32 Dropshipping FAQs Answered

If you’re new to the dropshipping world, there’s a big chance this would be one of the first dropshipping questions that would come to your mind. In its essence, dropshipping is a business model that allows entrepreneurs to sell items without actually physically having them in the store inventory.

In fact, an entirely different entity, called the dropshipping supplier is responsible for product storage and shipping. Once a customer makes a purchase on a dropshipping online store, the order is forwarded to the supplier for fulfillment and it’s on its way to the customer.

A dropshipper is an online store owner that sells products without physically owning them. If you decide to open up a dropshipping store, you’ll be the so-called dropshipper.

A dropshipping supplier is a company that physically possesses the products that you as a dropshipper will be selling in your online store. In general, the dropshipping supplier is in charge of storing the inventory you showcase in your online shop in his own or a partner vendor’s warehouse. Additionally, the supplier is responsible for processing all orders and shipping them to your end customer.

Customers are the online buyers that place orders in the dropshipper’s online store and then receive those products from the dropshipping supplier.

Because of the lack of inventory management, dropshipping is a business model that doesn’t require a big investment. However, a minor investment in terms of marketing and customer support is highly needed in order to boost your online store traffic and increase your profits.

The dropshipping model is a perfect match if you’re eager to be your own boss and manage a business remotely. Because of the fact that you are not a brick-and-mortar shop and you also don’t have to physically own the products you’re selling, dropshipping businesses can be managed from any location with only a laptop and an internet connection.

The short and obvious answer to this question is: Yes! Like any other form of business, dropshipping is a legal method of earning money by selling items that aren’t physically present in your store. Thousands of businesses are already using this method in order to offer and sell different types of products online. It’s a legitimate business model that is covered by the current regulations in the business segment of any world legal system.

The only thing one should be aware of is the presence of some suspicious dropshipping suppliers that don’t have full proof of the originality of the products they’re offering. If you’re looking for a trusted dropshipping supplier, you can check BrandsGateway and its luxury inventory. Additionally, if you want a more thorough take on the legalities of running a dropshipping business be sure to learn the common dropshipping mistakes to avoid.

Although some dropshippers decide not to register a company while entering the dropshipping industry, it’s preferable if some sort of licensing is present. For example, the most common entity chosen among dropshipping companies is the Limited Liability Company (LLC). The LLC is commonly registered as it protects the personal assets of the person starting the company and separates them from the rest of the assets.

However, you’ll need to make sure that your company adheres to all the state requirements in order to register it as an LLC. This is because each state has different rules, and it’s always a good idea to make sure you meet all the required criteria when registering a business as an LLC. For instance, if you were planning to start an LLC in Florida, you’d have to first understand the legal processes and documentation required for the same.

The suppliers are a key aspect of every dropshipping model so you should invest time to find the most appropriate ones. The things to consider are the area you source the products from, the shipping methods, the supplier’s experience, the product they are selling, etc.

A great place to start looking for dropshipping suppliers is a dropshipping suppliers directory as they provide a wide range of suppliers from different industries, who are usually vetted so you know you’re getting a collaborator you can count on.

Additionally, you can use search engines to find suppliers according to your chosen niche and vet them through their review pages on sites like Trustpilot. An example of a reliable and trustworthy dropshipping supplier for designer clothing and accessories is BrandsGateway, proven by its impeccable Trustpilot reviews.

As simple as writing an email would do the job. In fact, many dropshipping suppliers offer diverse communication channels you can reach them through. Therefore, connecting with the right supplier shouldn’t be a hassle at all.

Due to the fact that people will be purchasing products from your online store, naturally, they’ll contact you for any issues. That is why your minimal investment should be directed toward improving your customer service and providing a seamless relationship with your clients.

Although your dropshipping supplier is the one that ships the products to your clients, all of the customer support and additional services are the responsibility of the dropshipper. So, you’ll be in control of handling complaints from your customers, finding solutions to their problems, and other issues that might arise from the overall process. Therefore, you’d act as a link between your dropshipping supplier and your end clients.

