What Is Drop Shipping and what are the secrets to success?

If you were told that a product was being drop shipped to you, you’d be forgiven for thinking a giant crate was about to parachute down onto your front lawn. In reality, drop shipping is actually just a way of shipping goods that keeps costs low for online shopping retailers.

 

In a nutshell, a drop shipping store doesn’t actually hold any inventory in a warehouse. In fact, they usually don’t even have a warehouse! Everything sold by the online retailer is purchased from a third party and shipped to you directly from that third party.

 

This results in significant cost savings for the owners of online stores and means that almost anyone with a computer and some sales know-how can start earning an income from selling online.  

I knew that if I failed I wouldn't regret that, but I knew the one thing I might regret is not trying
Jeff Bezos, Amazon CEO

What’s the history of drop shipping?

 

Back in the day if you wanted to open a store you’d need a decent amount of capital to make it happen. For starters, you’d need a physical location, complete with a storefront, stockroom and all the overheads that come with it. Then, of course, you’d need to purchase stock, and with a bit of luck, turn that stock into profit.

Meanwhile, mail order companies were approaching things quite differently. Their thinking was, why invest in brick and mortar to display products when you can just ship products directly to the customer instead? The only catch was that the mail order companies needed to advertise their products in catalogues, and those catalogues attracted printing and distribution costs.

Despite their separate challenges, both methods worked well. In fact, you could argue that they catered for entirely different types of consumer. And as long as those customers continued to buy enough products to cover the overheads, both business models could continue to flourish.

Then along came the internet (cue menacing lightning flash outside) and with it, the evolution of online mail ordering and the birth of online shopping retailers such as Amazon and eBay. At some point along the way, someone connected the dots between affordable online stores and cheap international suppliers and just like that, drop shipping was born.

An example of a physical store sign, versus an online retailer that offers drop shipping.

 

Which products work best for drop shipping?

 

Drop shipping often relies on an investment into social media advertising, pay per click (PPC) and other paid marketing means to put your web store in front of customers. For that reason, most drop shipping companies will typically sell products that are easily affordable to the masses to maximise the number of potential sales. Typically these products include:

 

Health and Beauty

 

 

Example of makeup products which are a common drop shipping product chosen by online sellers

This includes everything from skincare and makeup to toiletries and sanitary products. Such items can usually be bought from an international wholesaler at minimal cost and shipped relatively cheaply due to their low weight. As an added bonus, most customers will usually need an ongoing supply of these products, so it’s quite easy to develop a loyal base of repeat customers.  

 

Clothing

An example of clothing products that can be sold via an web store using drop shipping

Clothes are in demand all year round. So if you can sell decent quality clothing and cater to the changing seasons, it’s quite possible that you will enjoy repeat orders from loyal customers long-term. Clothing is also a great niche to get involved in if you have an eye for fashion and predicting trends.

 

Computer Equipment

 

An example of a computer hard drive which is often a good choice for drop shipping companies to sell online

Computer accessories such as USB drives, portable hard drives and laptop batteries can often be bought at wholesale prices. This not only allows you to sell computer products for a higher profit but also gives you the opportunity to put together special bundles and deals.

 

Cell Phones and Cell Phone Accessories

 

An example of cell phone accessories such as headphones that can be sold online using drop shipping

The latest cell phones are always in high demand, and due to their slim design, they are often lightweight, helping you to cut down on shipping costs. As you might expect, you also have a great opportunity to sell related accessories such as phone cases and chargers along with the cell phones.

 

What are the pros and cons of drop shipping?

 

At this point, you might be thinking that drop shipping sounds like a pretty easy way to make money online, but like all businesses, there are pros and cons to consider.

Pros of drop shipping

  • Minimal capital needed to get started, with no need to purchase or rent a physical store. Usually, all you need is a Shopify store or something similar to start selling.
  • Easy to get started, with no warehouse to manage and no need to get involved in the handling or shipping products.
  • Ongoing costs are low, with many drop shippers running their web store from the comfort of their home using a cheap internet connected laptop.
  • Great flexibility, meaning you can run your online store just as easily from the beach as you can from a dedicated home office.
  • Scaling up is easy since selling more products will only increase the supplier’s workload, not yours. So no need to worry about stretching yourself too thin if the business really picks up.

