The goal of every serious dropshipper out there is to grow their dropshipping business to the point where they can proudly say that they have successfully scaled their dropshipping business to a certain figure. There are many examples of successful dropshippers who have been able to do this with great execution just as there are many who have failed in their bid to scale their dropshipping business. In this article, we will provide you with a complete guide on how to successfully scale your dropshipping business to 500+ orders a day with a guaranteed six-figure per month revenue.
To scale a dropshipping business means putting in motion all the necessary instruments to generate revenue at a greater scale and pace that dwarfs all the costs and expenditures that are associated with running your dropshipping business, from product cost to promotion/ads and fulfillment cost to everything in between. This means high cash-flow traffic for both outflows and more so for inflows. This also means extra demands on the resources that run your business as it’s normal with growth anywhere. Before this stage, you have done your product research and got everything right in that regard.
Maybe you also have found yourself a reliable dropshipping supplier that has been able to provide you with top-quality products and handle your dropshipping store’s fulfillment demands for at least 30 orders per day efficiently for the last four to six months with little or no friction. You have done some marketing and over a period of time your marketing has paid off and you are beginning to see some good results with your sales. You are well set up and everything is working just fine as it ought to. Now you are thinking of the next step forward for your store, which is naturally for any business especially one in e-commerce would be to increase sales and generate massive revenue.
Why does dropshipping business pursue scaling?
If you are wondering why most dropshippers are always seeking to scale their dropshipping business when everything seems to be working just fine, you are not alone in this thinking as many times when we engage with dropshipping entrepreneurs they a lot of them seem to be satisfied with running their small operations and earning good money from a couple of hot selling products. However, it is important to pursue scaling for your dropshipping business and these are some of the reasons why;
Perhaps you started off dropshipping products from market places like AliExpress, and with little or no branding efforts your products have done well in the market. Before long other dropshippers will start selling the same product and maybe for even cheaper prices and soon your product sales will lose momentum. This is where branding can help you so that even if other competitors begin to sell your hot trending product, with the right brand strategy you can keep your customers loyal. Scaling your dropshipping business allows you to deliver everything you would wish for when it comes to product branding and customizations.
A good number of dropshipping suppliers and manufacturers will not heed your request for product customization or at least will not offer so much flexibility unless you are making a huge order quantity at a go. Now when you partner with a professional dropshipping supplier company that understands that you are working towards scaling your dropshipping operation, they can negotiate with the supplier and have an agreement on your behalf where they promise the supplier that they will be making a certain number of orders at a certain frequency. This would allow you the leverage to demand as much customization as you require for your product list.
Economy of scale
As a dropshipping business, you want to do everything possible to keep costs to your business low as possible. Sometimes finding the products at a cheaper price or working with a third-party logistics company offering cheaper shipping just don’t give you all that you seek in terms of greater profit margins. In a good number of cases to have this cost advantage that you seek as a way to have a net margin that keeps you happy staying in business, you have to implement an economy of scale strategy, which is just another fancy word for scaling.
Your dropshipping supplier or third-party logistics partner can testify to this fact. They love it when they are working with a store that has scaled its sales as it saves cost for every participant in the supply chain. But even more than your supply chain, when you scale has an opportunity to save big on your marketing efforts. Yes, scaling will require substantial investment in the way of ad spending and marketing in general, but this cost will deliver better ROAS with the number of sales that will be made within a shorter time period.
As we know, consumers like to go with the numbers or say with the traffic. The result of scaling is traffic to your store and nothing gives a reputation to a store like traffic metrics. Potential customers will be able to make buying decisions much quicker when they observe the amount of traffic that a product or store is having as against when a store or product has little traffic or sales. You can also take advantage of customer review functionality in your store to drive this perceived reputation even further.
Getting your dropshipping business scaling right
In order to get your dropshipping business scaling right, we put together a few steps you should follow. These steps will help you save time and money and above all help you to reach attain the revenue goals that you desire for your dropshipping business.
Step 1. Figure out your winning product
One of the areas that independent ecommerce entrepreneurs make some of their biggest mistakes is in the aspect of choosing the products they sell on their online store. When it comes to making high volume sales, a lot depends on how well-off your product strategy is. That is to say how well sorted after is your products, how popular are your product in the markets where you sell, how marketable are your products, and how niche is your products. The list of areas to check when it comes to product strategy are not limited to these, so to put it in simple terms, when moving to scale in dropshipping you must be sure that you have the right products that score high on these checklist.