Depending on the dropshipping niche you’re focusing on, you can make between $5,000 to $40,000 on a monthly basis. If you choose high-margin items to be part of your inventory, you’ll naturally be able to work with larger profits. In fact, the nature of this business model states that dropshippers that incorporate high-ticket products earn higher incomes.

There are numerous success stories of dropshippers that are making solid profits by dropshipping luxury branded clothing and accessories. For this reason, you should reflect carefully when deciding on the niche of your dropshipping business and choose one that offers wide-ranging possibilities for the growth of your business.

The most important benefits of the dropshipping are the following:

• Low investment for starting the venture of your own choice.
• Opportunity to offer a wide array of products in your online stores, due to the fact that you don’t pre-purchase anything.
• As a result, the no pre-purchased inventory means low risk in the business world.
• No need to possess a warehouse to store products.
• The business can be run from every corner of the world with only a computer and a stable internet connection.

Just like any other business method, dropshipping does have some downsides that might affect the potential entrepreneurs trying to emerge in the eCommerce market. In fact, some of the benefits mentioned earlier such as the low capital for entry and not worrying about pre-purchasing and storage of products, are at the same time disadvantages. This is the case because low barriers mean oversaturated market and bigger competition.

Low margins are also one of the downsides of running a dropshipping business. With the rise of competition, the margins are usually plummeting. To escape this disadvantage, you should avoid dropshipping on AliExpress and, instead, partner up with a dropshipping supplier that can offer you the possibility to set up your own margins which will help you stand out from the competition, such as BrandsGateway which ensures earning up to 250% margin per order.

When it comes to setting up a dropshipping store, there are suppliers collaborating with development companies that can provide you with a complete turnkey dropshipping store solution.

For example, BrandsGateway is a supplier that’s open to referring you to their turnkey provider partner in order to support your dropshipping journey from the very beginning. With this solution, you can leave the development of your store to be taken care of while you decide what type of products to import from BrandsGateway’s catalog.

In general, there can be fees that dropshippers might encounter in the collaboration with their dropshipping supplier.

• Order fee: The order fee is commonly paid in order to cover the expenses that your dropshipping supplier has to pack and ship the product for you. However, these fees are usually small and amount to up to $5, with exception of items that are extremely large and require additional packaging and shipping efforts.
• Minimum purchase fee: This fee means that dropshippers would be obliged to pay a fee if their order doesn’t reach the MOQ (minimum order quantity) set by the dropshipping supplier. However, some dropshipping suppliers, such as BrandsGateway, don’t have a minimum order quantity, so you don’t have to worry about meeting certain criteria in terms of financial planning for reaching a certain MOQ threshold.
• Subscription fee: The subscription fee is an industry-standard fee dropshipping suppliers usually require which can be on a monthly or annual basis. This fee generally covers all the services that suppliers provide to their dropshippers in order to provide a seamless experience supported by their dedicated account managers.

Choosing the most suitable niche for your online store can be quite tricky. In essence, thorough research of the audience segment for each niche is more than required before everything else. A competitors audit can help you better determine where should you steer your business to.

Overall, choosing a too generic niche will probably not be a good idea due to the numerous well-established dropshipping businesses.

Additionally, there are some dropshipping niches that should be avoided, not because of the possible competition but because you could easily face problems with shipping and returns due to the nature of the products. In the end, finding the right balance is more than necessary.

As we mentioned in the previous paragraph, in order to get the correct answer to this question, you need to dig deeper into the world of dropshipping and do research on what are the best product categories that don’t have high competition rates. For example, the branded clothing dropshipping segment is booming right now, therefore you might want to consider getting into it and grab the profits.

