3 Tips on Being Profitable when Drop-Shipping

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Drop-ship and profitability aren’t two words you hear together very often. Here’s three suggestions for how to make the dropship profit dream a reality!

 

Get By With A Little Help From Your Friends (aka MVP Suppliers)
Do yourself a favor when sourcing product by choosing suppliers that share, or better yet, outright waive freight fees on drop-shipping projects. Luckily for you, here at AIA we have forged relationships with best-in-class industry suppliers who are willing to partner on drop-ship fees in order to win the business. But what if some suppliers aren’t willing to budge? We get it. Not every supplier is down with drop-ship. Instead ask a supplier to partner on the goods themselves or creative solutions to meet the client’s budget based on the additional expense of individual shipments.

Don’t Wait. Negotiate!
Next try partnering with freight companies that can handle large pickups. This is important because some freight companies limit the parcel pick up during busy times (holiday, peak season, etc.). Always choose a freight partner who you trust or have used in the past. 

Count Every Penny
The key to staying profitable for drop-ship projects of every size is to meticulously and rigorously document all up-front costs. This helps to avoid margin erosion on the back end for:

  • goods
  • decoration (setup/run charge)
  • pick/pack fees
  • individual shipments (remember — residential shipments are almost always more costly) 
  • variable data (customized item/size-based on individual) costing 

Most suppliers/fulfillment will charge for individual sizing or items to a specific recipient as it takes more time to make sure Bob Smith at 123 N. Main Street receives a size XXL and a tumbler while Mike Jones of 456 Elm Street needs a small and a mug.

The little details matter. It’s partnerships and relationships that can help guide you along the way. If you need help with drop-shipping and finding reliable suppliers, join the AIA Community.