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“Hot Offer! A Dropshipping Business For Sale!”: Why Owners Wave Goodbye To Their Stores

How to react to “Dropshipping business for sale!” ads? Where to look for a reliable pre-owned store, and how to choose the worthiest option? Why sell your hard-earned store to someone else? These and other questions are covered in today’s article!

For some Internet users, finding well-built dropshipping websites for sale and buying one from the previous owner seems like an easy way to start a thriving enterprise. Others, at the same time, consider it to be a risky decision.

So, let’s go through the most common queries and concerns typically related to the area of dropshipping business acquisition!

Why entrepreneurs put their own dropshipping business up for sale

It’s not uncommon to see a dropshipping business for sale on a site or forum. A person sees an ad for a ready-made dropshipping website for sale and immediately thinks that something is deeply wrong with the store.

“Why, indeed, would the owner say goodbye to a reliable source of income? The store brings no money, I guess, and the seller just wants to get rid of it by tricking some lazy and inexperienced buyer.”

This might be the case, of course, and this is exactly why you need to be really cautious while buying a ‘second-hand’ store (read the necessary rules below!)

But, even if a store runs perfectly and looks promising from the financial point of view, the owner still might want to sell it. There are numerous reasons for it:

  • Immediate profit

Some owners treat their dropshipping stores as long-term investments. Instead of getting continuous (yet moderate) profit from processing clients’ orders, they receive a huge one-time revenue from selling the whole store to a different person.

Indeed, if a store attracts lots of visitors, sees a stable flow of orders, and has high Google rankings, it has an incredible potential in terms of further growth. With wise management, the owner can turn a store like this into the main source of self-generated income. Understanding this, the current store owner can find a person who would love to get an established well-performing store and sell the site with a reasonable profit margin.

  • Growth opportunity

Through selling an already existing store, the previous owner gets the financial resources to support his/her further undertakings. Maybe, the store seller wants to try a different niche, or desires to launch a store with a different type of layout and design, etc.

It is a common scenario for recent newcomers. They order a ready-made store and don’t pay much attention to the niche choice. They get a good-looking store with stable performance but don’t feel any emotional attachment to the niche. As you can guess, they lose their interest in such a ‘random’ store quite quickly.

From this perspective, by putting a dropship website on sale, the owner gets an opportunity to grow professionally and to test alternative business opportunities.

  • Time savings

As we can learn from the experience of our client Alex, the time factor has a solid impact on the decisions made by a dropshipping business owner. In Alex’s case, it was challenging to keep up the outstanding performance across all the 5 stores he had. So, in order not to do a job of poor quality, he decided to sell one of his profitable online stores and to focus on the remaining sites.

  • ‘Spring cleaning’

Lack of time is not the only thing that can motivate the owner to resell the store. Sometimes, entrepreneurs get really excited about dropshipping business (which is perfectly understandable :)), buy or develop several stores at once… and find out that they now have more sites than necessary.

Our client Otto, for example, admits that he is ‘too lazy’ to work on all of his stores. That’s why he doesn’t pay attention to half of them. In this situation, indeed, the best decision is to sell these stores to someone else.

Some people, like our other respondent Daniel, solve the ‘overstocking’ issue by hiring virtual assistants. They are responsible for minor managerial tasks and customer support. But, as you can guess, it means additional expenses. So, if the owner wants to cut down the operational costs, the obvious decision is to put some of the ecommerce websites on sale.

In other words, if you see that a ready-made store is sold by the current owner, don’t immediately assume that it’s a fraud. Chances are the store owner is just rethinking his or her business strategy. So, maybe, you can heavily benefit from it and start a business with a ready-to-go store.

A dropshipping business for sale: pros & cons

Benefits of buying an online business

Many companies, including AliDropship, can build a dropshipping website according to your instructions. As a result, you will get a unique and fully functioning shop. So, why would anyone want to buy an online business from someone else instead of building a completely new website?

Well, a dropshipping business for sale has at least several benefits.

  • First of all, you don’t have to build your website on your own, which saves you a lot of time. Even if you know how to do it, it’ll take several days or even weeks if you’re full of ideas! You’ll have to create the store, set up payment gateways, all the necessary plugins and add-ons, import products, etc.
  • Second, you don’t have to find, import, and test products. An established ecommerce website for sale already has an inventory of goods. And if the seller doesn’t lie about the revenue the store makes, probably these products have proved popular. Of course, you will still have to find new products later (to refresh the offer). But it’ll take much less time and effort.
  • Compared to new businesses, an established one already has a clear target audience, a social media presence, and perhaps even a certain number of returning customers. You could say that online stores for sale are more or less known brands – unlike completely new businesses.
  • Naturally, you can launch such a website and start making money much faster compared to developing a business from scratch.

Drawbacks of buying an online business

Nevertheless, there’s also a number of cons. It doesn’t mean the whole idea’s not worth it. But one has to fully understand what he can and can’t get when seeing a dropshipping business for sale.

  • First, you can’t get the business of your dream. Since it was made by someone else, the site’s design, name, and selection of products will be different from what you may want. If it doesn’t bother you, then no problem!
  • The business you purchase may turn out to have reputation issues. Of course, the seller will most likely try to hide this information from you. And after the purchase, the business may require a lot of changes.
  • And finally, if you have little or no experience in promoting and running a dropshipping business, you may find it really challenging to keep this business afloat. A business never makes money on its own. It requires proper control. So, you may want to either start from scratch and learn everything step by step or find an affordable dropshipping business for sale. In this case, you won’t spend a fortune and will still get a ready-to-go business for your experiments.

How to choose between several options of dropshipping websites for sale

Ready-made dropshipping businesses offered by AliDropship: Customs Stores, Premium Stores, and Established Stores.

So, you’re looking for an already operating dropshipping store. What aspects should you consider before completing the purchase?

  • Pros and cons of the deal

Before you buy a ‘second-hand’ store, consider your reasons to do this. If you’re buying an already functioning store just because you don’t want to bother yourself with assembling a site from scratch, you can use a much more convenient option of ordering a ready-made web store from an expert team.

The purchase of a ‘second-hand’ store makes sense if you want to buy a store that already has a history of smooth functioning and already brings profit to the owner. Still, even if this is your core motivation, remember that you probably won’t be able to fully customize the site. Basically, you will have to accept the majority of development / design / product decisions made by the previous owner, and adapt to them.

  • Dropshipping business niche

Personally, you might see no difference between selling pet supplies and kawaii stationery. But even if you don’t really care what type of business to run, you need to at least make sure that this particular niche sees enough demand and won’t go out of fashion anytime soon.

For this purpose, you can use our free niche evaluation tool. With its help, you will learn if you really can make money in this exact niche. It will give you a general idea about the profitability and overall potential of the dropshipping store you’re going to buy.

In addition, you need to evaluate the niche potential in terms of SEO. It will give you a general overview of the level of competition and help you understand if people are interested in these particular dropshipping products or not. For this purpose, you can use Google Trends and Google Keyword Planner or focus on different social media.

To learn more about how to evaluate a niche from the SEO perspective and find the most profitable products to sell online, feel free to read our article.

  • Dropshipping store design

The quality of the store design influences the visitor’s decision to make a purchase, and heavily influences the store’s conversion rate – and therefore, your profit level. Most likely, you, as a new owner, will be able to change logos, banners, and other types of on-site images. But the overall structure and layout of the site will remain as is.

You don’t necessarily need to be an expert in online store design to evaluate this component of the site. All you need to do is visit different pages of the store and take notes.

Is it convenient and understandable for you to navigate the web store? Can you easily guess where to find the desired product and how to place an order? Does it look like a modern site developed by a skilled expert, or does it look like a slow and outdated relic from the 2000s?

  • Website traffic and performance

Ideally, the seller should provide you with the screenshots of the admin panel that disclose the number of visitors, the sales volume, and other important performance indicators. Even our success stories’ authors do this!

Here are 5 crucial factors influencing an online business value – check them out!

Additionally, you can make your own independent research, and, for example, check this website on SEMrush. Even though you won’t see its financial performance, you will get access to important SEO indicators. They are organic and paid traffic, the number of backlinks, main organic competitors, etc. It will help you understand whether the ecommerce website is optimized, and this way, you will be able to roughly estimate how profitable it might be to run this particular site.

  • Cost of the deal

Does the current owner ask for a reasonable price for the store? Is this a fair price for the site’s design features and performance peculiarities? Won’t it be cheaper (and handier) to order a fully customized store from a trusted service provider?

Remember: you can only identify the true value of this store after thoughtful research of its core metrics, so don’t be too fast in your judgement!

  • The seller’s behavior

If the original owner answers your questions promptly and clearly, you have nothing to worry about. It proves that you’ve come across a decent person who just wants to change his or her business strategy.

If the seller seems impatient, leaves your questions unanswered, and refuses to show the ‘inside’ of the web store, most likely, this is not a really trustworthy person. So, you’d better stay away from the ‘deal’.

Don’t give up, even if you cannot find a reliable seller or a suitable web store right away. Somewhere in the world, there is a person that sells exactly what you’re looking for.

Where to find an established ecommerce business for sale?

If you want to find a good dropshipping store for a fair price, you need to look for suitable deals on well-reputed platforms. We can recommend the following ones:

  • Flippa

Homepage of Flippa, a platform selling ecommerce businesses.

Flippa.com is an ecommerce business marketplace that is specifically designed to buy and sell online businesses around the globe. Since it’s a regulated platform, it has a set of rules for the deals’ participants. So you can expect a safe and fair environment.

If you have decided in favor of Flippa, we also recommend using their Escrow service. It will help you make the process of buying a website business more secure and will protect your interests. Moreover, they have great customer service! Therefore, if you have any issues, their support team will solve them as soon as possible.

  • AliDropship forum

AliDropship forum where you can find a dropshipping business for sale.

On AliDropship forum, there is a special thread created for current business owners who want to sell their stores – and the visitors who want to buy an already operating site. Unfortunately, we cannot guarantee the honesty and professional ethics of each and every particular seller. However, we really hope that our forum, as a community of like-minded entrepreneurs with similar business goals, solely consists of friendly and reliable people. 🙂

  • AliDropship established stores

AliDropship website page devoted to Established Dropshipping Stores.

That’s right: we’re offering established businesses, too!

As you know, our team consists of people who have first-hand experience in dropshipping. Digital marketing experts, SEO specialists, social media managers, designers, and other ecommerce professionals are involved in creating, developing, and promoting our self-owned stores. And from now on, we’re putting these established businesses on sale!

