Aug 12, 2021

Starting An Online Store?

If you are considering starting an online store you need to read this first!

Now more than ever I am receiving a lot of requests to assist in setting up an online store, most are looking for dropshipping or print-on-demand options.

More than ever before online shopping is growing record-fast and e-commerce businesses are seeing growth, as others are closing their business. The main thing that you have to define before starting, is your brand image and your niche. It has to be specific to successfully run campaigns and get clients to order your products. Solving a problem, sharing similar beliefs, and having the same values, in order to represent your clients is fundamental to your success. Remember it’s not about you, it’s about your buyers/clients.

So What About Dropshipping or Print-On-Demand.

You might have heard a bit, or even a lot, about dropshipping in recent years. Dropshipping as a whole is expected to register a Compound Annual Growth Rate of 28.8% across the period of 2019 to 2025.

The Dropshipping business model ships goods directly to a consumer from a third party rather than from the seller. Dropshippers, therefore, do not need to own their own stock.

Dropshipping or Print-On-Demand can be profitable if you have the right foot in the door. Before creating any form of Dropshipping business, or any other e-commerce option, you really need to do your homework:

Is there an audience or demand for the product?
Do you have a niche that makes your brand unique?
Are you prepared to put in the work for Social Media campaigns and landings?
Do you have the funds and time for successful marketing?
Do you have the right connections to successfully network?
Do you have a fallback plan, and flexibility to reset if needed?
Is your plan ready for growth?
How is your business, product, or service useful to the world?
Do you have funds for digital builds, such as a proper website with online transactions built-in, or for taxes, products, shipping, marketing?

There are so many things that go into planning a business, but sadly, people forget and rush into the process too fast, resulting in many small or aspiring businesses failing. Do your research about all the ins and out of running a business and how to build an audience, and do it thoroughly

In many ways, dropshipping and print-on-demand can feel like the ultimate e-commerce store hack;

You don’t hold inventory.
You don’t need capital to purchase your items.
You can list more items on your e-commerce store, at little or no risk.
No warehousing costs.
No picking and packing activities.
Basically, dropshipping can level the playing field.

With dropshipping, virtually anyone can get into e-commerce.

The guy who’s too broke to move out of his parent's basement.
The high-schooler still receiving his allowance from mom and dad.
Literally anyone!

But here are the not-so-good things about dropshipping:

You have zero control over fulfillment.
You have zero control of your product quality.
Products are often shipped from out of the country.
Shipping costs can be horrendous.
Payments are often calculated in the currency of origin, even though you are showing Australian dollars on your site. If not set up correctly this alone can be very expensive.
- I had a client who set up a print-on-demand business, made sure the supplier was Australian but the platform was a USA-based company - SO charges were in US$, converted back to Australian but fees were charged in US$ - Be very cautious of who you are dealing with and research all charges.

Sure, the idea of putting your feet up while a third-party company takes care of your fulfillment is pretty enticing. But there is a fundamental problem. When they screw up, and they will, at some point or another, your customers will be pointing fingers at YOU!

For e-commerce stores that handle fulfillment in-house, it’s easy enough to apologise, rectify the problem, and move on. Dropshippers, who have to communicate with manufacturers in a different city, or even continent, can become very frustrated - QUICKLY!.

*Under the Australian Consumer Law, you must accept returns of a faulty product, if it is within a reasonable period of time, even after the manufacturer's warranty has expired. It's also worth remembering that if the faulty item is quite bulky, heavy, or large and it's the retailer's responsibility to pay for shipping as well as the replacement product, it’s an expensive process.

Product returns can be hugely problematic.

Many sellers on the most popular dropshipping platform, AliExpress, don’t do returns (See comment above*). Even if they do, it can take an eternity for you to send your customer’s defective product to the manufacturer, get the replacement from them, and ship this back to your customer, not to mention the added costs.

So you have two options:

State in your store policy that you don’t entertain returns at all.
Allow returns and absorb the cost.

If you’re starting out with a limited budget, you might be tempted to not accept returns at all. That is just plain BAD FOR BUSINESS, and if it’s faulty, it’s against Australian Consumer Law.

You’re a new brand that no one has ever heard of and you need to build trust with your customers, not allowing returns will not help your cause.

Some of the oldest tricks in the book are indeed considered illegal in Australia and include;

Displaying illegal no refund signs or statements (you are not obliged if the customer changes their mind, but for faulty or misleading products you MUST replace, refund or repair)
Redirecting your customers to the manufacturer.
Forcing customers to accept a shorter manufacturer's warranty.
Insisting the customer return the faulty product in its original packaging.

Give It A Shot Anyway!

Now we've looked at the downside and you are still serious about chasing your dream of an online store, consider;

Finding a local manufacturer, supplier, or printer or one who is at least in your own country
1. and is prepared to fill smaller orders
2. and can do so fairly quickly.
Pre-Sell your initial inventory before ordering the stock,
1. discuss manufacture/print dates and turnaround with your supplier.
Plan and publish on your website the estimated delivery date, with a little buffer time.
Order from the manufacturer only items pre-sold, PLUS the same quantity for future sales.
1. This also helps you determine what sizes/colors/variations are most popular.
If sales continue, reorder before you run out of stock to keep the flow consistent.