Business-minded

My DROPSHIPPING Journey | Why you should try it? (Part2)

When I posted some photos about my business a few months back, I’ve been receiving a lot of questions about how it works. But I felt that giving them bits and pieces of information may not really help and I may not be able to summarize it well. I’m not a person of “few words”, hehehe.

So I always tell myself, when I’m ready, I could possibly share it in the vlog or in the blog… whichever I feel is more convenient for me. And so after a long reflection (since I have to consider some things – privacy and other stuff), I decided that maybe I could simply give a general tip to everyone.

WHY DROPSHIPPING?

I was on the lookout for business opportunities when I came across this term in late 2019. It wasn’t a new thing then. Lots of people are already into it but it was beginning to take its peak during the pandemic when everyone was thinking of doing business at home.

Just like what I mentioned in Part 1, it’s the easiest way to start a business since you don’t have to think of what to sell – you just need to choose from what they already have. You don’t need to buy any products – you just need to subscribe.

Subscription is the membership or partnership arrangement that you will have with the dropshipping company/wholesaler who will provide you with the products that you will sell.

Nowadays, automated dropshipping has replaced the manual dropshipping business to become really popular among startup business owners. What does the subscription fee include?

  1. Access to different product categories that you can sell
  2. FREE basic store creation (Lazada and Shopee)
  3. Order fulfillment (meaning, once an order is received, they will do the packing and delivery of your orders); seller/subscriber will only be in charge of marketing and promotion
  4. Release of Payout (on your registered bank account, weekly)
  5. Assistance from the dropshipping company (inventory, delivery, etc.)

In a nutshell, it really is a very ideal business model to begin your business venture. When I started it, I initially thought of getting ideas that I can consider when we decide to go back to the Philippines for good. Until I got challenged by a seminar that I attended who said that “no matter how much information you get, you’ll never really know what really works until you give it a try.” And with that, I realized that it is really better to launch a business while we’re still working abroad so that the business won’t give you so much pressure.

WHERE DO I BEGIN?

Getting into business can be exciting and nerve-wracking at the same time. EXCITING because it is taking the first step toward your goal. NERVE-WRACKING because any decisions can make you win or lose. That is why getting as much information as you can will surely help you take a calculated risk, or minimize possible loss.

Don’t just watch one youtube video or read one article about dropshipping… read a lot! Take time to watch different videos that will show you what works and what won’t work in dropshipping… or in business in general.

  1. Look for a dropshipping company that you think has the product category that you like (considering many other factors like sale-ability, cost and profit margin, long term marketing strategy, among others)
  2. Study their subscription packages, inclusions, and terms and conditions.
  3. Try it out for at least 3 months (suggested cycle for learning, store design, and joining campaigns on Lazada or Shopee, and getting sales/earnings)

When I started my dropshipping journey, I just considered my expenses “like” my enrollment fee to a business course (but this is just to justify my venture – we know that schools will give us more professional insights). I don’t mean to suggest that learning at school isn’t important. But learning without putting it into practice is a waste.

THINGS TO CONSIDER?

