UK Drop Shipping Guide - Build A Successful Drop Shipping Business

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UK DropShipping Guide - Build A Successful DropShipping Business

Google Trends shows that “UK drop shipping” and its related search terms are on a steeply rising curve. Is it a ticket to paradise? Or are punters gullible for handing over cash to access “drop shipping directories” with “exclusive” deals? Is there any real money to be made? Are services like Oberlo the future and which eCommerce platform has the best options for anyone wanting to use drop shipping as a business model?

The UK eCommerce industry is worth an estimated $150 billion and is the third largest eCommerce market in the world (Source. Statista)  But drop shipping as a business model is a small part of that economy. Individuals who sell online, make up about 15% of the total.

In this guide, I'll take you through all the steps required to build a successful, thriving, drop shipping business.

Drop Shipping Trends

What Is Drop Shipping?

Drop shipping is a way to sell products on your website that you don't pay for until they have been purchased, doing away with costly inventory and giving you massive flexibility over which products you sell. The drop shipper then fulfils the order on your behalf, so you don't have any packaging or transport costs.

On the face of it, dropshipping seems like a genuine low-risk business opportunity.

The internet marketing business model with the lowest barrier to entry is Affiliate Marketing

In reality, it puts you, the store owner, in the position of being a middleman with little or no control over product quality, stock levels, delivery dates and the inevitable returns. On the positive side with some hard work, you'll hopefully be able to escape the “me too” crowd and build a brand before the market becomes saturated with third-rate dropshipping wannabees.

Keep in mind that because your supplier will be sending single items to multiple customers on your behalf, you'll never achieve the economies of scale that someone purchasing an actual physical stock at wholesale rates can attain. So if you are heading into a hotly contested marketplace, you will most likely not be able to compete on price using dropshipping.

Competing on price alone though it is a terrible business model. To build a profitable and lasting business, you need to find untapped niche markets. Once you are established (and profitable), you can begin purchasing the physical stock at lower prices to increase your margin. Seasonal trends are perfect for the drop shipping model because you won't be left with a lot of stock when the pattern is over.

What Are The Benefits Of Drop Shipping?

Less Money Required To Get Started

I've discussed the costs of setting up an eCommerce store in this post. The summary is that if you were to employ a digital agency to set up the store for you and do the initial SEO and marketing on your behalf, you are looking for a £10,000 investment. You can subtract from that figure by doing some of the work yourself, and it's feasible to shoestring it for as little as £500 if you have the technical skills.

The drawback of doing it all yourself is that unless you are in the trade then your store probably won't look right, or it will look the same as all the other templated stores out there. With so many people jumping on the drop shipping bandwagon your store will be a little drop lost in the big bad vast ocean.

There is nothing wrong with building a site and learning as you go. I'm a big fan of just jumping in and trying things out. As long as you don't expect to make money from day one, this could be a significant second income for you.

Here are some simple maths to understand why drop shipping is such an attractive proposition:

I'm going to start up a shop selling t-shirts. I have ten product lines, and I want to offer four colours in four sizes. I'll start with five of each in stock. The cost price of each t-shirt is £5.

It doesn't sound like a lot of stock to get started, and it isn't. However:

10x5x4x4x5 = £4,000!

By swapping to a drop shipping business model, you free up cash otherwise tied up in stock to spend on marketing your site and making sure it gets found. Websites fail because of a lack of traffic and nothing else. Even the most poorly designed website can be successful if it has a lot of traffic. A brilliant side product of website traffic is feedback and the opportunity to improve.

Low Overheads

Because you won't be carrying any real stock, you won't have to pay any storage or container fees until your business gets bigger and becomes profitable. All you need is a computer, an internet connection and a phone to get started. You could also be a coffee shop warrior, but in reality, a comfortable office to work from would be ideal. Convert that spare bedroom into somewhere lovely to work.

Drop shipping is one of the very few business opportunities where you don't have to pay for stock until the customer has paid you, so it takes a lot of the risk away from your position. It has to beat learning to day trade the stock market for a living!

Flexible Inventory

Being able to switch out products quickly and efficiently is one of the significant advantages of the drop shipping model. You are free to test different products to see what works best on your website without incurring expensive stock charges. It's also possible to find out what the best sellers are and then physically purchase them at cheaper rates in the future.

Start A Dropshipping Business Working From Home

What Are The Drawbacks Of Drop Shipping?

Unknown Business Model In The UK

In the USA, drop shipping is a very well-developed business model, but it's still in an early growth stage in the UK. Suppliers are thin on the ground, but it is a market set for rapid expansion over the next few years.

High Competition

If being able to start up on a shoestring sounds like just the thing for you, the flip side is that there will be thousands of people doing the same thing. Being able to make your products visible in the vast crowd is going to be a massive challenge.