Already having a proven track record, reliable traffic sources, and stable profits, they make a great choice for any person wishing to invest in an online business.

  • AliDropship premium stores

AliDropship website page devoted to Premium Dropshipping Stores.

This is a really interesting low-cost opportunity to buy a dropshipping business. Each one of our premium stores is a profit-making, good-looking, mobile-friendly dropshipping website that has a stable history of sales and a verifiable track record. And the thing is, any user can buy an exact copy of such a store for an affordable price and start a highly successful business immediately, with no guesswork or experimenting!

So, if you’re looking for a dropshipping business for sale, which option will you pick? Will you order a turnkey store meeting your personal wishes and preferences? Or you’d rather prefer to look for a premium dropshipping store with proven profitability? It’s only up to you to decide!

Read the source: https://alidropship.com/drop-shipping-business-for-sale-pros-and-cons/

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This Is Why AliExpress Shipping Time Won’t Hurt Your Dropshipping Business

AliExpress can be a great dropshipping supplier. However, AliExpress shipping time often scares away people who want to launch their own dropshipping business. Of course, long shipping isn’t good for an ecommerce store. But in this article, I’m going to prove that it’s not a critical problem.

Future store owners worry that people won’t buy anything from them because of the delivery time. Typically, online stores deliver your orders in about 7-14 days, while with AliExpress shipping time mostly takes 15-45 days.

But why do you think that it makes a difference?

Here are 5 reasons why shipping time shouldn’t EVER be your worry!

1. Hot items are worth the wait

Did you make enough effort while choosing the best products for your store? If they are highly demanded and have great value for your target audience, your store visitors won’t mind the delivery time. It is especially true for unusual products that are not so easy to find in other places!

If a person orders a truly unique item, he or she will most likely agree to wait even if takes up to 60 days!

2. These are not life-critical products

The whole idea of dropshipping stores is to generate impulse purchases driven by emotions. You’re not selling prime necessity items like food or medicines, and your customers don’t have an urgent need when they buy from you. They are not placing orders because of a burning reason. They just (ideally) fall in love with your items, and make a quick and easy purchase simply because they liked something. In other words, they CAN AFFORD to wait.

3. You can always put a disclaimer

To be honest, this is absolutely necessary. Write the shipping time information in a visible place for your customers’ convenience – and for your own safety! If the product description starts with a phrase like ‘Please note: the average shipping time is 30 days’, the page viewer will know what to expect from the purchase.

4. Customer support is your ultimate advantage

Upset clients start to storm you with letters when they think that their item is lost and the whole thing was a fraud. Keep calm and be patient! You can sort this issue out in 3 simple steps:

  1. When you send your client the confirmation email, include the shipping times in it ONCE AGAIN – not everyone is attentive enough to read even basic information in the product description. When you congratulate your customers on making their purchases, it’s appropriate to remind them about the expected delivery period. For your own convenience, you can safely use the AliDropship Plugin: it automatically notifies your buyers that the order was processed and the package was shipped.
  2. As soon as you get the tracking code from your AliExpress supplier, email this code to the buyer and explain how to use this information to learn about the current location of the package. Again, the AliDropship plugin will do this automatically, so if you have the plugin installed, you won’t waste your time and energy doing these tasks manually.
  3. Make your refund policy very clear: kindly explain that you will surely make a 100% refund IF the item is not delivered AFTER the end of the delivery period you’ve promised. If you wrote it on your product page that the item will be delivered in 30-45 days, the buyer will ONLY get a refund from you in case the package is not there by the 46th day!

5. Find AliExpress products with fast shipping

As you probably know, AliExpress free shipping is usually the longest one. Other shipping methods are not an option since they cost several times more than the product itself. However, AliExpress delivery time depends on the location of the warehouse.

Where does AliExpress ship from? Most goods come from different locations in China. But some sellers keep some of their products in warehouses located in European countries and the US. If you order products from one of them, shipping can take just 5-15 days.

So, if you want to dropship goods to America, try looking for products with cheap or free shipping from a US warehouse.

6. Use alternative suppliers

Some entrepreneurs who are not happy with AliExpress shipping time may want to try other dropshipping suppliers with faster delivery. If you own an AliDropship or WooCommerce store, consider trying Sellvia.

Sellvia is an ecommerce wholesaler with hundreds of products belonging to broad niches. Some of them come from AliExpress, some are made by American manufacturers. But most importantly, Sellvia’s warehouse is located in California. As a result, your customers can get their packages in 1-3 business days after the order was processed!

Sellvia is fully compatible with the AliDropship plugin and suitable for dropshipping.

As you can see, long AliExpress shipping times can’t actually hurt your business when you have all the processes smoothly organized. So, if it was the only thing holding you back from getting your own dropshipping store, put the worries aside and go on the adventure!

Read the source: https://alidropship.com/aliexpress-shipping-time/

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How To Start A Sports Business With Sellvia And Sell For Profit

Are you a huge fan of sports? Would you like to turn your passion into profit? Don’t you know how to do this with minimum investments & maximum potential? If this is all about you, learn more on how to start a sports business with Sellvia!

Is it really profitable to start a sports business?

It’s widely accepted that you should enjoy your job. It must serve as a source of inspiration for you. This is why our team is sure that if you are in love with sports and feel strongly that you’re ready to turn your passion into profit, there’s the only way out for you – it’s to start a sports business!

Do you still doubt that it’s worth starting a sports business? Are you afraid of going under? Actually, there are no reasons to worry about this.

a picture showing why it's profitable to start a sports business

According to Statista, the sports market is increasingly large with its revenue that has been amounting to over $60 billion over the years. What’s more, the analysts from Statista predict that the sports market will grow to $80+ billion by 2023. Sounds impressive, isn’t it?

Besides, there are lots of other strengths of selling sports items.

  • As a rule, sports products cost a lot in brick-and-mortar stores. What’s more, the ones made by world-famous brands are so expensive that lots of people worldwide can’t afford them. So if you find a supplier with high-quality non-branded products at affordable prices, you’re likely to win the competition.
  • Most sports products are consumables. This means that your customers will have to buy them again and again. So repeat purchases are highly likely in case your customers are satisfied with your products, shipping, etc.
  • Among sports stuff you will find lots of products that really play an important role in the training process and are a key to their success and physical safety. This is the exact reason why sports products are always in strong demand.

Actually, there’s a lot more to come. Now it seems to be a lot more profitable to start a sports business, right?

How to start a sports business right with no effort?

Let’s say you know nothing about ecommerce, dropshipping, etc. But you’re eager to start your own profitable venture. So first of all, you need to build up an online store.

In fact, you’re able to create an online store yourself. If you have some IT skills, this won’t be a tough task for you. So you need a domain name for your website, hosting, and business automation software – it’s AliDropship plugin.

a picture showing the dropshipping automation software - it's AliDropship Plugin

However, there is an option that will let you save tons of time, money, and effort. So if you are an ecommerce newcomer, you don’t have any IT skills required to build a website, or you just want to get a smooth start with your business, it’s a great idea to order a custom online store from Sellvia.

a picture showing how to easily start a sports business with Sellvia

Sellvia offers you the ultimate solution to start an ecommerce business. The team of highly qualified IT developers, designers, and Internet marketers will do their best to build a perfect customer store that is supposed to work on autopilot and become your stable source of income over the years.

Start a sports business right: choosing the products to sell

After you’re finished with building a store and making it visible for all the Internet users, this is a high time to consider the product range of your store. Remember that your spotlight is the following.

  • High-quality sports stuff
  • Products with low initial prices
  • Items that solve the most thorny issues

Fortunately, on Sellvia, you’ll find only the most trending products that proved to be high-converting. Of course, high quality and low initial prices are ensured.

Fitness equipment

a picture showing where to find high-quality sports products at low prices with fast shipping

Price: US $8.99

Recommended retail price: US $23.99

Your potential profit: US $15.00

Fitness equipment has always been in strong demand among those who run a sports business and those who are trying to keep fit themselves. Nowadays, due to the COVID-19 outbreak, the demand for fitness equipment has increased considerably because lots of people worldwide have to do sports at home.

Are you interested in reselling fitness equipment? If so, it’s going to be a win-win for you: you’ll provide people with the desired staff and let them take care of their health. Meanwhile, this is a chance for you to succeed with your ecommerce business.

Yoga accessories

a picture showing where to source high-quality sports products for your reselling business

Price: US $29.99

Recommended retail price: US $69.99

Your potential profit: US $40.00

Along with fitness equipment, yoga accessories are also extremely popular on the market. If you address the statistics, you will see that both people practicing yoga and revenue of the yoga industry in the US have been steadily rising over the past years.

And if there is a demand, why not try to meet it and make a fortune with yoga accessories?

Cycling accessories

a picture showing hype sports products to sell in your online store for profit

Price: US $3.49

Recommended retail price: US $26.99

Your potential profit: US $23.50

What should you know about the cycling industry? In fact, it’s necessary to point out that there’s a huge target audience for you if you’re going to sell cycling accessories.

This refers to the broad popularity of cycling throughout the world. For example, in the USA, more than 40 million people cycle on a regular basis. It remains for you only to fill your store with tempting cycling tools and accessories and that’s it!

Sports safety and other necessities

a picture showing where to find products to start a sports business: it's Sellvia

Price: US $8.99

Recommended retail price: US $37.99

Your potential profit: US $29.00

Beyond sports equipment and other accessories, there are tools that can be considered as sports necessities. This is all about sports safety products, water bottles, waterproof bags, compression tools, etc.

Have you any idea why these products are a must-have for your sports online store? The point is that items that are designed to solve the most acute problems are sold well and require a lot less time and effort to promote.

How to start a sports business with Sellvia: pros and cons

As you can see, it’s increasingly promising to start a sports business nowadays. Due to a large target audience and strong interest in sports stuff, you have an opportunity to make a fortune with your online business.

However, if you want to get a smooth start in ecommerce, save your time, money, and effort, you’d better find a solution that will provide you with a ready-to-go business in the short term. This is exactly what Sellvia offers!

What’s special about Sellvia? Actually, this is a complete all-in-one solution that ensures the access to hype ecommerce products (that proved to be high-converting) at low initial prices, fast US shipping option (1-3 business days), marketing materials, etc.

Don’t you know how to launch your own profitable venture without large investments and specific skills required? Then learn more on how to start a sports business with Sellvia!

