The global dropshipping market is projected to reach a revenue of $1,253,790 million by 2030, Grand View Research reports.
The increased preference for online shopping coupled with the rise of eCommerce platforms, as well as the trend of cross-border eCommerce trade contributed to this growth.
Given all these factors, it’s never been easier for businesses and investors to branch out into dropshipping.
However, only 10% of dropshipping businesses succeed in their first year.
In this interview, we speak to Jill Sherman, co-founder & CEO of dropshipping software Modalyst and Head of Suppliers Hub at Wix, to discuss industry-specific strategies, including:
- The biggest dropshipping challenges and how to overcome them
- How to find reliable suppliers on Aliexpress, the leading dropshipping platform
- Tips on building customer loyalty with a consistent brand presence
Who Is Jill Sherman?
Jill is an accomplished entrepreneur with a global perspective and a strong track record in scaling businesses from inception to exit. With expertise in B2B eCommerce, SaaS, marketplaces, and retail, she holds a pending patent for her innovative work. Prior to Modalyst, Jill spent nearly two decades at the crossroads of luxury fashion, retail, and technology with prestigious brands like Vogue, Prada, and Harvey Nichols.
Wix acquired Modalyst in 2021 to provide its own eCommerce supplier marketplace and native dropshipping solution.
“When Modalyst was acquired, we were already the most popular dropshipping app on Wix.
Since the acquisition, we have grown tremendously internally. Not only are we constantly adding new suppliers to our platform, but we are also building new functionality both on Modalyst and directly on the Wix Platform,” Jill says.
Overcoming the Biggest Dropshipping Challenges
Starting or scaling a dropshipping business has its advantages and disadvantages.
According to Jill, reducing the risk of high competition by selling niche products can be tough:
“Dropshipping's low barrier to entry results in a crowded market where many businesses offer similar products. This intense competition can drive prices down, leading to slimmer profit margins and higher marketing expenses.”
To stand out from the competition, she advises businesses to offer a unique and differentiated product assortment.
“Selling items that aren’t widely available online can help reduce marketing costs and make it easier to reach your target audience.
Additionally, partnering with multiple suppliers can help avoid issues related to stock shortages and shipping delays,” she adds.
Overpassing the competition and dominating the market also requires performing a deep competitor analysis.
Watch our video guide below to learn the key steps for analyzing your competitors:
Creating strong relationships and turning customers into brand ambassadors is another challenge.
To effectively turn a dropshipping customer into a brand ambassador, you need a combination of exceptional service, engagement, and incentives.
“Find ways to constantly engage with your customers — check on their orders and the products received. Keep them knowledgeable and come back with newsletters and discounts. For those most engaged, offer a referral program,” Jill notes.
Discovering high-quality, reliable suppliers can also be difficult, she says, as they handle order fulfillment on behalf of merchants, making it crucial for orders to arrive on time, be carefully packaged, and include personalized invoices.
“This dependency on a supplier is challenging for retailers — if a supplier runs out of stock or changes their prices, it can result in order delays or cancellations, which can negatively impact customer satisfaction, as well as reduce merchant profits,” Jill highlights.
Watch the video to learn how to sell dropshipping products through Wix and Modalyst:
To overcome this challenge, a dropshipping merchant should be an excellent curator and marketer, finding the best products and suppliers for their niche and customer base.
Here are some key characteristics that Modalyst looks for when it vets its suppliers:
- Quality products: The supplier should offer a variety of high-quality, in-demand products. Even better if the products are unique. Order a sample of products to assess quality and enhance product descriptions.
- Competitive prices: The supplier should offer competitive prices, with product quality matching the price. Use image searches to compare similar products and their prices.
- Reliable shipping times and cost: The supplier must deliver within their stated processing and fulfillment times at reasonable fees.
- Responsive customer service: The supplier should provide responsive customer service. Modalyst monitors supplier response rates during vetting and expects suppliers to respond to merchants about any order issues within one business day to resolve the problem.
- Good reputation: The supplier should have a good reputation within the industry. Modalyst checks its website and social media accounts to see how customers have responded to their products and customer service, as well as investigates their existing merchant distribution.
Finding a reliable supplier is crucial to the success of a dropshipping business, and it’s oftentimes better to work with an established one.
Finding Reliable Suppliers on AliExpress Using Modalyst
Modalyst is the official dropshipping partner of Alibaba and AliExpress, which have become a dominant force in the dropshipping sector thanks to its wide range of products at extremely competitive prices, Jill says.
“Through this partnership, Modalyst has created a Chrome Extension that allows merchants to link their accounts directly with AliExpress and/or Alibaba, making it easy to source products from these marketplaces.
With just a click, merchants can import products, descriptions, images, and real-time inventory counts and prices into their online stores,” she adds.
Since AliExpress is a large third-party marketplace, Modalyst doesn’t vet the suppliers featured on the platform.
Instead, it advises its merchants to follow best practices for finding reliable suppliers with high-quality products on AliExpress:
- Review the store's Seller Feedback to ensure they have a high positive rating.
- Examine the Product Feedback and read the reviews for the specific item you plan to purchase.
- Verify that the seller provides AliExpress Buyer Protection for order disputes.
Merchants should also order a sample to evaluate the product's quality, delivery process, unboxing experience, and customer service.
Growing Your Dropshipping Store
Jill further shares some key strategies that can help effectively promote a dropshipping business and drive traffic to online stores in 2024:
- Create a blog, develop authentic and engaging content, and show your customers that you are a thought leader in your niche.
- Optimize your content and all product and landing pages for SEO to earn traffic to support your business.
- Create a YouTube channel as it will give you a voice.
- Encourage your customers to create video reviews of your products.
- Share educational videos to show how consumers can use the product and why it is valuable.
- Have pictures of customers using or wearing your product in reviews to enhance trust and credibility.
- Answer questions on Reddit, Quora, and other forums to become a trusted source in your niche, and market yourself as a knowledgeable thought leader.
“It is important to build a marketing strategy that is consistent with new content added to the web continuously.
This is a long-term play that could pay dividends over time.
As it is harder and more expensive to market on Google and social media, having a voice and establishing a presence with SEO should become an important part of a marketing strategy,” she adds.
A reputable digital marketing agency can help promote your dropshipping business successfully.
In a previous podcast, DesignRush spoke to growth marketer and former HubSpot manager Alex Birkett who shares effective SEO tips to transform your content and key criteria to rank on Google. Watch the video to learn more:
Of course, establishing a strong brand identity and fostering customer loyalty are essential strategies; however, it can be challenging when selling products from various suppliers.
“Building customer loyalty isn’t about flashy marketing or viral campaigns; it’s about consistently delivering on the strengths of your business and providing high-quality products and services,” Jill says.
She advises businesses to consider emphasizing brand advocacy, as their most enthusiastic customers may hold the key to unlocking new revenue opportunities.
Jill recommends keeping your brand’s voice and identity consistent across everything, even when working with different suppliers.
View this post on Instagram
Jill adds that you need to make sure product descriptions and images are in sync and maintain consistency in inventory and pricing to create a unified look and feel.
It’s also important to stay connected with your customers by engaging and re-engaging with them regularly and to create a customer-first culture.
Starting a dropshipping business is easier now than ever. However, the market is becoming oversaturated and competition is tough.
With Jill’s proven strategies, your business can have a higher chance of succeeding.