High Delivery Charges

You'll be at the mercy of drop shipper rates for packaging and distribution so expect rates to be slightly higher than regular UK Royal Mail prices.

High Product Costs

Buying single items at trade prices to be packaged up and sent out on your behalf is less efficient than bulk buying. This extra work means you will be paying higher rates than if you purchased multiple items in one go in true wholesale fashion.

Lack Of Quality Control

If you don't see the products before they are sent out then how can you vouch for their quality or authenticity?

Complicated Inventory Management

You'll have to be vigilant and check supplier stock levels regularly to make sure that you don't have products on display with zero inventory at the provider level.

Blank Un-Personalised Packaging

Being able to enclose coupons, offers, trial products and other paraphernalia in the product packaging is out of the question because you won't be handling the product. It's a significant opportunity missed for cross-selling and building brand awareness.

Returns

Dealing with returns and sorting out refunds can be a painful process. If you haven't seen the product before delivery and have no quality control, then you'll have no idea of the number of returns to expect. Suppliers may request that you handle returns and so you'll have to be adept at handling customer complaints.

Pros & Cons Summary

The drop shipping business models' primary benefit is that you can start a business very cheaply, but there are so many drawbacks that even if you make it work successfully, moving to a model where you physically purchase, inspect and deliver your stock is the ultimate goal. Drop shipping is a stepping stone to a full-fledged eCommerce business or to supplement and test your existing product lines.

Relying solely on drop shipping as a business model is not sustainable in the long term because competition in the future will be so fierce. We are already at the stage in eBay and Amazon marketplaces where price wars in some product areas are so cut throat that merchants already sell for a loss. 

Look for new opportunities, for example combining the drop shipping model with Facebook advertising is currently reaping benefits, there are opportunities to target impulse buyers with beauty and weight loss products, and that market sees new players daily.

For example, my wife has suddenly started making random purchases on Facebook, and I see anti ageing creams, makeup brushes and other beauty products appearing in the mail, so that's how I know it is working for some creative merchants.

Beauty products on Facebook

Finding A Drop Shipping Niche

The way to begin building a viable drop shipping business is the same as any other affiliate marketing or website idea - find untapped niches where there is lots of demand and limited supply. With so many people rushing to take advantage of the drop shipping model this is going to be harder than it sounds.

For the beginner, there is an awful lot to learn. From building out your website to devising an advertising plan and gaining that critical feedback to improve your service, you are going to come up against old hands who have been doing this for a long time and will have a head start on you.

They will have a better understanding of the marketplace and the customer demographic. They will understand where to focus their eCommerce marketing effort much better than you.

The primary consideration you need to address on your website is attracting website traffic. How will you drive hordes of eager buyers through your sales funnels? Buying advertising through Google Adwords or Facebook is one possibility, but you'll also need to be prepared for high advertising rates. Check those rates out first before you commit to your niche.

To try and level up the playing field you need to pick a niche that you understand well. If you are the type of person that buys the products you have in mind, then you'll have a good idea of what it's going to take to build a successful business in that niche.

t shirts

Don't get suckered into paying fees for a website that will give you a t-shirt or sex-toy drop shipping business. They are a website design agency posing as something they are not. Do not buy "off the peg", or "turnkey" drop shipping businesses".

One good idea for niche selection is picking a product you've recently purchased that didn't come up to your expectations. Using your knowledge of the marketplace, you can offer a better product and write better descriptions that help the customer make an informed buying decision.

In any business, to be successful, you must offer a better product and customer experience than the competition. You must add value to the proposition. Building an eCommerce business by competing on price alone is a race to the bottom of the marketplace and unsustainable.

Building a discount store that offers nothing but cost as a benefit will fail. The global marketplace is shrinking; it is becoming easier to buy products from countries like China and get them shipped to Amazon distribution centres. The Fulfillment By Amazon service accelerates this process. In the end, the only eCommerce businesses that will succeed are those that offer something unique and original. Your knowledge of the product area could be the advantage you need to succeed.

Some of the best niches for drop shipping are those that have specialist magazines dedicated to them. Many years ago I worked at a wholesale newsagent, and the array of independent magazine titles was staggering. If you want to find fantastic niches, then go through the specialist magazine titles. They have a following big enough which warrants producing a magazine. Wikipedia has a complete list of all the current and defunct titles which would make an excellent starting point for research 

Here's another useful resource for independent magazine titles

This storebuilder article (how to research and find an eCommerce idea)  has resources for finding and following trends and trend watching

How to implement A Drop Shipping Business

One way to approach building a drop shipping business is to find products or niches where the current product suppliers lack a marketing edge because that's going to be your job.

