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Everything You Need To Know About Dropshipping Before You Start

In this article, I will provide you with a list of things you need to understand before you start a dropshipping store—things that will prevent failure.

19
 min read
January 20, 2024
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It is easy to start a dropshipping business, but many fail because they go head-on without doing proper research. 

I have had my failures in the past, and I am positive you can learn from them. I will be discussing: 

  • 9 things to know before you dropship
  • Other things you need to avoid that nobody talks about
  • Common mistakes that dropshippers make that result in failure  

In the end, you should have the information you need to start your dropshipping store the right way. The fewer errors you make, the less corrective action you need to take later on. 

Let's get started.

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Learn from Nawras Ganim, our founder. He will teach you everything you need to know about dropshipping before you start. Click to watch now!

9 Things To Know Before You Start Dropshipping

1. You need to find a winning product

Dropshipping is not about selling anything you like and expecting people to flock to your store. You need to learn the skill of finding a winning product to succeed. 

What is a winning product? A winning product is one that:

  • Has a demand
  • Is profitable
  • Has reliable suppliers
  • Is of high quality 

So, how do you find one? One important thing to note here is that a winning product must always be based on data, not on hunches. It is too high a risk to invest in a new product without proof of demand from consumers. 

To find a winning product, you need a reliable data source like the product database of Dropship.IO. it is a tool that shows you the sales performance of products in Shopify stores. 

Here is an example:    

In here, I wanted to know if “phone cases” are winning products. As you can see, it is. At the top, there is a phone case being sold for $11.10, and the seller sold over a million of these in a month, with a revenue of $13.5 million. 

On the other hand, there are types of phone cases that do not make a sale, like these: 

In essence, I can say that there are certain types of phone cases that the market loves and some types that the market ignores. 

If I sold the losing products, I would have spent my time and energy for nothing. Sure, I do not have to buy the product for inventory, but I would have lost money anyway if I spent it on advertising. 

2. A niche store is better than a general store

A general dropshipping store sells all sorts of things, while a niche store has a strong focus on a certain type of product or market. For example, a dropshipping store that sells only kitchen products is in the kitchen niche. 

It is always better to operate a niche store than a general store because a niche store makes you an authority. If your niche is kitchen, a site visitor will immediately know that you are a kitchen specialist. All your products in your store have something to do with the kitchen, making you look more credible. 

Here are the other benefits of a niche store: 

  • Easier to manage digital inventory in the store
  • Marketing has a concentration of effort on the same target group
  • You are serving the same types of customers with similar expectations
  • It is easier to do SEO

With a niche, you do not have to create too many product categories or collections. A few will do. For example, in the kitchen niche, it should be enough that you have categories for:

  • Pots and pans
  • Non-electric appliances
  • Spatulas and ladles

You can add more, but just make sure that the additions have something to do with the kitchen. If you do this, marketing and driving conversion will also become easier. 

Why? With a kitchen niche, the only people who will go to your store are those are already have a plan to buy a kitchen tool, not random people who are merely window shopping. 

In your blogs, ads, and social media posts, you will also be likely to attract people who want the item. If they click your ad or link, it is also highly likely that they will buy. 

There are many niches out there, and you can even niche down further. The most niched dropshipping store is a single-product store where you sell only one product. 

We have a list of the best niches for dropshipping, and I recommend that you start your research from there.  

3. Know the legality of the products you sell 

There are many products that you cannot legally sell via dropshipping. One good example is food, which you cannot ship worldwide because many countries do not allow the importation of food. Another example is seed or real grass for an aquarium. 

Apart from the legality, there are things that you can sell legally but cannot advertise in common social media channels. If you go to Facebook's ad policies, you will see several product categories that do not allow for advertising. Below are some examples: 

  • Explosives
  • Sex toys
  • Drugs, alcohol, and tobacco products
  • Political content
  • Surveillance equipment
  • Gambling paraphernalia

There are many more, and it is best that you visit the advertising restrictions page of Facebook. The same thing goes with other social media channels like Pinterest, Twitter, and Instagram. 

