How to Scale Your Dropshipping Business: Growth Tips For 2024

You’ve built the foundation of your dropshipping store, navigating through the intricacies of product selection, building brand identity, order fulfilment, and other aspects of running an online store. By now, you may be thinking about not just running an online store but creating a profitable dropshipping business and taking steps to scale your dropshipping business. 

Scaling your business is different from simply growing your business. Growth may involve increasing business revenue, the number of employees or the number of products you sell. While growth can be exciting, not all businesses are ready for it. Without proper foresight, uncontrolled growth can be a blow to your finances and result in poor outcomes for you and your customers. It takes a lot of resources to maintain growth. Scaling, on the other hand, allows you to maximize revenue without necessarily increasing your costs. It is about getting the most out of your store at any level, so you can be prepared for long-term growth. By learning how to scale dropshipping, you’ll be able to sustain long-term growth and prevent collapse. 

Dropshipzone makes it easy to start and scale your ecommerce business using the dropshipping business model. We’ve compiled top business growth tips for 2024 to help you scale and maximize revenue for your dropshipping business.

Develop supplier relationships 

Reliable suppliers are the key to running a profitable business. They are in charge of product sourcing, quality control, managing inventory, and order fulfilment. This is why supplier relationship management (SRM) is so important. SRM involves building a solid foundation with suppliers to ensure optimal productivity and minimum risk along the supply chain. It involves not only choosing the right suppliers but also ensuring they have clear policies and procedures, negotiating contracts, ensuring product quality and continuously improving communication.

Sometimes, you may need to contact suppliers about misplaced orders, returns, or other issues. Clear communication is a must in these situations so you can understand the problem and work together to find a solution. But improved supplier relationships have more benefits than just problem-solving. By making an effort to understand your supplier’s business model, you’ll develop a deeper understanding of their capabilities. By opening up to your supplier in kind, they may be able to offer customised solutions to your pain points. Open communication leads to joint improvements as you support each other and share industry information. You may even negotiate bulk discounts for future purchases. Not only will SRM save you time and money, but these benefits will continue to give you and your supplier a competitive edge for long-term success. Best of all, in a time when supply chains are facing massive disruptions and consumers are warier about spending, your strong supplier relationships will bolster the supply chain and keep your business running smoothly.

Investing in the brand 

Your brand is one of your most important assets, perhaps even more important than your products. Because people don’t buy products - they buy their favourite brands. So why should customers choose you? What do you have to offer that is different from other dropshipping businesses? To see significant results, you need your brand identity and presence to grow alongside your revenue.

Brands spend thousands of dollars every year cultivating the perfect brand experience, from the clear glass walls and minimalist architecture of an Apple Store to the iconic shape of the Fiji water bottle. Ecommerce presents unique challenges when it comes to marketing your brand, especially when you’re competing with thousands of similar online stores. The more you invest in your brand identity, the closer connection potential customers will have with your brand and the higher return on investment you will gain from your marketing efforts.

Understand your brand story and unique selling proposition (USP)

The first step is to clarify your brand story. Where did you start, and why is this company important to you? What challenges did you face when starting out? What is your purpose? A strong brand story makes for compelling marketing messages.

Next, define your unique value proposition (USP). There's more to your dropshipping business than just selling products. What do you bring to the table that your competitors don’t? Why should your brand be the first stop for your target market? Once you’ve identified your USP, live up to it in everything you do. Do you want to be known as a fast, convenient brand for last-minute shoppers? Develop a relationship with your shipping partners so you can offer expedited shipping. Are you a luxury brand selling high-ticket items? Make your customers feel special every step of the way with personalised email or text campaigns, custom packaging, and more. Whatever you do, be consistent with this marketing. Consistency across multiple channels can be a challenge, but it will solidify your brand in customer's minds. 

Conduct market research

Get to know your audience so you can better understand their needs, wants and goals. One of the best ways to do this is through market research. With the right data, market research can show you the latest consumer trends, the right platforms to market on, and ideal influencer marketing collaborators. While in the past businesses have relied on third-party data, increased privacy laws have stalled many third-party data collectors and limited their accuracy. Businesses that can leverage first-party data (data collected directly from customers, social media followers or subscribers through polls, surveys, demographic information or feedback) are more likely to succeed and deliver a humanised brand experience. There is a wide range of tools you can use to collect this data, from specialised Shopify apps to free and paid online tools. 