If you don't have any internet marketing skills, diving into building a site in the hope that you'll make money is most likely to fail. Drop shipping is effectively an extension of affiliate marketing, and you need to be able to offer something different to be successful. It's not easy considering the number of people that think they can give it a shot and give up the day job.

One area where it is possible to put an advantage to work is by using a cloud-based website builder. In my research for this article, I came across several Magento websites that will have easily cost 10k+ to develop, and they have expensive maintenance costs. By using a next generation eCommerce website builder, you can drastically reduce the initial outlay and maintenance costs of building your dropshipping website.

The goal is to market your chosen product better than any existing provider is doing it. Don't create a website and fill it with a product just because you can. You'll be underestimating the amount of work that goes into maintaining a website presence. It is very labour intensive.

You can use this Chrome app Wappalyser to spy on a website and see what technology it uses.

Companies like Oberlo and Ecomdash who use API technology to integrate their App's with existing eCommerce software are revolutionising the industry. 

I've recently added Oberlo to the directory. See my Oberlo Review 

The App is an interface between the eCommerce store (Shopify for example) and popular eCommerce marketplaces like AliExpress or the Oberlo Supply market. These third-party apps take away a lot of the drudgery of having to research and find products.

How Drop Shipping With Oberlo Works:

A customer places an order in your Shopify store, and you receive money to your payment gateway account (PayPal for example). Then, you have to use your credit card and purchase an item for your customer from the supplier, to be shipped directly to your client.

Your profit will be the difference between the amount of money a customer paid in your Shopify store and the cost of the product you paid for the supplier after subtracting any advertising costs.

I would advise anyone that wants to get started with drop shipping to build a Shopify store and install Oberlo. It's by far the easiest method possible, and it will save you hours if not days of research. See my Shopify review

Shopify also has built-in support for selling on Facebook, and that is a hot new market at the moment.

The other method for UK users is to use EKM or Shopwired to build your eCommerce store and then manually integrate your drop shipped products. Many companies offer XML data feeds of their products that you can use or in the case of a few products you can add them piecemeal to your store.

The drawback with this method is the time taken to do it and also compared to Shopify, UK eCommerce software just doesn't have the cutting-edge features required to sell on social media marketplaces or integrate third-party drop shipping Apps.

Step One

Business Name, Domain Name, Social Media Handles

Don't get too hung up on domain names; you'll spend more time looking, procrastinating and dawdling over this step than building the site. Also, don't spend forever researching an eCommerce business idea, it's effortless to change if you want to try something different later on. The whole point of using Shopify/Oberlo is that it is flexible and quick to implement.

I've already written a couple of posts which will help you get started:

Name Your Business: 8 Tools To Help Find Your Business Name
Domain Names - Find The Perfect Domain Name

I've pressed into service an available domain name “celebrityfab.co.uk” for a niche covering beauty and health products. 

Step Two

Register for your free trial and create your Shopify store.

You can read my in-depth Shopify review or follow this link to sign up.

Step Three

Choose Your Store Theme. There are plenty of free options here, and there's no need to go buying an expensive theme until you've proven the concept. Try and keep your theme as simple as possible so that you won't have to make many changes. Good choices are New standard, Supply and Simple.

Once you've found your theme click “Install Theme” and you've done the job.

Shopify Theme Installation

Step Four

Add your logo and Install Oberlo

See This Blog Post: How To Create The Perfect Logo

Install the Oberlo App

Step Five

Import your products from Oberlo to the Shopify Catalog and publish them!

Search For Oberlo Products

Summary

Good Job! You are well on your way to producing a $1.1M turnover in the next three months! 

But wait. There's a couple of things I haven't told you. While the process of setting up Shopify and installing the Oberlo app is straightforward, this work scratches the surface of what's needed to produce something that will pass muster and convince people to part with their credit card details.

For a start, a lot of the product photography is inferior and requires attention, there are standard terms and conditions pages missing, and the layout needs a lot of work It is a long way from being called an eCommerce store.

The other glaring issue is that to set the prices you need to use a multiplier across the board to set the retail price or use the advanced pricing rules. Either way, you'll be purchasing goods through Aliexpress and then applying a multiplier to get to your retail price. So there is nothing stopping people from going directly to the manufacturer and making the same purchase at half the cost to exclude the middleman - that's you! Ignoring that minor drawback, the typical price multiplier is 1.8 - 2. 

Setting Up 

After a couple of hours exploring where everything lived, I developed a production line for producing the menu items and collections. You'll need to open four browser windows, and it does help if you have a dual screen setup. Have the following browser windows open:

  • 1. The site, so you can see how it looks as you go along. 
  • 2. The Shopify navigation menu in your chosen theme. 
  • 3. A window with the Shopify "Collections" available. 
  • 4. The Oberlo App interface. 

