Dropshipping – Part I

Dropshipping is one of the easiest and low risk business to start. With the help of technology, this kind of business is made possible in our era. For us common people who have little capital and leeway to fail, this option provides a way out. You can start with zero or very little monetary cost. If you fail, you simply waste your time and energy. While time and energy are still precious, it is still better than losing money.

In this series, I will guide you through the process of starting a dropshipping business. In this particular post, we will go through the concept and the first steps to start.

What Is Dropshipping?
In dropshipping, you are basically the middleman connecting the buyer and the seller, usually without them ever having to know each other. There are variations of course. For example, you set up an online store selling handphone covers. You do not hold any physical stock. When a customer pays for a handphone cover at your store, you take the money and immediately place the exact same order with your supplier, and have your supplier ship direct to the customer. You earn the difference in pricing without holding or even coming into contact with the actual product you sell.

Choosing A Product Or Category Of Products To Sell
That is the very first thing you need to do. Ask yourself what are you good at? What can you sell? Which product do you know well about? What advantage do you have? I will give an example that has a slight tweak to the standard dropshipping model, followed by a standard example.

On the example with a slight tweak, I do Taobao Daigou (buy-for-me services). Taobao is like the Amazon or eBay of China.
My advantage: I know the Chinese language. I am also able to pay for things using Alipay and Wechat which is something many others could not.
My skill: I am good at sourcing things.
My service: I help people buy everything legal that the platform has to offer. Whenever a customer wants to buy something, he can give me the product link direct or simply ask me to source for him. I have sold everything from an actual physical tree to BMW car parts from a China scrapyard, from solid wood tables and furniture to children’s art and craft materials.

I then ship the items from China to wherever they want. To do that, I also need to partner with a logistics company handling shipping. When a customer pays me money, I will buy from the Taobao store, have it delivered to the logistics company’s warehouse, and tell them to ship to my customer’s address. Throughout this process, I rarely come into contact with the actual product I am dealing with.

On the more standard example, I know a person selling New Zealand health supplements, cosmetics and milk powder to China.
Her advantage: She is a Chinese who lives in New Zealand, and knows the suppliers.
Why would people buy from her: China was plagued by food safety concerns for very long. Till today this issue is not fully resolved. Even if the food is safe to eat, it may not be the true genuine or quality product. New Zealand prides itself in its food safety – its agriculture exports are famous worldwide.
She is now the link between these sides – people who has the money and want to have decent and proper products, and people who has the products but want to sell them.
The mode of operation is largely similar to that described above.

Of course, while dropshipping is easy to start, it is not easy to succeed. Do not listen to those bullshit Youtube videos offering expensive courses on how you can earn a lot of money just buying and selling things. Trash advice such as just copying from Aliexpress and pasting into a Shopify online shop which you just created simply does not work well. Because what is your advantage? Only you know Aliexpress and others do not? Aliexpress is in English and they accept international payment methods. You have absolutely no advantage copying their products and pasting into your shop.

You definitely can succeed in dropshipping, but there is a lot of hard work put into it. For one, the examples above showed that you need to have 2 networks – the customer and supplier networks, both are separate from each other. Of all the people selling the same thing, why would they buy from you? Why should and why would strangers go into your online shop and place an order with you? We will go through this in more detail later on.

Choosing A Platform To Sell
There are free platforms and there are paid ones. Whatever you choose, the cost should not be too high as well.

Commissions based platforms with high traffic, such as Amazon, eBay, Rakuten, Gmarket are a good start. Different countries have different dominant platforms. Pay only when you sell an item. Note: Some platforms like Amazon do require you to pay a monthly subscription for their online store, while others may require you to pay a one-time setup free. The good thing with such platforms is that they have high traffic, and there is a good chance your product will be noticed. However, for your listing to be noticed more frequently, generally you will have to pay some form of advertising fee, which is an optional added cost.

One note of caution: It is common to meet scam buyers. These buyers will buy a product, claim that it is damaged or lost, then ask for a refund. Sometimes even though you have proof and submit a dispute, the platforms will still award the case to the buyer. Popular platforms have no lack of sellers. A customer is more important to them. Personally, I have had experience with such buyers, but when I raised disputes the only replies I get from the uninterested dispute team outsourced to India are just copied and pasted robotic answers that do not resolve the issue. In the end, I lost a couple hundred dollars from the sale. In my disappointment, I closed my account with the platform. I am now using 2 smaller platforms. They are smaller, but so far while there are the occasional issues with disputes, there is nothing much for me to complain about in this aspect. Of course, my sales are much lower now. Smaller platforms also have their problems. In my particular case, it is their insistence with using their partnered local courier company. Every platform has their own issue, so find one that is suitable for you.

Create your own website: Pay for a domain name and a cheap but reliable web-host. It does not cost much. Probably about $120 a year for a cheaper one. Fiddle on the free WooCommerce on your own to create a simple but free website as a start. Your website need not look fanciful. Just a simple, organised storefront will do. The good thing about having your own website is that it makes your business looks more legit and you have total control (eg there is now no need to be afraid of scam buyers). The downside is that when starting out, nobody will direct traffic to you for free. You have to promote your website yourself through various means, some of which are listed below and are free. While there are paid advertising options on search engines, personally I do not recommend them yet. Remember the premise of all these is to start a zero or low cost dropshipping business first.

Forums, Social Media: Advertising on Reddit, Facebook, Quora, Instagram, Twitter is free. Do use those suitable for you. People generally would have a social media account. Instead of posting your daily life or other things, share about your business. You already have a ready audience which are people in your network. Of course that is not to say you spam regularly and irritate everyone. Between your posts, now and then, share about your business. Of course you may also be thinking, why not just create a brand new account and use it just for business? That is recommended, but new accounts do not have much traffic and to direct traffic to the new account, you will most likely still have to tap on your personal account for a period.

Forums are also a good place. Although they have generally dropped from their peak in the 2000s and early 2010s, there are still some decently big international forums. Pretty sure each country also have their own forums. There are those focused and specific forums, and those general forums. Find a few, register an account and start to advertise there. Granted they may not be the most effective, but 5 minutes a day bumping up your posts in different forums is a small effort which I think is still worth it. I have personally got quite a few businesses from the forums.

Social Messaging Platforms: Whatsapp, Wechat, Telegram can all be used to promote your stuffs. These are platforms which we use everyday. But we can make some changes to make it stand out without intruding into people’s space or irritating them. Change your display pic to promote your business. For example mine can be a simple squarish picture with the words ‘Taobao Daigou (Buy-For-Me) Services’. Simple clear cut message put up as your display picture. All who talk to you on these platforms will notice it. And there you have it, you market yourself one step further. Status messages can also be changed to add more detail about your business. These are simple easy methods to market out your business without any cost.

Whatsapp / Wechat / Telegram groups etc are also effective. While most of us have groups for social and work purposes, there are also networking groups which allows you to advertise your products. Advertise your product / business / newly created group or channel in these advertising groups. Craft a simple and straightforward message, then just copy and paste into the groups. Do it once everyday for all your existing groups, and join as many groups as you can. For those groups which are too spammy and filled with bots, you can just skip it. For me, I have a Telegram channel, and I always advertise about my channel to all these groups and to my new customers. In my Telegram channel, then I do the actual advertising for my products.

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