Read the source: https://alidropship.com/how-to-start-a-sports-business-with-sellvia/

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Can I Dropship From My Country?

Lots of our clients have the same question: they ask us if they can dropship from their home country. We have the same answer for all of them.

Yes, you can do it!

We’d like to make it clear once and for all: you can dropship from ANY destination on the globe.

It doesn’t matter whether you live in Belgrade or in Kuala Lumpur or in Manila or anywhere else.

Does it make any difference if you are located in Singapore or the United States in case you’re doing all your business activities through a website? Basically, all you need to run a dropshipping store is a stable Internet connection.

Can you go online effortlessly?

If yes, then there’s nothing that can actually stop you from becoming a dropshipper.

Let’s go over the whole process again so you could see it more clearly!

Dropshipping business explained

So, let’s suppose you’ve picked your perfect dropshipping niche.

Next, to start your business, you need to get a website. You can either create it yourself or get a ready-made one – it’s up to you!

In any case, your own location makes absolutely no difference. Internet is global, so all the online works can be done from any place worldwide.

As soon as the website is ready, you need to fill it with items. These are not your own products; they don’t belong to you, you don’t manufacture them, and you don’t store them in a warehouse. You don’t even see these items – you just post pictures and descriptions of them on your website.

Easy, right? You don’t deal with storage facilities or manage manufacturing processes. You just find a reputable online seller with quality items, and add these product pages to your own website. Obviously, you need to make the product pages look perfect, but as it is all done online, your physical location doesn’t matter.

So, your website is fully operational, and one day you see that someone has just placed an order.

Your further actions are really simple: you contact the owner of the store where you’ve taken this particular product description, pay them the item price, and ask them to deliver the item to the address of your own customer.

You see?

Your physical actions are not required. You simply write an electronic message to the actual seller to place your own order, and you don’t have to do anything else. All the product issues and delivery tasks are the seller’s responsibility. You only need to write a couple of messages, and this can be done from any point on the globe that has Internet connection.

Still unsure you can dropship from your own country?

Are there any shipping limitations meaning that you can’t dropship from specific countries?

You’re not asking the original seller to ship the item to YOUR country.

You’re asking the original seller to ship the item to the country of your buyer.

See the difference?

Your place of residence doesn’t matter at all. Yes, you need to check the delivery terms of the seller you’re working with, but you only do this for the convenience of your clients. Your place of living has nothing to do with it.

Are there any legal limitations when you dropship from your country?

As a dropshipper, you are free to partner with any sellers at your choice.

Most likely, you’ll be teaming up with AliExpress or Sellvia. It’s all because you won’t need to make any formal agreements with these platforms, and you definitely won’t have to sign any contracts with the sellers. You won’t have any paperwork, and you’ll see the sellers are really friendly and open to communication with dropshippers.

For example, this is quite a typical notification you can see on AliExpress:

An example of an AliExpress seller description confirming the opportunity of dropshipping

And the Sellvia offering, in turn, is specifically created for dropshipping business owners! It’s optimized for their convenience and covers plenty of dropshipping tasks from enabling 1-3-day US shipping to providing profitable marketing campaign materials. Naturally, its team does its best to adapt to specific dropshipping needs of the community.

Of course, the sellers don’t really care where exactly do you live. As long as you order items from them and make your payments as agreed, they are more than happy to communicate with you.

And speaking about money, let’s also answer a highly popular question in the next paragraph!

Are there any payment limitations?

Whether you’re dropshipping with AliExpress or Sellvia, you can select the payment method that is the most convenient for you.

The platforms offer a number of secure ways to check out, so whatever country you live in, you are most likely to find at least one way to make a safe payment.

And of course, it’s important to make sure that you can accept payments from your customers (otherwise, the whole business has no point, right?)

This is why we typically recommend to integrate multiple payment options into your website: you need to be able to accept both credit card payments and PayPal payments.

The reason is, you’re targeting customers from very different parts of the world, and they may have various preferences and limitations in terms of online payment methods. For example, PayPal doesn’t accept payments originating from several countries. So, if you provide your potential customers with an additional way of making a payment (for example, with a credit card), you have it all sorted out.

As you can see, you’re unstoppable.

Quite a nice reason to start your own dropshipping journey, right?

Read the source: https://alidropship.com/can-i-dropship-from-my-country/

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Top Secret: 25 Dropshipping Tips And Tricks For Every Occasion

Dropshipping tips for beginners sound too obvious to you while dropshipping tips for experienced entrepreneurs seem to be too complex? Meet our all-inclusive list of the most valuable pieces of dropshipping advice ever – you’ll benefit from them regardless of your store’s stage of development!

It doesn’t matter whether you already own a highly profitable dropshipping store, or only consider the benefits of getting one.

At any stage of your business journey, you need a piece of advice or a handy life hack from time to time. Here, you can find the a number of dropshipping dos and don’ts that will definitely help you succeed with your venture!

Dropshipping tips and tricks related to your niche choice

Dropshipping tips: niche choice

Why do we start with these particular dropshipping tips? Because the niche choice is basically the first step you take before launching your own dropshipping venture!

Generally, at this point, people don’t have much background knowledge, which is why it might seem tricky for them to make up their mind on a certain niche.

But, of course, this issue is also highly relevant for the entrepreneurs who already have their own running stores. Thanks to the dropshipping business model principle, it’s not so difficult to change your store product offer if necessary. Still, the selection process itself might be slightly confusing.

So, what would we recommend on this stage?

1. Follow your heart

Write down all the activities, fields of knowledge, subjects and events you’re deeply interested in. Any of them might give you dozens of ideas for a profitable dropshipping niche.

Most importantly, this will be a niche you’re passionate about! When you are a fan of your own products, you are enthusiastic about your business even if it doesn’t go as planned. Plus, you surely know how to create the perfect visitor-engaging atmosphere in your store.

2. Educate yourself

Generally, these 2 aspects come together, but it’s still necessary to mention: you need to really know a lot about the specific features of the niche you’ve chosen.

Think of the following example: if you’re really passionate about children and the environment for their happy growth, but at the same time know nothing about child psychology and behavioral patterns on different development stages, it will be nearly impossible for you to launch a well-considered store with educational toys and games. In such case, you need to either study the topic and the market offers, or concentrate on related items that don’t require deep professional knowledge (cute and relaxing room decor, paintings, wall decals, textiles, etc.).

3. Meet the demand

One of the wisest ideas behind the dropshipping business model is the opportunity to benefit from the unmet demand that exists across the globe.

For a number of reasons, thousands of people worldwide can’t buy some of the desired goods in offline stores. For many of them, online shopping is also confusing. Sometimes, these people simply don’t know where to look for the necessary items and how to order them.

This is why it is crucial for you to research your potential customers’ needs and wants and understand how exactly you can help them get what they want! Isn’t it awesome to feel you’re really making a difference for these people?

4. Analyse

It’s not really enough to simply have a long list of store niches that are interesting to you personally and popular among your potential buyers. It’s vital to check which of these lovely niches is the best choice in business terms.

We have developed several algorithms that are specifically crafted to evaluate every niche from the point of view of its competitiveness, financial prospects, and marketing potential. Feel free to use these techniques in order to identify the most promising niche – or let us do this for you!

5. Keep an eye on trends

Technology and fashion never stay the same. New materials get tested, new manufacturing and informational techniques get invented, and new public obsessions emerge – as the result, new products enter the market.

It’s not always possible to predict or get ahead of these trends, but there’s one thing you can do for sure: monitor the hottest seasonal trends and pay attention to the global market sentiment as well.

6. Don’t be afraid to shift your niche focus

Discovered a trending product that doesn’t quite fit into your current niche? Noticed that your products are getting less interesting to customers? No worries!

It’s the dropshipping business model benefits that make your strategy flexible and riskless. At any moment, you can add any new niche items to your store and start promoting them to the relevant audience. It’s not uncommon for companies to develop their brands and expand their scope when necessary – you can easily do it, too!

Dropshipping tips related to your products choice

Dropshipping Tips: products choice

Basically, you will deal with various product-related issues throughout your whole dropshipping journey.

As we already mentioned it before, the flexible nature of dropshipping business model means that you can easily switch to a different set of products if you want. Plus, it is generally recommended to update your store offer from time to time in order to both keep it relevant to the cutting edge trends and encourage potential buyers’ interest.

This is why each of the tips below is highly valuable for any dropshipping store owner!

7. Consider the seasonality

Some types of products are actively bought only during some specific time of the year. If you decide to build your store offer around this type of items, you won’t have a stable source of income throughout the calendar year.

It’s obvious that ‘Merry Christmas’ bunting, for example, won’t be actively ordered in June. Still, an almost identical ‘Happy Birthday’ or ‘Just Married’ bunting will be equally demanded regardless of the time of the year.

8. Use various inspirational sources

If you want to identify the most demanded and money-making products, it’s a good idea to research several reputable sources.

Your personal preferences and experience certainly matter, but it’s also important to check some relevant platforms that provide you with true-to-life data on customers’ preferences and wishes.

9. Be picky

Not all the products can be beneficial for a dropshipping store owner.

Before importing any item to your store, go through this list of the most important product criteria and make sure you’re making the right decision. The more boxes this item ticks, the better!

10. Make test purchases

It’s always a good idea to buy a sample item before you add this specific product to your store offer. This way, you will be able to see if the original seller is a reputable person – double checks are never irrelevant! Plus, you’ll take a look at the actual item quality and decide whether you really want to sell it to your target audience.

Oh, and there’s one more thing: if you have this exact item at your disposal, you can use it for various marketing purposes! Shoot real-life videos with it, take close-up pictures of high quality, write super-detailed product descriptions, post item-specific blog articles, boast on social media, and even send emails notifying about your store offer updates – there are plenty of ways to benefit from physically having one item sample in your house.

11. Import wisely

When it comes to importing products to the dropshipping store, some people get super excited with the opportunity to import items in bulk. So, they literally overload their newly made store with hundreds of items, and expect the business to flourish instantly.

They only forget about one tiny detail: each and every product page should be edited. It is vital for the store image and credibility, and it really, really, really needs to be done.

So, please, don’t add too many products to your store in a single take! You’ll get irritated and bored really quickly after trying to edit all the pages at once. Start with 6-8 items per a category, and do your best to provide a brilliant presentation for every product.

Dropshipping tips related to your store credibility

Dropshipping tips related to your store credibility

Your first priority is to convert your website visitors into actual buyers, right?