The way I built the navigation was to browse a couple of the top sites in Google and see how they had their product categories and navigation setup.

Every navigation item you introduce needs to point to a collection of products, so make the collection first for example "makeup" and then search for your products in Oberlo. Once you've marked all the items you need (I just went for a random ten items, to begin with, to see how it was going to look), then you import them into your collection. Once your collection is populated you switch to the navigation window, create the menu item and point it to the collection you've just created. 

Importing Multiple Products

Search Oberlo For Products

Building A Collection

Collections lie at the heart of the Shopify eCommerce engine, and they are so adaptable that once you understand how the operators work (contains, ends with, does not include etc.), you'll be building extensive collections rapidly.

When you create a collection, it displays in your eCommerce store as a web page with a gallery of products that you've added to it. Clicking on the product image takes you to the detail page for that item.

There are two types of Collections:

An automated collection uses selection conditions to include matching products automatically. You can define as many selection conditions as you want, and you can also specify whether products must meet all requirements or any situation to be included in the collection. When you add a new product that matches the selection conditions for a collection, it will automatically add to the collection.

manual collection includes the products you add. The collection always contains the same products unless you add or remove them.

Change the sort order for the products in a collection

When a collection displays in an online store, the products in that collection display in the sort order that you've selected. Products are sorted alphabetically by default.

You can select from a few sorting options:

  • Manually
  • By best selling
  • Alphabetically: A-Z
  • Alphabetically: Z-A
  • By price: Highest to lowest
  • By price: Lowest to highest
  • By date: Newest to oldest
  • By date: Oldest to newest

Building A Shopify Collection

At this point, I've added just over 130 products to the store to fill it out and get an idea of how it is all going to look.

About eight hours of work, and we have a rudimentary drop shipping store in the making:

Day two drop shipping store

 

Once you've got a base set of products from which to work it's time to start filling out all the collection descriptions and adding in images. I used Unsplash.com for all of my pictures.

This is really where the hard work begins because although adding products is remarkably smooth, making sure the product descriptions are accurate and make sense is probably going to be another day's work. When manufacturers add their products into Aliexpress, I'm sure they use a mass uploader, and the product descriptions are keyword stuffed garbage to try and get their products found on the platform. All of these product descriptions are prime for a rewrite.

Dealing With Dropshipping Drawbacks

Dropshipping as a business model is inherently flawed, and I've discussed this at length in this blog post:

However, dropshipping using Shopify and Oberlo poses its own set of unique problems to try and solve.

Delivery Lead Time, Shipping Costs And Product Cost

Three problems to be addressed or our drop shipping site will never get off the ground.

Delivery Time

Products shipped from Aliexpress typically state they can take 30 days to arrive. (Although 8-12 days is typical). In today's economy where supermarkets are now offering same-day delivery, and significant brands offer next day delivery, how are we going to convince customers to part with their cash and then wait 30 days (or longer) for their goods to arrive?

First of all, we need to manage the expectations of the customer and make sure they understand the long waiting time and accept it. A good way of playing down the waiting time would be to state "Delivery times from 8-30 days". This isn't a lie, it's within the delivery guidelines, and I think it's far better than just stating delivery times are 30 days flat. Also, some goods are stocked and distributed from Europe, but of course we have no way of knowing which ones they are.

The other fact to make clear is that goods transport from Asia or China and hence that's the reason for the longer delivery lead times. If you are upfront about this from the very beginning, it's going to help a lot in the case of disputes.

The plan should be to import the most popular products in bulk once we have established what the best sellers are to speed up the delivery times and eventually provide brand packaging.

Shipping Costs

One of the ways to reduce shipping costs is to work with suppliers that offer many products. That way you can consolidate some of your expenses. 

Product Cost

Browsing Aliexpress can lead to some eye-opening discoveries. Some identical products can be double the cost depending on which supplier you use, so it pays to spend a bit of time researching your products and finding good suppliers. It's not so important to focus on getting the lowest possible cost for your product, with so many different selling platforms available unless you have an exclusive product there will always be someone cheaper than you.

Take a look at this example:

Drop ship pricing

The same product varies in price across platforms ranging from £2.40 on eBay to £9.97 on Amazon prime. For mass produced and everyday products, this is the case across the board. The seller at £2.40 may have bought thousands when the GBP purchased a lot more against the dollar, and they are selling the last few off at cost price to end the line. Or they may be the original manufacturer? With so many different channels to market, fixating on price will get you nowhere. As long as you are in the ballpark, you have a fighting chance.

The key is to be able to get your products in front of the people searching for them.

To fill out the links in the footer, I created the pages first (about us, contact us, terms and conditions etc.) and then made the links point to the newly created pages. It's straightforward to do. When building links always create the pages/categories/collections first and then you'll be able to see them when you want to create a link.

