sources). It’s essential for your dropshipping products, too. Focusing too much on one supplier or product is risky. You might see quick sales, but what happens if that supplier changes course?
Say your only supplier decides to sell direct-to-consumer and cut out retailers like you. Your business would take a serious hit.
We’ve seen it happen. Businesses that looked good on paper suddenly faced massive revenue drops because they leaned too hard on one brand. One moment, you’re pulling in half a million a month, and the next, you’re scrambling to fill a void when that supplier has manufacturing issues or changes their business model.
Don’t make that mistake. Diversify.
Sure, capitalize on products that sell well, but only let that be part of your strategy. A broader range of suppliers gives you a safety net. Again, it’s not just about short-term gains – you’re building a resilient business for the long run.
So, what’s the plan? Keep an eye on the successful products, but always be on the lookout for other reliable dropshipping suppliers. This helps you prepare for shifts in supplier strategies and keeps your business strong over the years, not just months.
How to Diversify Your Product List and Work With More Suppliers
So you get the idea – don’t put all your faith in one supplier.
But how do you diversify your product range for long-term stability? Here are some actionable tips:
- Broaden your supplier network: Start by selling products from as many suppliers in your niche as possible. Circle back to the “nos” you got in the beginning. Be relentless and get every supplier you can.
- Apply the 80/20 rule: Once you have multiple suppliers, watch your sales data. You’ll likely find that 20% of your products account for 80% of your sales. That’s okay. Once you identify your high-performing items, you can double down on your marketing efforts for those or negotiate better terms with suppliers. But remember, don’t neglect the remaining 80% entirely. Those suppliers are your safety net.
- Keep an eye on the market: Trends change, and so should your base of suppliers. Always be on the lookout for new suppliers, upcoming products, or even entirely new categories that align with your niche.
- Evaluate regularly: Regularly review your supplier and product performance. Are some underperforming consistently? It might be time to cut them loose and look for better options.
Diversification isn’t about spreading yourself too thin. It’s about calculated variety. So, as you grow, keep diversifying while focusing on what’s actually moving the needle for you.
The Pitfalls of One-Brand Dropshipping: A Cautionary Tale
Let’s look at what can happen when you don’t diversify your suppliers.
An aspiring Ecommerce entrepreneur (we’ll call him “Will”) jumped into the dropshipping world. Will discovered a brand of high-end kitchen gadgets that were a hit right away. Sales soared, and Will thought he’d found the secret sauce to a lifetime of financial freedom.
Instead of diversifying, he focused exclusively on this one brand and invested all his time and resources into promoting their products.
Things looked rosy until the brand faced manufacturing issues. Supply chain delays crippled their production, causing long shipping delays for Will’s customers. Sales took a nosedive, and his customer reviews went from excellent to abysmal overnight.
Will contacted the brand, only to discover that the manufacturing issues wouldn’t be resolved for months. His entire business was grinding to a halt.
It doesn’t stop there. The brand, faced with its own set of challenges, decided to shift to a direct-to-consumer model, completely cutting out middlemen like Will. Now, he was left with no products to sell, a tarnished reputation, and an empty business model.
Will’s story isn’t unique. It’s a classic example of the dangers of relying on a single brand in dropshipping. His short-term gains blinded him to the risks of a one-dimensional business strategy.
Even if you find a brand that seems like a goldmine, you should still spread your risk and ensure your business can withstand rough patches and unforeseen problems.
Tip 3: Lean Into Remarketing to Get Returning Visitors
Let’s cut to the chase. Very few people buy high ticket items on the first visit. If you’re not remarketing – nurturing previous visitors and turning them into buyers – you’re missing out on a massive chunk of potential revenue.
Why? Because return visitors are more likely to make a purchase, often at a rate that’s twice as good (or even 20 times better) than first-timers.
Return visitors convert better because they already know you. They’ve seen your products, navigated your site, and maybe even added something to their cart. This familiarity makes them more comfortable with making a purchase.
They’re already interested in what you’re selling. The fact that they visited your site before means they had some level of interest in your product.
And it’s not just the initial sale. Return visitors are more likely to buy from you again, and each subsequent sale is more profitable.
Why? Because you’re not spending money to acquire these customers. Not paying to bring in these sales means more profit in your pocket.
Remember, the name of the game is long-term success. Only targeting one-time visitors is short-sighted. To make your business last, you need to focus on getting people to come back.
How to Encourage Repeat Visits
Here are some quick tips on how to reel in returning visitors and get them to buy:
- Ads and audience layering: You can layer audiences in your advertising campaigns. Bid more on people who’ve visited your site before so they see your brand again.
- Email marketing: Regularly send potential buyers helpful content, product updates, and special deals to keep your brand on their minds.
- SEO: A good SEO strategy not only brings new visitors but can also remind previous visitors to return when searching for related terms.
Tip 4: Become a Household Name Within Your Industry
To be a dropshipping success story, you’ll need to become a household name.
When someone thinks of a product or service you provide, your brand should be the first thing that pops into their head.
When this happens, it lowers your advertising costs by reducing reliance on broad keyword searches. It also gives you a competitive edge because customers often favor familiar brands over unknown competitors.