Elevating customer service 

Customer service is a key difference between you and your competitors, which is why it is important to understand how and why customers are coming to your store, where from, and what they need. It is one of the easiest ways to retain customers, but also the easiest way to lose them. 

According to customer service research from CPM Australia:

• 89 per cent of consumers stopped purchasing from at least one company after a bad customer service experience in 2022. 

• 34 per cent of customers expect a first-contact resolution and may stop purchasing from a company without it.

• Only 47 per cent of customers are willing to give companies a second chance after a poor experience.

• 80 per cent of consumers share their customer experience with others. In 2022, 84 per cent of customers shared a negative experience, while only 74 per cent shared a positive one.

• Consistency across the customer journey and quality interactions with real people were of key importance to the customers surveyed.

Customer service does not simply start at the checkout. You need to maintain customer satisfaction throughout the sales funnel. Your customer might see a social media post and want an easy way to buy your product on the platform. They might see your website and expect a clear checkout process. After-sales service is also important, as you can retarget customers days, weeks and even months after their first purchase. You develop a loyal customer base by making your audience feel cared for.

Listen to feedback

Customers value businesses that show genuine concern for their opinions and feedback. One-third of customers believe that companies place no, low or moderate value on customer service, despite companies investing in customer experience more than ever. In order for your customers to feel heard, you have to listen to feedback. There are many ways you can collect customer feedback:

• Social media engagement is critical. Customers will engage with your business through comments, reviews or mentions - be there to respond to them.

• Check the top 4 review sites. Google hosts 73 per cent of all online reviews for businesses, followed by Yelp (6 per cent), Facebook (3 per cent) and Tripadvisor (3 per cent).

• Visit specialised online forums such as Reddit, Whirlpool or Choice to see what customers are saying about your products or industry.

• Ask your customers for feedback. Add a review section on your site and encourage users to comment their thoughts. 

• Send out customer surveys and polls. You could do this privately via email, or publicly via social media. 

You might even offer a gift or discount in exchange for feedback. Just don’t tie a reward to a positive review - it is illegal to create or arrange for a false or misleading review. 

Respond quickly to enquiries

51.7 per cent of consumers expect businesses to respond to negative reviews within seven days of posting, and 48 per cent expect a response within 24 hours. Responsive businesses are more likely to have a positive reputation, with 54 per cent of customers having a favourable view of brands that respond to questions or complaints. If you don’t have a dedicated customer support team, you’re missing out on valuable data and the chance to remedy a poor experience.

Clarify your FAQs and policies

Customers want answers to their questions to be quick, clear and concise. For a smooth customer service experience, you need to maintain an FAQ page and outline your policies and procedures clearly. An FAQ page is ideal for customers because it allows you to answer the most common questions customers will have (e.g. how long are your shipping times?) as well as specifics regarding your products (e.g. how do I clean your product?). If a question repeatedly shows up in customer enquiries, you will want it in your FAQs. Your policies and procedures are to clarify certain situations for customers, but also to ensure consistency across your company. Clear policies for outlining acceptable levels of service, returns and refunds and warranties will keep everyone, including customers, on the same page.

Automation & Marketing

With omnichannel retail playing a key factor in many marketing strategies, it’s becoming harder for marketers to reach every customer effectively. A lot of time and effort goes into social media marketing campaigns, from the initial idea to testing. This is why many companies are turning to automation and AI-powered marketing solutions.

Automation

There are a lot of small processes that go into making a business successful, from data organisation to order fulfillment. Automation is valuable because it can help you delegate these small tasks, allowing for scalable growth at a lower cost. Many online businesses use multiple logistics systems to keep everything in order - automation software can ensure these systems run smoothly and/or integrate them into a single service. The time and capital saved from automation can then be reinvested into scaling your online business. It is almost impossible for businesses to scale without some level of automation.

When you’re starting with automation, you’ll want to start with simple tasks. The more complex the task or the more data you require, the higher the risk of mistakes. Simple tasks are:

• Repetitive.

• Low-value.

• Time consuming.

• Essential.

Suitable tasks for automation may include financial, legal and HR processes, internal communications, project management, or even performance management and upskilling. You can also automate your social media presence by pre-scheduling posts.

If you don’t have a background in IT, you may find comprehensive tools like Sofortig, Zapier or Mailchimp worth your investment. If you have a dedicated IT team or a similar background, you might use customised APIs to automate and integrate processes between you and other platforms. However you automate your store, ensure that the processes you’ve automated are simple, necessary, and actually save you time: don't invest heavily in expensive automation software if you have to spend more time training your employees to use it than you saved doing the work yourself.