Cons of drop shipping

  • Low-profit margins, particularly in highly competitive niches where other drop shipping companies re-invest their gains from lower overheads into charging rock-bottom prices to secure business.
  • Frequently going out of stock due to inaccurate inventory communication from suppliers, or a breakdown in the technology, or integration of the technology that’s supposed to handle that inventory communication.
  • Providing customer service for products that you’ve never used, or even handled in person. This can be frustrating for customers who quite rightly expect you to have good working knowledge of the products you are selling.
  • Supplier communications, often leading to frustratingly back and forth email conversations that can go cold for weeks at a time. This is particularly annoying if you’re just starting out and need to secure a supplier to get going.
  • Issues with delivery charges, such as selling a product from one supplier and an accessory from another, resulting in two separate delivery charges for the customer. Whether you opt to cover these delivery charges yourself is something you need to consider.

 

Successful drop shipping companies to learn from

 

The following online shopping companies are well-worth checking out, especially if you’re looking for some inspiration to start your own drop shipping web store.

Jeffree Star Cosmetics

www.jeffreestarcosmetics.com

This online store uses a Shopify store to sell a range of cruelty-free cosmetics and beauty products with an estimated 26,100 visitors per day.

Fashion Nova

www.fashionnova.com

With a wide range of clothing for both men and women and just under 25,000 visitors per day, you’d be hard pushed to tell Fashion Nova apart from any other online clothing retailer.  

Spigen

www.spigen.com

A polished, modern looking online shop packed with high-end cell phones and accessories is the reason why Spigen attracts around 20,000 visitors per day.

 

Common drop shipping mistakes to avoid

 

As with all business ventures, there is a lot to learn along the way. Here are some common drop shipping mistakes to avoid:

 

  1. Don’t take on a supplier that charges subscription costs. There are plenty of other suppliers out there that don’t expect this of you.
  2. Don’t be pushed into placing bulk orders with suppliers, even if they claim the product is the next “big thing”. As the old adage goes, if it sounds too good to be true then it probably is.
  3. Don’t stick with a single supplier, always have more than one for your web store, just in case a supplier goes out of business or raises their prices.
  4. Don’t expect easy money. There are many success stories out there, but rest assured that those drop shipping companies worked hard to establish their customer base and will have a tried and tested sales strategy.  

 

In Conclusion

 

Drop shipping definitely lives up to its hype, with real money to be made if you can establish a profitable online store. And with such a low investment needed to give drop shipping a try, it’s relatively risk-free to take a punt.

Just remember that real success still rests on your ability to capitalize on a profitable niche and target the right audience with your products. With a bit of luck though, you’ll get it right and enjoy the many rewards that come being a successful drop shipper.

 

Do you want to find out more about our experience in eCommerce? Read about our Shopify services here

 

Do you have specific questions you’d prefer to ask in person? If so get in touch and one of our questions will be in touch shortly

Top 10 e-Commerce Trends 2018

The retail industry is undergoing a significant technological transformation. Thanks to rapid advancements in digital infrastructure, e-Commerce is booming (with huge scope for further growth) – now influencing approximately 55% of in-store purchases.

So, given that over HALF of in-store transactions stem from online influence, it’s quite evident that retail merchants can no longer solely rely on their physical presence to not only succeed but to also survive as a business.

Due to the increased accessibility of e-Commerce technology, it is essential that retailers grow their digital footprint to remain competitive in their sector.

Let’s take a look at this year’s e-Commerce trends to see which technological developments are influencing traditional commerce.

 

1. BRICK & MORTAR STORES

If you haven’t already, you’ll soon start to see a new wave of brick and mortar stores. Although they provide a physical shopping experience for their consumers, these shops first came into their sector as digital businesses.

