We've covered a bunch of information so far, discussing everything from the fundamentals of dropshipping to the intricacies of picking a niche and running your business. By now, you should have enough of a foundation to confidently get started researching and launching your own dropshipping business.
With so much to consider, it's easy to get overwhelmed and lose track of what's really important. That's why we created this list of the crucial elements to success. These are the core “must-do” actions that will make or break your new venture. If you can successfully execute these, you'll be able to get a lot of other things wrong and still have a great chance at success.
1. Add value
Having a solid plan for how you can add value to your customers is the most crucial success factor. This is important for all businesses, but much more so in the world of dropshipping, where you'll be competing with legions of other “me too” shops carrying similar products.
With dropshipping, it's easy to think you're selling customers a product. But successful small merchants understand that it's not only the product they offer—they're selling insights, information and solutions. You think you're an ecommerce merchant but you're also in the information business.
So how are you going to add value and help solve problems for your customers? If you're unsure, spend some time re-reading Chapter 4, which discusses the topic in depth. If you're struggling to answer this question for a given dropshipping niche, you may want to consider picking a different market.
If you're not able to add value through quality information and guidance, the only thing you're left to compete on is price. While this has been a successful strategy for Walmart, it's not going to help you build a successful drop shipping business.
2. Focus on marketing and SEO
Coming in a close second to adding value as a key success factor is being able to drive traffic to your new site. The #1 problem and frustration new ecommerce merchants face is a lack of traffic to their websites. Too many merchants slave away for months on the perfect site only to launch it to a world that has no idea it exists.
Marketing and driving traffic is absolutely essential to the success of your business and is difficult to outsource well, especially if you have a small budget and are bootstrapping your business. You need to take the personal initiative to develop your own SEO, marketing, outreach and guest posting skills.
This is particularly crucial during the first 6 to 12 months, when no one knows who you are. Following your site launch, you need to dedicate at least 75% of your time on marketing, SEO and traffic generation for at least 4 to 6 months—that's right, 4 to 6 months. Once you've established a solid marketing foundation, you can scale back and coast a bit on the work you put in. But early on, it's impossible to place too much emphasis on marketing.
If you're not a marketing or SEO expert yet, the following resources and blogs are a great way to get started:
- Moz. One of the most popular SEO communities online. Their beginners guide to SEO is a particularly great resource for those starting out.
- SeachEngineLand. Extremely prolific SEO blog, with dozens of new posts each day.
- SEOBook. A popular SEO blog and the home of a paid private community for SEO professionals.
- Distilled. This marketing and SEO agency has a top-notch blog and a number of quality training courses and guides, many of which are free.
- HubSpot Blog. Advice on everything inbound marketing related, from driving traffic with email to social media tips.
- Seth Godin's Blog. Solid high-level advice on marketing and building an audience.
- QuickSprout. A blog by well-known entrepreneur Neil Patel dedicated largely to marketing, SEO and traffic generation.
- Sparring Mind. How to use behavioral psychology to help influence customers and market your business.
- Copyblogger. Content marketing tips with an emphasis on writing effective, compelling copywriting.
- Mixergy. Interviews with successful entrepreneurs in the technology and online fields. Not focused exclusively on marketing, but lots of applicable information for aspiring entrepreneurs including marketing and early-stage advice.
Ecommerce marketing resources
- Shopify Blog. A comprehensive ecommerce blog with frequent posts on how to effectively promote and market your online store.
- EcommerceFuel. Tips from an active ecommerce entrepreneur on how to found, grow and market online stores. Written specifically for individual store owners and smaller stores.
Start your free trial of Shopify—no credit card required!
Almost every successful dropshipping store we encounter has one thing in common: It specializes in a certain product or niche. The more that stores specialize, the more successful they tend to be.
You don't want to just sell backpacks. You want to sell backpacks designed for around-the-world travelers obsessed with lightweight gear. You don't want to just sell security camera equipment. You want to focus on security systems for gas stations.
Many think narrowing their focus limits their potential customer base and will cost them sales. Just the opposite is true! Specializing allows you to communicate more effectively with your customers, stand out more easily from the competition and compete against a smaller field. Specializing is rarely a bad move to make in a dropshipping venture.
If you're launching a store in a new niche you probably won't know what segment of your customers to focus on, and that's OK. But as you gain experience with your customers you should identify the segment that's the most profitable and that allows you to add the most value. Then, try to position your business to focus exclusively on those customers' needs and problems. You'll be amazed at how your conversion rates skyrocket even if you're charging a premium price.
Remember: If everyone is your customer, then no one is. Specialization makes it easier to differentiate yourself, charge a premium price and concentrate your marketing efforts more effectively.
Learn more: How to Find the Best Products to Dropship
4. Have a long-term perspective
Building a dropshipping business is like building anything else of value: It takes a significant level of commitment and investment over time. Yet for some reason people assume they can build a passive six-figure income by dropshipping on Amazon after a few months of part-time work. That's just not the way it works.
As we mentioned in "How to Start A Dropshipping Business", it will realistically take at least a year to build a business that generates an average full-time income.
It's also important to understand that the first few months are the most difficult. You'll struggle with doubts, run into issues with your website and will likely have an underwhelming website launch that generates zero sales. Understand that this is normal! Rome wasn't built in a day, and neither were any successful dropshipping businesses.
If you mentally prepare for a challenging beginning and don't expect to get rich overnight, you'll be much more likely to stick with your business until it becomes a success.
5. Offer outstanding service
The Internet has always been a fairly transparent place, but the recent rise of social media has made your business reputation even more important to your success online. If you don't treat your customers well, they'll often let the entire world know—including many potential customers.
The biggest customer service risk for dropshipping merchants is having tunnel vision on per-order profits and losses when fulfillment issues go awry. As discussed in Chapter 6, it's critical to accept that dropshipping can get messy, that you'll be paying to clean up some messes, and that you shouldn't always try to pass these on to your customer. If you aren't occasionally losing money on individual orders to make customers happy, you're probably not providing very good service.
Having happy customers is the best form of marketing. As is true in all businesses, it's much easier to make a sale to a satisfied customer than to try to convince a new prospect to buy. If you treat your customers exceptionally well, they're likely to spread the word and refer others your way. With top-notch service, you can build a business where repeat customers generate much of your revenue.
Making customer service a priority set your dropshipping business up for success, so ensure it's a priority from the outset.
6. Don't get hung up on the details
Don’t focus too much on the details. Your company name, logo, theme or email marketing service aren't going to determine your success.
What makes a business successful are the things we just talked about: adding value, marketing, outstanding customer service, specializing and a long-term commitment. Still, new merchants will spend weeks, sometimes months, struggling to make a decision between two shopping carts or providers. That's valuable time better spent developing the core aspects of the business.
Do your research and make an informed decision, but don't let small decisions paralyze you.
7. The most important step
The most important step—the one that most people never take—is to actually get started building your business! This is the hardest thing for most people and it's usually a result of fear and uncertainty.
It's a common misconception that successful entrepreneurs have a rock-solid certainty about their business at the outset. When you dig a little deeper, you'll find that most had fears and reservations about how things would turn out. Yet they moved forward with their plan despite these doubts.
If you're serious about building your own dropshipping business, you'll need to do the same. Do your research, evaluate your options and then move forward with that information in spite of your fears and reservations. It's what entrepreneurs do. Start now.
Read this next: How to Get Your First Sale in 30 Days
Shopify's first dropshipping book, The Ultimate Guide to Dropshipping, was originally published in 2013 and recently moved to our blog. Keep an eye out for the Second Edition later in 2020.