Sunday, August 18, 2019

When thinking about starting up a business, you need a structured plan to keep track of the progress of the business according to the timeline.  Cost, marketing, manpower, location are among the things to consider. Some of these does not apply in dropshipping. Is business registration part of the things to consider when putting up a dropshipping business? 

Before I answer the question, I just want to give a disclaimer that I am not a lawyer or a CPA of any sort.  I do not have the legal capacity to provide legal advice. The information that I will be sharing is to guide those who are looking forward to starting their own dropshipping business.   

This is based on collective research, and experiences shared by other people who had first-hand experience.  

So, the question now is, “Do I need to register a business to dropship?”  Yes, generally speaking any business needs to be registered depending on the applicable laws in your location.  While some might say it is an online business and does not require a space, it is however, a requirement to declare your income.  Hence you need to report your finances for tax purposes. 

There were two different opinions given when it comes to the question of whether to register a dropshipping business or not.  Some say, it has to be registered. Others say it is not necessary. Now let us explain both sides to understand their perspective.
Why You Need To Register a Dropshipping Business Explained
First on the list of reasons why we register a dropshipping business is because of tax purposes.  As previously mentioned, all business need to be declared for tax purposes. Regardless of the type of business you have: a sole proprietorship, a limited liability company, corporation.  

If you are selling taxable products, your business needs a Sales Tax ID depending on your country or location.  If you are making money out of the sales and is not an employee of a business, then you are considered a business and you need a license to operate.  You are required by law to declare your finances as the income of the business. Otherwise, you will be facing serious problems in the future. 

This does not discount the fact that you do not have a physical store or you operate the business online.  Of course, each city and country of your location has different laws. As stated earlier, you may need to contact the business office at your place to discuss the scope of your business, and the process you need to go about registering your dropshipping business. 

Another advantage of having a business license for your dropshipping business is that you are giving your customers assurance that you have a legitimate business.  This is important in dropshipping. You will also have leverage and be able to negotiate with more suppliers because some suppliers will ask for a business license to deal with you. 
Why It Is Okay Not To Register a Dropshipping Business Explained
On the contrary, many dropshippers say that you can still operate your dropshipping business without having to register the business.  The first thing to ask is if you have on-hand inventory. Since dropshipping does not hold inventory, and the majority of the transactions are happening online, then you are not required to register the business.  

Another thing to think about is the level and scope of dropshipping business you consider to run.  Because dropshipping has been in the market for years, and more and more people continue to start their own, you have to understand that some of them do not use this as a full-time business, but it is more of a hobby.

A hobby considering the minimal margin you get from selling merchandise from dropshipping.  And also, not being able to generate enough to consider this a full-time business. If you read through this post What Is The Average Margin In Dropshipping, you would have an idea on the price margin you can set per product.  

This limits you not make enough in the beginning because there is only a limit you can use as a margin.  Now, as part of starting your dropshipping business is to ensure that you can legally operate as a business owner.  Previously I wrote about What Is The Cost Of Launching A Dropshipping Store.  

Here you will gain information on the initial set up for the dropshipping business you want to put up.  Although it was not discussed if you need to register the dropshipping business, at least it will give you an idea as to how much you need if you have decided to start your own. 

I would have to reiterate that the process may vary depending on where you are at. Some locations, cities or a country,  anyone that conducts the business of any kind, online or not, is required to have a business license. Primarily, this is the reason why there are two different opinions when it comes to deciding whether or not to register the business. 

It is always best to consult your local business office for assistance as to how you can go about the process of registering your dropshipping business, should they advise you that it is required.  One thing is for sure though, it is required for you to declare your income to your taxes to avoid having problems in the future.  

At the end of the day, you have an idea of how you want to run your dropshipping business.  You decide how big your goals are in dropshipping. At which we consider the budget, the scope of the business and how many customers you aim to target to earn money.  So I guess, the question is, “Would You Register Your Dropshipping Business?”

Monday, August 12, 2019

Customer service is part of any business.  Over the years of providing different kinds and levels of services to people, customer satisfaction has increased its level of expectations. It has become a benchmark of how services are rendered in any type of business.  Dropshipping, with its rapid growth, also has its own customer service standards catering to their customers. 