Canadian parka brand, Kanuk, have wowed us with their unique in-store experience that involves a -25°C room, giving consumers the opportunity to truly feel the effectiveness of the jackets in freezing weather conditions.

Online men’s fashion retailer, Frank and Oak, provides another quirky store experience. All 16 stores located throughout the U.S. offer premium coffee as well as barbershop services to their consumers in order to create a bespoke addition to the shopping experience.

These online retail businesses have succeeded in, not only providing a unique online user experience but also translating that personalized shopping experience into a memorable offline user experience.

 

2. AUGMENTED REALITY AT HOME

ikea app augmented reality virtual furniture

AR is gradually becoming a more prominent component in online retail.

The Ikea app, for example, gives its consumers the ability to place a virtual life-size product in their home to see how it might look before they make their purchase.

Having the capacity to visualize the way in which a product might sit in your own home will increase overall sales as it will boost consumer confidence and certainty.

Web developer and Shopify Expert, Kelly Vaughn, is in agreement with this and has stated that this is just the beginning of AR in e-Commerce: “Imagine being able to test out what furniture may look like in your home or how a standing desk might best work in your office”.

 

3. ROPO

The ROPO ratio (Research Online, Purchase Offline) is an accurate method for assessing the way in which a business’ digital footprint influences their in-store success.

Around 82% of mobile users search for local services via their mobile phone, and 19% of these searches translate into a sale within 24 hours of conducting the search. This positive correlation reflects the importance of tracking the interrelation between e-Commerce and commerce.

Examining the ROPO ratio allows businesses to see which aspects of their online business campaigns e.g. Google Adwords are directly contributing to higher sales rates, and thus they can alter their digital business strategy and implement targeted marketing accordingly.

For example, Matalan’s physical stores have greatly benefitted from its online presence, as every £1 spent on AdWords results in £46 in sales, £31 of which were in-store.

 

5. MOBILE CHECKOUT

With mobile phones becoming more and more sophisticated in their functionality, the rate of mobile checkouts against desktop checkouts is increasing. It has been predicted that mobiles will be responsible for 70% of e-Commerce traffic by the end of this year.

Significant advancements, therefore, require significant changes, meaning that merchants have to enhance their focus on online mobile retail experiences. Mobile retail developments such as fingerprint and facial recognition have already contributed to making mobile purchase more seamless.

Starbucks experienced this increased rate of mobile checkouts in their physical stores – so much so that the high volume of users making mobile transactions resulted in congestion in their shops!

 

5. MACHINE LEARNING

Machine learning refers to the way in which technology observes and remembers consumer behavior and then uses this information to perform personalized, targeted marketing.

For example, Netflix’s algorithm for recommending films and TV shows organizes 93 million global users into 1300 taste communities based on their movie and TV preferences.

Not only does this automated experience save online merchants time, but it can also contribute valuable information to businesses which can be translated into marketing campaigns.

For example, UX consultant, Mark Kelso shares his machine learning benefits: “we reworded our abandoned cart emails and have seen an increase in the conversion, for some shops by up to 12%”.

 

6. VOICE SEARCH

voice search on mobile ecommerce

The way in which we communicate through technology is rapidly evolving. The arrival of Alexa and Amazon Echo has introduced voice recognition into our homes. Therefore, e-Commerce platforms will need to become fully optimized for voice search functionality.

Dominos pizza app already has a head start on voice search services. App users can pick their pizza toppings and make the order vocally. Similarly Lyft app permits users to order taxi rides directly from Alexa.

We are just at the beginning of voice control in the e-Commerce sector.

 

7. DECLINE OF THE BROWSER

Thanks to an expanding variety of information channels e.g. apps, AR functionalities and voice technology, reliance on browsers is expected to wane.

The ability to make transactions through apps or use services embedded in social media platforms are also contributing factors to the decline in browser usage.

WalMart and Amazon are striving to develop a browser-less digital strategy that will provide basic everyday commodities such as milk or batteries.

 

want to set up your own e-commerce store? find out how we can help you here

 

8. SHOPPING NATIVELY

As mentioned above, many services such as maps are becoming integrated into apps.