So, let us say you have a great idea, and you want to launch a James Bond store where you sell hidden cameras, recorders, etc. 

While it is legal to dropship these items, how will you advertise if the social media platforms do not allow it?

Another example is if you do print-on-demand dropshipping with Printify, and you design t-shirts that support either Biden or Trump. Or what if you design shirts that are either pro or anti the LGBTQ group? 

In this case, both Google and Facebook do not like your product. Both platforms are not likely to allow your ads. You may get past this policy during the campaign season, but then there are so many rules you need to follow. 

Overall, I recommend that you stay away from controversial products related to politics, hate, violence, sex, drugs, and the like. It is easier to dropship common items like toys, hobby items, and clothing.   

4. The supplier is a fundamental part of your dropshipping success

So, you found a great product, and you are ready to launch your store. The thing is that the supplier, unbeknownst to you, is unreliable. 

Sadly, some suppliers do not share your goals. Once they made a sale, they made a sale—they do not care if your customers are happy. It is their shop, so it is their rules they will abide by, and this usually ends in:

  • Delayed shipping
  • Wrong item sent

There are thousands of suppliers in the world. In AliExpress alone, you will find at least six companies supplying the same thing. However, not all of them provide the same degree of service. 

It is also important to note here that some suppliers deliberately ship the wrong item to get rid of old inventory. For example, if you ordered a phone with an astronaut design, they would ship one that has a dog design. 

If you file a complaint, some of them dare to say that they ran out of stock for the astronaut design, so they sent the dog one. They would not even bother informing you of this problem before they shipped the item. The result? Your customer is unhappy. He asks for a refund, and you lose money.   

Suppliers like these exist, and it is unfortunate. To reduce this kind of risk, take the time to investigate. All supplier databases have a rating system so take a look into that. 

In addition, order the product yourself so you know how long it takes for the supplier to pick, pack, and ship the goods.

You must also be wary of reviews. Read reviews rated between 1 and 3 and you will see the real deal with this supplier. Some consumers love standards and would rate a 5 even if the supplier got delayed in shipping. Read the reviews and look for red flags.

5. Marketing and branding are not as easy as you think 

Marketing is hard, especially for dropshippers, given that many of us dived into this business because it requires low capital. Although you can market your product in so many ways, you are competing against more established sellers and brands. 

Here are some reasons marketing usually fails:

  • Your bid is too low – ad networks are more likely to show the ads of high bides because they will earn a higher revenue
  • You have no audience – many people advocate that you niche down when choosing your audience by adding more “interests” or narrowing your demographics. This advice is bad. The more you niche down in your ads, the lesser number of people there are for an ad network to show your ads to. 
  • Your ad image or video is unappealing – there are many tools you can use to make your ads look better. make sure you also use the appropriate sizes according to the ad type you are running. Never use blurry images—follow the appropriate ratios and you will not have this issue.

The ad copy is the most difficult thing to do when writing ads. From your headline to the body, you need to ensure that each word makes sense. The good news is that there are so many resources for writing ad copy online, and you can even use robots like ChtGPT to give you ideas for advertising copies. 

Take the time to craft a compelling ad. The money you pay to ad networks like Meta is money that will disappear if the ads do not convert.  

6. Your platform and servers are equally important

Shopify is the best platform for dropshipping because the creators built the platform for e-commerce. As such, they took into account the fact that a store will carry a lot of images. The servers of Shopify are fast, but not if you load your backend with junk.   

A slow store will not make sales. People can only be patient enough to wait three to five seconds to load a page. if each page in your store takes forever to load, the shopper will leave and look somewhere else.

Your Shopify store can load slowly if you integrate too many apps. As a beginner, you may find it enticing to use so many apps to add multiple functionalities. If you think about it, many of these apps are unnecessary.   

To test how fast your website is, go to Google’s Page Speed Insights and run a test. Then, you will see something like this: 

As you can see in the screenshot, the performance score is red, which indicates that the website is so slow. A score of orange is acceptable.  

