Is Secure Dropshipping Still Viable? 7 Things to Consider Before Starting
To the uninitiated, dropshipping is a retail model where you sell products online without holding inventory, and your supplier ships orders directly to your customers. Think of it as being a middleman in a truly global market.
Dropshipping isn’t as big a part of the business zeitgeist as it was a decade ago, but it is, nevertheless, still a growing industry. Indeed, the value of the global dropshipping industry is projected to hit $1.5 trillion USD by 2030, about three times its current value today. But while dropshipping as a whole continues to increase in value, it’s become harder for newbies to derive meaningful income from it, especially if they don’t do their homework or use outdated strategies.
Still, if you plan carefully and pick the right tools, you can turn dropshipping into a viable side gig or even a serious source of regular income. If you’re in the Philippines and considering a dropshipping business, consider these factors before you “drop” in.
1. Match Payment Methods with Local Buyer Habits
If you’re targeting the Philippine market, you need to consider how most people pay for online goods and services. Digital wallets like Maya and GCash are far more popular than bank transfers or credit cards, and many people still prefer physical cash, often through methods like cash-on-delivery. From the outset, you want to make sure that your system is fully capable of facilitating as many of these preferences as possible, preferably through just one payment technology provider.
2. Use a Shopify-friendly Payment Gateway
Shopify is, by far, one of the most popular platforms for dropshippers, particularly those who value setup speed and simplicity. However, Shopify’s defaults prioritize credit cards and other payments that aren’t available in the Philippines, so you’ll want to avoid limiting your market by getting a gateway that addresses local payments. If you’re setting up a Shopify site, you’ll need to integrate a Shopify payment gateway Philippines-based buyers can use, for the reasons we outlined in the first point.
3. Think About Store Setup and Integration Costs
Yes, dropshipping lets you avoid upfront inventory costs, but you still need to invest time (or pay someone) to set up your online store correctly. Even a Shopify storefront can be quite involved, and you want to make sure your payment technology providers provide whatever integration you need, preferably with just a simple plug-in.
That said, you shouldn’t assume everything will be“set and forget.” You’ll still need to configure shipping, manage supplier relationships, and set realistic shipping times. Most importantly, you’ll want to maintain a certain level of quality control, which can be a challenge if fulfillment is from abroad.
4. Account for Shipping Time, Fulfilment Reliability, and Customer Expectations
Because you’re often dependent on suppliers to send products directly to customers, delivery times can be longer compared to local retail or online stores that already have your products on hand. Regardless, long waits can harm customer experience and damage your store’s reputation, which is why you’ll need to communicate your lead times effectively. If possible, you should also prioritize suppliers with solid track records, especially if you’re targeting Filipino customers who have come to expect fast delivery.
5. Be Ready for Customer-Service Demands
As a dropshipper, you must function as a liaison between suppliers and customers. If there’s a problem with the product or delivery, most of your customers will come to you, rather than the supplier. That means you must be prepared to handle inquiries, returns, refunds, complaints, as well as any communications from the supplier’s end.
Also, because you’re not handling inventory directly, you’ll need strong coordination with suppliers; it may be a good idea to have a few on-hand samples as well, so you can better visualize the issues customers may be facing. And if you accept digital payments, ensure you keep track of all payment and fulfillment processes to avoid disputes or poor reviews.
6. Don’t Forget Regulatory and Cross-border Payment Limitations
If you plan to sell to overseas buyers, you’ll also need to think about potential foreign-currency restrictions and possibly fees that may apply if your business tries to process payments from foreign customers. If overseas dropshipping adds more complexity than it’s worth, consider holding off until you’ve got a hang of local shipments.
7. Always Aim to Build Trust
Because your customers can’t actually see their item until delivery, trust plays a crucial role in converting sales and gaining a loyal following. For that reason, all the typical online retail best practices for cultivating consumer trust directly apply. Having consistently clear descriptions, accurate photos, realistic delivery time estimates, and transparent shipping costs will be essential in making dropshipping viable over the long term.
The Bottom Line for New Dropshipping Entrepreneurs
Dropshipping can still be a viable business model, especially in the Philippines’ growing cashless economy, but only if you approach it with careful planning. New dropshippers are often surprised at just how much work is involved, especially when they come in thinking that it’s just going to be child’s play. In fact, it demands more out of entrepreneurs than ever before. If you’re prepared to handle the challenges, then dropshipping might be the business model for you.
