What is branded dropshipping?
These days, most people are familiar with the concept of dropshipping. It’s a convenient business model that incurs minimal startup costs and overhead, and supports rapid scalability. In fact, dropshipping is so popular, the market is expected to reach a value of $1670.1 billion by 2023.
With traditional dropshipping, ecommerce sellers promote and sell the products produced by other companies, which can make it difficult to develop a strong, differentiated brand.
Branded dropshipping takes a slightly different approach, giving organizations more opportunities to separate themselves from their competitors.
Here’s everything you need to know about the branded dropshipping business model.
What is Branded Dropshipping? An Introduction
Dropshipping is a business model and fulfillment method in which an ecommerce store owner doesn’t produce, store, or ship any of the products they sell. Instead, they partner with an external party that makes the products, keeps them in their warehouse, and handles shipping logistics.
With dropshipping, there are very few overheads, as ecommerce companies don’t need to purchase products until an item is sold.
Branded dropshipping uses the same methodology. However, instead of selling another manufacturer’s products under their name, the business owner applies their own brand name to the goods. The dropshipping partner packages the branded products using custom packaging, and affixes labels before sending them to the end customer.
In some cases, a dropshipping supplier can even add the company’s logo to the product itself. This gives the online store more opportunities to differentiate themselves with potential customers. It’s a similar approach to private label selling.
The Pros and Cons of Branded Dropshipping
Dropshipping in general can deliver a host of benefits to any ecommerce store, from easier order fulfillment to fewer overhead and initial investment costs. Branded dropshipping can be more beneficial in some ways, as offers an opportunity for companies to enhance brand awareness, increase customer loyalty, and boost profit margins.
Pros 👍
- Brand recognition: With branded dropshipping, entrepreneurs can add their own brand identity to high-quality products, improving recognition among their target audience. This can help to increase sales opportunities and customer loyalty.
- Differentiation: Many retailers running a dropshipping store are selling the same AliExpress or mass-manufactured products as everything else. When you dropship branded products, you can set your store apart from other vendors.
- Higher profit margins: If you use the right strategies to showcase your brand values and connect with customers, dropshipping brand products can be an excellent way to increase your profits, and earn more repeat customers.
- Customer loyalty: When customers form a relationship with your business, through connections to your brand, they’re more likely to continue purchasing from you. They may even recommend your products to other customers.
Cons 👎
- More work: With branded dropshipping you need to invest more time into market research, SEO, marketing, and brand development to ensure you’re forming the right connections with your target audience. It takes effort to build a strong brand.
- Expense: Branded dropshipping make cost more than regular dropshipping, as there are often extra fees for branding white label products, accessing unique product packaging options, and affixing your logo to items with print-on-demand.
- Risk: There’s a certain level of risk with a branded dropshipping store, as if you choose the wrong products, or offer poor customer experience, you could risk damaging your reputation with existing customers, and new clients alike.
Best Practices for Branded Dropshipping
Similar to standard dropshipping, branded dropshipping can be an excellent option for beginners. However, you will need to invest the right amount of time and effort into developing your brand. Here are some quick tips to help you make the most out of your branded dropshipping strategy.
Choose the right niche
Before you start searching through private label suppliers and building your ecommerce store, you’ll need to ensure you’re choosing the right niche and target market. Having a distinct target market will ensure you can develop a brand that speaks directly to the right customers.
Explore the dropshipping market carefully, and ask yourself what’s trending in your industry, what kind of products are generating demand, and what sort of customers are buying those items.
Create user profiles so you can align your marketing and sales strategies with the customers you want to reach, and think carefully about your product collection. It might be helpful to examine your competitors during this stage, so you can find ways to differentiate yourself from other similar companies in the same landscape.
Work with the Right Partner
It’s crucial to ensure you’re choosing the right partner for your dropshipping business. Some dropshippers specialize in branded dropshipping, which means they have more resources available to enhance generic products with your brand elements.
Look for private label dropshipping suppliers who can apply your unique brand effectively to every product. Make sure you think about:
- Product options: What kind of products can your dropshipping vendor provide? Do those items fit with your brand voice, values, and identity?
- Product quality: Ensure you’re choosing high quality dropshipping products that will reflect on your company in a positive way. Check out materials and manufacturing processes.
- Customization: How many options do you have for adding your own designs and brand logos to t-shirts, and other items?
- Customer service: How will your partner assist you with supporting your customers when it comes to handling returns, refunds, and rapid delivery processes?
Make sure you check the costs associated with your branded dropshipping service too. Check the extra fees associated with labelling and packaging your products, and make sure there are no minimum order quantity requirements to worry about.
Develop and Build Your Brand
Investing in branded dropshipping means dedicating enough time to developing an effective brand. Think about how you can make your business stand out with a unique business name, brand logo, and attractive storefront. Think about what kind of ecommerce platform you’re going to use to build your brand. For instance, will you have a Shopify store, or a storefront on a marketplace like Amazon?
Your unique brand should showcase your identity with a clear set of values, a brand mission, and an instantly recognizable visual presence.
Once you have your brand image, make sure you’re showcasing it effectively. Make sure your brand stands out in the content you create for your website and marketing campaigns. Showcase your unique tone of voice, and connect with industry leaders in your promotional efforts to earn credibility.
The stronger your brand is, the more likely you’ll be to attract loyal customers. Consistently draw attention to your brand in everything you do, from your email marketing strategies, to your sales, promotions, and even blog posts.
Focus on Excellent Customer Service
Building an effective brand isn’t just about choosing a logo for your online business, or experimenting with the right fonts and colors. You also need to develop a relationship with your customers. This means ensuring you can provide excellent customer support, and great user experiences.
Whether you’re selling on Amazon, Ebay, WooCommerce, or another platform, make sure it’s easy for your customers to find the right products, and interact with your company. Use your product descriptions to give your customers all the information they need to make intelligent purchasing decisions.
Provide a step-by-step guide to your returns and refund policies on your website, so customers know what to expect. It’s also worth investing in dropshipping strategies that allow you to deliver customers to customers as quickly as possible, as this will lead to higher levels of customer satisfaction.
Focus on being responsive to customers. Answer their questions on social media, and give them easy ways to contact you if they have any issues.
Is Branded Dropshipping Right for You?
Compared to traditional dropshipping, branded dropshipping can offer a lot of distinct benefits. It gives business owners an opportunity to differentiate themselves from their competitors, increase customer loyalty, and boost profit margins.
However, developing and maintaining an effective brand takes time and work. You’ll need to commit to showcasing your brand in everything you do, building effective marketing campaigns, and offering excellent customer service. Plus, there may be a few extra upfront costs to consider.
If you’re looking for an alternative to standard dropshipping that could help you to stand out in a crowded market, and you’re willing to put in the work, branded dropshipping could be right for you.