Do dropshippers provide customer service and talk with the customers?  Yes, they do.  As a dropshipper, it is our responsibility to assist our customers while maintaining good relationships with the supplier.  It is important to ensure that we keep our customers happy. This will lead us to gain more customers in the future. Customer service sets your business apart from the rest.

Why is customer service important in dropshipping?
Drop shipping has proven to be an easy way into the world of entrepreneurship.  A lot of people have been trying to establish their own because for one, the costs are low compared to other business.  Second, it requires no inventory of products. And the third is the flexibility it can provide you. 

For these reasons, you would have an idea of why people are becoming more attracted to getting their own drop shipping business.  Hence the competition. When browsing for products online, there are a lot of results that would appear, giving you promising advertising, and low price.  

Some would promise a faster turnaround process, but others would highly promote having customer support to assist you through the entire process.  This is something that a dropshipper would put investment and focus. Why? Because this is something that a business owner can have control over. 

In addition, any business means providing service to its customers.  No matter what type of business you want to establish, you will never go wrong with having a stable system that supports customer to do the job in making your business foundation stronger.  Having said why customer service is important, how can we, dropshippers, provide a quality customer service?

Tips How To Provide a Quality Customer Service 
How can we say that customer support is actually providing a “quality service”? Determining the quality of service given to customers may be subjective.  This can be influenced by a number of factors.  

As we know, there are different types of customers.  So, the best approach would be to streamline the process of handling customer queries.  By doing so, we can eliminate having to provide a service that can also be subjective to our customers.

Listen and Understand What the Customer Wants and Needs
The first step to providing a quality customer service is to listen and understand what your customer wants and needs.  As a dropshipper, there are rules and regulations we follow and the customers understand that.  

When a customer states the issue, most of the time we make assumptive resolutions which do not fully resolve the concern.  This is what most customer support representatives miss out. We explain the process to the customer right away without asking relevant questions to fully address what the customer wants. 
Make Timely Responses
To provide quality service to your customers, ask effective probing questions.  This eliminates the time spent to resolve the query, which also affects their satisfaction rates.  Customers are writing emails to us to ask questions. These may be questions on delivery, asking about the products.  

We need to treat each query with urgency.  This is one of the requirements for providing quality customer service.  We do not want our customers to wait for the delivery, at the same time wait for the response from us.  This makes our company look unprofessional. As much as possible, we want to reply to our customers within 24-48 hours.  

Stick with the Timeline
Delayed orders and responses to customers may trigger a customer complaint.  Initially, customers may just have an inquiry regarding the status. What makes a regular inquiry become a complaint is how we respond to the customers.  

Customers are more likely to become upset if we do not provide timely resolution to an inquiry.  Let us keep in mind that time is a valuable resource, especially in a business like dropshipping.  Every day that the item is not delivered to the customer may affect their satisfaction rate. 

Give Right Expectations
Below are some examples that may trigger unhappy customers.
  1. Customer support does not provide timely responses to customers. 
  2. When delivery is expected to arrive in 5 days, yet it took a week or so for the customer to receive the item. 
  3. Inappropriate responses were given to customers. 
Given these examples,  we need to be ahead of our customers.  Sure they may be upset if these timelines and expectations are not met.  But, it will make the customers more unhappy if they were not told about these specifics ahead of time.  
Do a Follow up 
After resolving the concerns of a customer, be sure that we reach out to them.  Ask them if we were able to address all concerns and that we are proactive in sending our help as a dropshipper all the time.  This will make our customers feel valued and special. By doing so, we can extend our services and exceed what is expected of us. 

After all, customer service does not only happen when customers reach out to us for help.  We, as a business owner wanting to keep a strong relationship with customers and suppliers, can also do something extra for our customers by simply checking out on them.

Remember on our previous post about Why Most Dropshippers Fail, it was mentioned that one of the reasons why a dropshipper might fail is because customer service was handled poorly.  There are times when dropshippers overlook this not knowing how much it could impact your success. 

Being able to provide the appropriate service the customer deserves will ensure a stronger business foundation for your dropshipping.  By using the tips mentioned, we can be a step or two ahead of becoming a successful dropshipper.

Friday, August 2, 2019

The processing time to complete an order for dropshipping is a big question to many aspiring dropshippers.  Due to the demands of the business, time means money. We want to do things as quickly as possible. Let us know what is the turnaround time for a dropshipping store to fulfill orders on this post. 