This will lead to a greater quantity of consumers purchasing directly from inside an app. For example, Pinterest has integrated a “Shop The Look” functionality, which allows users to click on a product that is featured in a photo, and then be redirected to a purchasing page.

 

9. IMAGE SEARCH

It is expected that by 2020, about 50% of searches will be conducted through voice or image search.

Visual search tools are on the horizon, and well-established e-Commerce businesses such as eBay have already enabled a visual search tool, which allows users to replace the traditional text search with an image.

This will make comparing prices of and finding a particular product much more convenient for consumers.

 

10. BETTER PRODUCT IMAGES & VIDEOS

Higher quality product images and videos are key for remaining competitive in the e-Commerce sector. Having unique engaging image/video content that deeply reflects the functionality and design of a product.

For example, Bellroy uses sophisticated video content to display the inside of their wallets and other products, showing the scale of the product, how it can be used and much more. This creates a much more convincing pitch for the consumer to make a purchase.

Check out the full product video here!

bellroy wallet product page video

 

Shopify vs Shopify PLUS

So you’ve decided to build a website for your business. You’ve come across Shopify, a reliable worldwide e-Commerce solution used by hundreds of thousands of online stores, but you want to find out more.

Shopify strives to make the online exchange of goods and services as user-friendly as possible for both the business owner and the consumer.

The sheer volume of online stores around the world that thrive off Shopify-built websites is reflective of its success as a comprehensive digital platform.

Business owners like you can choose from hundreds of digital templates, integrations and apps to create a customized website which, not only complements their brand but also provides them with the ability to monitor their products, organize their content and manage their overall business all in the same place.

Sound good? Well, now you have a decision to make.

Do you choose the basic Shopify package or do you upgrade to the more advanced version, Shopify PLUS?

If you are unsure as to which one to go for, I would firstly reco­­mmend experiencing a free 14-day trial.

If you have already done that and are still unsure as to which package is the most suitable for your business, keep reading.

 

Who uses Shopify PLUS?

 

Firstly, let’s identify some of the clients who reap the benefits of Shopify PLUS. Major global clients such as The Economist and Budweiser enjoy the advanced features, extensions and support provided by Shopify PLUS.

So, it’s fair to say that if you are a large business with high-volume sales, Shopify PLUS would be beneficial in driving your business. Smaller-medium sized businesses who require fewer features and less maintenance tend to adopt the basic Shopify plan.

But that’s not to say that Shopify PLUS can’t benefit a smaller-medium sized business.

 

Why Shopify PLUS may not be right for your business

 

As I already mentioned, Shopify PLUS fits a large enterprise business model which requires a range of sophisticated features and functionalities.

Therefore, Shopify PLUS may not be the best option for you if you are a smaller business.

Additionally, if your website is likely to consist of lots of blog posts, given the e-Commerce nature of Shopify, it may not have the suitable functionalities for your website.

You will require some degree of training once you’ve adopted Shopify PLUS as your online business platform. If you do not feel comfortable managing the backend, then you may not find Shopify as beneficial as others.

Nonetheless, have a read of the following features and advantages of Shopify PLUS before making your decision.

 

What has Shopify PLUS got that Shopify doesn’t?

 

So why would you pay extra for Shopify PLUS? Let’s discuss its main advantages.

 

shopify bag logo

 

24/7 Priority Technical Support

While basic Shopify provides 24/7 Technical Support for its subscribers, Shopify PLUS offers a broader range of support, including 24/7 Priority Technical Support and dedicated Launch Managers and Merchant Success Managers.

This is ideal for setting up an online business as managers go an extra step further in monitoring your website post-launch, offering platform training for business owners and advice on maximizing sales.

This allows business owners to enjoy lower maintenance costs, as Shopify managers provide the additional support needed which hired external technical staff would otherwise carry out.

 

Lower Transaction Fees

Shopify PLUS business owners also face lower transaction fees of less than 0.2% per transaction, as opposed to higher transaction fees with Shopify basic ranging between 0.5% and 2%.

