The Ultimate Guide To High-Ticket Drop Shipping For Beginners Lesson 7: How To Manage The Day-To-Day Tasks Of Your Drop Shipping Company
The Ultimate Guide To High-Ticket Drop Shipping For Beginners Lesson 7: How To Manage The Day-To-Day Tasks Of Your Drop Shipping Company
Trevor here with eCommerce Paradise.
Welcome back to the ultimate guide to dropshipping mini-course. This video is all about running your dropshipping company.
In the last video, I told you guys at the end that I wouldn't be covering the actual demo site setup process or getting suppliers here in this mini-course because I think I've already gone over enough about how to find them. Getting suppliers is pretty straightforward. Setting up a demo site is straightforward. Shopify is really easy to use.
In my Dropshipping Masterclass, I'll show you step by step how to do it. I think that's a big reason why you should sign up for that course.
Now, I want to talk to you a little bit about how you run a dropshipping company, so you can kind of see what you're going to look forward to when you get into this. I talked about this sort of in the first couple of videos briefly. I want to go over more in-depth on how it goes and what kind of things you'll need to prepare yourself for so that you're ready when the time comes to handle these issues.
Running a drop-ship business, an eCommerce business, is just like running any business. You're always going to have customer support, sales issues, and warranty support issues. You're going to have returns to deal with. You're going to have all sorts of stuff. Depending on the niche, of course. If it's a complicated niche, you'll have all sorts of product-specific questions. If it's not, you probably will have more just like general questions.
Let's get into it.
How to Manage Day-to-Day Tasks
Things are Going to Get Messy
You have to understand that things are going to get messy.
It's really good to stay organized. I keep spreadsheets, and I will show in the Dropshipping Masterclass how you can use spreadsheets to organize your entire drop shipping business to create systems so you can optimize and scale your eCommerce business to huge levels. With that being said, things are still going to get messy. It's going to be daunting. Every single day you wake up, you're going to have to dig into your business, find out what's going on and how to fix it and how to put out fires. You'll also try and figure out how to stop those fires from happening in the first place in the future. Then you get to get into building your business and how to make more sales.
Business development is a big thing. I go into all different types of that in the course. Right now, we're going to talk about basically keeping it simple.
You have to understand that things can get really complicated, but as long as you try to keep the processes simple, easy, and straightforward to follow, then it's really easy to do.
I came up with a five-step process for scaling your business. It includes getting suppliers, adding their products, optimizing their products, promoting the products (creating more content), and getting more suppliers. That's how you scale a business.
It's really simple if you think about it on a broad level. But then you dig into each one, and it can get quite complicated and quite confusing and hard to manage the process of actually doing it. That's what I will teach you how to do. I'll teach you hacks on how to manage your Gmail account, manage your spreadsheets, your Fiverr account so that things get done, and that things get done well, and the optimizations happen. This is so your business will scale and grow, and people get followed up with.
That's important. You're going to have to be doing stuff like this. One of the main things you're always going to be dealing with is when orders get messed up. There's either going to be some sort of shipping damage issues, shipping delivery issues, and the wrong product gets sent out. There are all sorts of things that can happen.
Take responsibility if mishaps happen. Own the mistake instead of saying "your supplier this," "your supplier that," "talk about our warehouse this," "our warehouse that." If you use a term like our warehouse, you sound like a bigger company. Instead of speaking about a specific person at your supplier, say our warehouse manager Ben said this. You're saying your warehouse manager, and it's true they might even manage the warehouse over there. But the truth is that you just want to be as professional and straightforward as possible.
Make it up to your customers. If things go awry, make it up somehow. Give them an extra discount, give them a gift, give them some free content, give them a free membership, give them a gift card. All sorts of gifts to give away. Normally, give them a little bit extra something in return. Hopefully, that makes it good. If not, sometimes the customer can be really a pain, and you have to know when to draw the line with people. But still, make it up to them somehow.
