Not promoting anything here, just want to share a thought I had about dropshipping and how it's influenced my business decisions moving forward.
I used to be obsessed with finding any product I could, usually cheap, less than £100 items and drop shipping on ebay, using other retailers as the unknowing dropshippers! I used an app that compared product prices to find the cheapest online. I thought I was a genius!!
I was making money, granted, however every sale I made, I would only be scraping a tiny margin, maybe 10-30%. And I would still have to make the sales to make even that!
So I thought, what if instead of selling cheap items and making 30% (30% of £100 = £30) why not sell high end items that people still buy online (30% of £1000=£300)! So in each case, I make one sale, both with the exact same margin, but in the latter, I make ten times the profit! From one sale! In other words, I would need to make an extra 9 sales which is more time, more effort and potentially more money spent in advertising.
It was a no brainer and a real AHAA moment for me! Hope it makes you think about your business if you're dropshipping and helps you make more profit! I have now moved away from ebay because working out the fees constantly was a pain and I chose to find a solid long term supplier and set up on my own store. I do not miss those ebay fees!
Check out my store, any feedback welcome and greatly appreciated! myluxurybed.co.uk
I like the approach you're taking with the much higher price points for your products. I keep going back and forth in my head ......should I just find some Chinese dropshippers with cheap products, and just jump in the game like the vast majority of ecommerce sellers out there, or go to the other end of the spectrum? I have found a couple of potential suppliers ( not China ) for a much higher end niche $500-1200 U. S., but I still need to research that niche more ,
Are you strictly online sales, or do you have a brick and mortar store? If you are only online, that would definately encourage me to look much harder at the the niche I'm thinking more and more about.
Took a quick look at your site, very nice beds.
That’s awesome that you were able to make it work. For others considering taking the same approach, keep in mind that there are pros and cons to doing so. Yes, you can earn more per sale, but in most cases, the costs (Ie. Sales/marketing) of obtaining the sale will increase in-kind. Meaning that if you have difficulties converting sales for lower end products, for most individuals, it’ll be harder to covert sales for higher price points.
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That's fantastic. I am online only and also working with dropshipping. Most of my products are in the high price point end of town.
I have been operating since May 2016 though have only sold some of the smaller, cheaper items such as lamps, candles and cushions.
Can I ask how lon g you have been operating and what you do marketing wise as online only?
As with I think most people, traffic is my major issue.
Danny - domu.com.au
That's solid strategy, though for peeps like me still starting out (opened my store in November) selling high priced items isn't financially feasable, yet. When a customer buys from you, you don't techincally have that money until Shopify deposits it into your account, so you have to use your own money to buy said product. I defs can't afford that right now. Maybe in the near future.
Traffic is the hardest part of the business, and it's all trial and error. Once you have developed your audience, and tested their response to both spectrums of pricing then its better to expand your direction of higher or lower end items. The key is to have relative content to your audience and build from there. My company does plenty of drop shipping for a large list of different websites. We supply just about any category from Home goods, electronics, apparel, pet supplies, gifts, jewelry, and accessories. We are always looking for good websites to parnter with on our items. Plus shopify makes it easy to integrate into our software for immediate tracking.
First off, thanks for all the replies. And traffic, having this post sent to shopify memebers via email has so far sent over 1000 extra people to my store (its only been 17 hours). Got to be good for SEO ranking right?
I will try answer all of the above questions.
Traffic is most definetly the hardest part of selling anything online and it is important to have a solid plan in place to bring customers to your store. I have a 9 step marketing plan (I like to see it as an engine, they all help keep everything ticking over).
1. Affiliate program! Although mine hasn't gone live yet, I believe this will increase sales massively! Affiliate programs are such a great way of advertising your business, while only paying for the advert if you actually make sales! You pay a commission per sale and if you get the right websites advertising your store, things could really start to take off! Keep it targeted, and promote your program to any influencers in your niche yourself! I have reached out to Instagrammers, bloggers and other furniture companies not directly competing wiht me and have got an amazing response, and a lot of websites waiting for my links. I use Paidonresults.co.uk Their service is great and they have helped some high profile websites grow.
2. Of course PPC advertising. I am just learning the ropes, testing the waters and working out what works and what doesn't.
3. Social Media. No brainer really
4. Posting to all free directories online! Helps with seo ranking, and could bring new customers to your store. Make sure all information is consistent.
5. Post on forums - like this one
6. PR - Because I donate 10% of the profits to charity, local news is all over it
7. Magazine ads - I advertise in local and national magazines. Country Life, English Home, just a few in my niche, and I know there are magazines out there for every niche! What better way of targeting an ad than to advertise to people already subscribed to a magazine on the topic!
8. Flyers and leaflets - I print good quality leaflets and post them to the high end more affluent areas around where I live. Good to do when I'm bored and good exercise too!
9. Email - Not something im very well versed in as yet, but slowly getting to grips with Mailchimp and growing my list.
It's just trail and error and figuring out which works best. When you find one working better than another, make sure to spend more time and money developing what works to make it work even better! If you find you're getting no results from something, don't waste your time, some things just don't work for some businesses and it's often hard to work out why.
Paul - the app I used to compare prices was pricespy. Made some nice profit on ebay using it, just be sure to check the links for stock levels, there's nothing worse than making a sale on ebay, going on the cheaper site to fullfil the order and finding it out of stock!
My store is online only, no brick and mortar store. We're looking for other products to start another store too and I find greater profit potential lies with products without a brand! Branded products are easier for customers to compare and find the cheapest online. Of course you can have success selling branded products if you find the right suppliers, but my path has led me to stick with what I know works! I wish everyone the best of luck!
Guy from myluxurybed.co.uk