Here are a few tips and helpful tidbits to consider before launching on your entrepreneurial journey:
1. Financing Considerations
While dropshipping is a very attractive business model due in part to its low start up costs and associated fees, some entrepreneurs consider various business financing options as a safety net, or to provide them with a larger initial inventory and marketing strategy in order to help them become profitable more quickly.
Some options for financing are:
- Business Credit Card - a great option if you either can’t or don’t want to secure a business loan. It’s something that you can always use for business expenses, whether planned or unexpected.
- Business Line of Credit - sort of a cross between a credit card and a loan, it’s like having a pool of money set aside to borrow out of for your business expenses. The beauty of it is that it usually offers lower interest rates than a credit card, and you only have to pay interest on the money you use out of the line of credit.
- Inventory Financing - a lender provides funds for a large part of your inventory financing in the case where you might not be able to afford the wholesale prices set by your suppliers. The products you purchase acts as collateral, and you make scheduled payments, just like with a typical loan.
- Ecommerce Grant - free money! Although the application process can be very involved and lengthy, it can often be well worth it for new business owners. Check out the U.S. Small Business Research program and the U.S. Department of Commerce for available options.
2. Pricing Strategies
When deciding what to set your prices at for your products, be sure to keep in mind that while you want to generate profit, you also want to cover any transaction fees, site subscriptions, marketing expenses, and necessary taxes. So in general, it’s a good rule of thumb to set your prices at least $10 above the wholesale price you paid to buy the product. Also, remember to check your competitors’ prices to make sure you’re in the right ballpark.
3. Over-Deliver On Customer Service
Think about some of your favorite customer service experiences; how good it felt to be listened to, respected, valued and cared for by a company or person and how happy you were when someone handled a problem or objection how you felt they should, or even better. BE THAT PERSON.
When using a third-party supplier, customer service concerns are inevitable, so commit early on to handling things with tact, speed, and professionalism as often as possible. Amazing customer service can be something that really distinguishes your business from another very early on in your career.
4. Have Fun
Starting a new business is so exciting, but it can also be daunting and tiring. Try chunking your tasks into achievable timelines and goals. Remember, you chose to become your own boss to improve your life, not make it worse, and your business should reflect that. Trust your intuition, make choices based on whether they will cause you more fulfillment, not more stress, and try no to be too hard on yourself. The learning curve is part of the fun, so try to enjoy the ride!