Dropshipping is a foreign trade term. Simply put, retailers do not need to stock inventory. They provide customer orders and shipping details to suppliers. Suppliers send the goods directly to customers, and retailers earn the difference between wholesale and retail prices.
In every industry, there are several steps that need to be figured out. When you are exploring on your own, there may be many detours, and there may also be some unexpected surprises. Every time you go through a process, you will have a different real experience. The same situation is also true for cross-border e-commerce. Now that Amazon's no-source model has become famous, many people know about the existence of this model. Generally speaking, many sellers will go through the initial, development, explosion, and stable stages. Where are you now?
Many novice sellers have heard of many fancy operations, such as building their own websites, etc. Here, the author does not recommend friends who are new to the industry to do this. First of all, they are not very familiar with this area. You must know that a three-foot-thick ice does not form overnight, and being impatient for quick success is not a good thing. Another reason is that there are too few growth platforms now, and most novice sellers find it difficult to become big sellers in a short period of time. There will be certain obstacles in every period. This is also a reason for choosing Amazon. It is fair and just, treating all sellers equally, allowing novices to survive.
Sellers who are in the development stage will have two options, one is FBA and the other is FBM self-delivery. The FBM model is suitable for many novice sellers. This is also the no-source model that is often mentioned. It does not require too much operational technology. It uses tools to collect data and upload it to Amazon after processing, saving the cost pressure of stockpiling goods. The FBA model is prepared for some experienced old players. This model requires a large amount of stockpiling and sending to foreign warehouses, and it is uncertain whether the product can be sold. There are risks, but its returns will be relatively higher.
Sellers who are about to explode already have certain experience in operations and are becoming more and more proficient in operating Amazon. What they need to do at this time is to optimize "Li Siting" based on the original product to make their products more distinctive. At the same time, remove some slow-selling products from the shelves, and then fill them with new products for continuous testing, so that traffic will come uninvited. At this time, more attention should be paid to product selection, and profit margins should be controlled in terms of cost, logistics and other aspects to ensure that one's profits are maximized.
When your store is in a stable period, you can slowly transform the no-source model and improve the competitiveness of your products in some aspects. Because you start with the no-source model, it acts as a springboard. During the operation, you can choose some products with relatively high sales, stock up and send them to Amazon warehouses, and use FBA to improve buyer satisfaction and experience. This is already a semi-boutique model, and then gradually transform it into a real boutique model, so that your store has longer development opportunities.
advantage
1. Less capital is occupied, which is the biggest advantage of Dropshipping. You can run a cross-border e-commerce store without investing tens of thousands of dollars in inventory. Traditional cross-border e-commerce takes up a lot of money to purchase inventory, and there is also the risk of inventory backlog.
2. It is easy to get started. Cross-border e-commerce will be much easier when you don’t need to deal with physical products.
3. Low management costs. Since there is no need to purchase inventory or manage warehouses, management costs are greatly reduced. In fact, many successful no-source cross-border e-commerce companies are operated in home offices, with monthly costs of less than $100.
4. Flexible location: you can easily communicate with customers or suppliers anywhere as long as there is an Internet connection.
5. There is a wide range of product selections. You don’t need to purchase the products you want to sell in advance. You can provide your potential customers with a series of products. Customers just need to place an order and let the supplier ship the products.
6. The average customer unit price is relatively high (profits are higher than in China). The consumption level in Europe and the United States is relatively high, buyers are less sensitive to prices, and their purchasing habits are exactly the opposite of those in China.
These benefits make Dropshipping a very attractive cross-border e-commerce model, but Dropshipping is not perfect.
shortcoming
1. Inventory issues: When you purchase from multiple suppliers, these suppliers are also supplying other merchants. The inventory changes every day, and sometimes there is even a shortage of stock.
2. Transportation is complicated. Goods may need to go through several transfers before they reach customers, and the freight cost will also be higher.
3. It is inevitable that the supplier sends the wrong goods. Even the best supplier may have such low-level problems. Although it is not your fault, you must take responsibility.
