Lets start by saying that a lot of dropshippers limit themselves to dropshipping in their country home, maybe because they feel they’re not prepared for multinational expansion.
With suppliers providing worldwide shipping, international borders have however become blurred and dropshippers are shipping their items worldwide from the comfort of their homes or country home. A detailed roadmap enables you prevent potential challenges and sets you on the path to business growth.
In this resource today on Dropazz, we would be discussing Worldwide Dropshipping, its Pros and Cons [Advantages and Disadvantages]. But, before we dive into that, lets take a brief look on what Worldwide Dropshipping is all about.
Introduction To Worldwide Dropshipping
Normally, Dropshippers ship products straight from the producer or wholesaler to the consumers (customers) in a targeted country even without owning a physical warehouse to store up inventory.
Pointing to the fact that a large number of suppliers can ship products anywhere around the word [first of all, verify this with your supplier], various dropshippers set their shipping parameters to Worldwide so as to examine which country provides them with the best results.
Pros And Cons Of Worldwide Dropshipping
On the other hand, some dropshippers work with what they know and market within their own home country or to the following 5 popular countries:
- The UK
- The US
- New Zealand [and]
Due to the fact that lots of suppliers reside in China and ship worldwide, dropshippers can easily enlarge their reach and exploit the international market instead of just competing solely in local markets.
However, you might be asking yourself why you should Dropship worldwide. Well, we wouldn’t make the choice for you, rather, we would explain to you the Pros and Cons associated with Dropshipping Worldwide. So, keep reading.
Pros Of Dropshipping Worldwide
Always remember that Increasing your reach worldwide can enable you tap into new target markets, particularly at a “WOW” cheaper advertising cost.
So, what are the advantages?
- Independent on high competitive markets:
As the united states is globally considered as the largest consumer market, market saturation may skyrocket your competition and you may experience a decrease in demand for the products you offer.
Successful e-Commerce brands like Amazon etc offer tough competition, not to mention the tons of smaller Shopify stores heavily concentrated in the united states.
Therefore, sales of “winning products” become maximized. To do well in such saturated markets will require taking existing market share from a competitor, enhancing the item, or/and increasing consumer demand.
- Affordable advertising costs:
Again, in less saturated but developed markets, where there’s little advertising competition, the advertising costs become lower.
Launching your campaigns in such countries could further be a way to develop your advertising budget for targeting the 5 popular countries.
- Identifying new markets:
Inasmuch as rivalry is healthy and offers momentum, there’s much potential in less competitive markets, where adoption of ecommerce is high and the spending power is strong.
An effective strategy to assess which additional markets to explore would be to access your orders and sort them by country. By so doing, it would provide you with the real live data on the countries that are working for you.
To achieve this, you can make use of Google Analytics, which will enable you get a good report on the countries generating the most sales for you.
Cons Of Dropshipping Worldwide
- High e-commerce fraud rate:
A lot of countries have built a reputation for having a high fraud rate.
For instance, according to Internet Retailer, Indonesia tops the world in e-commerce fraud, with close to 35% of all transactions from Indonesia discovered to be probable fraud. Others are Venezuela, South Africa etc.
Furthermore, the countries that have made a name in e-commerce fraud are mostly those with inadequate internet access and low economic situations.
For your commercial benefit, We’ve summarized and identified such countries to be:
- South Africa
- Less recognition and adoption of e-commerce:
Generally, most economically advanced countries can afford to spend more on luxury or non-essential products since their basic needs have been taken care of.
Whereas, in less developed countries, social network penetration might be low —this however implies that you might get less people with your advertising.
- Dropshipping worldwide creates payment gateway challenges:
Payment gateways and options might push you into order processing challenges. For instance, you may pay for advertising in countries where the sale is ultimately not made as a result of problematic payment gateways, or even worse, where fraud is high, as the case may be.
Therefore, there is need to test different countries, by all means, but don’t forget to separate your campaigns per country so that you can simply analyze or categorize your results. Particularly, unusual cart abandonment in a specific country can be an obvious indicator of a failed payment gateway.
By now, you should be able to decide if it’s a welcome development for your brand to do worldwide Dropshipping. However, as the case may be, rather than selecting worldwide dropshipping, you may wish to target just the 5 popular countries previously mentioned.