You always have to be kind of the middleman between your supplier and your customer. If things are going crazy, do what you need to do, but follow up with both on each issue and every single communication that happens. When you're doing the back and forth, and something needs to be followed up on, follow up with the supplier and the customer. The customer sends you, follows up with the supplier, and then tells the customer, "okay, I followed up with our warehouse. We'll wait, and then we'll tell you when something's happening." That way, you're following up with them immediately, and you're telling them some communication is happening. That's a really good customer service.
Check for Warranty Policy
If something goes wrong with a product that's damaged or defective, make sure your supplier comes through on their warranty policy. Suppliers will always have a warranty policy, like what happens when a product arrives defective or damaged. Make sure that they come through on that warranty policy. If they try to skimp or don't come through on it, read the specific facts back to them and make sure that it will be a supplier you're going to work with in the long run. If they don't want to support their warranty policy and make sure the end consumer is happy, it's probably not a supplier you want to work with in the long run. This is one part of weeding out bad suppliers - actually working with them and seeing how they perform.
Do Things One at a Time
One big issue you're going to run into with your eCommerce business is inventory, backorders, multiple suppliers, and multiple products per order. All these sorts of things are the things you have to deal with. Understand it's one thing at a time.
When you get an order and the product's out of stock, for instance, you just want to write the customer or call them and tell them. Usually both, you want to call and write. You want to tell them that "There was an inventory mishap; the product said it was in stock, but it's not. This kind of thing happens from time to time, but we are willing to make it up to you by giving you extra discounts or gifts. Here are the other options that are available and here is the lead time for when that product is expected back into stock." Wait and see what they say. If they want to cancel the order, that's fine; you can let them know that you get your products from the same warehouse everybody else gets it from, and if they go and order from somebody else, they're going to have the same issue. Tell them that.
The other thing is that if they want to place the order with you and they ask for a deeper discount, tell them that you can't, that you can offer them an extra gift card or something like that to use at your store.
Try to keep the orders.
Manage the backorder process well.
Let people know when you're going to follow up with them, and put notes into the Shopify orders so that you know what's going on with that order process.
Make sure you follow up with the supplier regularly, and you keep them to their lead times.
When you get an order with multiple products, and it doesn't happen to be profitable, still fulfill it. If you're going to lose a little bit of money, it's better to keep that customer than it is to lose the customer. Still fulfill those orders that you're going to lose a little bit of money on. You're going to make a lot more money later on down the road by having all these customers you can remarket to and get referrals from. That's important to understand.
Pick Products Carefully
You want to make sure that you're picking the products that you sell on your website very carefully. Go out and make sure that they're high quality on other marketplaces first before you list them on your website. Otherwise, you're going to run into many issues where you have defective products and damaged products showing up. People are going to be upset and blame it on you, not the supplier. You can try to blame it on the supplier all you want, but they're going to come to you because you're the one they bought it from. Keep that in mind and try to pick the best suppliers and products to use to sell on your website.
Keep Your Website Updated with Inventory
Try to keep your website updated with the inventory.
I don't actually do this on my websites. I say everything is in stock all the time because I like to handle backorders. I think it's one of our unique value propositions for us to be able to handle a backorder. A lot of these bigger websites won't because they're too big; it's too messy of a process for them. We like that, and we get to keep more sales. It's more time-intensive, but it means more profit for us. A backorder in March means more revenue in June when it ships out. That's how long backorders can go - one to three months. As long as the customer's okay with it, they really want that product; then, it's worth it for you to do the follow-up work and get that thing shipped out.
Make Sure Your Cash Flow is in Line
Sometimes suppliers want you to place a pre-order for that, so that takes that cash flow out of your account. Make sure you keep up on that; you can keep that as part of your spreadsheet. You can keep track of all the pre-orders that are happening. A big thing about running your business is you always want to save the suppliers' invoices somewhere. I will show you how to do that in the course. You'll be saving it in our spreadsheet into Google Drive so that you can have access to every single invoice for every single order. You can also put it into the Shopify orders comments as an attachment. It's a cool and easy way to keep track of all your invoices. It's easier to do bookkeeping quarterly and at the end of the year.
