February 13, 2018

Dropshipping Business: How to Deal with Shipping and Delivery

Shipping and delivery are essential issues every ecommerce store should resolve, so we touch upon the subject and here is the table of contents:

Dropshipping Definition

Let's clarify first what we mean saying about "dropshipping". Dropshipping is an ecommerce business where sellers outsource inventory and logistics. Production, warehousing, inventory, packaging and logistics is fulfilled by a merchant. Dropshipping sellers promote products through their online stores, receive orders from customers and forward these orders to merchants together with customers' delivery address.

In the end, sellers keep the difference between sales and purchase prices without even touching a product.

Dropshipping Shipping Methods

Various carrier options are available as shipping methods, for instance: USPS, UPS, FedEx, DHL Global Mail, TNT, Australia Post, UK Royal Mail, Canada post, ePacket, EMS, TOLL, e-EMS, China Post Registered Air Mail, China Post Air Parcel, China Post Ordinary Small Packet Plus, HongKong Post Air Mail, HongKong Post Air Parcel, Singapore Post, Swiss Post, Sweden Post, Russian Air, Special Line-YW, S.F. Express, etc.

Dropshipping sellers are able to learn what shipping method is supported for the exact product on the product page of a marketplace:
Note: ePacket is a shipping method designed specifically for merchants in China that sell their products online. This postal service is popular as it's affordable and relatively fast. Read more
Dropshipping Delivery Time
Delivery time depends on a shipping carrier, shipping distance, customs requirements of the country of destination. Preliminary analysis is required to provide customers with a proper delivery date for their expectation. Estimate delivery time is usually given on a product page of marketplaces:
Dropshipping Shipping Cost
Final shipping cost depends on the factors like shipping company, country of origin, destination country, customs regulations, package weight, and size. You may learn a final shipping cost from a shipping company or find it on product pages. AliExpress and Dropwow state shipping rates there:
Tracking Dropshipping Orders
To track parcels, you may either visit sites of the carries you partner with or use global websites, for instance, Cainiao, Parcel Monitor. Global order tracking services partner with many shipping companies at once. They are helpful if you have an international dropshipping business.
US-bases VS China-based Suppliers
It's known Amazon and Walmart offer two-day delivery options. The trend of providing faster delivery than before is common to all the top online stores. That means now customers expect short delivery time by default. For those who dropship goods internationally and work with China-based suppliers 12-20-day shipping time is a challenge.
The most popular reason why dropshippers cooperate with US merchants is fast delivery. Let's see if international dropshipping from China is an overcomeable issue, and if consumers are that much delivery time sensitive as it seems:
  • Delivery speed is not that important as a delivery date. According to one study customers don't worry that much about delivery time but they are bothered more about a delivery date. At first, this may seem the same but customers perceive "delivery date" differently from "shipping speed".
The eye-tracking checkout research underscored the preference users have for delivery dates:
Dropshipping Business: How to Deal with Shipping and Delivery
  • Replace a delivery date with a date range. Consumers don't seem to have any issues with date ranges is another interesting research insight. In other words, "Arrives April 3rd - April 9th" was as easy for users to understand as "Get it by April 9th" or "Delivered on or before April 9th".
Dropshipping Business: How to Deal with Shipping and Delivery
  • Delivery period is not an issue if you dropship from Dropwow or AliExpress, unlike Amazon. Surprised?

When people think about buying something, in most cases they go to Amazon and search this product. As there are many variants, people compare offers paying attention to prices, ratings, reviews, and, of course, shipping time.

When entrepreneurs use Dropwow or AliExpress for dropshipping, in most cases they use Facebook and Instagram as marketing channels. On Facebook dropshippers target the audience which feels passionate about their dropshipping products. And in this very case, people make unplanned purchases on impulse. They care less about delivery time because they act in the heat of the moment.

Moreover, dropshippers offer time limited deals to stimulate visitors to immediate purchases. This effect intensifies to trigger impulse purchases.

Examples of products likely to be bought on impulse with a marked audience interest:
  • Let your customers know about delivery period on product pages. Displaying information about shipping time on Shipping policy page is no doubt a must-have. Add this information to product pages too. When customers see shipping time, they won't expect it earlier. If you give this information on the last page of the checkout process, they may get disappointed and decline to purchase. Be honest. In any case, it's better to exceed customers' expectation than fail to satisfy it.
A surprisingly large chunk of products consumers buy in the United States are imported. For instance, more than 97% of apparel and 98% of shoes sold in the US are made overseas in countries like China and Bangladesh.
- Source: MultichannelMerchant.com
How to Set Up
Though dropshippers don't manage logistics, they need to display a clear and transparent shipping procedure to give their customers answers to the questions how and when they will get a parcel and how much it will cost. Let's see how to set up shipping zones in your Shopify store. Go to Settings > Shipping > Select "United States" in Shipping zones.
In this case visitors from any other country see a message during the checkout process that shipping rates are not available for their destination.

In most cases, entrepreneurs dropship goods to different countries, so they add shipping zones in Shipping settings of a store.
In another post we've described how to set up Price-based rates and Weight-based rates, so we'll skip this point for now.

Note: if you plan to cooperate with China-base merchants, please be informed that one customer will get his/her order in different parcels. An order with more than 1 item will be separately packaged and shipped, as products are manufactured by different suppliers. State that your products may arrive in multiple shipments like Macy's do for instance:
Dropshipping Business: How to Deal with Shipping and Delivery
Free Shipping: To Be or Not To Be
Many successful dropshipping stores offer free shipping which means it works. Agree? We offer three variants how you may do it:

  • Free global shipping over $100 - the most popular variant is offering free shipping for some purchase amount. $100 is an example. This information is usually displayed in Header of all pages.
  • A product is free of charge, just pay for shipping - this offer should be limited in time to have conversion. Find a low-cost (but nice!) product and calculate shipping cost. The shipping cost you charge your consumers may cover both your purchasing price (that's why a low-cost product is preferable) and shipping rate you will pay. In the end, an amount of a shipping cost for your consumers should be attractive.
Here are examples of products that cost less than $1
  • Free shipping on each order - This strategy is good for those who start, it requires investment. It helps to make the first sales fast. But be ready to sell with no profit as your margin will cover shipping expenses. But when you make 100 sales, you may retarget the audience to sell items for high prices.
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Product Manager at Dropwow
Victor Ikonnikov
Product Manager at Dropwow