Transitioning from Dropshipping to a Branded Store

Dropshipping is a retail fulfillment method where a store does not keep an inventory of the products it sells. Instead, the store accepts an order for a product from a customer and purchases the product from a third-party manufacturer who ships it to the customer directly. In this retail model, the dropshipper does not handle the product at all.

While it is a good retail model for businesses that do not have a lot of capital to keep an inventory of the products, these businesses main opt to become a branded store once it has enough revenue to start one. A branded store allows the business to control a lot of aspects of their brand, including the price, quality, and margin.

For dropshippers aiming to transition to a branded store, they need to follow a process so that they can start offering products under their brand.

Develop the Product

The first thing a business should do is to develop the product. This means it should research to see if the product the business wants to sell has a market. It should also understand its target market and its buying habits. This is particularly true these days since the market has changed due to the pandemic.

The business should also perform a competitive analysis to check on the potential competitors in the market and how they promote their products. This analysis also gives the business an idea of how the market will respond to the entry of a new player. It should also check the expectations of the market for the new product taking into account that it has yet to prove itself.

Additionally, the business should also work on the packaging of the product. It should check if the market will accept it. This is crucial since market acceptance plays a major factor in the success of the business.

Look for Manufacturers

Once the business has a product in mind and knows how it will perform in the market, it should start looking for potential manufacturers of the product. At this point, the supplier may be a locally-based manufacturer or an internationally-based one.

The business should weigh the advantages and disadvantages of a domestic or overseas manufacturer. The product also plays a factor since the business may want to get a local manufacturer for a private-label skincare product. A local manufacturer ensures the product is of high quality and meets the standards set by the government.

On the other hand, the business may look for an overseas manufacturer for other products, such as electronics since the cost of manufacturing these products is lower but the quality is still good. These manufacturers typically have an idea about the standard set by the US government for these products.

man looking at plans

Create a Business Plan

The business plan will require huge capital since the business needs to keep an inventory of the products it sells. In this case, it can use the business plan to source out the funds it needs to start the business. The business can check for resources available at the U.S. Small Business Administration. The agency also has funding sources available that the business can tap.

Determine the Distribution Channel

At this point, the business can now work on the distribution channels and how it can deliver the products to its customers. One of the main channels the business can use is its website. Since most of the consumers are online, the business should also go online to connect with its market.

It can also set up an account with online marketplaces to facilitate the promotion and sales of the product. They can take advantage of the fulfillment network of Amazon by signing up for the Fulfillment by Amazon service of the online retail giant.

Build the Brand

The last part of the process in transitioning from a dropshipping model to a branded business is building the brand. The business will have to work hard in increasing its online presence and promoting its product to allow it to compete with other products that have been in the market long before the business started.

The business can hire a digital marketing company to help in promoting the product and increasing its presence online. These companies typically employ different strategies to increase brand awareness, connect with the customers, and sell the product.

It is also important for the business to provide good after-sales services to deal with any issues its customers have with the product. At this point, the business should focus on providing a good customer experience to increase loyalty among its customers.

Transitioning from a dropshipping model to a branded business is challenging. But the benefits are worth the sacrifices the business will make during the process.

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