Order fulfillment can be kind of a tedious process sometimes; it depends. Some suppliers accept orders via email. Some suppliers require you to place orders on their website. Some require you to submit it via FTP or EDI, especially if you have multiple orders. Usually, I work with suppliers that accept email orders or website based orders.
You must not set up automation too much. It really depends. You have to test them out. In Shopify, you can set up an automatic order forwarding automation (shown in the course). You just have to be careful, test it, and make sure that the email gets sent to the supplier properly when you get an order for that product. Set that up, test it, and if it works well, then use it.
Basically, you want to make sure that just the right amount of information is going to the supplier. You don't want to see all the pricing information and discount that you're giving the customer, but you want to make sure they see the product and the gifts and the add-ons all properly. I will show you how to do that. You have to go in and adjust the purchase order within Shopify; that's in the course as well. It's all step by step.
That's about it. I mean, there's a lot of stuff beyond that.
You're going to have to deal with things like frauds a lot.
I'll show you in the course which fraud protection company that I set up with and how to get it set up and automate the process so that it automatically works for you.
You don't have to go in there and approve things manually. They'll automatically set up a thing where it'll approve your order manually as soon as they accept the order as non-fraudulent and take responsibility for it. It's an insurance company, so they'll do that. I'll show you how to do that in the Dropshipping Masterclass. You definitely need to set that up, especially for high ticket items. If you get a thousand dollar order and it ends up being fraudulent, you'll have to pay that $800 or whatever the cost was for that product back out. And that sucks. It's happened to me before, so just something you have to learn in life. It's part of doing business.
So and you just have to be careful. You can always call the customer yourself and make sure. You kind of know when you're getting a fraudulent order. A lot of people that are fraudsters like to place orders over the phone. They'll call in, request next day shipping, then they'll say they're willing to pay more. They want to buy two or three of the product. They have a different shipping address than their billing address. Maybe it ships to some kind of a third party fulfillment warehouse or ships out somewhere else. Make sure you recognize all these red flags of fraudulent orders, understand them so that you'll know to avoid them.
Along with that comes friendly fraud. That means someone places an order on your website, and they feel like they got the product, and it wasn't the kind of product they were hoping for. They'll place a chargeback saying that the product description is bad. Usually, the bank or PayPal will tell you you need to make it right with the customer. As soon as the customer returns the product, give them a refund. Sometimes the bank will just go ahead and give them a refund. It really sucks.
It happened to me before. Somebody just decided that they wanted to try a chargeback, and it was, I think, Amex. They just refunded the customer. We were out $1,400 in sales revenue. I think it was a $1,200 product. That was pretty rough to deal with. We tried to send them collection letters and all that, and nothing ever came of it. It was just part of doing business. We made a lot more money over the long run than that, so we didn't really have to deal with it. We just write it off on our taxes, no big deal.
You have to understand that it is a potential possibility. You have to have really clear terms on your website as to what happens in case of all these things. You have to understand that when you are dealing with the credit card company when you get a chargeback, you have to give them all the evidence. Every single communication you have with the customer. All that stuff, every single order, so that the credit card company understands what's going on. They'll require the customer to ship that product back to you before they refund the customer.
We have won lots of chargebacks. That was one out of 20 that we've had, or more. We've won all those chargebacks because we've provided all the evidence. Don't think that getting into this will get you all these chargebacks and lose all of them. It might happen if you screw up and don't give them all the evidence.
There are returns. Returns is an important process to understand. Make it easy for your customer, and make it hassle-free as well. If a customer decides that they don't want a product, make a process for that. If they get a product and it's defective or damaged, make a process for that. Have clear terms laid out on your website. I have templates for all this stuff, great processes and apps you can use in the Dropshipping Masterclass where I show you step by step how to use them. I think that's a really great reason to sign up for that class.