In dropshipping, products are sent directly from suppliers to customers. What should I do if a return or exchange occurs?
Generally speaking, customers will not return or exchange goods without reason, because returning or exchanging goods is troublesome for the customers themselves. The customer must be dissatisfied with something, which is why he went to the trouble of returning or exchanging the goods. If you handle it properly, you may be able to make customers become loyal customers of your store.
When it comes to the return and exchange process, you need to pay attention to two points: how to plan ahead and how to handle returns and exchanges.
Establish a return and exchange policy in advance
Formulating a return and exchange policy in advance is to prevent problems before they occur! Before you start dropshipping, you should have a thorough understanding of the supplier’s return and exchange policy. If your dropshipping business has already started, you need to check whether there are any changes in the supplier's policies and update your store's return and exchange policy accordingly.
Step 1: Understand the supplier’s return and exchange policy
When working with suppliers, be sure to familiarize yourself with their return and exchange policies, as each supplier's policies are different. Dropshipping is when suppliers ship directly to customers, so their policies will directly affect yours.
In general, here are a few things to know:
Are there any fees for goods returned to the supplier's warehouse? If so, how much does it cost?
How many days after a product is sold do you accept returns or exchanges?
Should your customers or you pay for return shipping?
Do you accept returns or exchanges for incorrect orders (e.g. the T-shirt is the wrong size)?
What is the supplier's entire return and exchange process?
If you have many suppliers, you need to understand their return and exchange policies in detail.
Step 2: Create your own return and exchange policy based on the supplier’s return and exchange policy
This step is very important. Develop your own policy within the constraints of the supplier's return and exchange policy.
The specific points are as follows:
If the supplier supports a 30-day return and exchange service, then your return and exchange policy should tighten this period a bit, such as 20-25 days. Because sometimes you may forget to re-ship the goods to the customer, so there will be some time left.
If you have many suppliers, try to include all of their policies in your return and exchange policy.
For example, your T-shirt supplier supports a 20-day return and exchange service, while your mobile phone case supplier only provides a 14-day return and exchange period. You can set different return and exchange periods in your return and exchange policy based on different products; or you can combine the two and set the return and exchange period to 10-12 days.
Do not display the return address on your return policy page. Guide customers to contact you privately, and then give you the address depending on the situation. Because sometimes it's better to have customers return items to your own address rather than directly to the supplier. The reason for doing this will be explained later.
Returns and exchanges must provide a waybill number, otherwise they will not be accepted. Be sure to clearly state this in your return and exchange policy, and tell customers that returns and exchanges without a tracking number will not be accepted.
How to handle returns and exchanges?
After taking the above preventive measures, if returns or exchanges still occur, you need to start dealing with this issue. First, you need to understand the common reasons for returns and exchanges, and then propose solutions for each reason.
Common reasons for returns and exchanges
If you receive a return or exchange request, there may be the following reasons:
1. The customer bought the wrong product (e.g. the wrong size T-shirt)
This situation is actually very common, especially for clothing and shoes, the return and exchange rate due to incorrect sizes is also very high.
Generally speaking, suppliers will not accept such returns or exchanges, but of course some high-quality suppliers will accept such returns or exchanges. So as mentioned earlier, you must be familiar with the supplier's return and exchange policy.
My suggestions are:
Agree to returns and exchanges regardless of the supplier's policy. Why? Agreeing to returns and exchanges shows that you take the problems customers encounter seriously, and first-class customer service may bring you loyal customers. However, you can ask the customer to pay for the return shipping fee. After all, it was the customer who made the wrong purchase and it is not your responsibility.
2. The product does not match the description
This problem is a bit of a headache. Either you made the wrong product or your supplier made the wrong one.
First you have to figure out who made the mistake. If you uploaded the product manually, it is possible that you made a mistake; if you used the data update service provided by the supplier, it is possible that the supplier made a mistake.
Whether the fault lies with you or the supplier, you must take responsibility and address the customer's issue promptly. You can put yourself in their shoes and think about it. If you bought something and the seller told you, "It's not our fault, the supplier made a mistake, you should go to the supplier," what would you do? I guess I will never buy anything from this store again.
