Start a Profitable Online Store from Scratch with Dropshipping

Irrespective of how, when, and where you decided to embark on entrepreneurship, if you have landed on this article, it means you are ready to tread the uncharted alleys of Dropshipping.  

For the uninitiated, let us quickly define what Dropshipping means before we move forward.

What is Dropshipping and How You Can Build a Profitable Store

Dropshipping is an e-commerce business model wherein entrepreneurs do not need to hold the physical inventory of the products being sold on their website or social marketplace. These entrepreneurs are commonly known as Dropshippers.  

The global Dropshipping market is touted to cross US$243 billion by 2023. According to Industry Research report, Dropshipping market is poised to grow at a CAGR of 20.7% between 2022-2028 and is projected to cross US$621 billion by 2028.

Let us have a look at how you can differentiate your e-commerce business from other Dropshippers, and scale exponentially.  

To be a successful Dropshipper, you need to know how to leverage the power of Digital Commerce to your advantage.

Harsh Truths About Dropshipping

1. No Control Over Supply Chain and Inventories

Heavy reliance on third-party suppliers has plagued the Dropshipping industry since the beginning. When an entrepreneur must rely on third-party vendors for one of the most crucial processes of running an online business, i.e., fulfilment, it raises several red flags. If the supplier fails to fulfil the orders to the satisfaction of the customers, it will inadvertently affect your business. Similarly, if the supplier shuts-shop, your entire business operation can get disrupted overnight. It would also do you good to remember that you may not be the only business engaging your supplier’s services.  

2. Difficulty in Addressing Customer Enquiries and Complaints

When your order fulfilment relies heavily on your supplier, you do not have full visibility of the process to be able to provide informed customer support. If your customers receive defective items or incorrect products, you have to constantly go back and forth between interacting with your suppliers as well as your customers to sort out the issue. Without a comprehensive communication solution, you would end up wasting your time by jumping between different communication channels.

3. Low Barrier to Entry

While Dropshipping has proven to be one of the most profitable ventures for more than a handful of entrepreneurs from around the world, it cannot take away from the fact that Dropshipping has low barriers to entry. Which means, anyone can start a Dropshipping store and add to an already overflowing pool of players in the market. Without identifying and defining a niche, it is next to impossible to stand out from the crowd and expect the business to take off.

10 Ways to Increase Your Dropshipping Conversion Rate

1. Communicate Proactively

There is one cardinal rule to remember when it comes to Dropshipping. Your product is not unique. You may have the first mover advantage, but if the product is listed publicly on the supplier’s or wholesaler’s website than it is only a matter of time before it gets picked up by other Dropshippers. It is important to grab every opportunity to interact with your customers and offer them an exceptional shopping experience to be able to convert them into customers.

After visitors are redirected to your product page, you can set up your engagement widget like CINNOX to proactively greet the visitors with a pre-configured Smart Greeting to encourage them to initiate a conversation with your support team for a personalised shopping experience.

2. Seamless Inventory Management

One of the differentiators between Dropshipping and other e-commerce business models is that it does not involve physical inventory management. While there is an upside to this, there is also the risk of not having complete control over your supply chain.  

When your inventory is managed by a third-party supplier, flawless communication with customers as well as suppliers becomes a particularly important cog in the wheel for running the operation. If you are just starting out, there is a high chance that you are operating alone. If that is the case, you cannot afford to waste time and effort jumping between various communication channels to engage with your customers and your suppliers. A comprehensive communication widget like CINNOX can unify all channels of interactions and empower you to scale your business without leaving the comfort of your website.

3. Recover Abandoned Cart

Over 69% of carts are abandoned by customers. That is huge! So, what can you do to recoup these losses?  

It is important to have a complete view of the visitor’s journey through your website in order to understand little things that can add up. Most of the time customers leave without purchasing because of poor experience. To offer personalised service and ensure your customers get what they came looking for, your engagement widget must provide you with the roadmap of their journey through your online store when customers reach out to you for support.

For example, when visitors initiate a conversation with you, your communication widget must be able to provide you a comprehensive view of how the visitors’ navigated through your website to the point where they initiated the conversation.  

When the visitors return the next time as customers, your team should have complete view of their previous interaction data to have a contextual interaction with the customers and be able to better understand their pain-points. This can be easily achieved by labelling your interaction data with pre-defined enquiry labels to help you deliver more personalised services.

You can fuel your retargeting campaigns by drawing key insights from the labelled interaction data and entice your website visitors to complete their purchase by offering exclusive discount coupons.

4. Be Approachable on All Channels

You may run a full-fledged Dropshipping store or even a one-product store, what is important to remember is that experience precedes purchase. The nature of Dropshipping business is volatile. Unlike the big players who are more established and have built trust over a longer period of time, you, as Dropshippers do not enjoy customer’s confidence yet. While confidence cannot be earned overnight, the first step to gaining it is being approachable on all channels that are being used by your target audience.  