Your goal is to make the score green on both mobile and desktop devices. Once you get the results, scroll down and read the report, and you will understand what makes your store load so slowly.

Do not underestimate the speed of your website. There is a reason Amazon spends so much money on international servers—they know that online shoppers do not like slow websites. If your dropshipping store crawls, you will lose credibility.    

Finally, make sure you upload images in modern formats designed to be web-friendly. One such format is WEBP. You can use free conversion tools online to convert your JPG and PNG images to WEBP for free. 

7. Product quality is a basic expectation of customers 

Quality is relative to the price that a person pays. In dropshipping, you do not need to sell expensive items, and I would also advise you not to do it. 

As far as quality goes, focus on: 

  • The product’s integrity – no breakage or missing part
  • The product’s functionality – does it work as intended?
  • The product’s longevity – does the product last according to expectations? You need to consider the materials used such as cheap plastic.   

Customers, especially those who buy affordable goods, do not complain a lot. however, if they do, then there must be a serious problem. 

The one thing I recommend is that you buy the product before you even add it to your store. Yes, this will cost money, but it will save you from dealing with a ton of problems later on.

All sellers and suppliers will attempt to show their products in the best possible light. Because of photography’s magic and the power of Photoshop, ordinary products will certainly look more vibrant and attractive. 

But in reality? The product may not even meet your expectations.

One way to find out if a product is really that good is to read the reviews. The downside is that most reviews do not tell you a story. Many consumers who rate a product five stars do not even leave decent feedback. They just say things like “great!” or “awesome!” or “I love it!”

At best, you need to order the product yourself to see it. Use it and test it to validate its real worth. Do this and there is no way you can go wrong with it. 

Another benefit of ordering the product is that you can use it for ads. you can take your own photography or videos, and use these unique media in your ads, social media posts, and product listings. 

There is no need to buy all your products. If you are dropshipping five products from the same supplier, and one is of good quality, we can assume that the other four are also of good quality.

8. There is a psychology to pricing your goods

There is a trick to pricing your products, and it is an important marketing tactic to succeed in dropshipping. Without this knowledge, you will have a narrow view of pricing your products, leading to little or no sales. 

Here are some strategies you can use: 

  • Bundle your product
  • Create FOMO promotion 
  • Use an anchor 
  • Frame your price 

Bundle your product

Bundling your product tells a consumer that he is getting a good deal. It is a basic pricing psychology that many fast-food chains use. Just ensure that the bundles make sense. 

For example, you can bundle a drone and an extra battery together where the customer could save money if he purchased this bundle than if he made the purchase separately. However, it would be unwise to bundle a drone and a remote because remote controls rarely go out of order.

Create FOMO promotion 

FOMO stands for fear of missing out. It is a psychological phenomenon where customers want to buy something not because they need the item but because the deal is so good and the sale coming to an end. this also applies to limited-edition products or those that will soon be out of stock. 

Here is an example: 

The seller, Shein, is offering two types of sales or discounts, and both of them have a deadline. Both of them end on the same date, but the discounts are different. A buyer looking at this only has up to the 15th of January to get a discount of 25% for orders above $59, and a discount of 30% for orders above $9.90.

If you use FOMO, make sure you stick to your word. Some dropshippers say that the sale will last only 24 hours, and then they reactivate this sale after that. A shrewd consumer will see through this tactic, and if he does, you will lose credibility.   

Use an anchor 

An anchor is a price that attempts to lead a consumer to buy something that has a higher price because it makes more financial sense.

Here is an example: 

  • One battery –$50
  • Two batteries –$75
  • Three batteries –$100
  • Four batteries –$110

As you can see, the price of one battery is about $25. If you buy only one, you will pay more. If you buy four now, you pay only $110 instead of paying $200 for buying four separately; you would save about $90.   

This type of pricing is called price anchoring. You will also see this in fast-food chains, especially if they want you to buy a large drink instead of a medium one.   

