Drop shipping is one of the easiest kinds of businesses to start when you have no e-commerce experience. Not only can you have a store up and running with ready-made platforms like Shopify, but you also do not need to hold your own inventory, and you can reach anyone in the world thanks to the internet and international shipping. Drop shipping is also an efficient revenue source for digital nomads who travel from city to city without an office. However, dealing with international business entails additional factors to account for, so here are a few details to keep in mind if you decide to expand beyond the United States.
Make a note of startup costs
Launching an e-commerce business requires fewer overhead costs than brick-and-mortar, so you won’t have to worry about renting a space and keeping the lights on if you drop ship (though your Shopify or another account might come with a $29 per month fee, give or take). There are other associated costs, though, if you are overseas, or if your suppliers are international. For instance, you’ll probably still need a US phone number, so you’ll need to pay for a global calling plan or port your number into Google Voice, which is internet-based.
According to Drop Ship Lifestyle, drop shipping internationally carries an average startup cost of $274. This figure includes the fee to register your business in the US ($238), your domain cost (anywhere between $2 to $16 annually), and your first Shopify bill. This number increases with advertising expenses and paying for an inexpensive logo design. Less than $300 is still not bad for getting started, but be aware of additional legalities.
Pick the best suppliers
If you are going to sell to anyone in the world, then it might be wise to partner with trustworthy dropping suppliers in other countries (you want to reduce shipping times for your customers outside the US). However, you still want to select vendors that speak English. Doing so is not just for ordering from them, but for interacting with them when things go haywire. Because you get the brunt of customer service, your life will be extremely difficult if you are trying to solve an issue for someone while unable to communicate with the manufacturer.
Labor laws may vary in different countries, so double check that your partners have ethical business practices and pay their workers fairly. Make sure that they produce quality goods, too—you do not want to sell something to a customer that is made with substitute material or falling apart. As with suppliers in the US, though, make sure that your suppliers have dedicated service representatives and have expertise in their industry.
Shipping will take more work
If you are working remotely but still using your US suppliers to ship to US residents, then you have less to worry about. If you decide to partner with international suppliers, though, or ship from the US to other countries, then there are some additional shipping aspects you need to account for.
Shipping takes longer, to begin. Mailing a package from New York to Oregon is quicker than from New York to Thailand. This lengthened journey means that there is more opportunity for a package to be lost, so be prepared to answer a customer complaint when their order does not arrive punctually. It might be wise to purchase an insurance plan to cover such losses, so do some further research into which plan will work best for you.
Every country has its own restrictions and clearances for what comes from abroad, so familiarize yourself with relevant importation laws. The US, for example, requires you to file export information electronically when you export merchandise worth over $2,500. Shipping rates and customs fees will vary as well.
Target the right markets
Your products might be more popular in some countries than others, so focus your marketing efforts on and open your store to places that are demanding what you sell. You might be surprised at the conversion rates you find, too: according to one case study, the US was a drop shipper’s highest source of traffic, but they found a conversion rate 1.5 times greater in Australia. Denmark, Norway, Ireland, Finland, and Canada were also lucrative markets, so perform some analysis and experimentation to determine where it benefits you most to sell your products.
Expanding your drop shipping business internationally or running it from overseas might increase your income, but there are regulations and costs you should be prepared to navigate. How do you plan to drop ship abroad?