If you are new to dropshipping, click here.
Profit is determined directly by the difference in the buying and reselling price. Naturally, more customers means more revenue but increases costs as well. Therefore, micro target when you start, start small and aim big. Target your niche. Build your brand.
To start, here are some dropshipping strategies:
- Target your niche for the long run- Brand your new product such that it fits in a range of products you can easily release in the near future, possibly from the same supplier. You may not use the same supplier for that product for safety purposes, if they shut down, you have no product. But there will always be another supplier selling a similar product you can build your brand against. This also gives you the added edge of flexibility in your online business.
- Online Business Purpose- you may want a sole purpose to keep your business running, for example: IKEA –
- Lowered cost per item- This is to increase brand recognition and get more customers. This model generates profits on sheer volume, rather than getting a lot of profit per item. Lowering the cost per items can be really time-consuming, because more orders equal more time spent on customer support as well as ordering.
- Raised cost per item – With this model a brand is attempting to create a more premium and exclusive image. The business would be using the reputation of the brand to maximize profit per sale and focus on exclusivity.
It’s a great model for luxury items, and is also easier to deal with logistically as there are fewer items to move around.
This method requires high-quality products. Even though Aliexpress is known for cheap low-quality products, it actually has many reliable suppliers of premium quality products as well.
- Free + Shipping – Started in 2016 and kept growing. It works like this: seller presents a product as ”free”, while the buyer only has to pay for the shipping. Shipping is usually priced at $10, while the product and the shipping combined cost less than $5 when ordering from the supplier. However, the frequency of abandoned carts due to customer disappointment simply ruined businesses that used this model.
- Create an affiliate program – Having people who sell for me has increased my revenue. I use Affiliatly as a medium-priced affiliate program creator. It is very simple and affordable. By generating 2 sales on average, you will most likely profit enough to able pay off its fee for the whole month! It is definitely worth a shot.
Passive Income Idea: After growing and with a stable income, outsource your work and make dropshipping a passive income source.
Ready to earn extra income? Read my free dropshipping guide.