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4 Lesser-Known Dropshipping Strategies for Small Retailers

 

dropshipping

If you’re a small-to-mid-sized business owner, you’re thoroughly aware of how hard and challenging it can be to present your customers with the best possible assortment of quality products. You most likely have goals to expand your store, product line, services, and create a hub that better serves your customers. But things like a tight budget, high overhead, and intense competition can wear down your aspirations to expand and grow your business.

But there’s a solution to that pain – it’s not a quick-fix, simple, easy, solution, but it’s an actionable tool that can help you achieve your business goals.

That tool is dropshipping.

In this blog post, we’ll take a look at some dropshipping strategies that you SMB owners can employ in order to alleviate product sourcing frustration and expand your assortment, all while staying comfortably within your chosen niche.

Profit from a good long-tail strategy

If you’re managing owned inventory, you know how valuable warehouse space is. But you’re also aware that long-tail products are a necessity to year-long success.

One of dropshipping’s unique advantages is the opportunity to capitalize on sales of profitable long-tail products without sacrificing warehouse space or up-front cash on product that moves slowly throughout the year.

By finding a dropship supplier for your long-tail products, you can open up that warehouse space for other products. You also remove the risk of some of those long-tail products dropping off completely and no longer selling.

What about seasonal items?

In the same vein as long-tail products, dropshipping also works well for selling seasonal items or regular items at seasonal volume without the hassle of storing the items months in advance of the seasonal demand surge.

You can expand your assortment for seasons of peak sales very easily by adding products from a dropship supplier that you don’t already offer. This ties back into the overall goal of presenting your customers with a larger assortment of products that still fit in your niche.

Use dropshipping to test-drive a supplier

One of the biggest challenges facing retailers is finding a reliable supplier. If you run a retail business fueled by owned inventory, dropshipping can enable you to “test drive” a supplier before committing to using them full-time to fulfill product needs.

For example, if you find a supplier that has a great price on a product of interest, but the supplier is one you’ve never heard of and you don’t want to run into any fulfillment issues down the road. Try to negotiate a dropship deal and see how the supplier performs with orders you send them.

Expand your catalog without the risk

Easily the biggest benefit that dropshipping presents for small businesses is the ability for small business owners to expand their assortment without the added risk and expense of more owned inventory. No amount of market research can guarantee that a certain product will sell, which means that when you make a bulk order of a new product for your store, you’re taking on a significant risk. But by adding that product to your catalog via dropshipping, you remove the risk of losing money on product that doesn’t sell. At worst, you’ll lose the time it took to integrate the supplier and list the products on your website — a far cheaper and more affordable outcome than having to liquidate unsold bulk inventory at a loss.

These are just a few of the many use cases that dropshipping presents for small businesses. While dropshipping isn’t a perfect solution for every business, there are ways that it can help your company.

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Kabbage Team

The Kabbage Team is here to not only fund the small business loans you need, but to help you grow your business through free marketing tips, webinars, tools and more. Is there something you'd like us to cover or want to get your small business featured on our blog? Send us a note at content@kabbage.com.

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