Build your brand into a household name by:
- Actively participating in industry forums and online communities. Become a go-to source for information and solutions related to your niche.
- Building relationships with industry influencers, bloggers, vloggers, and media outlets so you can collaborate and do joint promotions.
- Getting high-quality backlinks from reputable sites in your industry.
The moment your brand name is the first that comes to people’s minds when they think of a specific product, you’ve pretty much won. Market your dropshipping store consistently, and you’ll get there.
Tip 5: Create a Unique Value Proposition
When starting any business, the last thing you want to do is blend in.
Your business needs a Unique Value Proposition (UVP) that sets it apart and captures attention. A compelling UVP differentiates your brand from competitors and can become the north star that guides every marketing decision you make. You also need a good offer! And that doesn’t mean the lowest price.
A UVP is especially critical in high ticket dropshipping, where customers are handing over a substantial amount of money for their purchase.
Imagine a potential customer scrolling through a list of online stores that offer similar products. Why should they choose yours? Without a clear UVP, you’re just another item on the virtual shelf, and they’ll browse right past you.
Your UVP provides that crucial “why” and drives customers to your site, instead of your competitors. Customers are always looking for that “extra something” that gives them a reason to choose you over someone else. Your UVP gives them that.
Study your competitors. Figure out what they offer, and see what’s missing. What does each of your competitors say about their business, their product range, customer service, and pricing models?
Then create your UVP.
How to Create a Unique Value Proposition
Use these steps to develop your own UVP:
- Identify customer pain points: Know what problems your target audience wants to solve. Line up your solutions with these pain points.
- Define what makes you different: List all the ways your product or service is different from (or better) than those of your competitors. Is it quality, customer service, pricing, or something else?
- Test and validate: Use small-scale ad campaigns to test how your UVP resonates with potential customers. Tweak and adjust based on feedback.
- Make it clear and concise: Simplicity is key. Anyone who hears your UVP should be able to easily understand it.
- Communicate across channels: Share your UVP consistently across all your marketing channels, from your website and social media to customer service and email campaigns.
- Assess and revisit: Your UVP isn’t set in stone. As you grow and the market changes, reevaluate your value prop. Keep an eye on how well it’s resonating with your target audience, and don’t be afraid to pivot if you need to.
Tip 6: Hire the Right Help for Your Business
Here is a truth you need to swallow: There comes a time in every business owner’s journey when going it alone is no longer feasible or smart.
In the beginning, you’ll wear many hats and do a ton of the work yourself, but as your business grows, you’ll need to find ways to delegate.
Even though it can be an extra expense, hiring help at the right time will help your business thrive.
And just to drive the point home, picture this scenario:
Imagine you’ve got a dropshipping business that just hit the $2-3 million revenue mark, and you’re still the only one running the show.
You’ll find yourself shackled to the phone, answering customer questions. Your business would become a burden, rather than setting you free and allowing you to do what you want with your time.
And worse yet, you’d become the bottleneck in your own company’s growth. All this could lead to burnout or even business failure.
So what can you do instead? Hire some help.
Start by simplifying your operations. Document your processes in such a clear and straightforward way that even a seven-year-old could understand them. This makes it easier to onboard new team members and ensures consistent, quality work even when you’re not the one doing it.
Lay the groundwork by developing systems and processes for everything you do. Write out these standard operating procedures, refine them, and make sure they’re easy for team members to use. Once these processes are in place, handing off responsibilities will be easier.
Ready to bring in someone to take on a few tasks? Hiring is both an art and a science. Look for candidates who have the skills you need and fit into your company culture. Everyone you hire should be a quick learner who is willing to adapt.
Hiring team members might seem like a gamble at first, but once you see the effect they can have on your business, you’ll wonder why you didn’t do it sooner.
When you remove yourself from day-to-day tasks, you can switch from working “in” the business to working “on” it. You won’t be bogged down by every minor decision or task, so you can focus on optimizing your supply chain and exploring new marketing channels.
Many entrepreneurs resist hiring because they don’t think anyone else can do the job as well as they can, or they worry about the added cost. However, the most significant risk lies in not hiring soon enough. You might wake up one day to realize your business has turned into an all-consuming job you’ve grown to resent.
The sooner you recognize the value of delegation, the faster you can scale your successful dropshipping business without sacrificing your sanity or quality of life.
Don’t Leave Your Dropshipping Success to Chance
Building a successful high ticket dropshipping business is about more than quick wins. It’s a marathon that requires thoughtful planning and strategic growth.
As you navigate the journey of becoming a successful dropshipper, remember that every decision you make – from establishing a strong brand to hiring the right help – impacts your future.
The things we’ve talked about here aren’t just checkboxes on a to-do list. They’re your foundation for dropshipping successfully.
Read these inspiring dropshipping success stories next.
To get started on the right foot, we invite you to join our free class, “The 5-Step Formula To Build and Launch a High Ticket Dropshipping Business in the Next 30 Days.”
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Article by Jon Warren
- Worked with 400+ Ecommerce business owners to help them grow their business
- Started 3 high-ticket dropshipping businesses that reached 7 figures per year in revenue
- Managed marketing for his and his clients’ businesses that has produced 117,000 high-ticket purchases for an estimated value of $120.5M
© Dropship Breakthru 2021