At first, it may seem that the dropshipping requires heavy funding to be successful. That may be true for the most businesses – if they are not done the smart way. You can always throw unnecessarily huge amounts of money at something and hope for it to take off, but you can also make use of the following advice and run your dropshipping store – a budget friendly way.
Since you are reading this, you are probably seriously considering launching your own dropshipping business. It is also probably your first dropshipping business, or at least you feel the need to learn more about how things work (even seasoned experts need to stay up to date!).
You have been hearing a lot about dropshipping and you are certain that it needs some investments, but you need to find that sweet spot between not spending enough and failing, and overspending on unnecessary things and going bankrupt.
This article will fill the gaps in your knowledge and help you launch your business.
Analyse Your Assets and Resources, And Use Them Wisely
Are there assets more important than your own skills and experiences?
Think about that – what is it that you can do yourself to lower the expenses of your dropshipping business? Everyone remembers to utilise their money (the most obvious asset) when starting up a business, but sometimes people forget to make use of their own skills or environment.
- If you work from home or you simply have a free time to spare, then you can cut on your expenses on hiring live customer support. Majority of the customers like to get a personal touch when buying things online, and that’s even more true if your brand is new and not yet recognised.
- If you are a musician or a music enthusiast, then you might consider choosing a music-oriented niche. This way you will cut your time on researching your niche-specific problems. Same goes if you have any other interest that you are already comfortable writing about, or are simply familiar with. Music was just an example. If you build your dropshipping business on top of your genuine interests, you will also enjoy your business more. In the long run, that also is an important thing.
- Have a YouTube channel or a blog? Using a simple plugin, your blog will become a store, and all your subscribers/readers will convert to potential customers.
- Have an eye for design and know a thing or two about using Photoshop – then you can make your website a more pleasant place to visit just by changing your website background to something more appealing than plain white.
- Speaking of websites – you will not have to pay developers if you know how to setup a WordPress website.
- Your personal characteristics are also an important thing to consider when trying to cut your costs. If you are a good communicator, then you won’t have to struggle when arranging cross-promotions or collaborations with other brands. You can also negotiate better shout-out prices from influencers!
- If you are good at writing – say goodbye to all the big SEO expenses. You will surely come up with unique and engaging titles and keywords for your business.
This list could go on forever because we all differ one from another. Think about your personal assets, you will surely find a way to reduce the costs of launching your dropshipping business.
Know Which Expenses Are Absolutely Necessary When Starting a Dropshipping Business
Take a look at the dropshipping business and ask yourself – which expenses are absolutely necessary in order for it to function properly?
A working website, reliable suppliers and a way to reach customers.
Do you need to engrave your brand’s logo on each item that you sell? It is not a bad idea, but it is also not strictly necessary.
Same goes for heavily animated countdown timers or expensive, Hollywood-grade effects in your promo videos.
Are your site visitors just that – visitors – or are they actual customers? If the return on investment is low when the investment is ten dollars, it is probably going to be low once scaled up to ten thousand dollars.
I am not saying that hiring Chris Hemsworth to promote your brand would be a bad idea, I am saying that the time for that has not yet come. You are just starting, so make sure that the core features are working as intended.
Don’t Go All-in With Marketing When Starting Your Dropshipping Business
Speaking of hiring Chris Hemsworth to promote your brand – as I said, that’s not a bad idea. But it is also not a good one, if it means putting “all of your eggs in one basket”.
Marketing is essential to every business, but here’s a valuable tip not known to everyone: There are many alternative approaches which are budget-friendly, or even completely free. Heavily cutting the marketing expenses of your dropshipping business may seem an opposite from doing a smart thing – but consider the following things:
Social network promotions can be free. Social networks are invaluable when starting your business: If you post something engaging, more and more people will see it.
Facebook, Instagram, Reddit, Quora, Pinterest – do not overlook these potential goldmines of sales. The best part is – they cost nothing or next to nothing.
Let’s look at search engine optimisation (SEO): Ranking on the search engines is free. If done right, it will be a passive source of customers, not just the week you post your new product. With a bit of tweaking, it will bring you customers for years to come.
Social Proof marketing is also a great, low-cost (free if you can set up a simple slider on your website) and an efficient way of converting visitors to buyers.
It is not, strictly speaking, a marketing technique, but it is an important part of your sale process (a purchase funnel). A gallery with testimonials from satisfied buyers will improve your credibility score and it will definitely improve your sales.
First work on your credibility and your conversion rates while making use of the free techniques for promoting your content. Then, you can scale your business up with paid advertisements.
Package Deals Are Dropshipper’s Good Friends!
Package deals or package offers are a way to save money, but also a way to ensure compatibility and consistency.
Remember – almost all things are negotiable. So, when contacting your goods or service provider – do not ask for a price for one item. Ask them to give you a quote for a long-term partner.
But there are no promo codes on their website, and the prices are fixed – you might say.
Well, try putting yourself in their shoes – would you turn down a customer who wants a discount for buying 200 pieces of a good off of which you earn 30%?
Remember, everything is negotiable. That’s one of the benefits of Package Deals.
Another perk of Package Deals is consistency and compatibility. You don’t want to receive white USB chargers with black USB cables. Or even worse – Android phones from one supplier and iPhone chargers from another. Neither do your customers.
Your store will also be more consistent and better organised when getting your goods from fewer suppliers.
The Last, But Certainly Not The Least Tip on Launching and Running Your Dropshipping Store – Know What You Are Buying (And Selling)
Since you cannot do everything by yourself, you will need to rely on third party solutions and products. Before commiting to some software or a platform, you should do a thorough research on everything about it.
Read all the legal documents, learn about the possible censorship or fees on the platform you are considering for your dropshipping store.
Will you be able to reuse the software in multiple dropshipping stores?
Is it a one-time payment or is it a monthly subscription plan?
Almost all the genuine products have a good refund policy, but it is always better to not make mistakes in first place.
It also goes without saying that you need to do an extensive research on a potential supplier or one of their particular items. Always read the terms and items descriptions. Learn about their delivery deadlines, refund policies and quality warranties.
This will save both your money and your time.
You will be the one getting a feedback and dealing with customers after the order is done, so do your homework before doing something you might regret later.
There are many ways to spend less, and spend smart. As you have just learned, launching and running a dropshipping store on budget is entirely possible.
Did you learn something new from this article? We would be happy to hear your experience in dropshipping on a tight budget.