It's important to understand return merchandise authorizations. They are what your supplier will require, so your customers can't just ship a product back to them. You have to contact the supplier first, get a return merchandise authorization (RMA), and they will then give that to you, which you give to your customer. The customer will usually have to pay for the shipping to send it back. There are complexities there, too. If it's a big product, they might want to use the same shipping company that shipped it there and get some sort of a call tag or something. Usually, they'd have to pay for that upfront, but regardless, it's a whole process. You have to understand how to take care of that. I will show you an example return in the Dropshipping Masterclass. So you guys will understand exactly how the process works and how it goes through.
Keep in mind that you can charge restocking fees. If buyer remorse return is happening, you can charge like a 10, 20, maybe even 30% or more restocking fee. That's important because that will lower their ability or inclination to follow through on the return. Charge that restocking fee; don't be afraid to do that.
I think it's really important. Some people think it lowers conversion rates, but I don't think so. I think that it makes it so that you get more serious buyers. Those same buyers will still buy; they'll be more serious about keeping that order because they know the restocking fee is there.
On certain lower cost items, they may even buy from somebody else before they return it to you, and they'll just say I decided to return to them because they have a better return policy. Having a restocking fee is very beneficial. I highly recommend doing that.
As far as defective items go, I recommend having some sort of a template in place. I provide this in the Dropshipping Masterclass. Create some sort of template in your store where you will be able to provide a step by step process for them to get that product fixed right away.
They receive it, and it's damaged, what do you do?
You've got to call or email. Wait to get a response back. Then you've got to figure out how to send those pictures over. You have to ask the customer to send pictures. Go to the supplier, say that you have pictures, and send out a new product. They'll say yes or no. Whatever they do end of sending out, you follow up with the customer and say, "Did you get that product, and did it fix the main product?" They say yes or no, and then you go from there.
It's a pretty simple process, but you have to make sure it gets done. You have to do the follow-up. If you don't, that can be one of the main reasons people never come back and buy from you and never refer you to anybody else. If you do follow up well and it does get fixed, they will come back to buy from you, and they will refer you to other people. It's totally worth following up on that kind of stuff.
There are all sorts of other weird shipping issues you might run into. For instance, you just listed a new product on your website, and the cost of shipping is much more than you thought it was going to be, and you end up not profiting or, even worse, losing money. I highly recommend doing something where you actually call the customer, email them first to ask them if they're willing to pay extra for that. Some customers don't care. And some customers aren't. If you do it, at least you know. And if they're not, then fine, you can still send it out.
You might lose money. If it's too much, you can always just cancel the order. I recommend keeping the order if it's not too much or just breaking even.
Shipping is really important to understand. Sometimes you need to have your own freight company for big orders. You usually use the supplier's shipping connection, like UPS Freight, or FedEx Freight. When it comes to freight, sometimes they want you to assume the liability. You're going to have to go out and get a third party shipping company, like UPS Freight, an account with them, and then set up that freight shipment through their website. You have to provide them the product details, size and weight of the package, and the customer's drop shipping location. And then they're going to do that. They're going to have to set up a time and date with the customer to receive that package.
It's quite a complicated process. It does take some time, but it's worth it. You're making a profit on that product. You can also outsource this to a VA to handle as well.
Can things go wrong?
Yes, of course, they can go wrong. You have to have attention to detail when it comes to this kind of stuff. It's really not as bad as it sounds. It's a very simple process. It's just like shipping anything else out. Once you've done it a few times, it becomes really easy and second nature. Consider the first time you're going to do any of this stuff; it's going to be hard. Beyond that, it's going to become an everyday process for you that you can do just like anything else you do in life.
Now handling international shipments is quite a bit different. You have to fill out all sorts of stuff like a bill of lading forms and other things depending on your selling product. You have to be really careful. Usually, when it comes to international shipments, I like to accept cash payments from the customers. That means a direct deposit into my bank account. That way, they can't file a chargeback if they weren't to get the product. Returning a product can be very expensive, just like shipping.
