How to Level Up Your Dropshipping Business
China and the US have had rising tensions between them recently, causing a ‘trade war’. These tensions jeopardized the Dropshipping industry, especially when it came to selling to US customers. However, these concerns have now taken a back seat to the globe wide historical pandemic affecting everyone today.
Historically, the dropshipping business model has been heavily dependent on the ability of Chinese suppliers to send their goods across international borders. That global shipping ability was stifled significantly during the early months of the pandemic. However, as China has gotten more of a handle on the pandemic, shipping across borders has recovered.
Earlier this month, ChinaPost announced good news in regard to ePacked chargers. In an announcement on July 7th, they stated: “Transportation surcharge for most of the packages to Europe are cancelled, and to the United States, it is reduced to 15 yuan/kg”. This is great news for all dropshippers.
What makes this a good time for dropshipping?
Under normal circumstances, summertime is when people tend to spend more money on travel and generally spend more time outdoors. Now, people are stuck at home and they are spending more time online. According to Techcrunch, at the start of the pandemic, there was an immediate effect on time spent online by individuals:
The Harris poll conducted in late March and early May came to the following conclusion about social media:
“In the most recent May 1–3 survey, 51% of total respondents — 60% of those ages 18 to 34, 64% of those ages 35 to 49, and 34% of those ages 65 and up – reported increased usage on certain social media platforms”.
Also, a survey done by Slickdeals shared the following conclusions about impulse shopping during the pandemic:
“In January of 2020, before the pandemic, the average American was found to spend $155.03 monthly on impulse buys. In a new poll in April, during the pandemic, that number jumped up 18 percent to $182.98. According to the respondents, nearly three in four (72 percent) said that buying something impulsively during the pandemic has positively affected their mood”.
These trends create a perfect environment for the dropshipping industry. There is increased traffic on social media, and people are more likely to make impulse buys in order to “treat themselves” or alleviate boredom. What are some ways that you can take advantage of the current circumstances and grow your dropshipping business to the next level?
1. Stop focusing on poorly performing products
The great thing about drop shipping is that you are not committed to any particular product to any significant degree. If you have products that are currently taking up space in your online store, and you are spending your advertising dollars without receiving sales, remove them. You don’t have actual inventory that you need to move, so why keep listing the product?
You think that there is no harm in keeping them, but even if it’s not costing you any money to still list them, these unprofitable products are still taking some of your focus. They are also using up important online real estate that can be used by an item that might actually sell. This point is even more important if you are keeping items that usually perform well at this time of year, but aren’t selling well now. An item only selling occasionally isn’t worth keeping if you are just hoping that their sales will pick up again.
In case it hasn’t been obvious to you yet, the old rules don’t apply anymore. The fact that people are shopping more and that they are not able to spend their summer like they are used to leads to new trends emerging even more quickly than normal. The “metabolism” of emerging trends has sped up due to consumers spending more time online. Which brings us to the next point…
2. Keep a close eye on emerging trends
Identifying trends has become more crucial than ever. People’s needs and circumstances have changed drastically, along with the fact that these factors continue to keep changing every single day. Watching emerging trends is a given for any dropshipper. However, some dropshippers tend to get too comfortable with the handful of products that are selling and don’t put much effort into expanding their catalogue. After all, that means doing more research, creating more advertising campaigns and making more changes in your online store.
Now is not the time to be lazy! The best place to shop online is Amazon. The great thing about researching Amazon trends is the fact that you can use the massive amount of resources that sellers on Amazon use. Also, on Amazon consumer behavior is very similar when it comes to the items that are sold, not only the way purchases are made.
As a dropshipper, you are targeting the portion of the population that is shopping impulsively. These are not the people that spend their time browsing Amazon and comparing prices. In a survey done by Invespcro, they found that 45% of millennials prefer shopping online because they can compare prices, which means that the other 55% don’t. These 55% of millennials who don’t compare prices are your target market. Another survey done by Geoblink found that most impulse purchases in 2020 happen online:
3. Add more payment methods to your store
Since people are shopping more online, this means that there are more impulse shoppers. The last thing you want to do is present an eager shopper with an item they desire only to have them realize that they cannot pay using the payment method they have available. Just like that, the opportunity for a sale is gone. Online payment options keep increasing and people are inclined to try out more convenient methods.
A good idea would be to check all of the possible payment gateways that are available on your platform. Then check the compatibility of those payment methods with your operations and consider adding at least 1 or 2 popular methods to your payment options. This type of proactive thinking can increase your conversions in the long term.
The unfortunate circumstances caused by the pandemic are not necessarily unfortunate for dropshippers. It is precisely at this time where you can build your business! Make an effort to adapt your catalogue by adding new offers that are based on new and emerging trends. You should also consider ways that can make buying your products as convenient and as effortless as possible. Rolling up your sleeves and putting in some extra effort can pay off more than you can imagine. Good luck dropshippers!