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Choosing how to invest in your business

As with any business, you must commit your time and money for your dropshipping business to succeed. While you can choose what to invest in each area of the business, dropshipping usually works best when you invest time into certain areas and money into others.

Examples of where to invest your time

A dropshipping business has many parts, such as products, orders, design, marketing, customer success, shipping, payments, and suppliers. For you to make good decisions as your business grows, you need to understand how each part works.

Investing your time into building the core parts yourself is a good way to make sure that you learn how your business operates. Here are some examples of good places to invest your time when you build a dropshipping business.

  • Choosing suppliers - The quality of the products, the speed of the order processing, and the packaging of the orders can be important factors for whether your customers leave good reviews, recommend your store to others, or order from your store again. If you spend time researching different suppliers, then you learn which ones to start your business with and which ones might make sense to use later on.

    For example, you might find a supplier who has excellent quality products, fast order processing, and custom packaging options, but has high minimum order quantities. To start, you might choose a supplier with no minimum order quantities, good quality products, slow order processing, and average packaging until you can meet the minimum order quantities of the other supplier.

    For more information on choosing suppliers, see Choosing suppliers.

  • Choosing products - If you invest time into learning what products to sell, then you're better able to judge the quality, set appropriate prices, and learn what other products are available for dropshipping.

    For example, let's say you sell women's dresses and list them as red, blue, green, and grey. Despite this, you receive emails asking for the specific colors of the dresses because different computer screens show slightly different hues of each color. You realize that your customers want their partners to be able to match their outfit. Because you researched your products at the beginning, you know your supplier offers other clothing options in the same material as your dresses. Being aware of the other product offerings from your supplier now lets you put matching ties, scarves, and handkerchiefs as add-on products to your dresses.

    For more information on choosing products, see Choosing products to sell.

  • Learning about your customers and market - Understanding your customer demographics and the trends in your market helps you make better marketing decisions, such as what types of discounts to offer and where to focus your marketing efforts.

    For example, you might sell men's shoes, and realize that younger men prefer certain brands while older men prefer others. If you find that younger men typically spend less money than older men on shoes, then you could offer free shipping or a percentage off for the brands that younger men prefer to increase conversion rates. You could also offer add-ons or buy one, get one half-off deals for the brands that older men prefer to increase your average order value.

  • Learning new skills - Investing your time into doing the work for your business, you learn how to run every part of a business, which can help you in all future projects. If you first try and do all the tasks yourself, then you learn what tools exist to help you, what skills might be valuable for you to hire an employee for as you grow, and get a better appreciation for what goes into each part of a business.

    For example, even if you aren't a designer, you could try and design your first website, logo, and marketing newsletter. By doing this, you learn what certain design elements are called such as hex codes, h1 headers, and unordered lists, which helps you better explain what you want to any designers that you hire later on.

Examples of where to invest your money

If you have some funds set aside to help get your business started, then you can delegate some of the work to freelancers or Shopify Experts. This can help with some parts of a dropshipping business that can require specialist knowledge or skills that can take a long time to develop.

Here are some examples of good places to invest your money when you build a dropshipping business.

  • Adding extra features to your website - The Shopify App Store has hundreds on unique apps that can add extra features to your business. If your business could benefit from an additional feature, then investing in an app could speed up the success of your business.

    For example, you might want to let your customers customize their products by adding pictures or text to their orders. Instead of investing your time in learning code and how websites talk to each other to get the data your customers give you, you could let an app add the feature to the website for you.

  • Exploring more marketing options - While there are many free marketing options, spending money on marketing campaigns lets you choose from more options to find the one that works best for your business.

    For example, Facebook Ads and Google Ads aren't free but reach a wide range of potential customers. Using these types of ads can be better for reaching your customers faster than waiting for them to find you.

  • Customizing your business - Most free or low-cost options for the various parts of your business require you to use certain templates or options. By investing money, you're able to customize your business more to help it stand out.

    For example, Shopify offers many free themes, but there are many other paid themes available on Shopify's theme store that might better suit your business.

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