The other thing is I like to let them know ahead of time that they either need to pay the duties and taxes upfront with us, or they're going to have to pay them with them. We usually charge them more money than they would have to pay if they took it directly to make sure it's covered. When you fill out the bill of lading, you're going to check a box that says you're to pay it, or you're going to check a box that the customer will pay it. That's the same information you have to relay to the customer. And yes, I know, this sounds complicated, and yes, it is.
But again, the first time you do it will be the toughest. The second time, the third time, will be easier. After that, it will be like second nature.
Understand how it's done, and I highly recommend as you're doing this kind of stuff, filming videos of yourself doing it so that you can outsource it later or teach somebody else how to do it later. You don't have to be the only one doing this stuff all the time.
Customer service is one of the biggest things you're going to have to deal with when you're doing your dropshipping business. It's a pain in the butt sometimes, but it can also be a very fulfilling and fun process at others. Now there are different ways to do it. My method is a simple three-way process. I use Shopify orders comments and Gmail and Grasshopper for the phone systems.
There are other platforms you can use. There are things like Help Scout and Zen Desk. They're just more complicated, and you don't really need them when you can do all this stuff within Shopify. There are tons of free add-ons for Gmail that are free. I will show you how to do all that stuff that's free and easy to use within the systems you already have in the Dropshipping Masterclass.
Some things to keep in mind when it comes to customer service is good phone support etiquette. You always say your company name when people call. Thank your customers. Be nice and use a friendly tone with them. You don't want to be irritated or speak loud towards them. No matter how irritated or loud towards you that they're being, you always want to maintain a professional, friendly tone with them. Some people get really upset because they're afraid they're not going to get their money back; they have this fear of losing. Sometimes you have to treat people like a small child that's having a tantrum.
When you do that, it can solve your problems. That's what people love to hear. It's good to be empathetic in customer service. If you're looking for more customer service training, go on YouTube, and type customer service tips. There are tons of training out there. Big corporations pay tons of money for this kind of stuff. It's definitely something you should look into if you're going to be building this for the long term, which I know you are.
Grasshopper is great because it's a professional 1-800 number that forwards either to your cell phone or a virtual assistant like a virtual receptionist service. You can take messages, text people, and take faxes there. You can set up your customized greeting; you can have multiple extensions. One for sales, one for support, one for warranty, one for returns. One for yourself as the CEO or marketing manager.
It's important to understand phone support is key to making sales online in high ticket drop shipping. You're going to have to have your phone number on the top of the site, on the bottom of the site, the product page, everywhere. You have to be really promoting the fact that people can call you and place the order. You have to be there when they want to place the order with their phone. You have to have a VA if you're going to be overseas. Make sure that you're there, and make sure you're answering your phone because you might lose sales if not.
That's it, guys. That's all the tips I have for you in this video of how to run your dropshipping business.
In the next video, we're going to be talking about the key elements of success. Wrap everything up and to give you a full, overall picture of what all this looks like tied together.
See you in the next video.
Step-By-Step Training for High-Ticket Drop Shipping
Here are the next steps you'll need to take to start your high-ticket dropshipping business:
Resources for Starting A High-Ticket Drop Shipping eCommerce Store
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eCommerce Paradise was created by Trevor Fenner of Seattle, Washington in 2015 to help you, the entrepreneur, to start and scale your own eCommerce business selling high-ticket products online with the drop shipping fulfillment method so you can make more profit per sale, have a sustainable and evergreen online business, get started with very little upfront investment, and live a location independent lifestyle. Trevor owns multiple 7-figure High-Ticket Drop Shipping eCommerce stores and is a digital nomad, traveling the world while working remotely with the help of his team of over 10 virtual assistants from around the world. Trevor is currently located in Bali, Indonesia. Trevor is also a passionate skateboarder, surfer, scuba diver, photographer, environmentalist, outdoorsman, fitness and tattoo enthusiast.
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