Did you know you can get a fully automated, USA based dropship website, built for you, in whatever niche you want, in 72 hours or less? Go to https://learn.dropshipusa.io/webclass to register for our free webinar that will teach you our secret dropship model, and how you can get it built for you. Now let's dive in!
Dropshipping is a business model where retailers don't keep the products they sell in stock. Instead, they take orders from their customers and have the products shipped directly from a wholesaler or manufacturer.
Dropshipping has many advantages for both entrepreneurs and consumers. Entrepreneurs can start their businesses with minimal overhead cost, as dropping shipping only requires basic marketing skills to drive traffic to your store.
Consumers get access to high-quality products that are often cheaper than what you would find at retail stores.
How Much Can You Make From Dropshipping?
Dropshipping may seem like an easy way to make money, but several obstacles need to be overcome before you see any profit out of your store.
The main issue lies in how returns are handled. With traditional retail businesses, the retailer buys products from a wholesaler or manufacturer and then sells them to their customers for a higher price.
The difference between how much they paid for the product and how much they sell it for keeps the business profitable. If people keep returning items, retailers are forced to either eat the cost of the returns or make less money overall.
Why Customers Return Products in Dropshipping?
There are several different situations in which a customer might want to return an item they have purchased from your store, including the product being faulty, the customer decides they no longer need it, or because they simply changed their mind.
Each of these reasons has a different way how you can deal with them and how much money you will lose in the process.
When a product is faulty - for example, there is a part missing from a set of jewelry that was never mentioned in the description when it was listed online - then this should be dealt with on a case-by-case basis.
If it's something simple, such as one small earring being missing from a pair, then giving your customers the option to purchase another single earring at a half price would make them happy.
If there is a part of the product broken or missing, though, you may want to consider sending a new replacement item free of charge.
Customer Don’t need it Anymore
Handling returns when your customer no longer needs the item they originally purchased is a lot easier.
For example, our customer bought a new laptop from your store and then found some technical issues with it that he did not notice before purchasing it. In this case, you would just ask how much he paid for it so you could issue him a refund for how much he initially paid instead of how much the price was reduced to on sale.
Customer Simply Changed Their Mind
Finally, how do businesses deal with customers returning items because they have simply changed their minds?
This specific reason can be resolved in two different ways: either by giving your customer a full refund for how much they originally paid or how much the product was on sale, or by offering a store credit that can be used to purchase anything else from your online shop instead.
It really depends on how generous you want to be with how you handle returns and how much work you need to put into it.
Return in Dropshippiung vs Traditional Business Model
Dropshipping works very differently than traditional retail models. You do not buy any of your inventory upfronts, nor do you have ownership over the items you sell once they are sold to your customer.
This means that every product your consumers buy can be returned at no cost to your consumer with no consequence to you as a retailer. How you handle these returns is how your business will succeed or how it will fail.
Your customer has no obligation to return the items they bought from you, and if nothing is holding them back, they will likely keep their new item and order a new product from someone else instead.
In Dropshipping How to Handle Returns
The best way how to handle returns small business like dropshipping is two-fold:
First, make sure that your products are as high quality as possible (no cheap plastic gadgets); second, make sure all of your suppliers offer free shipping on returns.
This way, consumers feel more comfortable ordering products online, and you won't lose any money by keeping your shipping costs down. Of course, not every Dropshipper out there has access to such wholesalers and manufacturers willing to work under such a condition, so how do you get around this?
Ensure Quality Product than Free Shipping
If you have a high-priced product that is of exceptional value, there's a chance that your customers won't want to return it. Instead of offering free shipping on returns, make sure your products are worth the price tag, and they will not be returned anyway.
In some cases, however, no matter how much quality you add to your products or how low the price tag may seem on each item, people still manage to find faults with everything.
Offering an Exchange Can be a Way
What if a customer buys a $500 camera from your store and then discovers that it cannot fully zoom out in the photo mode?
He might end up returning this expensive product to you even though he knew precisely how far the camera could zoom in when he purchased it. What you can do in situations like this is offer your customer an exchange for a different product of the same price, but only if they pay the cost of shipping on their return.
This allows you to keep some profit off of this sale instead of losing everything by not charging any return shipping fees and gives your customers another option if they don't want to incur the cost of returning their new camera to you.
How successful your business will be depends on how willing you are to experiment with how you handle returns. However, whatever method that eventually works best for you needs to be communicated clearly with all your suppliers so there is no miscommunication on how each specific item should be.
It is definitely possible no matter how difficult it may be to find a solution that will prevent returns from hurting your bottom line. By following the guide above, you can significantly increase your business’s profit and how many new customers decide to give you their business.
With the popularity of online retailers ever-growing, more and more people are finding ways to make money off this new market by starting their internet stores. But how do they handle dropship returns?
If you wish to open up a shop online, handling returns might prove to be a bit tricky. In this article, we will explore how successful businesses deal with their returns policy to have some ideas on how you might want to go about yours.
How To Handle Customer Returns Can Make A Difference
As you can see, how your business handles its returns policy directly affects how many new customers decide to give it their business.
You can't please everyone all the time, though, so make sure that whatever policy you decide upon goes through every supplier involved before you start selling their products.
You always have options for how your business chooses how it will handle dropship returns, but only if you first understand what those options are.
Looking at how other successful companies have gone about their returns policies is an excellent way to start as there is always plenty of information online on how other people think you should do things.
As soon as your customers realize how much work goes into how you handle dropship returns, they will also realize how much effort you put into what you do and how important their business is to the success of your company.
This extra benefit can go a long way in making them happy with how you run your shop and might even encourage them to purchase from you again.
Whether you are planning handle dropping returns or how to open your first online store, it is always worth reading other people's opinions on how they have done things before.
Online communities can be a valuable source of advice for entrepreneurs that want to succeed, and the internet is full of blogs, forums, and chat rooms that will help you out.
Don't forget, you can get a fully automated USA based dropship website, built for you, in whatever niche you want, in 72 hours or less. Go to https://learn.dropshipusa.io/webclass to register for our free webinar that will teach you our secret dropship model, and how you can get it built for you in only 3 days!