COVID-19 has affected everything in e-commerce. From decreased orders to supply chain problems to standstill manufacturing, dropshipping is no walk in the park in 2020.
While it feels like doom and gloom, there's some good news for dropshippers on the horizon: e-commerce spiked by 93% in May 2020. Customers are browsing more online today than they did pre-pandemic-and more of them are converting, too.
You're facing tons of challenges as a dropshipper during this pandemic. But you can find opportunities even in trying times. Now's the time to make changes, improve your business, and find a way to stay afloat.
4 best practices for dropshipping during COVID-19
We don't know when or if "normal" will return, so agile dropshippers will be the winners during COVID-19. I believe dropshippers can not only survive, but thrive, during a pandemic with the right approach. I recommend following these 4 best practices ASAP to get more traction.
Modify shipping and logistics
As e-commerce shipping costs surge by 60% in some areas, dropshippers are seeing diminished margins. This is happening because:
- Fewer flights are available to transport goods.
- International flights are even fewer-but flights that do make it will quarantine your products for weeks.
- Shippers have limited space. With more folks staying at home, shippers don't have the extra capacity (or workers) to handle an influx of e-commerce orders.
There's been a huge increase in e-commerce demand, which would normally be great! But with limited delivery resources, dropshippers are left footing a higher bill and longer lead times for shipping and logistics.
This isn't your fault as a dropshipper. But, as you probably know, any kink in the supply chain trickles down and becomes your problem, too.
Fortunately, there are a few ways to prepare your business for the challenges of dropshipping during COVID-19:
- Communicate with your supplier: Keep the lines of communication open. Ask about any anticipated interruptions and their turnaround times. Try working out a deal where you order more product in advance or only pay when the order actually ships.
- Give impeccable customer service: Be upfront with shoppers. Let them know about delays, thank them for their patience, and explain the reason for delays. If people don't like waiting, offer no-hassle refunds.
- Offer waitlists for in-demand products: Customers can sign up and get notified when products are back in stock. That helps you sell out inventory more quickly while managing customers' expectations.
Adjust your marketing
Marketing practices from 2019 just won't cut it in 2020. Everything from your website to your social media needs to address customers' new reality if you want to make more sales.
Social media
Lean heavily into organic social media right now. That means:
- Writing posts with a unique voice that gets people excited. Super-formal posts just won't work.
- Posting videos. Whether it's YouTube, Facebook Live, or Instagram Stories, invest in native multimedia content to boost your organic reach.
- Engaging with people: Tag others and start a conversation. Reply to comments. Social media is about getting social, and engagement is critical to selling more e-commerce products in the long haul.
Email marketing
You're collecting email addresses, right? Use them! Email marketing is an owned media channel, which means you don't have to play by a third-party's rules here. You own the data and you own the message-embrace it.
Segment and automate as much of your campaigns as you can. The more segmented your list, the more you can personalize your message. And since personalized emails are 6X more effective, segmentation is definitely worth it.
Use your email list to build loyalty, announce specials, thank customers, and solidify an actual e-commerce brand. Dropshippers who invest in email stand to see more short-term sales as well as long-term loyalty.
Advertising
Few dropshippers are advertising right now because of our uncertain economy. I understand that, but the dip in competition means you'll see lower costs and more impressions when you advertise. It's a dropshipper's dream!
Advertise your products on Google Ads, Facebook, Instagram, or YouTube.
But remember to sell products that people want during a pandemic. Ads about drinking at bars or dancing at nightclubs will go over like a lead balloon. Get ROI by advertising where there's demand.
Your website
Stand out during the pandemic with these smart tactics to increase e-commerce sales:
- Write a blog: You know you need a blog, but are you actually posting on it consistently? Yes, blogging is a long-term strategy, but it's essential for ranking in search engines. If you don't have time to blog, you can always outsource it to a contractor.
- Speed up your site: Run your site through Google Pagespeed Insights. You want an e-commerce site that's simple and fast. Any speed errors will tank your conversion rate, so take speed seriously.
- Overhaul your product pages: Consider adding a new section to each product page detailing turnaround times, shipping or return policies, and how to use the product indoors or safely during the quarantine.
- Add or change your website banners: Use your website banners to manage customers' expectations. Remind people about the difficulties of dropshipping during COVID-19, related delays, but also use this to comfort your shoppers, too. State that you're open for business and thank them for their support.
Sell in-demand products
Dropshipping is all about customer demand. But whatever you knew about consumer behavior flipped overnight during the pandemic. People are behaving differently and demanding different products. Dropshippers have to adjust their operation to stay agile and fill these needs.
Unfortunately, it looks like COVID-19 will be with us for a while. Invest in a little product research now to see your future for the rest of 2020.
How are your products performing right now? Do you need to change products or your market?
Customers aren't spending as much money on items like:
- Suitcases and bags
- Watches
- Clothing
If you see a troubling dip in orders, change products ASAP. Here's a snapshot of where people are spending their money during the pandemic:
- Home fitness equipment and supplies
- Home office essentials, like headphones, laptops, and blue blocker glasses
- Kitchen appliances, like bread machines
- Cleaning and sanitation supplies
Dropshipping products aren't stagnant. You have the freedom to add or drop products based on ROI. Check your stats and don't be afraid to pivot-staying agile could save your business.
Manage your money better
Dropshipping during COVID-19 calls for good cash flow management.
It seems like our situation changes on a weekly, if not daily, basis. Dropshippers need to manage their working capital very, very carefully to stay in business. If cash is tight right now, consider:
- Selling your stuff: Unsold inventory is burning a hole in your pocket. Whether you need to discount or bundle less-popular items, do what you can do to move them. That might mean reselling to other vendors or offering steep discounts, but it frees up cash for you to sell better products.
- Slash expenses: The nice-to-haves should be the first thing to go. Try to DIY your social media posts if you've hired a contractor to handle it, or cancel unnecessary subscriptions. But be careful: don't cut services that help you sell more products. Cut carefully so you don't shoot yourself in the foot.
- Plan far ahead: What will your business look like in the fall of 2020? It's hard to say without cash flow planning. Think forward to managing your money. What expenses or renewals are happening in the next 6 months? Do you have the cash to cover that? Know what's coming well in advance so you keep enough cash on hand.
The bottom line
Don't get me wrong: dropshipping during COVID-19 has unique challenges. However, we can find opportunities even in the darkest of times. As a dropshipper, that means modifying your logistics, marketing, products, and cash flow management for this new reality.
Your business serves customers' needs. As those needs change, your business should change, too. While we're living in an uncertain world, these 4 tips will bring a dose of predictability back to your dropshipping business.
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