  1. SETTING YOUR BUDGET – that’s why it is more advisable for those who are working with at least enough savings to spare. The subscription fee will eat up more of your budget at the beginning stage (the suggested budget should be enough to cover at least 3 months of operations). I don’t recommend this to anyone who will invest their last money thinking that it will give them immediate return. NO!
  2. CHOOSING YOUR PRODUCT – earlier I mentioned sale-ability, cost and profit margin, and long-term marketing strategy as your main considerations. The product should be something that you feel has a demand, or based on your personal observation, has a need. The need could be basic, meaning, regardless of time and season, everyone will buy your product. The need could also be seasonal like face shields or masks – but then you should consider the business continuity when the season is over. But seasonal products have proven to be very profitable when you tap the right market at exactly the right time.
  3. PRICING YOUR ITEM – one of the minor disadvantages of dropshipping is that you can’t yield high profit being a third party or middle man in the business. You really have to take time checking on the prices against existing competition and against other suppliers/dropshipping companies. The key is in doing more research and checking all possible options. When pricing your item, you need to consider the COST OF GOODS (drop shipper price or wholesale price), PROMOTION & AD COSTS, SHIPPING FEE (check Lazada and Shopee shipping charges), PLATFORM COMMISSION, and TAX (if applicable). I somehow got my first pricing model from someone who told me that to be competitive, just add 50 pesos for every item and sell volumes of it in order to earn. But I realized, that’s not a good decision at all. Until I bumped into another video that inspired me to be “MALUPET” (to be bold). If you want to earn, think PROFIT FIRST, add all costs, then come up with a price. This eventually led to me earn better since I don’t consider competition as my gauge for pricing but I consider my income goal as my direction. Don’t be a victim of price war and always consider a good balance of your product saleability and income.
  4. PROMOTING YOUR PRODUCTS – here, I will not over-emphasize the need to get yourself familiar with the Seller Center of Lazada and Shopee by watching their tutorials. I suggest you to open a dummy store in Lazada or Shopee. This will give you a chance to navigate the Seller Center which is your dashboard for product upload, store design, pricing, joining campaigns, placing ads on Lazada or Shopee, and monitoring of your payout. However, when you subscribe to a dropshipping company, you cannot use this store but they will make a new one for you and they will also have access to it as well. So, when promoting your product, your creativity is your biggest asset. You cannot just play this game with only a passion to earn as your motivation. Good thing, there are dependable FREE APPS that can help you with these creative ideas – like canva. When creating a standout layout and product photos, you need to make it simple yet catchy. Referring to the price war earlier, you need to project an image that is worth the price you are asking (high-quality images are a must). If you want to price it higher, make sure that your product looks expensive yet close to reality.
  5. SETTING UP FREE SHIPPING & JOINING CAMPAIGNS – you will know more about this when you’re familiar with Seller Center: how you can register your product to a specific campaign, how to set up free shipping (or should you offer free shipping), are some of the decisions that you as the business owner will take after careful consideration of your price. As always, the rule of thumb is, don’t ever sell below the cost. If possible, start selling at 100% profit margin if you can, esp if you’re selling home/lifestyle products with costs below 500pesos). Profit margin consideration can go lower if the cost of the item is above 1000 pesos (you may consider 50-75% profit margin). But never at 50 pesos profit!

WHY YOU SHOULD TRY DROPSHIPPING?

Because, personally, it turned out to be a fun way to learn the retail business. But of course, we might differ in our objectives and our budget. One should be ready before taking a plunge into this model. DROPSHIPPING is not a guaranteed, no-fail, business strategy.

Just like any other business, it takes a lot of research, a lot of effort, a lot of time, for you to even come up with a decision, and to actually do it. Some say, many Filipinos are not fond of reading. That’s why many would opt for an easy-money, get-rich-quick scheme compared to any business that doesn’t even guarantee success.

The difference lies in the learnings and business continuity. No matter how you think you failed because you’re not earning, make sure that you’ve gained so much knowledge and information in the process. No matter how you think you failed because it didn’t work out the way you envisioned it, maybe you can use it in another business model – from dropshipping to probably having your own store and selling your own brand.

As OFW trying to venture into an online business, you should come to a point when earning isn’t your MAIN OBJECTIVE since you still have work and a source of income right now. I realized that there are many OFWs who saved much, started a business when they went back to the Philippines, but with a lack of expertise and experience… they failed. We need these experiences in order for us to understand them first hand… to learn and make informed decisions in the future.

I still have more to share about DROPSHIPPING. If you have questions, please write them down in the comment section and we will try to answer them in the next post (no private message or direct message will be entertained).

LINK TO PART 1: https://bestlifeqatar.com/2022/03/27/my-dropshipping-journey-how-i-earned-6-digit-income-from-lazada-and-shopee-part1/

LINK TO PART3: https://bestlifeqatar.com/2022/03/29/my-dropshipping-journey-top-dropshipping-companies-in-the-philippines-and-other-tips-part3/

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