Adding more pages to Shopify

Once the links have been added to the footer section though, you'll notice they appear in a vertical column. Vertical columns are elegant if you have four columns (like we do here on Storebuilder), but it takes time to grow a site out and add more links. Rather than begin to create extra pages that we don't need at this stage I made the links appear horizontal across the page to fill the space.

Making the links appear horizontal

Here's the code I used to make the links appear horizontal across the footer:

//Make the links in the footer horizontal

.site-footer li {

display:inline-block;

padding-right:15px;

}

Add the above to the end of your theme.scss.liquid file in assets and notice I've added the // comment at the beginning so that when you come back to look at the file at a later date, you know why that piece of code is there. It's always important to annotate your code edits.

At this point, I also deleted all the other themes that I'd downloaded to eliminate any confusion with which files are currently being edited, removed the “powered by Shopify” byline (in footer.liquid) and amended the links header to “useful links”.

Then I filled in all the text on the newly created pages.

Now for some detail on how I handled the shipping/delivery method:

First of all, I set up advanced pricing rules so that higher-end products have a lower corresponding mark up:

advanced pricing rules

Products from £0 - £10 get a multiplier of x2 (double the cost price) £10.01 to £49 is 1.8 and $49.01 to £500 is a multiplier of 1.5 which is a 50% margin. 

The way that Oberlo works means that the customer will purchase the product through your website and you'll receive the payment into your Paypal account or chosen payment gateway (which I'll discuss in part four).

Because you are drop shipping, the products are not being delivered from your origin address, and so standard shipping rates will not apply.

You could set up shipping rates to equate with the weight of the product, but I opted for the more comfortable option of making all shipping costs free and making sure I have enough markup in the product to compensate. This should hopefully persuade more customers to opt for the more extended product lead time as they are getting free delivery into the bargain.

The trick to make this work is to use the Oberlo chrome extension which will allow you to sort products directly through the Aliexpress interface. The Oberlo chrome add-on makes it easy to find all products for your search that are delivered free by ePacket. You can see that in action below:

oberlo chrome add on

Once I'd seen how the Oberlo Chrome add-on worked, I realised that it would be effortless to add more collections to the store. So, as in the image above I've begun to add in nested categories (Lipstick, Lip Gloss, Face Concealer, Eyeshadow etc.) to make the navigation more comprehensive. By tagging items with multiple tags, you can make individual items appear in numerous collections. That makes building out the store easy, and there's no need for duplicate products to achieve the same end.

daytwo

 

It was at this point I suddenly realised that it was going to be possible to create a store with a vast range of products. At the outset of the project I thought that creating a store with twenty or so products was the way to go but now that I've seen the power of Oberlo and Shopify I've changed my mind. One way to compete with other established stores is to offer a broader range of products. The drawback with this is:

  • It's going to be time-consuming to add thousands of products to the store.
  • What happens if Oberlo disappears? It's not likely but if anything wrong happens to them your business will go down the pan with them.

In the UK we don't have local directories for dropshipping like Aliexpress, but in future, I'm sure we will see Apps for Shopwired and EKM that can achieve the same result.

Import And Export

It took me several tries to get my products successfully imported and to understand what I was doing! When you import products from Aliexpress into your Shopify store, they exist in the Shopify database so you can still retrospectively apply advanced pricing features to the entire set of products.  Very useful if things aren't going so well and you want to reduce the prices across the board to generate more sales. When you do this a handy red "sale" circle appears over the product which looks quite neat. You could of course also increase prices in the same way.

Tagging Products

Get your products appropriately organised from the beginning rather than going back and trying to update everything after you have imported all the products. For this reason, I deleted all the products that I'd used to see how everything worked and started again using everything I'd learned to make it better.

Summary

It's taken another four hours to establish how the shipping rules are going to function and how to create lists of products using the Oberlo App that have free ePacket shipping to the UK. That's on top of the 8 hours so far invested in the project, so we are in for a total of 12 hours. The main take away is that you need to be very organised in the way you import products to your store because with so many products to choose from it is going to be very easy to create a spaghetti mess from which you'll never recover. Adding hundreds and hundreds of products in one go is not the way forward. Far better to take the time to categorise, create a collection and tag your products as you go.

On the outside, it's a great looking site put together in just a couple of days using the free Shopify templates. The Oberlo App works fantastically well and utilising the Chrome add-on, it's a breeze to add new products to the store.

The images are automatically imported along with all the product details, and the whole routine is very slick. So why then won't I be spending any more time on this?

Despite the hype and frenzy surrounding drop shipping as a business model, on the inside something doesn't feel right and that typically spells trouble ahead.

