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Your Complete Guide to Dropshipping

Looking to build a successful online business? This comprehensive guide covers everything
you need to know about running a dropshipping business.



Running a Dropshipping Business

Even though it is a great source of income, running a dropshipping business is neither hassle-free nor easy. If you want to succeed with dropshipping, you’ll have to invest a lot of time, hard work and thought. 

The most important piece of advice we can offer for dropshippers is simply this: "Don’t panic!" 

Mistakes, problems and misunderstandings will occur, but you can work through them. Expect challenges to arise, but don’t let them stop you. 

If you treat such mishaps as learning experiences rather than as catastrophes, you’ll become a more effective dropshipper and make more money. Approaching each problem you encounter as a lesson will enable you to develop more effective processes. 

To prepare you for the day-to-day pitfalls, of dropshipping, here is a list of some of the most common problems you may encounter.

Dealing with Backorders

A backorder occurs when a dropshipper cannot or will not fulfill an order. Backorders do happen, so you had better have a process in place to deal with them. Options for dealing with backorders include:


  • Having More Than One Supplier
    If you use multiple suppliers, you can simply order from somebody else. Having several suppliers also allows you to expand your inventory and boost your product range and customer base.

  • Checking the Availability of Products Before Placing the Order 
    Contact the supplier and see whether the product is in stock before ordering. This may seem like common sense, but you would be surprised to find out how many experienced dropshippers still make this mistake.

    Click here to review this topic as covered in the previous lesson, "Finding Suppliers."

  • Developing a Good Relationship With Dropshippers

    Work with suppliers that have sales representatives you can contact quickly via phone, Skype, Facebook, email and so on. If your supplier is not easily accessible, you will have a big problem on your hands at some point. 

  • Investigate Dropshippers Before Using Them

    This one is extremely important. Order an item from the dropshipper and see how long it takes to arrive, as well as what the condition it arrives in.

How to Provide Top-Notch Customer Service

The one-sentence solution to solving your customer service woes is this:

Pay attention to your customers!

Typically, a buyer will only contact you if something goes wrong. The buyer is trying to tell you about a problem with your business, so listen and resolve it.

Some basic tips for providing great customer service include:


  • Respond Quickly

    Always respond to communications from buyers ASAP. Answer questions as quickly as possible, and deal with concerns in a timely manner.

  • Be Honest 

    If you cannot meet a customer’s need, come out and say so. The old mantra that the customer is always right is dead wrong; the customer is often wrong! If possible, offer the customer an alternative such as a comparable product or a refund, but don’t commit to do something that is beyond your capabilities.

  • Be Willing to Refund Money 

    Nobody likes refunding money, but a quick refund is usually the fastest way to resolve a problem. A quick refund can turn a dissatisfied buyer into a happy customer who will do business with you again. 

    If you are worried about people taking advantage of your easy refund policy, don’t worry. The number of refunds you’ll likely have to give is tiny. 

  • Show Appreciation 

    Show appreciation to your customers by giving them positive feedback on eBay. Use the "Leave Feedback" button to send them a message; we recommend that you write a personalized message to really make a good impression on your customer.

Learn How to Deal with Fraud

Unfortunately, there are a lot of fraudsters trolling eBay and other sites for victims. The good news is, it's fairly easy to avoid these sharks and their slimy tactics.

Some tips for dealing with (and avoiding) fraud include:

  • Use eBay’s Buyer Requirements to Block Questionable Customers

    I block all customers who don’t have a PayPal account, those who have two unpaid item strikes against them, those who have a primary shipping address in countries I don’t ship to, and those who have a feedback score lower than -1. 

    This effectively shuts out bad customers as well as a lot of scam artists.

  • Be Wary of New Payment Methods

    Avoid payment methods that the big eRetailers, such as eBay and Amazon.com, don’t accept. This includes checks, money orders, direct credit card payments, funds wired to you, and more. If customers send electronic check or credit card payments, have them make it to eBay.

  • Don’t Ship Items Until You Have Received Payment 

    If you accept an offer, don’t ship until payment is received; if someone uses an electronic check, don’t ship until it clears. eBay will let you know when you have received payment.

  • Report Fraudsters on eBay 

    If you get ripped off, make sure you report the customer to eBay so the account will get a low feedback score and other dropshippers will be aware of the customer's activities. 

  • Dealing with Negative Feedback

    Negative feedback is actually an opportunity to improve because it is a warning signal: Clearly there is a problem with the way you are running your dropshipping business. Use negative feedback to identify problems and solve them.

When dealing with negative feedback, keep these points in mind:

  1. Go over the transaction and try to identify what went wrong. Then take steps not to repeat it.
  2. Contact the customer who sent the negative feedback and ask if there is any solution you can provide to resolve the issue. 
  3. Offer to refund the customer’s money, especially if it is a small amount.
  4. Read some of the positive feedback you’ve received to boost your morale. 
  5. Don’t become overly obsessed with a single piece of negative feedback it simply reflects the attitude of one customer. There are plenty of other buyers out there.

Running a dropshipping business is not easy, but it can be fun, satisfying and profitable if you are willing to devote the time and attention required to make it a success. 

Remember the best way to overcome problems is to deal with them quickly; if you treat problems as opportunities for learning rather than obstacles, you are on the road to riches. We'll learn more about this in the following lesson.



Next Lesson: boosting your dropshipping success