It is widely known that a thoughtfully made dropshipping store can successfully compete even with huge online platforms like AliExpress. As you can guess, in order to achieve it, you need to make sure your store doesn’t look like a spammy scam site.

This detailed guide contains all the possible reasons why people might leave your store without making a purchase, and explains how to fix it. Here, we will just go over the most important aspects of this task.

12. Think of the first impression

What will your store guest see upon the very first visit?

First impression matters, which is why a highly appealing store design heavily boosts the number of orders placed through your store.

The success of a dropshipping venture depends on the number of impulse purchases, which is why your goal is to charm your visitors and win over their hearts in the flicker of a second.

13. Take care of the layout

If your store is beautiful but totally inconvenient in use, the visitors will be likely to leave it without making a purchase.

This is why it is generally recommended to build a store on the basis of a carefully designed theme that was specifically developed and optimised to bring the highest returns possible.

Millions of online stores across the globe use the same layout patterns with the proven efficiency, and still look unique in their own way. This is the perfect reason to follow the example of successful business owners and build your own venture with the use of the previously tested solutions.

14. Write the FAQs

Your store should answer all the possible questions related to online purchases.

Naturally, people might feel insecure and suspicious about giving their money to an unfamiliar online store. This is why you need to patiently and professionally sort out all their queries.

Still, it’s really time-consuming to write all the same answers over and over again. So, why not dedicate a special store section to it? It really boosts your credibility, plus, you won’t waste any more time on explaining your returns & refunds policy, payment options, delivery times, etc. From now on, you simply need to send this page link to everyone who asks a related question.

15. Provide social proof

Use every possible way to convince your potential buyer that a) your store is not a fraud, b) lots of people are happy with the products they got from you.

For this purpose, you need these awesome tools – the more you try at once, the better!

Dropshipping tips related to your store management

Dropshipping Tips: online store management

16. Learn what to expect

If you don’t have the background knowledge about running an online store yet, make a little research to learn what will your average daily routine will look like. This way, you’ll be able to prepare yourself in advance, and plan your daily schedule in a way that is both pleasant for you and beneficial for your business.

If you already have some history of managing an online business, it still might be useful to learn from someone else’s experience, especially if this ‘someone’ enjoys a multi-billion dollar annual turnover.

17. Monitor your competitors

Proficient dropshipping store owners admit that competitors commonly copy their marketing strategies and promotional techniques, as well as design and layout patterns.

What stops you from doing the same?

Obviously, it doesn’t mean that you should follow every step of your competitors and steal their store ideas. Instead, it might be really useful to learn another person’s view on the market development, and understand what direction they are taking their business.

At the same time, it lets you quickly learn about someone stealing YOUR job; the sooner you find the way to outsmart them, the better.

18. Use automated solutions

The reason why people prefer dropshipping business to their 9 to 5 jobs is the business flexibility.

The correctly chosen automated or semi-automated solutions make it possible for you to make maximum profit while spending minimum time on the managerial tasks. Of course, you might need to spend some time choosing the most suitable dropshipping platform and try several options before finding the greatest one, but the result will be totally worth it.

19. Stay safe

That’s the thing that always gets ignored!

Please don’t do this.

There are 2 possible dangers that can pose a threat to an online store: fraudsters who pretend to be buyers, and tech glitches (hacks, viruses, software issues, etc.).

None of them is scary, actually: just take the precautions we’ve described in the linked articles, and everything will be fine.

Dropshipping tips related to ads & marketing

Dropshipping tips: ads & marketing

There are thousands and thousands of them, you know?

Let’s just quickly go through the little hacks that are a must-have for any dropshipping store owner!

20. Use the power of Facebook

Facebook was voted to be the best platform for dropshipping business promotion. Store owners gladly share their secrets of using this social media for their own benefit, and you can definitely follow their example.

All you need to do is learn how to manage your ads wisely, understand how to deal with ads targeting in the most efficient way, and read our awesome case on FB Ads remarketing. It will give you a general idea of arranging and crafting promotions that work best for your type of business.

21. Go for free promotions

It’s not always strictly necessary to stick to the paid promotions.

If you can’t afford any marketing expenses now, or if you’re not sure what exactly will work for your business, start with the activities that don’t require any fees: it can successfully be done both on Facebook and on Instagram.

22. Learn SEO basics

With the help of search engine optimisation, you make your website more visible on Google search result page.

You can’t just expect a random person to occasionally stumble across your webstore because of a lucky chance, right? It’s your task to make it easy for people to find your store, which is why SEO should be one of your first priorities on the stage of a niche choice.

Even the domain name of your website should be optimised!

Use these guidelines to create an SEO-friendly store, and the long-term results will be more that satisfying.

23. Reconnect with the store visitors

Not every visit to an online store ends with a purchase.

Still, there is a chance for you to get in touch with people who added something to their shopping cart and left without placing an order!

This strategy is proven to increase the overall number of sales in your store, so we highly recommend trying it.

24. Mind holidays

Holiday season can be a blessing for your store…if you do some preparations in advance.

Go through this checklist to find out how to benefit during the holidays time.

25. Learn from mistakes

Good news: these don’t have to be your personal mistakes.

We have collected the most crucial and impactful mistakes that can seriously hurt dropshipping business. Look at them carefully, make sure there are not involved in your business, and get happy you’ve gained valuable knowledge without learning these errors the hard way!

This dropshipping tips selection can go on and on, surely, but these particular pieces of knowledge are the cornerstones of a profitable and enjoyable business. Accumulate them, research them, and put them into foundation of your own successful venture!

Read the source: https://alidropship.com/25-dropshipping-tips-for-every-occasion/

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Best Dropshipping Suppliers On AliExpress And Beyond

Is AliExpress the only source of products to dropship? Today, we’re going to discuss the alternative ways for online businesses to find dropshipping suppliers! Also, we’ll explain how to make the best choice of products to sell from suppliers on AliExpress.

Usually, when talking about choosing the right products for your dropshipping store, we assume that you import these items from AliExpress. Still, it is not the only option.

Directories in your search of the perfect dropshipping suppliers to import products from

What do dropshipping newcomers do before making the very first steps on their business journey? That’s right! They look for reliable business partners to ensure the success of their future venture – dropshipping wholesalers. Such companies are called dropshippers, but people often use this term to refer to dropshipping retailers.

Sometimes, they look for suppliers on their own by simply going through Google search results. Unfortunately, wholesale manufacturers and suppliers are far from being good marketers.

Some people expect to easily find lots of dropshipping manufacturers and suppliers with high quality products at wholesale prices on Google. Well, they will be disappointed. Unless they’re lucky enough, they’re unlikely to succeed in their search. Not to mention the fact that many wholesalers are not ready to do dropshipping.

Thus, due to having little to no experience in this field, they don’t only look for counselors and advisors. They also search for middlemen who can connect them with the most appropriate business partners.

Most typically, these middlemen are required for product-related tasks. So let’s imagine that the entrepreneurs know what they would like to sell. It might be difficult for them to establish contact with reliable and trustworthy manufacturers anyway.

This is why these beginners turn to dropshipping directories. Simply speaking, these are the specially assembled databases of trusted wholesale distributors.

There, you can find detailed information about suppliers. It’s all about their fields of activity, manufactured products, addresses, and, sometimes, financial position or sales value.

Thus, a dropshipping directory is a database of wholesale suppliers grouped by category, market or niche. Many directories carry out special checking procedures to ensure the suppliers are legitimate and genuine wholesalers.

How do directories work?

So, entrepreneurs make a payment to get access to a dropshipping directory database. After that, they add the images and descriptions of the selected products to their ecommerce stores.

Then, the traditional dropshipping business model works as usual. The customer orders placed on the dropshipping site get sent to the manufacturers. These suppliers, in turn, provide the full range of the necessary product-related dropshipping services.

They store items, arrange shipments, provide sellers with tracking codes, etc. If required, they also customize the delivered packages by designing them in the style of the dropshipping store they work with.

Sounds like a good option, doesn’t it? You get access to multiple wholesale dropshippers and can easily fill the inventory of your online store with top products. Your supplier will take care of packing and shipping the orders to the buyer.

However, few dropshipping businesses actually use directories.

Why directories aren’t commonly used to find dropshipping suppliers

Why do entrepreneurs rarely use dropshipping directories?

It might seem that these verified lists of well-reputed suppliers are a smart decision for dropshipping newcomers. Unfortunately, some of the directories’ downsides might cause serious problems for the entrepreneurs.

  • Paid access

The majority of directories charge a fee for access to their database. You either need to make a one-time payment or pay a yearly/monthly fee.

  • Pricing difference

Some suppliers listed in dropshipping directories have a specific pricing strategy. In order to buy something from them at a wholesale price, you need to officially confirm that your business is legit. Then you need to be approved as a wholesale seller. Otherwise, you will purchase their products at usual, retail prices.

  • Business preferences

Usually, dropshipping directories consist of large-scale companies that are looking for long-term profitable partnerships. Many of them don’t consider working with small online businesses. Especially it refers to newcomers who are unlikely to order large consignments of goods.

  • Partnership limitations

It’s quite typical of these well-known manufacturers to dictate the terms of doing business. There might be requirements for minimum order size, or maximum allowed price markup, and so on. Certainly, it limits a dropshipping store owner’s activity quite significantly.

So, it is reasonable to pay for getting access to a dropshipping directory only if you deal with the following.

1) looking for appropriate product ideas

2) researching the market offers

3) looking for a highly specific product category that can’t be easily found elsewhere.

So, have you already chosen the niche? Have you understood what products you are going to sell? Then, you can find decent suppliers from some free ecommerce platforms on your own.

The best alternative option to dropshipping databases is AliExpress.

This is an ecommerce platform of global reach that contains products from millions of distributors worldwide.

The reasons to search for dropshipping suppliers on AliExpress

Why do entrepreneurs often look for dropshipping suppliers on AliExpress?

There are enough reasons why AliExpress is much more suitable for dropshipping products from suppliers than any dropshipping directory.

  • Product range

Generally, it is typical of manufacturers to focus on a narrow product segment. They are also likely to deal with a limited number of related categories. For example, they sell children’s clothing, toys, and stationery.

Or they concentrate on consumer electronics, gadgets, and gadget accessories, etc. In fact, it is clear. Managing an extended stock is quite a complicated and laborious task.

However, AliExpress is a huge ecommerce platform with an extensive variety of products. It facilitates the interaction between countless sellers and buyers. Any supplier can post their offers on the platform. And now, it has resulted in over 100 million products currently presented on AliExpress.