The answer to this question depends on what kind of dropshipping supplier you’re collaborating with. The ideal scenario here would be finding a supplier that can offer you an automated integration for different eCommerce platforms that’ll allow real-time order syncing and automatic inventory updates which will help you focus on different segments of your online business such as building brand awareness and product advertising.

This depends on the location of the dropshipping supplier and the level of quality he offers. The time may vary from supplier to supplier but usually, the orders are completely fulfilled in 10 days’ time. However, there are suppliers that can reduce this time down to 3 to 5 days, so if you’re still in the search of a decent supplier this is definitely a crucial moment that you should take into account.

Yes. As in every shipping process, you’ll get a tracking number for your order and you’ll be able to track the whole journey of the ordered product from your dropshipping supplier to your client.

Usually, the dropshipping supplier hands out a tracking number when the order is processed and sent through the website system they use, through email, or any other way of being considered in the collaboration deal. After the dropshipper receives the tracking information, it’s their responsibility to send it to the customer through your online store interface.

Although the dropshipping supplier is the subject that ships the order to your client, they’ll perform these services for a certain fee which is usually very low. This is because they often partner with services like FedEx, DHL, and UPS in order to get the best out of the shipping experience and provide your end clients with fast and on-time delivery of the ordered products.

Dropshipping suppliers, such as BrandsGateway, offer shipping for only $15 on a product for a standard process. Of course, you can always go with express delivery but the fee for this will increase as well.

Not many dropshipping suppliers are offering this kind of service, although it can be a lot of help, especially for all those entrepreneurs that are just now starting their dropshipping venture. An account manager is a person that’ll be thoroughly familiar with your business story and will alleviate the communication between you and the dropshipping supplier.

Therefore, when choosing your dropshipping supplier, be careful to select one that does provide this service. An example of a dropshipping supplier that provides a dedicated account manager is BrandsGateway which can help you every step of the way.

Dropshipping saturation could be a problem, but once you select a niche that’ll let you emerge with products that are unique or needed aside from the stiff competition, this won’t be a bother anymore.

Of course. In fact, dropshipping branded clothing is the best way to avoid the entry barriers of the dropshipping market, as well as protect your dropshipping business from some fishy dropshipping suppliers that might want to scam you.

Yes and yes. In fact, this is specifically mentioned in the offers that dropshipping suppliers have for dropshippers in order to help them build a decent online store from scratch. If a dropshipping supplier doesn’t offer this, then it’ll probably be better to avoid it at any cost. Quality images and descriptions of products are highly important features in one eCommerce store and lead to an increased number of conversions and sales.

Dropshipping suppliers, such as BrandsGateway, that offer automated dropshipping solutions will take care of every step of this process during the importing stage of their catalog of products into your store.

Yes. As we have mentioned before in this article, anyone can open a dropshipping store due to easier entry barriers that require no capital investment for buying expensive and bulky inventory. So, people that are already running certain businesses can further improve their market presence with dropshipping and therefore earn higher margins.

There are a lot of countries to dropship to that are considered a good starting point for a business. The fact that you can run your business online from anywhere gets you ahead in the game of reaching a potential audience. However, targeting certain countries will always mean careful planning.

For example, if you want to target Europe, it’s best to aim for a European dropshipping supplier that’s located on the same continent in order to get a much more reliable shopping experience for your clients in terms of shipping.

Setting up a viable dropshipping return policy will always be a plus in your relationship with the clients. Additionally, you should always check with your dropshipping supplier whether he offers some discount fees for returning orders as you are going to be responsible for any issues the customers will have with the ordered products. There are some suppliers that offer 14-day return policies that start right after the customer receives the product.

Finding straightforward answers to questions that pop into your head while preparing to launch your dropshipping store will often be a real challenge. In essence, there will always be some dropshipping questions that’ll require a bit more intensive research that sometimes may or may not be enough to answer all of them. However, we do hope that we gathered the most important dropshipping FAQs in this extensive list, intended to help you fuel your dropshipping business and get you on the right track while conquering future markets.