Following my presentation on dropshipping, I wanted to create a blog post to address some of the main questions and concerns I received from my peers, as well as delve a little further into this concept and explore some examples of it in action. On the whole, I was definitely surprised to see how few of my classmates had even heard of it before, as only 4 people raised their hands. I knew that drop shipping was still an emerging business model, however I didn’t quite realize just how little attention it garnered.
The most prominent question that arose regarding my presentation was how come the consumer doesn’t just bypass the drop shipper and purchase the items from the first seller. The first reason that most people don’t do this is the same reason that most people in class didn’t raise their hand – because they just don’t know about it. When we see these products online on ecommerce stores, we simply don’t know that it’s available elsewhere for far less. We don’t know about Ali Express or Taobao or other Chinese supplier sites. Furthermore, brand awareness plays a large role in this choice as well. These sites often have established social media presences and very legitimate looking websites. We’re all more comfortable buying from a brand with hundreds of thousands of followers, as well as reviews, instead of an obscure Chinese seller with a limited description. Lastly, these dropshipping websites still successfully reach consumers over their cheaper counterparts because of their convenience. Ecommerce companies that only dropship spend a mass amount of money on targeted Facebook ads. These rely on quick thinking consumers who perceive a useful product and purchase it immediately.
One of my favorite examples of a perfectly marketed drop shipping website that has found huge success is LDS Man.
They are a company that sells exclusively The Hangout Bag, a lightweight chair/sofa that can be easily inflated, but rolls up very tightly. They advertise it as the perfect item for the beach, park, or camping, as well as a necessity for attending music festivals. As an avid festival goer myself, I saw their ad in my feed and purchased one for $39.99. I had seen tons of people using them before at past events and thought they were super practical. However, about a month after I had purchased mine, I thought to actually check the item out on Ali Express, and lo and behold, there it was for around a quarter of the price. This is just one example of a drop shipped item being sold elsewhere for much cheaper, if only you do the research.
Lastly, I had received a lot of feedback regarding my own personal experience with drop shipping and asking for more information regarding the venture. It all started about 8 months ago when I first heard of the idea, so I began to make my own website via Shopify. The item that I initially intended on drop shipping were these interesting, retro-designed tank tops that I had called Vibe Tanks. I found a highly rated seller from China and reached out to form a relationship with him. He agreed, and I created my ecommerce store, outfitted with clean looking graphics and descriptions for each design. With the website layout all squared away and my product vendor located, the only thing left was to drive traffic and generate sales. However, this was the place where my venture fell short.
After a previous poor experience running Facebook ads, I decided this time to try to write a sponsored Reddit post. I submitted it to Reddit and purchased 500 upvotes on my post, which helped land it on the top homepage for the day. However, this did not end up generating as much traffic as I had hoped, which only resulted in about 5 sales. By selling the tanks for $19.99, and paying only around $5 each, this was a measly $60 profit or so. My Vibe Tank venture was a short-lived one to say the least, but it still served as a learning experience for me in dropshipping and entrepreneurship as a whole.