These products fall into various categories. So entrepreneurs can choose any items they fancy and adjust their dropshipping stores to a specific target audience’s interests.

  • Free access to the database of dropshipping suppliers

Please remember that dropshipping directories usually limit access to their databases. As a result, entrepreneurs can’t browse the list of wholesalers and their products before making the necessary entry payment. It certainly causes a significant problem to the newcomers, who can’t know for sure if it will pay off.

At the same time, AliExpress doesn’t charge any entry fees. The registration on the platform is free, and you don’t need to log in if you want to explore the products. Plus, the platform provides the ground to evaluate the seller’s performance and reliability.

Therefore, it lets businessmen choose only the best products from the dropshipping providers. It includes the business operation length, the percentage of positive buyers’ feedback, the number of orders placed by visitors, etc.

  • Zero fees

Dropshipping directories don’t simply charge monthly or yearly membership fees. By the way, these fees vary depending on each separate provider.

What’s more, they can also ask for a restocking fee. This is compensation for stocking and delivery expenses. It’s relevant for the cases of customers’ returns when items have no actual defects.

However, you shouldn’t worry about this if you work with suppliers directly through AliExpress. You don’t have to pay anything to start working with the distributors from the platform. Moreover, you certainly don’t have to make any additional payments during the whole process of business collaboration. All the expenses associated with refunds and returns are going to be your dropshipping suppliers’ headache.

  • No limits on markup

Unfortunately, dropshipping directories put your possibilities of making a decent profit at risk. It refers to some limits on markup. Entrepreneurs have to set a so-called recommended retail price on the seller’s items.

In other words, the initial price can only be increased by a limited sum of money. In most cases, it’s not more than 15-20% of the starting cost. Otherwise, the partnership agreement can possibly come to an end.

Meanwhile, the sellers from AliExpress don’t insist on a specific price. The items on AliExpress have very low prices in comparison to identical products elsewhere.

It means the possible markups, and, therefore, the profits, can be quite impressive. Even several-fold price increase in this case will not affect end buyers negatively. It will still result in adequate financial gains for the store owner.

  • No limits on sales volume

Again, dropshipping store owners are quite often obliged to place a certain amount of orders when they sell goods from directories. Unless they do, dropshipping suppliers can refuse to continue dealing with these entrepreneurs.

It’s never going to happen if you work with a seller from AliExpress. It’s not even necessary to bring to the suppliers’ attention that you order their products for dropshipping purposes.

  • No legal requirements

Most commonly, large-scale manufacturers and distributors only work with officially established companies. Some of them even prefer only businesses registered in the US.

However, none of this is necessary to contact a manufacturer on AliExpress. The platform is extremely popular with private individuals. Even with those who make purchases for their own use and not for reselling. This is why local dropshipping wholesalers gladly work with everyone regardless of legal status.

  • Global reach

The ultimate benefit of starting a dropshipping business is the possibility to reach an unlimited number of customers. In most cases, they are the people who aren’t able to get these products in their own countries offline.

General wholesalers mostly offer shipping within Europe or the US. AliExpress, in its turn, makes it possible to arrange a delivery literally to everywhere in the world. It allows you to enlarge your target audience significantly.

Obviously, AliExpress is not the only online ecommerce platform created for clear communication between manufacturers and buyers. Still, our own research has indicated that for the purposes of dropshipping, it is probably the best solution on the market. Feel free to click the following links and learn about the possibilities and limitations of Amazon, eBay and Etsy for dropshipping.

Now you are aware of AliExpress benefits. So you are probably wondering how to pick the most reliable business partners on this platform? We know the answer!

How to choose the best dropshipping suppliers on AliExpress

  • Filter the product search results

The hunt for the perfect AliExpress suppliers starts on the search results page.

When you are writing your product query in the AliExpress search bar, don’t forget to tick the “4* &Up” box. In that case, only the high quality items will be shown to you.

Sort the results by the number of orders. So you will see the most frequently purchased items at the beginning of the product list. Take a look at the screenshot below.

Searching for AliExpress products with filters to find reliable dropshipping suppliers

Thanks to these simple actions, you won’t waste your time on poor quality items from questionable sellers. You will only deal with worthy offers that are tried and true. Moreover, they are approved by other buyers.

  • Explore the seller stats

Well, you need to go to a single product page on AliExpress. There, you can mouse over the store name and view the seller’s statistics.

You can learn how long the store has been operating, view the feedback score from previous buyers, etc. You are even able to see some additional helpful stats.

Look at the screenshot below.

Seller's stats on AliExpress

As you can see, that’s a pretty young store. Even though its performance isn’t very bad. It doesn’t look inspiring either.

It seems that in their feedback, the buyers often note that the sold items don’t fully match their descriptions. What’s more, there are some communication issues, and the shipping time is quite long.

How do you figure out whether you still should trust this seller? Go to the next step!

  • Examine the potential dropshipping suppliers’ product reviews

Within the seller’s store, pick 8-10 items that have the highest number of orders, and go to their product pages.

Go to the Feedback tab on each of these product pages. There, read the customers’ reviews super carefully. It will help you understand what exactly is good and bad in the seller’s activity.

Pay special attention to the reviews that contain pictures. With the help of these photos, you can roughly evaluate the quality of the product. Beyond this, you can understand whether the buyers’ claims are fair.

An AliExpress product page with customer feedback score

Sometimes, people get annoyed by some tiny details that are not really relevant. The things that are just a one-time ‘glitch’ in the interaction.

However, sometimes several different buyers point out the same difficulties they had during the purchasing process. And that’s a bad sign. For example, it is highly important for the suppliers who offer clothes.

Do various buyers write that several different products don’t match the expected size? It might mean that the seller offers irrelevant size charts. Certainly, it doesn’t show this store in a positive light.

  • Check the potential suppliers’ shipping terms

On the product page, look at the available shipping costs and terms. Check whether the seller can ship your order to the country where the majority of your potential buyers live. Whether it’s the United States or any other.

Shipping options on an AliExpress product page

Click on the tiny arrow to change the country of delivery. That’s how you’ll see whether the seller offers cheap and quick delivery directly to your customers. Your buyers wouldn’t want to wait for their orders for a long time and overpay for the short delivery times, right?

Shipping options offered by an AliExpress seller

Such research is going to give you a better understanding of the seller’s activity. Eventually, you will certainly clarify your perspectives of cooperating with this distributor and make the right decision.

Want to deal with trusted and reputed sellers only? Check out AliDropship Insights – a FREE database of the best AliExpress sellers to partner with, the best niches to take, AND the most promising products to sell!

Tips on working with dropshipping suppliers

  • Don’t hesitate to contact suppliers

The sellers on AliExpress are entrepreneurs just like you. And they are always glad to cooperate if it brings them more sales. Therefore, if you’ve found a good supplier and his products are selling well, send him an email. Or contact him if you have questions.

In any case, this cooperation can result in many benefits.

  • Be polite and adequate

Always talk to a supplier in a friendly way, be polite, and keep your end of the bargain. Try not to cause unnecessary troubles and don’t forget to thank the partner for little and big favors (like unusually fast shipping or an extra discount).

It will let you build strong relationships with the seller and make things easier in the future.

  • Check the orders before redirecting them to the supplier

Although with the AliDropship plugin, you don’t have to fulfill orders manually, it’s still a good idea to check customer information before ordering the products on AliExpress. Buyers often make mistakes: they fill in the wrong fields or leave them empty.

As a result, the order may get sent to the wrong address, thus causing problems not only to you but to the supplier as well. Avoid such situations!

  • Check your emails regularly

Also, make sure you regularly check the messages you get from your suppliers. They may face an unexpected problem that needs your attention. Not responding in time can lead to shipping delays or worse.

And if there’s a problem and it was the supplier’s fault – don’t get mad! We all make mistakes, and most of them are not worth destroying your relationships. But of course, if a particular seller keeps making mistakes, you may want to reconsider working with him.

  • Find multiple dropshipping suppliers

Working with only one wholesaler is definitely easy. But it’s dangerous as well! If something happens, you will lose all your inventory at once.

That’s why our team recommends finding at least several suppliers. It doesn’t mean the more the merrier, though. If you have 8 suppliers, you can feel more or less safe and it’s not that difficult to manage them. Having 30 suppliers will hardly make any difference except managing them will get really tough.

We hope that our little research helped you understand how to find the best dropshipping suppliers. And we’re looking forward to seeing you fill your store with the most awesome offers from great sellers! Don’t you have your online store? Then, go and start your business to benefit from it!

Read the source: https://alidropship.com/find-best-dropshipping-suppliers/

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Target Audience Analysis: 6 Tips On Identifying Your Customers

Do you have no sales or website visitors? Are you sure that you advertise your products to the right people? Let’s do a target audience analysis and check this out!

Who is your target audience? Who is more likely to buy products from you?

If your answer is something like “I’m going to sell my products to everyone” or “I don’t limit myself to any groups of people”, I have some bad news for you.

If you target everyone, you target no one.

Without knowing your target audience, it will be impossible to effectively run your eCommerce business and earn lots of money.

So what is to be done?

The solution is simple: perform a detailed target audience analysis and enjoy your improved results!

And we’ll tell you how to do it right.

Let’s go.

What is a target audience analysis?

Your target audience is a group of people who might be interested in your product or service. As a rule, these people have similar interests, they’re about the same age and of the same gender.

To define target audiences, business people usually perform a target audience analysis. In simple terms, it means investigating the behavior, preferences, interests, location, demographics and other aspects of a specific group of people.

A target audience analysis usually consists of the following aspects:

  • Gender
  • Age
  • Location
  • Marital status
  • Education level
  • Income level
  • Cultural and social background

The more elements you’re taking into account when defining your target audience, the narrower it is.

For example, if you sell extremely expensive men’s suits appropriate for the red carpet, your potential buyers are most likely to be rich well-educated men living in First World countries and regularly visiting social events. As you can see, this audience is really narrow.

Why is it important to know your target audience?

A woman wondering why target audience analysis is important for businesses.

Knowing your target audience is a must if you’re going to be a high-flier in the eСommerce business.

First, you will clearly understand who really needs your goods. Therefore, you will appeal to your potential customers more successfully.

Let’s say you sell educational books and your target audience consists of students, teachers, and academics. Although all these people are really interested in your products, you need to divide them into groups and promote your store with different pieces of content. The marketing strategies that make sense for students may not work for teachers, and vice versa.

