Dropshipping is a common practice in the e-commerce world, especially for those who want to start an online store without incurring massive overhead costs. With dropshipping, entrepreneurs can start a business without any inventory or warehousing. They also won’t have to deal with the logistics of packaging, labeling, shipping products to customers..
However, sometimes dropshipping poses a challenge: Because many online stores use the same supplier, they end up selling the exact same products, making it hard to differentiate one business from another. This is where branded dropshipping comes in.
What is branded dropshipping, exactly? We’ll give you the lowdown in this article, along with the pros and cons and some best practices.
What is branded dropshipping?
Let’s start with dropshipping first.
Dropshipping is an order fulfillment method in which the online store doesn’t create, store, or ship any of the products they sell. Instead, they partner with a dropshipper that makes (or purchases) products, warehouses them, and handles all shipping logistics. The online store doesn’t need to purchase any inventory from the dropshipper in advance — they only make a purchase when a customer buys the product from their online store.
Branded dropshipping is a type of dropshipping where the online store sells a dropshipper’s products under their own brand. The dropshipper packages the products using branded packaging and affixes brand labels to the products before shipping them to the customer.
In other cases, the dropshipper actually adds the online store’s logo to the product itself, such as through stamping or embroidery. In this way, the online store’s brand is front and center on the products.
What are the pros and cons of branded dropshipping?
Why choose branded dropshipping? Its main benefit is that it creates a branded experience for the customer, which can increase customer loyalty.
If your online store has a strong brand that consumers love, they’re more likely to value those products and continue buying them. Plus, it makes your product distinctive, setting it apart from goods sold at other online stores. As a result, your store may be able to charge a premium for branded products.
“Branded dropshipping is a great way to start your business. You can set up the store, get the products, and start selling them without having to pay for any inventory up front,” says Rengie Wisper, cofounder of Ever Wallpaper, which sells unique wallpaper murals.
“But there are a few things you need to consider if you want to make sure your brand is represented properly in your store. Make sure that your logo is clear and legible on every product page. Customers are going to be looking at it every time they visit your store, so make sure it’s easy to read,” Wisper adds.
Branded dropshipping may cost more than regular dropshipping because the dropshipper will likely charge extra for adding your brand details to their products. In cases where profit margins are already slim, this can be a dealbreaker for some businesses.
Similar to regular dropshipping, the online store has little control over what happens during product manufacturing, labeling, packaging, and shipping. If there are issues — such as a logo being added incorrectly — this can be detrimental to the brand.
Best practices for branded dropshipping
To ensure your branded dropshipping venture succeeds, plan ahead with regard to the following best practices.
- Work with a specialist. Some dropshippers specialize in branded dropshipping, which means they have the experience and resources required to add brand elements to products. They’ll also be able to offer different ways to brand the products, such as through labels, stamps, and packaging.
- Have an eye-catching logo. This is the branded element that will appear on the products, so it needs to stand out. Work with a professional designer to create a logo that reflects your brand and values and appeals to your target market.
- Have a plan in case things go wrong. Your brand name will be visible on the product, so if there are defects, customers will blame you. Have a return policy in place that enables customers to get a replacement product at no cost to them.
- Use both text and imagery in your marketing. “Remember that this is an online store — don’t rely on imagery alone,” says Wisper. “Make sure each product has a clear description and some key benefits listed so customers know exactly what they’re getting when they purchase from you.”
- Focus on customer service. Your customers may not even know what branded dropshipping is. If they have an issue, they don’t want to deal with a third party; they want to deal with you. Provide several communication options, such as phone, email, and chat, so your customers can easily reach you.
Branded dropshipping is a cost-effective way to start an online business while promoting your unique brand. To make the most of it, here’s one last piece of advice from Wisper: “Don’t forget about social media! Make sure there’s some way for customers who buy from your store to easily share their experience with others.”