This is ideal for businesses with high-volume sales.

 

Higher Level of Customization

The extra monthly cost provides business owners with extra tools and features that would enable you to boost your creativity and optimize user experience.

Shopify PLUS allows business owners to customize pages that are not customizable with Shopify basic, for example, the checkout page can be tailored to match your brand specifications.

You also have control over payment processing features.

Check out some of the top Shopify themes here.

 

 

Simplified checkout

Not only can you customize your checkout with Shopify PLUS, but you will also experience a simplified checkout system which shares the same domain as your website – a feature Shopify basic lacks.

Approximately 10,000 transactions are made per minute across Shopify stores, so if your business is experiencing high-volume transactions then it’ll work to support high-volume sales.

This contributes to an optimal user experience.

website building tools

 

Unlimited staff accounts

If your business has 15 managers or more, Shopify PLUS is an ideal platform for you as you are able to add unlimited accounts to access your online store.

 

International e-Commerce

If you’re a large business seeking to expand on an international scale, or you already have stores located globally, then you’ll enjoy the benefit of being able to create up to 10 clone stores with Shopify PLUS, which support multiple languages and currencies.

 

Wholesale channel

A useful feature of Shopify PLUS is the wholesale channel, which allows business owners to track wholesale customers and orders. You also have the option of directly selling your goods and services through social media marketplaces such as Amazon, eBay, Facebook etc.

This is great for attracting a wide audience.

 

Integrations and reporting

Shopify PLUS enables business owners to create and share reports and analytics, so that customer behavior and sales flows can be monitored without using third-party features.

 

Security  

Shopify PLUS is also a highly secure platform for both businesses and consumers.

 

APIs

Shopify PLUS delivers a series of APIs which are successful in optimizing user experience. These include:

  • Shopify Multipass API – this increases the ease at which customers log in to the website
  • Shopify Gif Card API – this allows customers to pay with a gift card
  • Shopify Discount API – this offers a discount feature

…and many more.

 

shopify vs shopify plus logos

 

These are just a handful of the advantages of Shopify PLUS. If you want to explore what Shopify PLUS could do for your business then click here and request a quote.

 

Top 20 Shopify Apps 2018

Shopify is an extremely popular tool for online business owners as it provides them with a wide variety of features and functionalities designed to drive sales and optimize user experience.

These features and functionalities can be extended, however, by choosing to install any of Shopify’s hundreds of apps (1000+ available). Whether you want to improve your customer service,  marketing or reporting, the Shopify app store can provide you with many solutions that target these areas.

What is great about these apps is that you can download many of them for free, which means you are adding value to the functionality of your website which is likely to boost your sales –  without paying any extra for the service!

I understand that over a thousand apps is quite a large quantity to sift through, so I’ve tried to make it a bit easier for you by selecting my top 20 high-impact Shopify apps for this year, to make operating your online business as seamless as possible.

 

1. Conversio

 

Conversio is an email marketing app, which is designed to send follow-up, abandoned cart and newsletter emails to your customers. Other features include customizable receipts and customer feedback. This is especially valuable to small businesses that are looking to achieve growth in sales, repeat purchases and increased brand awareness in an ever-increasing competitive world.

Price: From $20 / month

Free Trial: 30 days

 

2. Smile.io

 

Smile.io provides a comprehensive platform for referral marketing, by offering rewards and VIP schemes to your customers. By achieving true customer loyalty and encouraging existing customers to send referrals to their contacts, you are likely to drive more sales.

And it’s free! So essentially you can increase sales revenue for no extra profit.

Price: FREE

 

3. Wishlist Plus

 

Wishlist Plus can maximize your sales through its ‘Wishlist’ feature, which can be implemented on your Shopify store to allow customers to keep a note of their desired products. That way, if a customer doesn’t wish to purchase an item immediately, they will be reminded of it later in their Wishlist basket.

Not only does it serve to help the customer, but it also provides you with an insight as to which products are most popular amongst your online users.

