32 Dropshipping FAQs Answered

Dimitar Alimaskoski

Starting out as a dropshipping business might come confusing at times. Naturally, you will have a lot of dropshipping questions that may or may not be easy to find an answer to. In essence, this is because the dropshipping method is a type of eCommerce model that does not fit in the description of traditional business ventures. Basically, due to the multichannel order processing, this might be a hard pill to swallow at the beginning so you need to equip yourself with a lot of information that will help you along your journey and ease the efforts of opening and running a dropshipping store. That is why, we have gathered a bunch of Frequently Asked Questions about dropshipping that people wanted to be answered and compiled them in a list, in order to help every dropshipping enthusiast out there that is thinking of emerging on the market.

What is dropshipping?

If you are new to the dropshipping world there is a big chance this would be one of the first dropshipping questions that come to 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 the product storing 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.

What is a dropshipper?

A dropshipper is an online store owner that sells products without physically owning them. If you decide to open up a dropshipping store, you will be the so-called dropshipper. In other words, after an online shopper makes an order in your dropshipping store, the order will be forwarded to your dropshipping supplier who will take care of the packing and shipping of the package.

What is a dropshipping supplier?

A dropshipping supplier is the 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.

What is a customer?

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

How much of an investment is needed to start a dropshipping business?

Dropshipping is a business model that does not require big investment because of the lack of inventory management. However, a minor investment in terms of marketing and customer support is highly needed in order to boost your business and increase your profits.

Can I manage my dropshipping business remotely?

The dropshipping model is a perfect match if you are 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 do not have to physically own the products you are selling, dropshipping businesses can be managed from any location with only a laptop and an internet connection.

Is dropshipping legal?

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 are not 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 is a legitimate business model that is covered by the current regulation in the business segment of any world legal system.

Dropshipping is a legal business model

The only thing one should be aware of is the presence of some suspicious dropshipping suppliers that do not have full proof of the originality of the products they are offering to dropshippers. If you are 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 10 common mistakes to avoid if you are starting as a dropshipper.

Should I have a business license in order to run a dropshipping business?

Although some of the dropshippers decide not to register a company while entering the dropshipping industry it is 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 that is starting the company and separates them from the rest of the assets.

How and where can I find suppliers?

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 and 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 are 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.

How to approach a supplier?

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

Who provides the customer service in dropshipping?

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

Are dropshipping suppliers also responsible for customer support?

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 will be in control of handling the complaints from your customers, finding solutions to their problems, and some other issues that might arise from the overall process. Therefore, you would act as a link between your dropshipping supplier and your end clients.

What is the average earning of dropshippers?

Depending on the dropshipping niche you are focusing on, you can make between $5,000 to $40,000 on a monthly basis. As a dropshipper, you can have a larger amount of profits if you choose high-margin items to be part of your inventory. In fact, the nature of this business model states that dropshippers that incorporate products that have high margins earn higher profits. There are numerous success stories of dropshippers that are making solid profits with 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.

Dropshippers are earning a lot of profits

What are the benefits of dropshipping?

The first and most important benefit of the dropshipping business model is undoubtedly the low investment for starting the venture of your own choice. Simply put, dropshippers do not own the products they sell and use third-party companies known as dropshipping suppliers which take care of shipping the products to the dropshippers’ customers. Therefore, dropshippers do not have to worry about the costs that other businesses have regarding the inventory.

Another thing related to this is that dropshippers can offer a wide array of products in their online stores, due to the fact that they do not pre-purchase the items. This is very important for attracting a wider spectrum of the audience segment and end up with a higher number of sales. Additionally, no pre-purchased inventory means low risk in the business world. If somehow, things go south, dropshippers do not have to worry about paying the price of failure which, in traditional business models, often comes as losing money for having to sell the inventory at a loss.

Due to the fact that dropshippers do not have to possess a warehouse in order to store their inventory, the business can be run from every corner of the world with only a computer as a means for work and a stable internet connection.

Does dropshipping have downsides?

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 the 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.

Can a dropshipping supplier help me set up my store?

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

Finding a turnkey dropshipping store solution

What kind of fees should I expect from my dropshipping supplier?

In general, there can be fees that dropshippers might encounter in the collaboration with their dropshipping supplier. One fee is per order, which 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 up to $5, with exception of items that are extremely large and require additional packaging and shipping efforts.

The second fee is the minimum purchase fee which means that dropshippers would be obliged to pay a fee if their order does not reach the MOQ (minimum order quantity) set by the dropshipping supplier. However, some dropshipping suppliers, such as BrandsGateway, do not have a minimum order quantity, so you do not have to worry about meeting certain criteria in terms of financial planning for reaching a certain MOQ threshold.

The last fee, which is an industry-standard, is the subscription fee that 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.

What kind of products should I dropship?

Choosing the most suitable niche for your online store can be quite tricky knowing that right now the dropshipping segment is a bit oversaturated. Due to this fact, choosing the right niche is one of the most important steps one needs to make in order to succeed in this field. In essence,  thorough research of the audience segment for each niche is more than required before everything else. A competitors audit will also 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.

Which niche is the best for dropshipping in 2021?

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 do not have high competition rates. For example, branded clothing is a niche that will allow you to get easier access to the dropshipping market and ultimately bring you higher profits. Of course, you need to be careful to choose the best dropshipping supplier for such a niche.

Dropshipping branded sunglasses

How to send my customers’ orders to my dropshipping supplier?

The answer to this question depends on what kind of dropshipping supplier you are collaborating with. The ideal scenario here would be finding a supplier that can offer you an automated integration with your store that will 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.

How much time does it take for the dropshipping supplier to send the order to my customers?

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 are still in the search of a decent supplier this is definitely a crucial moment that you should take into account.

Is it possible to track orders?

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

How do my customers get a tracking number for their orders?

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 considered in the collaboration deal. After the dropshipper receives the tracking information, it is their responsibility to send it to the customer through your online store interface.

Who is responsible for paying the shipping costs on the orders?

Although it is a fact that the dropshipping supplier is the subject that ships the order to your client, they will perform these services for a certain fee which is usually very low. This is because they often partner with services like FedEx, DHL, 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.

Will I get a dedicated account manager from my dropshipping supplier?

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 with their dropshipping venture. An account manager is a person that will 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 that can help you every step of the way.

Could dropshipping saturation be a problem?

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

Can I dropship branded products?

Of course. In fact, dropshipping branded products 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.

Can I use the supplier’s product photos and descriptions?

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 does not offer this then it will be probably 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.

Can I implement dropshipping in my current business?

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.

What is the best country to start a dropshipping business?

Numerous countries are good for starting a dropshipping 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 and the audience that lives there it is for the best if you find a dropshipping supplier that is located on the same continent in order to get a much more reliable shopping experience for your clients in terms of shipping.

Should I set up a return policy?

Setting up a viable 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.

How can I know if the products I sell are 100% authentic?

Once again, that is why it is explicitly important to choose a dropshipping supplier that provides a guarantee of the authenticity of the offered inventory. For example, if you want to sell branded fashion products it is more than necessary to ask your dropshipping supplier for disclosing a certification of authenticity for all the products that you are going to incorporate in your online store.

To summarize

Finding meaningful and straightforward answers to questions that always pop in your head while you are preparing to establish a market presence with the help of dropshipping, will often be a real challenge. In essence, there will always be some dropshipping questions that will 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 ones in this extensive list, intended to help you fuel your dropshipping business and get you on the right track while conquering future markets.

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About the Author

Dimitar Alimaskoski
Content writer and music fanatic. Always using song lyrics as inspiration for my words.

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