Secondly, knowing your target audience helps you allocate your resources properly and keep within your marketing budget. This way, you will only spend your money on the right people and suitable marketing tools.

For example, if you know that your audience is over the age of 45, it’s better to promote your eCommerce store on Facebook than on Instagram. According to the data, in 2018, more than 35.4 million U.S. Facebook users were between 45 and 54 years old, whereas only 9% of people in this age group were using Instagram.

Besides that, the knowledge of your target audience lets you be more competitive and increase your conversion rate.

Challenges of target audience analysis

When starting a target market analysis, marketers often face a number of challenges.

  1. Understanding your product

First of all, you may find out that you don’t fully understand the product you want to advertise, its features and the benefits it can provide. That’s why our team recommends choosing a dropshipping niche you feel passionate about.

Of course, you can still pick products from other niches, but in this case, make sure you truly understand them to create attractive content and ads.

  1. Finding the balance between visitors and conversions

It’s especially important for entrepreneurs who want to attract buyers with content marketing. Valuable content can lead hundreds of visitors to your website, but not all of them will want to buy your goods. Contrariwise, if you focus your marketing efforts on people who will most likely buy the goods, you may miss a large audience of potential customers who are less likely to buy.

Here you need to find the proper balance.

  1. Finding the most efficient channel

Another challenge for an advertiser or content marketer is to find the right channel. Should you create video content and promote it via YouTube or should you pick social media instead? Should you run ads on Pinterest or Instagram? Depending on the niche of your dropshipping store, you may want to try a number of options.

Here the team of AliDropship can recommend using Facebook for advertising as it has a very large audience.

How to research your target audience?

Now that the importance of knowing your target audience is obvious, let’s learn how to do a target audience analysis and understand your clients better.

1. Get familiar with your product

A target audience research should start with finding out everything you can about your product. It’s great if you already know the benefits of your offer. But if not, spare no time and money to know it better and thus better understand your audience.

Read about the product or even purchase and test one. Often, you can target not one but a few audiences with the same product. For example, posture-correcting goods are now popular not only among older people but among gamers and office workers as well.

2. Collect demographic and psychographic data

Demographic data includes a number of parameters such as gender, age, sexual orientation, religion, level of education, etc. The list can be different for different products and niches. Some data can be irrelevant while some information can become really important.

Psychographic data is more subjective and describes how audiences behave, what they like or dislike. Here you want to know the interests of your audience, their activities (hobbies) and their opinions.

3. Identify the pain points of your target audience

Another important part of a target audience analysis is identifying what bothers your potential customers, their problems and needs. These problems are called pain points, and your product is the thing that can solve them.

To answer all these questions, you can use a number of methods. You can take surveys, analyze audiences in social media (we’ll cover that later), make keyword research, visit niche forums, talk to people on Quora and Reddit, research your competitors, etc.

After gathering all the necessary data, you should be able to create a buyer persona.

4. Create a marketing persona

To find out what your potential customers look like, we recommend creating the so-called marketing (or buyer) persona. This is a representation of your ideal customer based on your suggestions and the data you collected about your existing clients.

Actually, there are 3 ways to create a marketing persona.

The first one is doing a survey of your real customers. You need to prepare a list of questions for your buyers, place it in your blog or email series, and ask your customers to answer them.

Explain to your subscribers that this information will help you make your eCommerce store better and more relevant to their needs. As a rule, most people are ready to help others, so feel free to ask them for feedback.

The second way to create a marketing persona is to do research online. We recommend thinking about the websites your potential customers may like, visit them, and read comments. People often write lots of valuable information when discussing something online, so you just need to find it and take advantage of it.

On top of that, we recommend registering on your niche related forums and blogs. This is also a great source of information.

As for the third way of creating a marketing persona, it is a bit risky. You can describe your perfect buyer on your own, using only your suggestions and relying on your intuition. However, we strongly recommend that you test your assumptions after a while because you may have a wrong idea about your potential customers.

According to statistics, the use of marketing personas makes websites and marketing campaigns up to 5 times more attractive to customers.

5. Use Google Analytics

Google Analytics is a great source of information and you definitely need to use it when doing a target audience analysis.

There are 3 key areas that we focus on when looking for people who matter to our business.

Let’s look at them.

  • Demographics

Google Analytics can give you a clear picture of what age and gender your audience is.

Age and gender data provided by Google Analytics.

This way, you will better understand who visits your website and what information is important for them. For example, if you sell clothes and your audience mainly consists of young women, you can add more articles on female fashion to your product offer.

I would also recommend trying Instagram and Pinterest because young fashionistas usually spend a lot of time there.

  • Interests

The Interests report in Google Analytics provides insights into visitors’ preferences, tastes, habits, hobbies, and more.

Google Analytics data on the interests of a target audience

These details will help you see what topics your website visitors are interested in. Therefore, you will be able to create content that will be the most valuable for them.

  • Location

Knowing where your customers are located is helpful because of 2 reasons. First, you will learn what languages your website visitors speak, and plan your marketing campaigns accordingly. Secondly, it’ll make you aware of the different cultures you are addressing.

Google Analytics data on the location of site visitors

Having this data lets you:

  • Understand what types of content make sense to your website visitors
  • Avoid information that would offend or confuse your audience

For example, it’s probably a poor decision to congratulate your customers on St. Patrick’s day if they live, let’s say, somewhere in the Commonwealth of Independent States.

6. Do a target audience analysis with Facebook Insights

The last way of doing a target audience analysis is using Facebook Insights.

With this tool, you can quickly determine the number of the people who viewed your page and see these views by:

  • Section (posts, videos, photos)
  • Age and Gender
  • Country
  • City
  • Device (computers, mobile devices)

For example, if you see that your subscribers prefer videos to other types of content, it’s better to focus on creating videos rather than on placing photos.

What’s more, there you can see insights about your Facebook page’s followers, recommendations, previews, etc. This information will definitely come in handy if you want to meet the people who will love your business!

Target audience analysis is the key to your dropshipping business success, and it definitely should become a part of your marketing strategy. Regularly use these ways of defining your target audience and you’ll open up new horizons for your dropshipping business!

Read the source: https://alidropship.com/target-audience-analysis/

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A Beginners’ Guide To International Dropshipping

International dropshipping allows you to sell products worldwide without even leaving your home. Sounds impressive, right?

This article is going to help you find your footing in international dropshipping.

What doesn’t catch on with the customers in your country may be a profitable opportunity in another one. And you don’t need to travel to these countries to launch your business.

Dropshipping blurs the international borders. Your business is no longer tied down to your location. You can live in Uganda and sell goods to the USA or Europe. You can even travel to your heart’s content without any harm to your online business. All you need is to take your laptop with you.

Sounds too good to be true?

Believe it or not, but it’s really so. And you don’t have to work miracles to become financially independent and lead a life you’ve always dreamed of.

However, it doesn’t mean you should dive into dropshipping without planning it out. Without a plan, you’ll run up against plenty of unnecessary problems that will get you down fast.

To let you avoid this, we’ve drawn up this roadmap to international dropshipping. Take one step at a time and watch your business grow.

#1. Make the list of the countries you want to dropship to

choosing countries to dropship to
Obviously, the first thing you should do before starting your online business is research a potential market. You need to know where your products could do the trick and bring money in.

Thanks to the tools like Google Trends, you can easily evaluate the level of demand for certain items. You just need to type your keywords in the search field and see how the interest in the product has been changing over the years.

In some countries a product can be desired by a large number of people, while in others, the level of demand will be far less.

Thus, you need to weed out the countries that don’t have any interest in the items you’re selling. Draw up the list of the most promising countries to sell your goods to. It’s going to be helpful for your further work.

#2. Size up the level of competition in your niche

Sizing up the level of competitionWhen you have a list of potential countries, you should look at each of these regions closer. Some countries could be flooded with online stores that occupy the same niche.

In these kinds of circumstances, it’s going to be difficult and quite expensive to win over the competition. There, customers have a lot of alternatives to your store – plus, promotional campaigns on oversaturated markets cost a lot more.

However, it doesn’t necessarily mean that a high level of competition is a sign for you to back out.

Remember that the competitors’ products and promotional campaigns may not be of the highest quality. And here is where you can break into the market and come out on top!

Yet, if your common sense drops hints that the competition is too tough, then you’d better focus your effort on the countries with better conditions.

#3. Choose suitable dropshipping suppliers

Choosing dropshipping suppliers
We’ve mentioned before that the reliability of your business partners is of utmost imporance.

But besides this, there is one more thing to consider if you want to dropship internationally. Your suppliers should be able to deliver the products to every country you target.

Plus, your clients want to receive their packages as soon as possible. And, most certainly, they have little desire to pay extra delivery fees.

Meanwhile, it may turn out that an AliExpress seller has a free or a low-cost shipping option for one country but doesn’t have it for another. Or it could occur that the shipping to some states costs higher than the item itself. Who would like that?

Thus, you need to go to AliExpress and try to choose the suppliers who provide cheap delivery services, such as ePacket, to all your target countries.

Finally, another thing worth mentioning is the tracking code. When you pick your suppliers, make sure their shipping options include the tracking information. Tracking a delivery order helps avoid all kinds of troubles. If you can track the goods, you will have information about the status of the shipment, whether it has been delivered to the address or if it’s experiencing some delays.

In any case, with having access to the tracking of the package, you will be able to resolve any issues much more effectively.

#4. Try to find suppliers that store their products near your customers

find the suppliersIf the order takes a large amount of time to reach its destination, you risk running into various predicaments with your customers. The most impatient and irritable of them could be a real pain in your neck and cause some serious troubles.

To keep customer anger at bay, you should work towards reducing the delivery time. The best way to achieve this is to search for the sellers on AliExpress who store their products in the countries you target or in the neighboring states.

It’s simple – the shorter the distance is, the faster the delivery.

In one of our articles, we explain how to find the suppliers with the warehouses in the USA. This way, you cut down the shipping time from 20 – 30 to 7 – 5 days.

The good news is, you can repeat the same trick with any other country you need. Some AliExpress sellers have their warehouses in various countries like the one in the pictures below.

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#5. Set suitable payment gateways

Set payment gatewaysYou come across an item that you want to buy right on the spot without any delay. But, you can’t. The store doesn’t accept your credit card and you’ve left your cash at home.

Sad, right?

If you don’t want your clients to feel the same way, you need to integrate suitable payment gateways in your online store.