Price: From $0 / month

Free Trial: 14 days

 

4. Pinterest Buyable Pins

 

This form of social media marketing allows you to buy Pins, which enables customers to purchase your products directly through the Pinterest app. This is a worthwhile investment in your online store as it makes the purchasing process quick and accessible for your customers, therefore maximizing sales.

Price: $29 / month

 

5. Plug In SEO

 

This Search Engine Optimization (SEO) tool will let you monitor your site’s performance for no extra charge! The app will consistently monitor your site and automatically notify you if there are any problems you need to fix.

Price: FREE

 

6. Trust Hero

 

Reduce the rate of incomplete transactions or abandoned carts by implementing Trust Hero in your online store. This app provides an element of security for customers when buying from your site, and therefore will result in more sales revenue for your business.

Price: FREE

 

7. Happy Checkout

 

Happy Checkout provides users with a thank-you-page upon completing an order, as well as incorporating a social component by displaying social media links and an opportunity to stay updated with your store.

Price: $5.99 / month

Free trial: 7 days

 

8. Oberlo

 

Oberlo is a super useful tool which allows business owners like yourself to easily import products to your online store, ship products to customers, and to monitor your prices and inventory. Over 85 million products have been shipped around the world with Oberlo, so why not get started now?

Price: From $0 / month

 

 

9. PushOwl

 

Reduce the number of abandoned carts on your site by allowing PushOwl to send reminder notifications to customers who have incomplete transactions. Not only that, PushOwl sends out automated messages for discounts and promotions.

Price: From $0 / month

 

10. Pre-Order Manager

 

As suggested in the name, Pre-Order Manager looks after your pre-orders for your whole store or for individual products. This app is customizable, giving you the freedom to design your button and description to match your storefront specifications.

Price: From $0 / month

 

11. Klaviyo

 

Klaviyo provides a range of marketing features to help you boost your sales, including targeted Facebook and Instagram marketing, responsive email templates and automated abandoned carts notifications.

Price: FREE

 

12. Mailchimp

 

This app monitors your customers’ behaviour and sends out relevant targeted emails and newsletters to match their shopping behaviour.

Price: From $0 / month

 

13. ReferralCandy

 

A similar concept to Smile.io in terms of rewards and loyalty schemes for your customers, ReferralCandy also lets you customize your rewards for your customers to motivate them to share your online store and individual products to their contacts.

Price: $49 / month

Free Trial: 30 days

 

14. Snapppt

 

Why not try social media marketing with Snapppt? Much like Pinterest Buyable Pins, Snapppt makes it possible for Instagram users to purchase your products through your Instagram page by clicking on embedded links on your posts.

Price: FREE

 

15. Yotpo

 

Generate more sales by giving your customers the ability to leave product and site reviews with Yotpo’s in-built form.

Price: From $0 / month

 

16. Kit

 

Kit is a Facebook marketing app that allows you to implement targeted relevant Facebook and Instagram ads to drive your sales. This app is better suited to small businesses and also manages email marketing and social media posts.

Price: FREE

 

17. Recart

 

Recart is a unique Messenger Marketing app that allows business owners to boost their sales through implementing automated Facebook Messenger, Email and Push messages, which are helpful in following-up abandoned carts and checkouts. Recart is used in more than 45,000 e-Commerce stores.

Price: From $0 / month

Free trial: 28 days

 

18. SEO Image Optimizer

 

SEO Image Optimizer specializes in gaining business owners increased traffic and sales from Google Image Search.

Price: FREE

 

19. LoyaltyLion

 

This app is ideal for designing loyalty schemes for your online customers. LoyaltyLion does this by driving customers back to your site, encouraging them to make repeat purchases and motivating online users to refer your site and products to their friends and family.

Price: From $0 / month

Free trial: 14 days

 

20. Sumo

 

Sumo seeks to boost sales and revenue for business owners through marketing strategies such as monitoring cart abandonment and increasing conversion rates by encouraging customers to subscribe to your newsletters.

Price: From $0 / month