If you can find valid reasons to counter my arguments then, by all means, fill your boots, you may be able to build yourself an excellent drop shipping business in no time at all. But for me? I'm out. For the following reasons:

daytwo

Managing Products

To build this site out big style would mean managing around 1000+ products all at a low price point (sub £10). To organise this correctly, you'll need to find suppliers who offer the broadest range of products so that you can consolidate your shipping costs.

The good news is that using Shopify/Oberlo; you can add thousands of products to your store meaning you are bound to gain some traction with Google. The bad news is that managing many products is going to be exhaustively time-consuming — a full-time job for a junior product manager.

The solution would be to choose a niche where you are dealing with around fifty or so core products, to begin with, and you can weave these into an existing blog to monetise it — creating a drop shipping business that hosts hundreds if not thousands of products is creating a monster that you can't manage. Products that are no longer available, price increases and image changes (don't get caught for misrepresentation) will all eat up your valuable time.

As a method for testing out new products or beefing up an existing product range, yes, drop shipping is the ideal way to test the waters. But for managing hundreds of products across many suppliers – this is asking for trouble.

Click Here To Read My Shopify Review

Delivery Lead Times

Oberlo claims that if you make it clear on your website that delivery is going to be 7-30 days, then people will happily wait for their items for the cost saving. But I don't see this as being a viable business strategy. People may purchase as a one-off and be happy to wait, but I wouldn't expect a great deal of repeat business.

By the time people come to do their Christmas shopping, it will be too late for you when they realise goods won't arrive until the New Year.

Did I mention products may come from many different suppliers in the same order? Packets will arrive at the destination spread over several days. You are bound to get many complaints from customers who think they are missing items when they get the first delivery.

Price Multiplier

The ability to set up an automatic price multiplier makes it easy to adjust your margins but in an ever-shrinking marketplace, buying at retail and then applying a multiplier does not make business sense.

You'll be relying on people returning to your website to purchase because of the low cost. But you are already selling at premium prices. Buyers are becoming savvier by the day, and they can quickly copy your product descriptions and paste them into Amazon, eBay or even Alibaba Express itself with a couple of mouse clicks.

With products delivered in plain packaging and no brand loyalty to speak of it's going to be an uphill task.

Reliance On Oberlo App

It's Oberlo that makes the whole thing tick, that and Shopify. Which means that if you ever wanted to move to another eCommerce platform for whatever reason, you can't.

No Value Added Proposition

No VAP is the main reason for my decision. Building a drop shipping website is easy. I've proved it. But with no value added proposition any gains you make in the short term will be wiped out in the long run by superior marketing techniques.

If you are going to build an internet business, then do it for the right reasons: A better product or service designed with better value for money. You can't use drop shipping to build anything with exclusivity because there won't be any. The best you can hope to do is to group your products into a tight niche and support them with better blogging and product information.

Without a solid base from which to work (your website) it's going to be incredibly difficult to make a difference in the world.

If you can see past my arguments or you have a better niche, then you still might make it. But mostly you'll be making yourself a glorified middleman at the mercy of suppliers and the amount of business they can handle and customers that you'll find it challenging to satisfy when you don't control any product distribution.

As an addition to an existing business model or to test the waters with a new product line, drop shipping with Oberlo is the ideal tool. Other than that you'll be building on shifting sands.

Build A Dropshipping Website With Shopify/Oberlo - Start Your FREE 14 Day Trial Today!

Here's A List Of Drop Shipping Ideas For Inspiration: 

1. Oberlo

Oberlo integrates with the massive online marketplace at AliExpress, but it only works with Shopify and nothing else, which means that both EKM and Shopwired are unable to work with it.

I spoke to both UK companies about their drop shipping options, and they agreed that there is room for massive improvement in this area. Shopwired says they have considered making an alternative to Oberlo, but that would mean duplicating development effort to achieve the same result and for a much smaller UK audience.

What's needed is an App that can integrate and pull together all your eBay and Amazon listings and keep track of your Facebook and other social media campaigns as well as utilise a drop shipping directory. That's quite a task list and a job for a startup.

Meantime we are waiting for Oberlo to open up its doors to other eCommerce platforms. Or for other competitors to enter the marketplace. For new UK drop shippers, there is no quicker way to get started in the business than by using a combination of Shopify and Oberlo.

However, before you go rushing off to build your Shopify drop shipping store, there are several things you need to know about Oberlo and AliExpress which is the marketplace with which Oberlo interfaces.

Things To Know About AliExpress

1. AliExpress is a massive online retailer owned by Alibaba Group Holding, a Chinese eCommerce company that provides consumer to consumer, business to consumer and business to business sales via web portals. It allows small companies based in China to sell to customers all over the world via the AliExpress website.