Make sure that the gateways you’re about to set are available in the countries you’re going to target.

#6. Run separate promotional campaigns for each country

promotional campaigns for different countries Every country has its own history, culture, and traditions.

What puts people off in India could be right up your alley if you’re a US citizen. And the other way round.

While creating your advertisement, you need to consider the diversity between countries. You should have a specific approach to each country you target. Besides, if you want to get the best results from your advertisement that targets a specific country, you need to translate it into the local language.

#7. Translate customer reviews

customer reviews
Your reputation is one of the most essential parts of being successful in international dropshipping.

How do people figure out if your online store is worth buying from?

From the people who have already had this experience, of course! Don’t even doubt it: your store visitors read the reviews that the previous buyers have left about your products and your customer service.

Fortunately, you can build a sound foundation for your online business right from the beginning. Even if nobody has bought anything from you yet.

With AliDropship Google Chrome Extension, you’re able to add the reviews along with the products you import to your store.

But, the customer feedback on AliExpress could be posted in different languages. They may not include the ones your target countries speak.

Thus, you should translate the positive reviews into English, at least. For better results, you need your product reviews to include comments in all the languages your potential clients speak.

#8. Provide a great customer service

customer serviceAs a rule, unsatisfied customers are more inclined to take their anger out on you by leaving negative feedback. If everything goes well, people just take it for granted.

If you don’t want bad rumors about your online store to run rampant on the Internet, you should provide your clients with excellent customer service.

It means that there is no room for any misunderstanding between you and the customers. If you can’t speak English or the other target languages fluently enough, there will definitely be some problems.

The key to handling this difficulty is hiring somebody who has the necessary knowledge of the language. They’re going to take care of your customer support and save your reputation. Freelance platforms like Fiverr, UpWork, Freelancer let you easily find someone who is fit for this.

#9. Additional international dropshipping features you should be aware of

If you are indeed interested in creating a dropshipping business that will target other countries, then there are a couple of additional factors you should be aware of.

Let’s go over them one by one.

  • The laws and regulations of the destination country

It’s no secret that every country has its own restrictions for international shipments. If you wish to run a profitable business you need to make yourself familiar with the laws and regulations of the countries you decide to target.  Thus, you will avoid any unnecessary troubles with the law and keep your profits to yourself.

For example, in certain countries you are required to file information about the incoming order. If you fail to file this info, you risk facing various fees and penalties.

As you can see, the outcome can be costly for your business. So, making yourself familiar with the laws is strictly in your interests!

  • Packaging

A poorly packaged product can be a major letdown, especially to consumers who enjoy it when the package is of high quality and represents the product in the best way. However, aiming to please your potential customers is not the only reason why you should try to create a custom package. Besides ensuring your items are delivered in the best condition, it heavily affects the shipping rates, as they will differ depending on the size and weight of the package.

For this reason, if you want your dropshipping business to look like an actual business, you should invest in the packaging to make it more presentable and memorable to your customers.

Make a creative packaging design that best reflects your brand. Moreover, try to use lightweight protective materials to ensure low shipping rates.

  • Return terms and conditions

Just like any other wholesale business that sells various products, make sure to get acquainted with the return policies of your dropshipping suppliers. Moreover, don’t forget to list your own return policy om your online store, to provide your customers with this information. Provide straight and clear information about the payment methods, guarantees, etc.

By getting better acquainted with the general features of international dropshipping, you better prepare yourself when you start dropshipping your goods to customers from other countries and increasing your profit margins.

Now, you’re good to go! You know the most essential things about international dropshipping and can give it a shot. If something still holds you back, feel free to leave your questions in the section below. We’re always ready to help you.

Read the source: https://alidropship.com/international-dropshipping-guide/

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How To Manage An Online Store: 3 Rules For Dropshippers

Have you ever wondered what to expect from your brand new dropshipping life? Handling daily operations in AliDropship’s self-owned stores that make hundreds of thousands of dollars annually, I am happy to share my typical day and tell you a bunch of little secrets on how to manage an online store!

How to manage an online store: the basics

Essentials

When you run a dropshipping store, it’s easy to fall into the trap of being active 24/7 – like, you know, checking your inbox as soon as you are awake, handling an order return in the middle of a family dinner, staying super late to do some stuff in the store, etc.

Mobile technologies make it possible to work flexibly from any place and at any time, indeed. Unfortunately, some people think it means they should be managing an online store all day round to cover as many tasks as possible.

Please don’t.

Rule #1 is to organize your day in a way that lets you have enough free time that is NOT dedicated to your business at all. Remember that you don’t run this business to make yourself exhausted and burnt out; quite the opposite, you launched your store to make money in an easy and enjoying way, right?

First things first

What does a dropshipping entrepreneur do every day?

So, what’s the proper way of running an online store? My working day starts with checking my inbox.

When I look at my emails, I concentrate on the following types of letters:

  • Changes to orders

It happens a lot in ecommerce. A person places an order, pays for it, and then says, ‘Hey, look, I changed my mind, I still want this T-shirt, but in a different color. And a different size, too. And oh, can you also add a pair of sunglasses to my order?’…

A message from a dropshipping customers who's asking to change the size of the ordered item.

It might seem tricky at first, but you get used to it soon. It’s really important to discover these letters in time. If you haven’t transferred the order to your AliExpress supplier yet, you can easily make the necessary changes.

And even if the order was already processed, it’s no big deal. You still can fix it by contacting the supplier directly and describing the query if you act immediately.

  • Refund letters

It’s not uncommon for buyers to change their minds completely, and that’s another part of ecommerce business management. For whatever reason, they may feel that they don’t want the item anymore, and cancel the whole order. Why not? They have the right to.

Alternatively, a refund letter can come from a customer who is tired from waiting for the delivery and thinks that the package is lost, or from a buyer who is not happy with the quality of an already received order.

In any case, these letters require my close attention and careful work that always starts with contacting the original seller on AliExpress.

  • Payment confirmations

Oh, here comes the most interesting part of managing your online store.

I check the tiniest details of all the PayPal and Stripe payments because, you know, stuff happens.

The thing is, payments made with the help of credit cards can sometimes turn out to be a fraud attempt. This is why I perform a very careful check to make sure that:

  1. My buyer’s name (the name of the addressee) is the same as the name of the card holder
  2. The country of delivery is the same as the country of the card holder’s residence
  3. There were not more than 3 payment attempts made from different credit cards

What if the payment was successfully processed but personal details don’t match? In this case, I email this customer and ask to send their ID to make sure this purchase was legitimate. But what if there were attempts to use several different cards to process the payment and all of them were declined? I normally cancel the order because this purchasing behavior is typical for fraudsters.

Given that I run over 20 dropshipping stores, I have to do tons of work sorting all these emails out. On average, it takes me about 4 hours per day to go through all of the letters and to take the necessary actions.

And here I’m talking about a normal, ordinary day when I only have to process about 50-60 orders. When it’s pre-holiday time, online shopping activity rises and the amount of purchases goes up like crazy. So, the workload obviously gets heavier. That’s the thing you need to consider when you get your store prepared for any holiday season.

How to manage an online store: the core

The basics of managing an online store

Proofreading

As a dropshipping store manager, I have this really curious element of my daily routine related to order fulfillment. To be more specific, it’s all about checking the customers’ mailing details before transferring them to the relevant AliExpress seller.

During this part of the day, I:

  • Check the spelling of the addressee’s name and surname

You won’t believe this, but yes, people make spelling mistakes in their own names and surnames.

Fun fact: you won’t even notice it if your customer is a foreigner and you have no idea about the most common names in this country.

This is why it’s important to have some knowledge about your target audience, or at least do a little online research and check the spelling of unfamiliar names.

Obviously, this is not the only thing that can get mixed up 🙂

A message from a dropshipping customer who made a mistake in order details.

  • Check the ZIP code

Obviously, I can’t possibly know any person’s ZIP code, but there are cases when I’m 100% sure that the details are incorrect.

Some people just leave this field blank.

Some people write their phone numbers in this field.

How do I know it’s a phone number or just a wrong combination? I try to learn the ZIP code formats for the regions where my customers come from. If I know, for example, that this area should have a ZIP code that looks like SW1A 1NH (7 digits, 2 numbers, 5 letters), but the provided code is something like 644053 (6 digits, 6 numbers, 0 letters), it’s evident that there is a mistake.

  • Check the ‘Additional Details’ field

For some reason, some people use this field instead of the right one and write their addresses here. I don’t exactly know why anyone would do this, but it doesn’t actually matter – I take a careful look at this field anyway.

Rule #2 is to pay attention. If anything seems questionable to me, I simply write an email to the customer and ask him or her to confirm the shipping details, or to submit them once again.

This time-consuming, but simple procedure is essential. If I blindly submit incorrect shipping details to an AliExpress seller, it will most likely result in delivery troubles.

Promoting

I could share lots of tips on how to run an online store, but most of this information (including small details) can be found in other articles on our blog. So, I’m going to give you two general recommendations on selling products.

  • Advertise your goods on social media

You can find dozens of online selling tips on AliDropship’s blog that explain how to find popular products, how to drive traffic to your shop with SEO, tips on using Google Ads and other tools, content marketing, etc. The team and I use all these methods, but most sales still come from social media, and particularly from Facebook.

Why are social media so efficient?

Partially, it’s because certain networks have very large audiences, which makes it easier to find customers among them. Partially, it’s because social media have turned into shopping destinations. People are not just used to seeing ads in their feeds. Often they expect to see an ad, find an interesting product, and buy it.

So, while using other advertising methods is desirable, social media promotion is a must for a successful online store! Describing how our team runs social media campaigns could take too long, so I recommend reading the corresponding article dedicated to our Facebook marketing strategy.

  • Email marketing

Another great way to raise sales is to send emails to previous buyers and new leads. On the one hand, the revenue from this channel may be much lower than what you earn from other sources. On the other hand, email marketing is mostly used in remarketing, which is very cost-efficient.

When you advertise goods to a new audience, these people are unfamiliar with your business and products. But if somebody left you his or her email, this person is more willing to get letters from you and buy goods.

So, sending emails should be part of your dropshipping routine, too. As for what kind of letters you should write, here’s the list of the most popular email types:

  • Product updates: tell potential customers about new arrivals.
  • Sales notifications: tell customers about upcoming sales or discounts.
  • Abandoned cart notifications: remind previous website visitors about the products they wanted to buy before leaving the site.

You don’t have to send these letters every day. Two or three times a week should be enough. Moreover, you can create email templates to save time.

