Outsourcing has always been the way of pushing out a small aspect of your business to experts who can better handle them and create a better ROI for you. But there is a new trend in town; you can now outsource a very large portion of your business to experts, sit comfortably, and still make a huge turnover.
As a small business, you should need a lot of funds to fight the competition, however, dropshipping has overturned all the initial expectations about starting and successfully carrying out a business. This can be said to be even more difficult coming from the angle that dropshipping belongs to the eCommerce sector and there are big names such as Amazon, Alibaba, and Walmart in this sector.
What do you need to start a dropshipping business? At the barest minimum, you need a computer, a website, and a source of internet. Once you have these, your dropshipping business can kick off; for any business entrepreneur, this is seeking for little or no funds to start a profitable business.
Some countries have ensured that the internet is free, there are hosting sites that can enable you to create a website for free; the only requirement is to source for your computer and once you build your client base, you are in business.
Obstacles you need to overcome in the dropshipping business
The fact that you are outsourcing major aspects of the dropshipping business does not mean you must overlook obstacles; you are going into the dropshipping business to make profits and create a niche for yourself in the business, then you must do all it takes to set up the business and survive. The following are aspects of the dropshipping business you must think seriously about before outsourcing:
1. Wholesale suppliers
It may not be easy for you to get directly to the manufacturer, hence the best option is to get a wholesale supplier. The wholesale supplier you need to ensure success must be credible, since you may be venturing into the business without funds, your fate lies on the credibility of your suppliers.
Some retailers can also enhance your supply channel; how can your wholesaler supplier ensure this without having warehouses in major countries of the world? The reality in the world now is that most countries depend on products from China; this may probably be based on the fact that products from China come cheaply and are qualitative due to the availability of labor or leveraging technology.
For instance, AliExpress is one of the biggest suppliers from China and has a lot of warehouses all over the world; this clearly means that any drop shipper that wants to fulfill orders from the U.S. for instance does not need to depend on products that must come directly from China; AliExpress can easily supply from any of their warehouses that are located in the U.S.
With this, you can easily build credibility if you can deliver on the promise, you must also look into the profit margin; from a wholesaler, you have better chances of making better profits. The retailer must consider the profit before fixing prices for products, which you can also get into your kitty.
However, the most important thing to you is to ensure that your customers get value for their money; once you can ensure this, you can rest assured that you have got into the business. What keeps any business thriving today is customer satisfaction; the competition has become so stiff; the world has become a global village; it’s no longer easy to monopolize any business since, within a twinkle of an eye, customers can get whatever they need from any part of the world; the internet has made this possible.
You need to ensure that your wholesale suppliers are transparent so that whatever information you give to your customers must be credible. Customers are very concerned with transparency and are wary of any business setup they consider suspect.
2. Shipping time
Another important aspect of dropshipping that you have to outsource is the shipping of the products. The essence of dropshipping is to sell products around the world without keeping inventory; this makes dropshipping very competitive since you don’t need to have so much funds to engage in the business, however, you are at the mercy of others.
You will outsource inventory, packaging, labeling, and shipping; customers want to get their orders in qualitative time. Most purchases now are to meet some demands, and nobody will be happy with an order that arrives after the need for the product has elapsed.
Who are you outsourcing shipping to? Basically, you don’t have anything to do with the product; your business is to receive the order from your customer, pay the wholesale supplier, and allow the wholesale supplier to package the product, label it, and send the product through a carrier to the customer.
Your customers do not know the wholesale supplier and, therefore, have nothing to do with them; the buck still stops on your table. The wholesale suppliers and, ultimately, the carriers you outsource to must be credible; without ensuring their credibility, you will lose relevance in the market.
Before outsourcing your dropshipping business, you must endeavor to verify the credibility of the wholesale suppliers and the carriers they use. Your customers will expect to know the delivery time, and this information must be made available on your website.
You must understand the difference between order processing time and shipping time and ensure your customers are in the picture. What a customer wants to know is when the product will be delivered; this boils down to the total delivery time, however, if you are transparent with your customers and make them realize the difference between order processing time and shipping time, they will understand better what you go through and possibly be more amenable to any delay to their expectations.
Your customers may not outrightly understand that the bulk of your business is outsourced; this may not be an important factor that you must disclose. However, if your customers trust you and refuse to deal with the Amazons and Walmarts of this world, you need to build trust and ensure transparency with them.