2. Low prices often but not always mean poor quality or inferior goods. Production costs in China are far cheaper than most of the rest of the world so buying directly from a manufacturer can mean significant savings. However counterfeit goods proliferate due to poor control over trademarks. 

3. Delivery times can range from 7 days to three weeks, so you'll have to balance up whether a customer will wait longer for a product at a lower price or whether offering faster delivery and dealing directly with manufacturers or suppliers is a better option.

Want to see what a dropshipping site looks like made using Shopify and Oberlo? Check out my drop shipping website at Celebrityfab.co.uk which I built for the drop shipping guide.

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The Adventure Begins!

UKLocalWholesalers.com is a directory of UK Wholesalers who pay a fee to get listed on the site. Browsing the listings is free for users. Most wholesalers have minimum order fees of £100. 

Some of these wholesalers specialise in drop shipping and provide data feeds and images, but most do not. If you know what niche you are going to be working in, then you might find some useful sources here.


Esources.co.uk is another wholesale trade directory with over 395,000 listings of which 171,000 claims to be drop shippers. However, in reality, a fraction of that total will be genuinely geared up for drop shipping.

Ideally, you'll know your niche before starting to look through the listings because you could easily spend a couple of weeks browsing! There is a separate dropshipping section so start there. If you want to view many listings, you'll need to pay the £20 registration fee.


Duplay.co.uk

Duplay specialises in kids and garden toys. They have a vast range of bouncy castles as well as electric cars, bikes, garden trampolines and waterslides. They offer both affiliate and drop shipping partner programmes.

To open a drop shipping account, you fill in the registration forms, and you'll get access to the trade account website where you place your orders. You take the order and process the customer payment on your eCommerce site and then log in to the Duplay trade website to set the same order again to be delivered to the customer. This sales process will work well until you start getting a lot of requests!

Building a mailing list out of children's birthdays has to be one of the best business tactics ever! Every year their birthday comes around, and every year you'll be there to prime them up a few weeks beforehand with birthday party ideas like a bouncy castle.

The beauty of this would be integrating a form into your site which asks for the child's age. Once you have this, you can hit them up with offers for the rest of their life!

Do you know how much a bouncy castle costs to rent? It's typically close to £100 so build a website that captures traffic for these search keywords and then offers them a longer-term solution by buying one outright.


Libertyhousetoys.co.uk

Wholesalers who develop friendly, easy to use websites are few and far between, but I came across this excellent site wholesaling children's furniture, toys and accessories. In the esources directory, it says they are a drop shipper, but on the website, there is no mention of it, so you'll need to contact them directly to get the details.

One of your most time-consuming tasks as an eCommerce store owner is going to be writing product descriptions and sourcing images for your products. If you find a wholesaler that has already done that for you, then it will save you a lot of time.


150 150 Warning 1A note on companies offering turn-key websites:

As you research your drop shipping market, you may come across companies proposing to build you a turnkey website complete with everything you need to operate a drop shipping business from day one. These types of site are worthless and nowhere near worth the £399 fee they want to charge you for them. In many cases, they are website design companies who have turned their hand to drop shipping and offer turn-key websites as a sideline.

If you purchase a subscription to a cloud-based eCommerce website builder, then it doesn't matter how many times you change the store name or add different products, and you won't have to pay the upfront fee that many of them are charging.


http://www.tigriswholesale.com/

Continuing the toy theme here's a nicely done drop shipping opportunity for kids toys, musical instruments, puzzles, table games and much more. What caught my eye was the enormous range of electric cars which were on display at tigristoys.co.uk.


http://www.cougarbeautyproducts.com/

Facebook advertising has opened up eCommerce to a massive new audience, and many of them are impulse buyers.

Fad products like charcoal teeth whitening are all the rage at the moment, and there will always be a market for conventional beauty products like facial masks, day creams, night creams and oils.


Printful is a white label on-demand fulfilment company that specialises in custom product drop shipping. They offer custom printing and embroidery on a variety of clothing, accessory, and home decor products.
The good thing about Printful is that they do all their printing and embroidery in-house, and they have a fulfilment centre in Europe, enabling them to ship to the UK in 4 days on average.
Setting up an account with Printful is free, and they integrate with a bunch of different eCommerce platforms including Shopify, WooCommerce, Amazon, and Etsy.

Being able to sell products with your designs means you can offer products designed specifically for your target audience, but it also means you'll need to invest time in creating designs and placing them on the products you want to sell. Luckily, they also have a free online mockup generator that lets you generate mockup images for your store.


In my research, I started to find that better and better opportunities presented themselves the further down the Google search results you go. Is this because drop shipping companies are not very good at promoting themselves?

