Because of the capital costs and fulfillment headaches, many people are hesitant to open an online store. Consider what it would be like if someone volunteered to cover your upfront inventory expenditures for thousands of items as well as oversee your fulfillment operations. It would be a lot easier to get started, and you could work from anywhere in the world. Does it seem too good to be true? It isn’t if you know where to begin.
1. When a provider fails to fulfill an order
Even the best vendors make mistakes, and delivery failures are unavoidable from time to time. So, what happens if your source sends the wrong item or none at all? Here are three choices to consider:
You should never hold your dropshipper responsible for a mistake. It will simply confuse them and make you appear inept. The customer is entirely unaware that the dropshipper exists. Instead, take responsibility for the problem, apologize, and explain what you’re doing to fix it.
Depending on the severity of the problem, you may want to compensate the consumer ahead of time. This could include a refund of the delivery price (one of our personal favorites) or an upgrade if the buyer needs a new item to be supplied.
Although you must accept responsibility for the error, this does not mean you must reduce your profit margin. Any ethical supplier will pay to correct its own mistakes, including return shipment charges. It will, however, most likely not cover any freebies or updates you provided to the customer. You must factor in the costs of public relations and brand development.
2. Managing various suppliers and inventory
The most significant issue you’ll encounter running a dropshipping business, according to most veteran dropshippers, is monitoring inventory status across various suppliers. If you don’t do an excellent job at this, you’ll frequently be alerting clients that their order is out of stock, which isn’t a great way to get loyal consumers and brand lovers.
It’s a complicated procedure to manage inventory between your suppliers and distributors properly, as well as to restrict the amount of out-of-stock items you sell. You can sync inventory with Shopify apps like DuoPlane and Syncee or a web-based service like Ordoro. This is a terrific alternative when vendors provide real-time data streams, but this isn’t always the case.
3. Concerns about security and fraud
Keeping your clients’ credit card information on file might make reordering more accessible and potentially enhance sales. However, if you’re hosting your website, the security risks and responsibilities are usually not worth it. To hold credit card data, you must follow all PCI (payment card industry) compliance regulations and undergo security assessments. This is a costly and time-consuming process, especially for non-technical business owners. In addition, if your system is hacked or compromised, you may be held accountable for the stolen card data.
The best strategy is to avoid storing credit card information. Consider accepting payment via Shop or PayPal, which helps speed up the checkout process and prevent cart abandonment.
4. Recognize chargebacks
You’ll earn a “chargeback” if a client contacts their bank or credit card provider to dispute a charge you made. Your payment gateway will deduct the amount of the contested order from your account for a short period while you show that you supplied the products or service to the consumers. If you can’t produce proof, you’ll be charged a $25 chargeback handling fee plus the amount in question. You could lose your eCommerce site if you have too many chargebacks compared to the volume of transactions you’re processing.
5. Dropshipping returns: how to handle them
Before you write your own refund policy, be sure you fully understand how all of your vendors handle returns. You may afford to be lenient with your terms if they offer a lax 45-day return policy. One supplier’s strict return policy may compel you to reconsider the words you can afford to put in place.
6. Issues with shipping
You can choose from three different shipping rates:
With this option, your shopping cart will calculate an actual real-time quote based on the total weight of all purchases made and the delivery destination. This is quite precise; however, it can be challenging to calculate shipments originating from multiple warehouses.
You’ll determine flat shipping prices depending on the kinds of products ordered if you choose the per-type method. As a result, all tiny widgets would be $5 to ship, while all large devices would be $10 to ship.
You’d charge one flat amount for all shipments, regardless of level, as the name implies. You might even consider providing free shipping rates. This is the simplest option to use. However, it is the least accurate in terms of representing actual shipping costs.
7. Assist customers
Take it from us: using an Excel spreadsheet to manage all of your customer inquiries, requests, and returns isn’t ideal. Excel, as good as it is, isn’t designed to handle customer service. Similarly, as your company and team expand, managing assistance with a single email account becomes increasingly complex, resulting in difficulties and service interruptions.
One of the most extraordinary things you can do to assure exceptional support for your consumers is to set up a help desk and write a series of FAQ articles. Help desk software comes in various shapes and sizes, but they all provide a central spot for managing customer service correspondence and concerns. Most desks make it simple to assign issues to crew members and track dialogue between all parties involved.
8. Provide telephone support
It can be challenging to decide whether or not to provide phone help. It’s an evident approach to provide real-time support, but it’s also one of the most costly. You won’t manage calls if you’re starting a business while working a 9 to 5 job. However, it can be a viable choice if you work full-time on your enterprise or have someone on staff who can. You can always have your phone number ring through to voicemail and return consumer calls later when you cannot staff a phone throughout the day. This isn’t the ideal solution, but it’s a solid start.
9. Concentrate on marketing
Customers must be able to find your store in order for you to make sales. To do so, you’ll need to build a constant flow of traffic. Search engine optimization (SEO), Facebook advertisements, and Google Ads are often the most incredible marketing avenues to focus on as a new drop shipper to improve website traffic.
While beginning an eCommerce business is one of the quickest methods to get a company up and running, keep in mind that it isn’t a short road to financial freedom. It needs significant labor to create a successful dropshipping business so that clients are delighted and return.
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