How to manage an online store: the bottom line

More tips on how to manage an online store

The centrepiece

After I sort out all the emails for today, I go ahead with the core part of managing an online store: order processing.

As you can guess, this procedure doesn’t take much time because the plugin does it all automatically. All I need to do is click the ‘Place Order’ button, and basically, that’s it. The system does all the rest. After the supplier sends me the tracking ID, the plugin automatically grabs this data and connects it to the order details.

After this, I only need to change the order status to ‘Shipped’, and the client will automatically receive the email notification about the successful shipment and the tracking ID. Given the amount of work I need to do manually every day, this is a huge time saver, obviously.

Analytics

If you want to boost the performance of your online business, it is absolutely a must to track every kind of statistical data you can gather.

Once a week, I calculate the net profit: overall revenue minus advertising expenses minus the cost of ordered items.

Plus, I provide my colleagues with data on our buyers’ purchasing behavior. For example, I can see the customers’ country of origin. What’s more, I surely can tell what items sell best in a given period of time.

These details are valuable for our Internet marketing specialists because such data influences the product policy, the ads targeting, the amount of money spent on promotion, etc. I am not directly involved in the creation of promotional strategies; still, I can sometimes give a piece of advice to marketers when it comes to one specific store we run.

This store is all about a highly specific fan niche, and I’m actually a fan of it myself. Therefore, I know which communication tricks and product offerings can work well there.

Managing an online store: dropshipping takeaways

In my experience, the most important thing about how to manage an online store is sticking to a healthy work-life balance.

The best solution is to work ONLY within a specified period of time that is convenient for you. Never sacrifice your personal life for the business’ benefit!

Lots of tricks can be used to minimize the time you’re spending. For example, I have pre-written email templates for almost every occasion. Additionally, I use AliDropship’s automated solutions that help me get enough time to sort out various queries that appear because of the human factor.

Plus, your dropshipping life is much easier when you are an expert in your niche.

Rule #3 is to dedicate your store to something you know well. The more experienced you are in this particular field, the easier it is for you to predict what will work best for your customers.

This passion is what motivates you to keep going and to grow your business. I hope these tips on how to manage an online store will help you find the proper balance, and I wish you the best of luck with your awesome dropshipping stores!

Read the source: https://alidropship.com/managing-an-online-store-rules/

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VAT Explained: What Is VAT And Do Dropshippers Have To Pay It?

Sooner or later anyone who’s thinking about launching a business faces an issue that causes severe headache – taxes! In this particular article, we are going to talk about value added tax (VAT).

What is VAT?

Value added tax, or VAT, is a type of tax that is levied on the value of goods or services added at each stage of production, distribution, or sale to the end customer (consumer). Also known as the goods and services tax in some countries, it’s a consumption tax that is paid by the final consumer who ‘consumes’ products and services, but in practice, VAT is paid at each stage of the supply chain.

Sounds too complicated? Let me explain it in simple terms.

How does VAT work?

Let’s imagine a supply chain that consists of three stages: a farmer who grows apples, a food-manufacturing plant that makes apple juice, and a retail store that sells the juice to end customers. Now let’s get to numbers.

For simplicity, let’s suppose the farmer only puts his own efforts into growing apples. He doesn’t buy anything from other businesses. In this case, he has no expenses and his added value equals the price at which he sells the apples to the plant. So, if he sells the apples for $100, the VAT is applied to this sum.

If the value added tax rate is 20%, the farmer will have to pay $20 to the government. But he doesn’t want to lose money and includes this sum into his final price which increases to $120.

The food-manufacturing plant buys the apples from the farmer and pays him $100 + $20 that goes to the government. The plant makes apple juice and wants to earn $200 as profit (added value). In this case, the plant will have to pay $40 as VAT.

But the plant has already paid $20 to the farmer, so it sells the juice for $360: the cost of apples ($100) + the farmer’s VAT ($20) + the profit ($200) + the plant’s VAT ($40). In this case, $40 goes to the government, while $20 goes to the plant as compensation for the farmer’s VAT.

Next, the retail store pays $360 for the juice and wants to make a profit of $400. But it has to pay $80 to the government as VAT and wants compensation for the plant’s VAT. So, it sells the juice to an end customer for a total of $840: the cost of juice ($300) + the plant’s VAT ($60) + the store’s profit ($400) + the store’s VAT ($80).

As for the end buyer, he or she pays $840 for all the juice bottles including $140 as VAT, but he or she cannot get this sum back.

So, as a result, the customer doesn’t pay the money to the government. Instead, the businesses in the chain do it. But the end consumer pays the tax to businesses so that they could hand the money to the government. The VAT that the customer must pay equals $140. It is the sum of the VAT the businesses have already paid to the government: $20 + $40 + $80 = $140.

A drawing explaining how value added tax works

But what about dropshipping? Do you have to pay value added tax? In most cases, you do.

When you purchase a product from a supplier, the price already contains VAT he/she pays to its government. So you don’t have to worry about it. But you must also collect VAT from your customers to compensate for your expenses and hand the tax to the government.

The AliDropship plugin lets you include taxes in the total price of your products. You can set the tax name and rate, apply it to the price alone or to the cost of shipping as well, and even bind the settings to countries, regions, or cities. Here you can learn more about tax settings in the AliDropship plugin.

Let’s take a look at tax systems in the most popular countries for dropshipping – the UK, the US, and the EU.

Disclaimer: The content of this article is provided for informational purposes only and should not be regarded as legal advice on any subject matter. We strongly recommend consulting a professional tax advisor before taking any action.

Value added tax in the United Kingdom

After the UK left the European Union, its tax regulations changed. Here’s what you need to know.

If you want to sell products in the UK from overseas, you have two options. You can either use an online marketplace or sell goods from your own website.

And since this is the case for dropshipping, you have to register your business for VAT in HMRC (Her Majesty’s Revenue and Customs). You can do it online or by post. After that, you’ll get a 9-digit VAT number.

If the cost of the consignment of goods doesn’t exceed £135, VAT is calculated based on the price at which you sell products to customers. If the cost exceeds £135, VAT is calculated at the point where the products cross the border.

The standard VAT rate in the UK equals 20%. But for some categories of goods, the government applies the reduced rate (5%). Some product categories are VAT-free. To see the full list of VAT rates in the UK, follow this link.

You can also read our article on dropshipping in the UK to learn about other taxes and customs regulations in the kingdom.

Sales tax in the United States

First of all, the government of the United States doesn’t collect value added tax. Instead, end customers pay sales tax.

It’s a consumption tax imposed on goods and services sold within a state’s jurisdiction. While VAT is collected at each stage of production, sales tax is collected only at the final stage (consumption). Still, from a retailer’s point of view, sales tax is basically the same as VAT.

The problem here is that the federal government doesn’t collect sales taxes. It is the responsibility of the states. As a result, sales tax rates are different in each state, and so are the rules (to some extent).

For example, California has the highest sales tax rate equaling 7.25%, while Delaware imposes no sales taxes at all. You can see all sales tax rates by state here.

Previously, a business didn’t have to pay sales taxes unless it ‘had a nexus’ in the given state. To have a nexus means to have a physical presence in a state: to own a brick-and-mortar store, a warehouse, etc. However, after the new Supreme Court ruling (South Dakota vs. Wayfair,  Inc.), this requirement is no longer in force.

In simple terms, it means the following. Previously, if your business didn’t have a large enough presence in a given state and a customer from this state purchased something from you, you didn’t have to pay the sales tax. The same goes for businesses registered outside the US.

But now, according to the new ruling, it doesn’t matter whether you have or have not a nexus in a given state – you do have to pay the sales tax anyway.

Nevertheless, to collect sales taxes, your business must be large enough: to have annual sales not less than $100,000 or make not less than 200 separate transactions in a given state per year.

It means that if your dropshipping store receives less than 200 transactions from this particular state and makes not more than $100,000 from this particular state, you don’t have to pay the sales tax to the government of this state.

But if your business exceeds this limit, you will have to register your business with the given state’s tax authority. Unfortunately, each state has its own requirements, so it’s impossible to give a general recommendation here. Just visit the corresponding state’s website to learn the details.

Value added tax in the European Union

Goods imported into the EU countries with a value of up to €10-22 (depending on the country) are exempt from import VAT. But if their value exceeds this limit, import VAT must be charged.

If your business is located outside the EU, the responsibility to pay VAT lies on the importer of record. Usually, it is the end customer. The problem here is that the customer must pay the tax when he or she receives the parcel. It often becomes a very unpleasant surprise and can lead to more refunds.

To solve this issue, one can register for VAT in the country where the products cross the EU border. It’ll make you the importer of goods liable for collecting and paying VAT. In this case, the consumer will pay the full price (including import VAT) at the checkout. Or you could just warn customers that they will be charged with VAT.

But different EU countries have different VAT rates (from 17% to 21%), while some countries exclude mail orders from this exemption. What if you sell goods to an EU country different from your country of registration?

If your business is registered in the European Union and sells products to end customers living in another EU country, you apply the VAT rate of the country where you are registered.

But it works only if the sales generated in the given import country do not exceed the threshold of this country. These thresholds vary from one EU country to another:

List of VAT threshold limits in EU countries

If you exceed the threshold, you will have to register for VAT in that country and charge its own VAT rate instead of domestic VAT. VAT rates differ depending on the country as well:

List of VAT rates in EU countries

From July 1, 2021, these rules will change. EU and non-EU businesses importing goods with a value up to €150 will be able to join the Import One Stop Shop (IOSS) Scheme. It will let you declare and pay VAT in a single monthly VAT return.

You must collect the tax when accepting the payment for the goods (i.e. at the checkout). Then you pay it to the country where you registered your business for the Import IOSS.

Otherwise, the customs broker will collect VAT.

If the imported consignment of goods has a value exceeding the €150 threshold, import VAT is paid to the customs. It may also require a regular VAT registration in the country of importation.

The government will replace the old VAT thresholds with a new uniformed threshold. Small businesses registered in an EU country and selling less than €10,000 of goods to other EU countries, will be able to charge domestic VAT. Otherwise, they will charge the VAT rate of the country of import.

As you can see, the tax system of the EU is probably the most complicated because each country has its own rules and tax rates. So, consulting a tax advisor is a must here.

We hope this information has proved useful and now that you better understand how to collect and pay VAT, you are ready to launch your dropshipping business!

Read the source: https://alidropship.com/vat-in-dropshipping/