AI Marketing

AI marketing is when marketers use AI to produce optimised content. This is usually done by using AI to collect and process data, allowing the software to target specific market segments, automate certain processes, and generate content.

As statistics have shown, consumers are wary about AI-generated content. However, the results of using AI marketing paint a different picture. In reality, AI-generated content marketing has a high acceptance rate with 73 per cent of consumers trusting AI-written content. Businesses trust AI too, with 58 per cent of marketers saying increased performance is a top benefit of using generative AI, and 30 per cent of global IT professionals report employees saving time with AI and automation tools. This means your competitors may already be using AI marketing strategies unless they are part of the 41.9 per cent who don’t use AI due to a lack of understanding of the technology. By learning how to use AI to your advantage, you can produce results that are faster and more effective than the competition with less ad spend.

There are many different AI applications that can help you with your next marketing campaign.

AI market research

AI can help you explore shopper behaviour, examine your competitor’s performance, find products with consistent demand, and then launch targeted campaigns based on data. Tools like Unbounce allow you to automatically direct customers to customised landing pages based on demographic or other customer data. Mailchimp not only allows you to automate email campaigns and optimise them with analytics,  but also refine campaigns with market segmentation. You can import customer behavioural data from other integrations to fuel your campaigns, and estimate customer’s lifetime value and likelihood of repeat purchases. These are just a few tools available that will help you collect valuable first-party data. 

AI marketing automation

While not all automation is powered by AI, it does provide certain benefits. It is especially useful for email marketing, but targeted emails are just a fraction of what AI can do. ReConvert is a Shopify app that uses AI to automatically recommend products, generate one-click purchase pages, upsell and cross-sell based on predicted customer preferences. Buffer is a social media management tool that can help you repost, refresh or generate new posts, suggest the right time to post, and view all unanswered social media comments and customer inquiries (filtered by tone and importance) in a single dashboard. Google Ads even uses Smart Bidding to automate your ad spending so you will always target trending keywords, but never above your budget.

AI content generation

Apps such as Jasper, ChatGPT and Copy.ai are all examples of AI generative content tools. Simply input your prompt and your chosen app will generate any content you like, whether you need a simple product description or a 10,000-word blog. However, human oversight is still essential to ensure the accuracy of AI-generated content. AI algorithms do not intuitively understand human behaviour, but they can reflect human biases. Their data pool is also limited by humans - for example, ChatGPT has limited knowledge of events that happened after 2021. Finally, not all AI tools possess a plagiarism checker, so you may end up with duplicate content. At this stage, generative AI tools are best used to brainstorm, outline or optimise content under supervision. 

AI-powered SEO

Are your product pages fully optimised for website visitors? Are you appearing on search engines? If you’re not sure, you might need an SEO tool. PageSpeed Insights, Hotjar and Google Analytics are all AI tools that can be used to improve your SEO. These tools will measure your ecommerce website performance, see where your consumers are looking and clicking, and plan optimised content with trending keywords. With a high-performing site, customers are more likely to stay on your website, shop from you, and come back for future purchases.

Building 1-to-1 relationships with customers 

We’ve already explored how you can connect with customers through market research, consistent customer service and automation. Now, we’re going to explore how to build customer loyalty one-to-one.

Direct contact

Direct contact is the most effective way to build a relationship with customers. While you should automate simple tasks like answering FAQs, it’s always better to follow up in person for complicated queries. Outside of direct enquiries, customers love seeing businesses having fun on socials. It’s no surprise that Wendy’s social media accounts are still going strong in 2024, with its reputation for roasting fellow businesses on social media. The strategy isn’t all for the show: research shows that X (formerly known as Twitter) and Facebook users consistently value the brand higher than the general US population of adults. Fans of the brand will often ask for tailored roasts, and Wendy’s happily obliges. Of course, sassy is not the only communication style you can embrace. National Geographic’s @natgeo Instagram account has 283M followers, making it one of the most popular brand social media accounts. They give their photographers a level of creative control, including caption writing, that allows them to post breathtaking photos with unique perspectives. They also use their platform to raise awareness of various causes, creating even more buzz and showing they care about the same things consumers do.

