Amidst several controversies, the dropshipping industry is still booming and is a viable option for those who want to make money without much hassle or investment. According to reports, approximately 33% of the ecommerce business uses dropshipping as their key inventory management model. Even big brands like Walmart have used it for expanding their product offerings and acquiring more market share.
The universal dropshipping market was assessed at a whopping USD 102.2 billion in 2018 and is anticipated to record a CAGR of 28.8% from 2019 to 2025. The market will likely undergo a significant growth, thanks to the incessantly rising craze for online shopping and cross-border e-commerce trade. As more and more dropshippers join the bandwagon, the need for businesses to stand tall in the competitive cluster becomes inevitable. One of the simplest and most inexpensive ways to do so is with custom packaging for dropshipping. Before we move on to discover the benefits of personalized dropshipping packaging, let us take a quick look at how dropshipping actually works.
What is Dropshipping and How Does It Work
Drop shipping is a simple, no-investment e-commerce selling strategy wherein the retailer isn’t directly responsible for inventory management and distribution. Instead, he focuses on promotional activities and once an order is placed, the information is transferred to a third party who completes and ships the order on the retailer’s behalf. Since the seller isn’t physically involved in the fulfillment process, they have less headache to deal with. Needless to say, it is a relatively convenient and profitable way to build a customer base without having to worry about stock management, store space or shipping.
The dropshipping process usually involves five steps:
- A customer places an order with the dropshipper (typically, an online store).
- The retailer forwards the order details to a third party seller (drop ship supplier).
- The third party seller receives the order information and checks it against their inventory for order confirmation.
- Once confirmed, the supplier is responsible for packing and shipping the order to the customer.
- The customer receives their purchased product.
Because the dropshipping packages are typically labeled in the retailer’s name, purchasers likely won’t know that their products have been sent by a third-party seller.
Custom Packaging for Dropshipping and its Myriad Benefits
As a seller, you’d want your business to stand out from the crowd and to do so, you must offer something unique and memorable. Aside from selling a product, you also need to present a sentiment that your audience will connect with. It’s about building a brand that your customers will recall when they’ll be in need of your product or service. Building a loyal consumer base with returning customers is the key behind any successful business.
While lower pricing can help draw customers in the initial base, you’ll ultimately render loss in the long run. Never underestimate the power of packaging even when you’re running a dropshipping business. Opting for custom packaging dropshipping can ensure shipment safety, customer satisfaction, and profitability—for both retailers and distributors.
When competition is at its peak, brand recognition and recall are the supreme factors. As a dropshipper, you need to prioritize these things in your marketing strategy to gain maximum advantage. Some of the biggest and most successful businesses like Amazon and eBay are instantly recognizable due to their unique product packaging. Always keep the key features of your product packaging consistent with the overall branding to best promote your dropshipping store.
One of the biggest challenges for dropshippers is that their goods are frequently damaged during transit because of poor packaging. In order to build a good brand reputation and credibility, you need to ensure that your products arrive in perfect condition to your customers. Aside from affecting your brand image, damaged products are typically returned, which means loss of time, money and a prospective customer.
Specific items like crockery, gadgets and liquid products require specialized packaging for legal and utility reasons. For instance, lithium ion battery packaging is mandatory for shipping several electronic items. Light commodities with delicate surfaces and somewhat resistant structure, for example, vehicle interior parts and upholstery, need special cardboard packages customized to the product. Custom packaging for dropshipping ensures your products’ safety in transit and reduces the use of unnecessary inner packaging materials like bubble wrap and air pillows.
The excitement and satisfaction of opening a parcel is so popular and impactful that several YouTube channels have devoted themselves solely to that experience. Some of these unboxing videos bag up to hundreds of millions of views and over 10 million subscribers.
Custom dropshipping packaging can add to your customers’ online shopping experience, from a unique sensory feature to snug fit. Sturdy, high-quality shipping materials can also make your brand appear more reliable and professional. Your customers will readily associate your business with quality and dependability, thus improving its reputation and credibility. This also improves brand loyalty and repeat customers.
According to a report, consumers using social media are 4 times more prone to spend money on purchases. Sometimes, the influence is so strong that 29% of consumers are bent on making a purchase on the same day of watching something on social media.
Additionally, many consumers today share their buying experiences online, including their unboxing experience. Custom packaging for dropshipping allows you to make the most of free social media advertising on popular community platforms like Facebook, Instagram, YouTube, Twitter, and TikTok. People will be more likely to share your product details online if they find the packaging unique, interesting, and functional. Alternatively, you can also start an interactive social media contest encouraging customers to post their unboxing videos and give them a discount coupon in return. This would work as an excellent and promising branding strategy.
Long Term Gains
The dropshipping business runs on a simple formula – fulfill your customers’ orders directly through a supplier or wholesaler while earning a certain amount of profit on every sale. Therefore, unless you’re selling very rare or high-end products, you won’t make a lot of money via dropshipping since you cannot justify the high prices.
Nevertheless, with custom packaging solutions, you can create a unique brand identity and gain more authority over your products. This recognition and credibility will give you a strong foothold in the industry, and allow you to make a decent amount of money with dropshipping.
Words of Advice
Talk to your packaging vendor and see if they can ship your custom packaging to your third-party vendor directly. In case they do not offer this service, you might need to coordinate with your supplier to see if you can forward your custom packaging to them for product shipping.
Make it a point to mention the possibility of delay in delivery if you face any challenge while accommodating this feature. It will take some extra time, diligence and hard work on your end to get it all done, but the long-term payoff should be rewarding.
Business Development Manager with a demonstrated history of working in the Media and Digital marketing sector, Passionate about innovation and bringing the future into new business solutions.