Frame your price 

Finally, there is a thing called proper framing. To explain it briefly, it means using the right phrasing. How you communicate your marketing is crucial to how a consumer perceives value. 

For example, you can say “buy-one-get-one free” instead of saying “50% off.” Between these two phrases, the first one is a better proposition because the customer would think he is getting one item free. 

9. You must be there for your customers

Lastly, you must ensure that your customer service is unparalleled. It is easy to build a dropshipping store, but dealing with customers requires a real passion for service. 

Here are some tips:  

  • Always be polite
  • Be straightforward with your answers; do not beat around the bush
  • Try to presume other questions and address these possible objections

Some customers are rude, and you will have a fair share of this. Expect this, especially if the customer is unhappy with your product. If he is, offer an alternative rather than risking a bad review. A happy customer is a better choice, even at a small financial loss than a disgruntled one who will leave a bad review. 

Happy customers are also your advocates. They will tell their friends and families to buy from your store because of the experience they had.

Other Things to Consider If You Start Dropshipping

In this section. I will explain some bonus things you need to know before you start dropshipping.

1. Scaling Too Hard

Scaling means ramping your sales up, which you can do by aggressively advertising. The problem that can arise is that your suppliers may not be able to catch up. This issue normally happens during sale seasons, like during Thanksgiving or Christmas holidays.   

Another thing to watch out for is that your payment processor may put your money on hold. For example, PayPal will usually do this if the system observes that there is a surge in the amount of money you receive.

Manage how you scale, and contact PayPal or your payment processor. Tell them that you are marketing, and they will not put your sales payments on hold.   

2. Right bank account 

If you are dropshipping in the US, I recommend that you use a bank account that transacts in US dollars. Why? Because you want to avoid currency conversion fees. 

If you are not a resident of the US, you can use financial systems like Revolut to have a “US bank account.” Use this system to make all your transactions so you can avoid currency conversion fees.  

3. Use Shopify payment options

Most dropshipper use Stripe or PayPal, but these are not the best options. Instead, use the payment gateway of Shopify. 

Why? With Shopify’s payment gateway, your international consumer will see the prices in their local currency, not your default currency. Because of this, it is easier to convince the site visitor to convert. As a result, you will make more sales. 

In addition, Shopify payments allow you to enable Klarna, a system where you can offer buy-now-pay-later payment options. 

The only thing to worry about here is that Shopify will charge you a conversion fee. Although this can eat a bit of your profit margin, I can say that it is negligible because you will make more sales, anyway.  

4. PayPal can ban your account 

PayPal seems to have a love-hate relationship with dropshippers because many customers file a complaints that they never received the product (especially if the supplier is from China).

As such, PayPal is strict—they want to see your shipping tracking number, and you must upload this manually in PayPal. 

This uploading process is tiresome, so use an app like Paltrack in Shopify, which automatically uploads the tracking ID to your PayPal account once an order has been fulfilled. 

5. Ad account restrictions

Facebook and other advertising networks will ban your account if you violate their policies. My advice is that you read their policies before you even start marketing. 

Facebook, for one, also has what they call a Page Quality Score. They send surveys to people who click your ads, and you will have a score between 0 to 5. You want to be close to 5. To do this, make sure that the shipping experience is great and that your ad matches what the consumer sees on the landing page. 

In addition, use a private dropship supplier instead of AliExpress. If your customer is unhappy, he will take this dissatisfaction into account and rate you so low on the Facebook survey.

Common Dropshipping Mistakes to Avoid

1. Picking the wrong niche 

To succeed in dropshipping, you need to pick a niche or a product that: 

  • You understand well
  • Has a demand
  • Is easy to find suppliers for
  • Has no legal issues or ramifications

Do not sell something that you like. For example, we all like shoes. I like shoes, but I do not understand shoes. If I chose this as a niche, I would not even know where to begin as far as customer expectations are concerned. 

Choosing a niche that you are not passionate about puts you in a bad business position—your ignorance about the product will show, and you are more likely to make mistakes along the way.     