User-generated content

UGC is brand-specific content that is created and published by customers, brand loyalists or even employees. UGC can come in many forms, from images to full testimonials. UGC is great for marketing because it shows an authentic side of the brand and acts as a kind of word-of-mouth marketing. It gives customers a unique opportunity to be a part of their favourite brand and participate in their community. It deepens customer relations and fosters brand loyalty. You can use UGC in specific marketing campaigns or encourage organic posting with branded hashtags, dedicated events/competitions, or a simple landing page. Ecommerce platforms such as Etsy and Shein encourage users to post pictures of their products in reviews, while Apple’s #shotoniphone campaign encourages users to show off their favourite pictures shot on their brand new iPhones.

Give generously

Everyone loves a gift, and so do customers. Generosity is an incredible tool in your marketing belt. But why would you give something away for free (and potentially lose money) when you could sell it? While you might not see a return on investment right away, there are several long-term benefits to being generous.

• You get to interact with customers in a way that doesn’t involve a sales pitch. This method attracts customers who may not have been interested in buying at all…but now that you’ve given them something, their interest is piqued.

• People love free things, to the point that we will spend more to get a free product or free shipping. No matter the gift, you’ll attract interest and potential leads.

• When customers know your brand gives generously and they like what you give, it establishes your brand as an expert in your field.

• When a customer takes home a branded object, you’ll be regularly in front of them. If they use it regularly, you’ll always be on their mind when they need your products or services. 

In 2020, at the height of the Covid-19 pandemic and lockdowns, Sony announced their Play At Home initiative for PlayStation consoles. Gamers could download digital copies of Journey and Uncharted: The Nathan Drake Collection for free, to keep forever. In 2021, they continued the initiative with a free extended trial of Funimation and 11 other games including Ratchet and Clank, Subnautica, and Horizon Zero Dawn: Complete Edition. Sony also pledged money towards supporting indie developers through the pandemic. Ultimately, over 60 million games were redeemed during the initiative. What did giving away 60 million games do for the company?

• It encouraged widespread engagement during a time when consumers were looking for entertainment, but not necessarily in a position to spend money.

• It encouraged players who had abandoned their PlayStations to return to their old consoles.

• Permanent digital copies of their best-selling games encouraged long-term engagement with the company, even after the lockdowns ended. 

• It made the company stand out, as no other company was offering such generous deals.

• It showed the company cares about other causes, such as indie development.

• It put PlayStation at the forefront of consumer’s minds just in time for the release of the PS5 and two of its flagship titles Ratchet and Clank: Rift Apart and Horizon Forbidden West.

Overall, the initiative improved brand recognition and helped the company maintain a thriving player base during a global health and economic crisis. 

You don’t necessarily have to give away products. A blog allows you to give away knowledge. Condense your blog posts into an ebook and send it to your most loyal readers. In the end, it's not the size of the gift that matters, but the value to your customers.

New products and store expansion 

Now that you have fully optimised your internal processes, it’s time for some new product ideas.

There are few downsides to adding new products to your ecommerce store. Expanding your product line helps keep your store relevant, especially in industries like fashion that experience seasonal trends. It improves the customer experience by offering complementary products in one place. It can increase your average order value and overall profit margins. Finally, it can attract new customers to your store.

Before expanding your product range, ask yourself if new products fit your target audience and your brand goals. If you want to be the one-stop shop for affordable kitchen gadgets, adding an expensive blender to your product range could muddle your brand messaging. A new product should align with your brand messaging, fill a gap or improve on your current offerings, and fit with your current pricing strategy. You may need to test products before fully committing them to your store.

Should your store cater to a broad customer base with a wide range of products, or sell a curated selection of niche products? Data suggests that this varies depending on customer demographics and industry. For more information, download our special report here.

With a new range of products, it’s time to expand your store. Just like brick-and-mortar stores, the best way to expand your store is to open new locations. In ecommerce, this means adopting an omnichannel retail strategy. Don’t just sell on your brand website: sell and advertise on other online marketplaces, on all social media platforms, and on your own mobile app. You may even consider developing a sister company that caters to a different audience but can be used for cross-promotion, so you can cover all marketing channels. 

How to scale a dropshipping business with Dropshipzone

Dropshipzone makes scaling easy. Whether you’re a successful dropshipping business, a supplier looking for a new market or an online retailer looking to expand your range, we provide the tools you need to start and scale. You can join Dropshipzone today for free and get instant access to thousands of quality SKUs that you can easily add and remove from your store as required. Our in-house app, Sofortig, seamlessly syncs to any Shopify store, or you can use our open APIs. With no minimum order quantities, no inventory costs, low overhead costs and no hidden fees, Dropshipzone is the low-risk scaling solution you need for successful business growth.