The product selection is key to dropshipping success, lots of dropshippers are seeking for trendy products with high profit margin to make profits on dropshipping, a few dropshippers product profit margin is upto 78% but hardly to make profit in the end, why? Similar to other business dropshipping also has complete supply chain,  thus optimize the product cost, order fulfillment cost, shipping cost, refund aftersale, marketing and business cost is very important. The following are the tips to help you increase profits for dropshipping.

How to select trendy products with 50%+ profits for dropshipping

There are many product selection tools and platforms available for you to select trendy products,

Product selection platforms: Amazon Aliexpress 1688 Taobao Tiktok

Product selelction tools: google trends Jungle Scout、AMZScout、CamelCamelCamel、Sorftime, dropship center, findniche

Dropshipping plugins: Dsers Doba

Some tools are free while some are paid, you can pick some to help you select products for dropshipping, or you can search some tools more suitable to your dropshipping business, we will introduce the dropshipping product selection tools and methods in the future. There are mainly 3 rules for shopify dropshipping product selection:

Determine market demand: First, understand current consumer needs and preferences through market research and look for product categories with potential.

Select high value-added products: Choose products with high added value, such as handmade artworks or uniquely designed goods. These products tend to have higher profit margins.

Analyze competition: Evaluate the degree of competition for the selected products and choose products with less market competition but stable demand.

Once you select the high value niche products for dropshipping, it is very important to find quality dropshipping supplier on Aliexpress or 1688, as both the product cost and refund aftersale cost will affect the profit margin, source dropshipping suppliers with good product quality, reasonable prices, stable supply and thoughtful service to cooperate with could help you reduce refund aftersale rates.

Evaluate product quality and cost

The quality of drop shipping products is directly related to consumer satisfaction and reputation, so it is necessary to ensure that the selected products are of good quality. Thus when you select the product you will need to estimate product costs, shipping costs, VAT and other expenses in detail to ensure that all costs are covered when setting prices and achieve a profit margin of more than 50%.

Make proper pricing strategy

After evaluating the product’s cost, market demand, and competition, set a reasonable price to achieve a profit margin of more than 50%. You will also need to take the daily promotion with 10% to 15% discount and orders exceed $100 with free shipping service, in addition, the holiday promotion, bundle sale, up sell and cross sell discount should also take into consideration.

Improve sales conversion rate

From the above photo stats you can see the ads cost is the biggest cost for dropshipping, in order to reduce the total ad cost, improve sales conversion rates and word of mouse marketing in the store is very important for dropshipping.  You can optimize the the following 2 aspects:

Optimize store decoration and product descriptions: Focus on store decoration, product descriptions and keyword optimization to improve product attractiveness and credibility.

Call to Action: optimize the call to action guide to speed up clients order time.

Provide high-quality after-sales service: Respond to customer questions and complaints in a timely manner to improve customer satisfaction and loyalty.

How to reduce product and shipping cost dropshipping from China 1688 Taobao

When you dropshipping from China 1688 Taobao there are usually 4 kinds of cost, product cost, domestic shipping cost(some seller offers free shipping while some charges), service fee and international shipping cost(EU countries has VAT). How to dropship from 1688 Taobao cheaper than Aliexpress? There are few tips for you as a reference:

1. Select light weight volume goods with high value. Since the weight and volume directly affect the international shipping cost, when you select goods for dropshipping, weight volume under 1kg should be the mostly suitable goods for dropshipping;

2. Source reliable dropshipping supplier on 1688 Taobao. If you search product on 1688 you will find the same product with multiple supplier and the price range very wide, how to filter reliable dropshipping supplier on 1688? We usually source based on product sales, price, repeat purchasing rates, store credits, reviews etc. Then select top 2 to 3 supplier to place sample orders, compare the material, quality then select the best one;

3. Bulky wholesale best seller products. Once you tested best seller products on your store, you can bulky wholesale from supplier based on the daily sales, order 3 to 5 days sales volume once to get 10% to 20% discount price, once you lock down the stock inventory, it is also for faster shipping for new coming orders and better user experience;

4. Apply bundle sale, cross-sell and upsell. That’s very easy to understand the marketing strategy could help you increase profit margin, for example, you dropship one T shirts from China to USA cost 10 usd, if you bundle sell 3 different colors in one pack, the total cost might slightly higher than 20 usd totally as the product and shipping cost reduced.

5. Declare lower value for less VAT. When you ship goods from China via supplier or dropshipping agent, you can ask them help slighly decrease the VAT value to help you save cost for packages shipping from China to EU.

Of course, to increase the profit margin, the most important thing is to reduce the aftersale refund rates, you can take a look the blog how ShipAnt help fashion clothing dropshippers reduce aftersale refund rates: How to reduce refund rates for fashion clothing dropshipping.

With ShipAnt dropshipping service, we cannot only help you increase profit margin but also assist your store brand marketing for better user experience. Once the dropshipping became a long lasting business, I am sure 50%+ profits can be a very porfitable ecommerce business.