The second and third points are self-explanatory, but the fourth needs clarity. Do not sell items that have questionable existence in terms of morality and legality. For example: sex toys.  

While sex toys have a market and are legal in some countries, no media platforms allow these products for advertising. Sell products like that and you will limit yourself to SEO and free social media marketing (provided you abide by the rules) and also advertising in adult channels. So, better stay away from products like these.    

2. Not striving to be a good marketer

Another mistake that many dropshippers make is not taking the time to learn to improve their marketing skills. Overall, building a dropshipping store is the easiest part of this business. It is the marketing efficiency and effectiveness that you have to worry about.     

The internet made marketing easier and also harder at the same time. Easier because marketing channels are accessible, and you can use all sorts of free tools to create your marketing copy. 

Why harder? It is harder because now, you are competing against millions of marketers for the same eyeballs. It is also expensive, so you must be ready to shell out money as you go along and learn. If you do not become good at this, you will hardly make any sales at all.  

3. Ignoring customers

Do not ignore your customers. Ensure that your dropshipping store has a chat box, even a robot, or any method by which you can communicate. If customers send you an inquiry, make it a point to answer these inquiries in less than 24 hours.

I know that this can be time-consuming, especially if dropshipping is merely a side hustle for you. The trick here is to sit down and think of all the possible questions they may have or their objections and provide answers in an FAQ section in your store.

4. Selling too many products

Once you get to view a dropship supplier tool like Spocket, you will be amazed at how easy it is to import these products to your store. It can be tempting to keep adding new product categories and products, but I advise you against it. 

Adding lots of products to your store does these things: 

  • You will lose focus on your target market because you are serving too many types of customers
  • You will spend a lot of money on advertising to move all your products
  • You will deal with many suppliers, and this can lead to problems

Focus on a few products only so you do not spread yourself so thinly. If possible, I recommend that you create a single-product dropshipping store. If you need more details on this, please read our blog about the 20 best examples of one-product Shopify stores

5. Bad UI and UX on the dropshipping store 

Your website is like the glass panel of a physical store. It is your display window or the façade of the store. Since it is what your customers will use, make sure that the design is not just coherent, but that the website also delivers both excellent user interface (UI) and user experience (UX). 

Here are some tips: 

  • Make your website mobile-friendly
  • Do not clutter your pages with too much information like text and images
  • Keep a lot of white space; it is easy on the eye
  • Make your menu accessible; create a navigation system that makes it easy for the user to find what he is looking for
  • Keep the checkout process simple
  • Reduce pop-ups and anything that inconveniences the customer 

Lastly, make sure that your website loads fast. Do not use too many plug-ins or Shopify apps because these programs slow down your store servers.

FAQ: Everything You Need To Know About Dropshipping

What do I need to know before starting dropshipping?

Dropshipping is a legitimate and real business. As such, you will face the same challenges as any retail business does. You need to be meticulous in your product selection and never stop learning to succeed in dropshipping.  

What knowledge do you need for dropshipping?

The skills you need in dropshipping are product selection, math plus analysis skills, and marketing skills. 

What do I need to start dropshipping?

You first need $25 monthly to start dropshipping to pay for your Shopify store. In addition, you also need a dropship import tool, or supplier tool, like Spocket and Printify, to make your workload lighter.   

What do you need to know about the dropshipping business?

You need to know that you are not alone. Since the barrier to entry is low, you must expect a lot of dropshippers in the same niche as yours and be prepared to compete against them.

Summary

In conclusion, the first thing you really need to focus on is niche or product selection. Take the time to research which products are winners in the industry you want to penetrate. At this point, I strongly urge you to register for a 7-day free trial account with our system, Dropship.IO. Use it to your advantage and gain leverage over other dropshippers!   

Try Dropship
Discover winning products to sell today.
Shopify Offer
Start and sell with Shopify $1/month for 3 months.
Try Dropship
Discover winning products to sell today.
Shopify Offer
Start and sell with Shopify $1/month for 3 months.
TikTok Offer
Get up to $1,500 in free TikTok ad credits.

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