What is the turnaround time for fulfilling a dropshipping order?  There are two phases to complete an order in dropshipping.  The processing and shipping time. The timeframe to order products in dropshipping generally takes up to 35 days.  This is the standard order processing and delivery time we consider when making that purchase. This varies on the location and the type of products ordered.

There is no fast shipping option is dropshipping.  Customers have learned to accept this as they have been making that purchase with dropshippers regardless of the time they need to wait for their orders.  This is an expectation of customers buying products on our store. 

Time is money in any business, especially when we are talking about a service that offers delivery.  We want to do things as quickly as possible. After all, we can use the time for other things useful.  So, as a dropshipping business owner, we want to talk about the phases of fulfilling an order in dropshipping.  

Processing Time vs Shipping Time
The fulfilling time of a dropshipping order depends on the product and is also depending on the delivery location.  Now, let us get to the specifics on how each process is done and how long it will take to complete.

What It Means About Processing Time 
We often encounter the word “processing time” in dropshipping.  Ideally, it takes 3-5 days for the processing time to complete. This is the controllable part as a dropshipper.  Here are the steps to fulfill an order. 

  • The process of placing the order.   This is the initial phase to fulfill a dropshipping order.  The turnaround time usually takes 24-48 hours. 
    • Here, the customer chooses the product online.  
    • Once the customer was able to choose the item they want to purchase. They click the “order” button and it will be put on the process.  We will wait for the customer to confirm the order.
    • Part of the confirmation of the order, the customer needs to provide his information.
    • He will then proceed to pay the product.  Once paid, the confirmation has been completed. 
  • The process of Completing the order (2-3days)
    • At this point, an order number has been generated and we will begin to forward the order request to the supplier. 
    • The request will be sent to the supplier who will check for the items ordered.
    • They will check the availability of products, the quantity, and the variants.
    • Once confirmed that the item is available, the supplier will proceed with packing and handling of the products. 
    • After all, these have been accomplished, the supplier will send the item to the shipping facility.
Discussing About the Shipping Time
We have learned about the first phase of fulfilling a dropshipping order which was the processing time.  Now the second part will be the shipping time. Generally, it takes approximately 5-20 days to fulfill the shipping process as most products are coming from overseas.  This is normally completed and done by the suppliers.

The shipping time is defined as the time spent to deliver the products from the warehouse to the customer.  In this phase, we no longer have the control as a dropshipper. However, later on, we will discuss how we can make things better when it comes to shipping time.  Below are the steps in detail as to how we fulfill the shipping process in dropshipping.

  • Shipping Order Process (5-20 days)
    • The dropshipper already created the order on their side.  Now, the supplier received the request of the order who will transport the product to the shipping service and get in contact with them to deliver the product. 
    • In return, the supplier gets a tracking number for the order which is linked to the order number generated by the dropshipper.  The tracking number will be used to get an update of the location of the product and how soon it can be delivered to the customer.
    • The shipping service loads the items and dispatches them for delivery.  They are now responsible for transporting the products to the customers.
Both processes described above are the general steps to complete a dropshipping order.  The customers are aware that most products ordered in dropshipping would take longer. Customers are willing to wait but better if we can send the products faster.  But, it’s okay. What will make customers upset is if it takes longer than the expected delivery time.  
However, dropshippers have ways to cut the time to fulfill a dropshipping order.  As we know, most of the products are coming from China. If that is the case, the delivery time would be longer.  As a turnaround, if we see that an item is coming from the suppliers in China, we choose ePacket as the delivery option to ship the products to the customers. 

Why choose ePacket?  An ePacket is an international agreement by countries to ship merchants to other countries.  Normally, it takes 4-12 days to ship items via ePacket. So, when choosing the shipping method for Chinese suppliers, try as much as possible to look for ePacket on the delivery options.  It will help you save more time.   
Since it takes longer to deliver the products from China, ePacket is a good option as it also helps you track the items.  That way you can be on top of the order and be able to provide the details of the shipping to your customer. Another option would be, choosing suppliers from the US to fulfill the order.  Overall, this decreases the shipping time to an average of 4-13 days.

Now that we have learned about fulfilling orders in dropshipping, we can now Avoid Dropshipping Problems.  Another topic we covered to minimize the risk Why Most Dropshippers Fail.  Soon you will be successful in setting up and keeping your dropshipping business stable.