Oberlo may be the easiest way to start a store, but it's not the best way to find an opportunity. So don't be fooled into thinking that going down the Shopify/Oberlo route is always going to be the best option.

In many cases finding an opportunity combined with an excellent domain name and backing it up with some quality content is all you need to build a significant second income from a drop shipping business.


More Dropshipping Thoughts

High Advertising Costs

When you start a drop shipping business, you are primarily relying on your marketing technique surpassing those of your competition. In most cases, this means spending a lot of money on Facebook or Adwords campaigns.

If you look at most of the sites for sale on Shopify Exchange, you'll see that while some of them claim high monthly revenue figures, they also have high advertising costs associated with them. You can do some due diligence by running their domain name through Semrush and viewing their organic traffic figures. You'll see a lot of them are non-existent, so while it's possible to say "I took this business to £65,000 monthly turnover in six months" they don't highlight that they have £55,000 in associated advertising costs to obtain that, naturally.

There's a great group on Facebook called “Shopify Entrepreneurs”. If you haven't seen it yet, then it's must-read material for anyone beginning to build an eCommerce store, regardless of the software you are using to make it. Once you've hung out there for a while you'll notice a recurring theme; people expect money to fall into their laps like the leaves on an autumn breeze.

It's not enough to add a theme, drop in a few products and then start hoping the cash register starts singing. Instead of people working hard for their money, they are falling for the whole “I built a six-figure eCommerce business in three months” Facebook advert, hook line and sinker.

We learned about honesty and integrity - that the truth matters... that you don't take shortcuts or play by your own set of rules... and success doesn't count unless you earn it fair and square.

Michelle Obama

There is no substitute for putting in the hours and the hard work. There are no shortcuts, only doing things correctly and most of the time that means learning from your mistakes. Building an eCommerce business takes patience and time the same as any other business. Give it a bare minimum of two years to breathe and to begin attracting traffic. No site ever died from an abundance of traffic, or at least those that did couldn't afford the hosting charges.

Content Creation Requires Time 

The current emphasis on researching eCommerce trends, finding a niche product and launching your site into a non-competitive market is excellent advice. But good luck with finding those markets. Everyone is looking for the same thing, a market that isn't saturated with people trying to flog their products on Amazon, eBay and any other platform that will support a Shopify “Add To Cart” button.

eCommerce website builders make the job of bringing products to market on the internet so much easier than old school server-based software. They are quicker, nimbler; much easier to set up and that is their attraction. But the advantage gained is quickly being eroded by the number of people trying to squeeze into an already crowded marketplace. The half-baked Shopify sites that consist of one page and a couple of links are frighteningly bad. They will never inspire consumer confidence and make a sale even if you paid the two years subscription fee up front.

If You Need Cash Fast - Freelancing Should be Your Gig

Like a youngster buying his first car and finding the insurance and running costs four times as much as the original outlay, building an eCommerce store is merely the entry price to market. It is the cost of building up those all-important reviews and gaining consumer trust that is the real barrier to entry.

And to get those reviews and build that trust? You'll need traffic. You develop traffic from blogging and gaining links over time. You can see why I'm not convinced three months is in any way shape or form a viable project length. No, that's not it at all. If you need cash fast then freelancing should be your gig.

To be successful, you must set lofty goals. Aiming too low means you'll be just another eCommerce website in the Google graveyard. Aim high, and with a following wind, you might make something that people will like. Use the top site in your niche as a blueprint and then improve on it. That should be the goal.

Not to do the bare minimum and offer up a Hail Mary.

Dropshipping Summary

As a business model, drop shipping now rivals affiliate marketing for the ease at which you can start a new business.

Many affiliate marketers use embedded XML feeds to recommend products on their websites supplied by the leading affiliate marketing networks, but the commissions available are so ridiculously small that you have to build very high traffic websites to make it work. For example, trying to sell white goods or electrical products through affiliate marketing typically has commissions of 2- 3%.

Using a Shopify store in combination with Oberlo allows you to make a better presentation and offer a broader range of products at a higher margin.

The caveat is that every man, dog, brother and his son, wife and children will all be trying to do the same thing because it is so easy to do. Competing on price is not the answer.

Drop shipping is an excellent supplement to an existing business model, for example, a successful blog which already has a qualified traffic stream. Or for going into marketplaces where shopping buttons were not previously available (Facebook/Shopify).

As a stand-alone investment of your time, you'll have to have unique knowledge of a marketplace or a new angle to make it a success. Setting up shop is one thing; getting traffic to it is quite another.

All Life Is An Experiment, The More Experiments You Make, The Better

Ralph Waldo Emerson Poet

You can't build a business without trying something or experimenting. For a low-cost way to start making an eCommerce business and begin learning the ropes then Shopify in conjunction with Oberlo is the way to do it.

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