Most successful dropshippers that have had success in scaling their business usually recommend products that can maintain a long-term hot sale. These are products that are always needed in their varieties throughout the year. Other successful dropshippers have also gone with products that have seasonal sales explosion that can run for 4-5 months without break and they have done this successfully by studying and observing consumer trends and adjusting their strategy as the trends change with the season. An example of this is dropshippers who scale during the fourth quarter with products that are always in high demand through Halloween, Thanksgiving, Christmas, and New year. And immediately follow their strategy up with top-performing products with consumers in their target market in the first quarter of the following year. And once you have such a product you are almost certain to have a smooth and profitable scaling experience for your dropshipping business.
Step 2. Adopt the right supplier
When you make the push to scale your dropshipping business you are basically calling for growth in every aspect of your operation. One critical part of this growth is the volume of orders you will receive as a consequence of the marketing push you have done towards scaling – which we will talk about in a bit. As you begin to have increased orders and the volume of orders is increasing with every given day things begin to break if you have not ensured your supply chain is capable of growing with you. And once issues with wrong orders begin to happen or long delivery complaints begin to come in, your whole effort towards scaling may just have capsized. Things could very quickly go sour as fast as they had gone sweet for your business.
This is why you should never take for granted the aspect of partnering with the right dropshipping supplier fit for your business. To do this right you will want to try your supplier for a month or two at least before coming more responsibility to them. Most dropshippers will usually seek out dropshipping suppliers from Alibaba.com, AliExpress, or from dropshipping supplier groups on Facebook or by carrying out a Google search for dropshipping suppliers in China, all of which are totally fine to go with when searching for a supplier for products you sell on your online store.
However, when you eventually decide on a supplier they may not necessarily be set up to meet your business needs and fit with your scaling plans so before you engage with scaling with any supplier, do your due diligence on them to be sure you can go on with them. There’s only one way to be sure you have a supplier that can handle your order volumes as per your scaling plans, and this is by starting a trial run whereby you give the supply a 20 order per day product and after two weeks quickly double this up with another product with good volume to reach 50 orders a day.
Score the performance of the supplier and if they successfully fulfill these orders with zero issues or near 100% efficiency, then you have yourself a supplier than can go with your scaling plans. You can now move for discussions on your scaling plans with the supplier so they can get themselves ready for high order fulfillment traffic from your store. This is a tested and proven strategy to avoid issues on the way when you scale your dropshipping business.
Step 3. Automate wherever possible
As a dropshipping business seeking to scale you surely are not new to automation when it comes to the customer order cycle with your store. If for some reason you have not implemented an automated customer order cycle then you need to do this with the supplier you work with, you do not want to attempt scaling your dropshipping business with a supplier that cannot sync your store with an ERP system that ensures automatic order fulfillment as doing sure will most definitely guarantee disaster for your dropshipping business.
Ensure to work with a dropshipping supplier that offers automatic order fulfillment and integrates with your store to provide both you and your customers with timely updates on order status. The other aspect of your dropshipping business that you would want to automate has to do with your customer service handling. Just as having the right dropshipping supplier is critical to the success of your business so is your store’s ability to properly handle customer service.
If you’ve done well on your own before now handling every aspect of your business’s customer service needs, you won’t be able to do this anymore on your own when those orders start to pour in with great 100x the frequency. You will need to build a team of virtual assistants for your store available through third-party software or plugins depending on what e-commerce platform you use and you will need to hire a few human hands to help manage coordinate customer service with your virtual assistants this is because you will be heavily invested in the task that will demand most of your time now; marketing!.
Step 4. Build a management team
Imagine the demand for your time that running your dropshipping business alone requires of you, it can be time and energy-draining sometimes. If you imagined this well you can tell that you need a team to manage affairs in different areas of your dropshipping business. Areas as Tasks such as analytical product research copywriting, website design, product listing, and editing, and bookkeeping will need the help of others so you can focus on activities to grow sales. If you get it right, your business will be making a profit well enough to easily take care of the cost of keeping this team hired.
Step 5. Scale your Ads
There’s no success with scaling if you don’t scale your ads and invest in other forms of marketing for your dropshipping store. Scaling is largely about increased marketing efforts. You will need to increase your budget for ads on Facebook and other social platforms and employ every marketing strategy that works for your target market and audience. You will need to make a serious push for increased marketing to get the results you desire. This could see your business’s overall expenditure rise sharply without revenue necessarily rising accordingly but once your ads and marketing efforts begin to land at the right places your revenue will very soon dwarf what you spend on ads and marketing in general.
Success in dropshipping business doesn’t come easy or by chance. You must work consciously towards your goal and be patient to reap the benefits of your efforts. Whenever you begin to feel you are handling too much than the limitation that you can handle, you can always outsource some of your tasks to freelances on job market places like Upwork and Fiverr. It is important you balance your work and personal life to avoid burnout which is very common with a lot of dropshippers. With the guidelines detailed in this article and proper management, you should have no trouble with scaling your business whenever you think you are ready.