Customers should be able to reach out for support and enquiries using social media, chat apps, emails, SMS, live chat, calls, video calls, or any other channel of their choosing. To maintain your sanity and to have an all-inclusive view of your customer interaction data, you should be able to manage all these conversations on a single widget.

5. Use Labelled Data to Drive Your Marketing Activities

Your interaction with customers is more than just a pile of data, it is gold. But if it is left unattended and unlabelled, the interaction data is not going to prove much useful. In order to identify customer intent, you must define a consistent naming convention to categorise your interactions with customers and label these interactions to turn unstructured data into actionable insights. These insights can help you drive marketing campaigns and send timely notifications such as, restock alerts, exclusive discount coupons, product delivery updates, etc.

6. Have an Active View, Not A Retrospective View

If your store has started performing well and you have hired staff to manage customer enquiries, you should not have to wait till the end of the conversation to see if the interaction was favourable to your business or not. To maintain the upwards trajectory of your Dropshipping store, your customer engagement solution should enable you to monitor the conversations on the go.  

Armed with the ability to monitor chat enquiries in real-time, you can easily jump into the conversation and assist your staff in delivering excellent customer experience, which in turn will ensure that the customer makes an informed purchase. When customers make informed purchases, it automatically brings down your RTO (Return to origin) rate and reflects positively on revenue.  

For most of the Dropshippers, one of their challenges is to connect with the customers and suppliers in Mainland China as calls and chat might be affected by the local network and regulations. One of key capabilities of CINNOX is unifying PSTN, IP calls and WeChat, giving your team and customers seamless experiences in connections. You can switch from call or chat to offer multimedia experience like video calls, screen sharing, and file sharing for better engagement with your customers and suppliers in China.  

Dropshippers can even use smart calling, a potent feature available in our Omnichannel Contact Centre plan, using which you can upload contact lists and let CINNOX automatically run an outbound call campaign to engage the customers on the list.

7. 24/7 Availability to Increase Trust Factor

When you are running a Dropshipping store it is important to note that the customers are always on fence about purchasing from your store. It is highly likely that they have never heard of your store before and have only landed on it by clicking on an Ad campaign you are running on Facebook, Instagram, TikTok, or Google. One unpleasant experience is what it takes to lose the customer forever.  

Your focus should be to eliminate any red flags that could avert a customer from your website. There are many ways in which a customer determines a Dropshipping store’s credibility, but nothing is as important as availability of customer support.  

A smart communication widget should support flexible routing capabilities and be able to redirect customer enquiries based on the location and browser language settings, to offer personalised experience to your customers.  

72% of customers are more likely to buy when the information or interactions take place in their language. If customers have the option to interact with your team in their native language, you can see a positive impact on your conversions.

8. Go Over and Beyond to Enhance Your Customer’s Experience

Let us take the example of a print-on-demand T-shirt store.  

If your visitors have really liked a T-shirt design on your store, but it is listed as ‘out-of-stock,’ and they decide to reach out to you to see if you can help, what would you do?

Let us play out two scenarios to see how Dropshippers would approach this issue

Dropshipper A: Informs the customers that the store does not currently hold T-shirts in their desired size and asks them to check back later.  

Dropshipper B: Understands the customers’ need and quickly reaches out to other suppliers to check the T-shirt availability. Upon receiving the supplier’s confirmation on availability, the Dropshipper communicates this to the customer and confirms the order over chat.  

According to you, which Dropshipper would convert more sales?

When you are running a print-on-demand store, it is important to remember that your customers do not see you as a print-on-demand store, but as an apparel store. So, you have the flexibility to fulfil their orders using any other supplier’s service.  

But to be able to service your customers to the best of their expectations, you need to be able to communicate effectively with your customers and your suppliers effortlessly, and in real-time.

9. Reduce RTO With Timely Verification

Reduce the number of fraudulent orders and bring down your return to origin percentage by sending text messages to your customers immediately after they place the order, so that they can click and verify the order.  

Also, give them the flexibility to reach out to you by placing a direct chat link in the SMS for an additional support. Timely communication about shipping updates via email and SMS channels goes a long way in establishing trust and reliability. To save you the time and effort, you should be able to create and manage your communication campaigns through a single platform.

10. Offer Support on Video and Calls

Most of the communication widgets are not built to handle customer support effectively. While some solutions are good at providing live chat capability on your website, they fail to unify all communication channels like social media, emails, SMS, calls, video calls, etc. As your business and team grows, managing support becomes an integral part of your business sustenance program. A single inbox can help you centralise your communications with customers and suppliers, providing you a consolidated database of valuable interactions that can be used to drive your business growth strategy.  

Let us revisit the print-on-demand scenario.

If your customers wish to print a customised design for a special occasion on a T-shirt or a coffee mug, and they decide to reach out to you through the CINNOX widget on your website, you can quickly bring in your designer to join the chat and turn the chat into a video conference call, where your customer can easily share their expectations directly with the designers without the fear of their design-brief getting lost in translation through the communication loops.