If it is the supplier's fault, it would be best if the supplier agrees to refund the money or re-ship the product to the customer.
However, if the supplier does not agree to a refund or re-shipment, and is not proactive in handling the issue, you should consider looking for a new supplier.
Don't argue with suppliers. There is no need to argue. It is more important to solve the problem. If the supplier's subsequent performance is still poor, then you can stop cooperating with them.
Remember: suppliers are your partners; don’t let small mistakes ruin your relationship.
3. The product is damaged or defective
If your supplier is high quality, this situation will rarely occur. However, this still happens to some extent.
What are you going to do? Be sure to pay all costs for the customer and do not let the customer bear the return shipping costs.
You can provide return labels to customers via email, making it as simple and quick a way as possible for them to return or exchange products. This is very important. Only when your service is up to standard will your customers be loyal to your store.
Focus on problem solving
Once you've determined the reason for the return or exchange, it's time to start resolving the issue. Customers don’t care whether you are a dropshipper or not, nor do they care whose fault it is. All they want is a refund or exchange. First you should apologize to the customer, then quickly find a solution.
If your service makes customers feel WOW and pleasantly surprised, it is very likely that they will recommend your product to their friends.
This kind of word-of-mouth marketing has little cost and is very effective.
There is no need to return low-priced products.
Some products are priced so low that there is no need to bother customers with returns. For example, a customer may want to buy a mobile phone charging cable for iPhone 6, but ends up buying one for iPhone 7. For a low-priced product like this, you can just let the customer take it, and then send him an iPhone 6 charging cable.
In fact, you have not lost anything, and the customer may even be grateful for your thoughtful service.
If it is a higher-priced product, have the customer return the product to your address instead of the supplier's address.
If you have never handled returns or exchanges before, you can ask customers to return the goods to your address so that you can become familiar with the specific process of returns and exchanges.
Why should the return be sent to your address?
It can detect whether customers or suppliers are lying. If you actually see the product in action, you can determine if it is what the customer says it is. Moreover, because you have obtained first-hand information, if the product is really damaged as the customer says, the supplier will not be able to argue that the product is intact after receiving it.
It can ensure that returns and exchanges go smoothly. Since you are doing it yourself, you are more likely to ensure that everything goes smoothly.
You can familiarize yourself with the entire return and exchange process. If you return goods to a supplier in person, you can get a rough idea of how difficult the process is and how long it takes.
Actual return and exchange process
If this is your first time dealing with returns and exchanges, you may not be clear about the specific process.
Generally speaking, processing returns and exchanges requires the following process:
1. Customer submits return or exchange request
What you need to do is: determine the reason for return or exchange, and contact the relevant supplier to obtain a return authorization code. No matter who is responsible, you must apologize to the customer and tell him/her your solution.
2. The supplier agrees to return or exchange the goods
What you need to do is: If the customer returns the product directly to the supplier, you will give the customer the return address and return authorization code. Some suppliers' return and exchange policies specifically require a return authorization number to be affixed to the return shipping label (not the shipping box). If the customer pays for the return shipping, you should remind the customer to purchase a shipping number.
3. You or the supplier receives the package
If you receive the package: check if the product is damaged and take photos for safekeeping (see if the supplier’s statement after receiving the package matches what you saw), then send it to the supplier.
If the supplier received the package: keep in touch with the supplier, follow up on the package's arrival at the warehouse, and then ask the supplier to refund you or have the supplier re-ship to the customer (if the customer wants it).
4. The customer receives a new package, or you receive a refund
Send emails to customers to ensure that the package reaches them smoothly. If the customer does not want an exchange and wants a refund, you should refund the customer and then email the customer to ensure that the refund is received smoothly.
If a return, exchange or refund occurs, don't worry, because this is a very normal thing.
Plus, this might be your chance to surprise your customers. Customers may not remember what they bought from your store, but if there is a return, exchange or refund, and you happen to provide the most thoughtful and nice service to the customer in the shortest time, the customer may remember you.
