One of the most common questions I get asked relates to clothing being sold using the drop shipping mode of distribution. In this post I’ll explain some advantages and disadvantages of choosing clothing as your niche to get into, particularly if you are looking to work with a drop shipper.
I am able to speak from personal experience on this topic as I have personally been there and done that.
At the start of 2011 I have decided to start a small project which was to sell clothing styled and geared towards the clubbing/festival culture. While attending a large scale music festival it came to me that what people wear at these types of events is not your everyday clothing. There’s a distinctive look people try to achieve here. Shorts are baggier, singlets are a must for anyone with the slight amount of muscular definition, skirts are shorter, and tops are usually accompanied by their fair share of bling. (yes I did use the word “Bling”)
Getting the range of clothing together was no problem as there is tons of it on the market already, people just seem to feel more comfortable buying it from a dedicated “Club Clothing” store, as if the fact that they are buying it from a particular type of store validates it that they are making the right choice. This is why the concept of Niche stores works so well. It’s the same thing as shopping for a formal occasion such as a wedding or the prom. You wouldn’t feel comfortable to purchase that tuxedo from a large box everyday retailer, but you would happily hand the cash over at a specialist formal clothing store, even if the same tuxedo costs you twice as much there, and it’s actually the same item.
My site was quite basic, it was your run of the mill cheaply templated Volusion store, no Facebook, No Twitter or any other social accounts to promote or spread the news. It’s purpose was purely to satisfy my curiosity if i can actually setup and profit from a quick drop ship website. If the site proved to be successful, I would continue and actually devote more time and effort into making into a fully featured niche clothing site.
The launch of a drop shipper reliant website
At the time of launch I had around 120 products listed on my site. I have managed to hook up with 3 dropshippers who were really mainly just online sellers themselves and had access to cheap bulk lots of the items i needed, and were willing to drop ship these to my customers for a small cut of course. One of them was a manufacturer operating out of Thailand, the other two were US based but getting their product from Chinese manufacturers.
Advertising your drop ship website
The only form of advertising I ran to promote the site was Google Adwords targeted geographically. I had to really get this right as advertising city type of fashion in rural areas would have simply been a waste of money.
I have decided to dedicate a budget of $30 per day initially and targeting only New York and Chicago. I figured that by targeting the biggest cities first, Id have the best chance of capturing my target audience and if I wanted to expand, I could do it progressively as I’m settling into the business.
My first Ecommerce Results
The results of my adwords campaign were almost instant. It took no more than a couple of hours before I have booked my first online sale. It was for a pair of Camo styled long shorts, Sale price was $79.95 which included free shipping to the customer. The cost to me was $34 for the product, plus shipping $12.95 priority international mail. The profit margin was quite healthy sitting at just over 41%.
I thought this was quite impressive and was even more excited that in 24 hours I have managed to make 3 sales, bringing in a net profit of $72.91.
Over the course of the next 4 months, there were ups and downs. I have had days where the site sold 7-10 products, but I have also had 5 days in a row where there were no sales made at all. If you consider the advertising at $30 per day, those 5 days made me go backwards to the tune of $150.
Nevertheless, overall it was a viable business and it was making a profit. I still managed to clear at least $500 in net profit per month, sometimes more.
Considering I was working with a basic site with limited product this is not a bad effort and it satisfied my curiosity whether such a venture could in fact work. I can honestly say Yes, there is definitely money to be made using dropshippers selling clothing online.
End of Business – For Now
While it was my full intention on keeping the site going and expanding it to a fully featured eCommerce site, something happened that was beyond anyone’s control. A devastating flood had hit Thailand which has taken one of my main dropshippers offline. I don’t mean they had temporarily lost internet connection, their entire factory got flooded meaning they had to cease all manufacturing operations. Unfortunately they never recovered.
For about a month I have tried to run the site with my remaining 2 drop shippers however i was only running on about ⅔ of my product range, meaning I either had to look for other dropshippers to fill the gap, or source the products at wholesale and shipping them out myself as required.
As I also run a brick and mortar retail business, I really had no time for this anymore and therefore decided to close down the site. I closed the site but still felt a positive sense of achievement, as I knew that if I really wanted to, I could do this all over again, dedicate more time to it and start a large successful online store generating a healthy income.
Some Considerations and Observations
Profit Margins from Drop Shipping
The profit margin achieved selling clothing are a lot higher than what you can achieve reselling technology. I managed to sell my clothing at higher prices then people could obtain it elsewhere on the internet. I managed to achieve a higher profit margin using dropshipping, then some online and brick and mortar retailers do.
One of the main advantages of selling clothing online is that people just buy what they see and like. Its a more of a browse, find, like and purchase process, unlike with other consumer electronics where people can Google the product name, SKU and simply shop around for the best price.
Shipping and Drop Shipping
Clothing is an easy and fast product to ship. Most reliable dropshippers will dispatch the item within 24 hours of receiving the order. Postage is cheap enough and can be sent in an overnight satchel within the country and can be shipped internationally with transit times taking no more than 5 working days.
There is no real danger of damage to the items as you would find with other products such as electronics.
No Returns in this niche
Another thing that makes dropshipping clothing worthwhile is the zero return rate. There seems to be some unspoken acknowledgement form people who purchase clothing online that if they make a bad choice of colour or size, it is their own fault and not yours. On many occasions I have had repeat customers that buy the identical product again, just the next size up or down. Not once did the try to return the product and ask for a swap or a refund.
If you are exploring your online venture and are looking into the clothing niche and use dropshippers to deliver the products for you then you can rest assured there is definitely a strong enough demand for this product and quite healthy profit margins to be made. Ideally you don’t want to just run a general clothing store but rather hone in on a micro sub-niche. Specialise in men’s business attire, womens wedding dresses, fashion shoes, beach clothing, club clothing, uniforms only etc. Just don’t try to sell all at once. This way if a targeted customer finds your site and they like what they see, they have no hesitation paying whatever you ask for.
Lastly, a dropshipping business can be utilised on a global scale with absolutely no geographical boundaries. If you are in Australia you can tap into the massive US market by simply advertising your .com store in United States. On the other hand if you are in the states, you can tap into the relatively low competition market in Australia. People do it everyday with great success.
When you first start to sell online, especially dropshippers, you may feel a bit anxious about how will they work with you or more importantly, will they take care of the product delivery in a timely and professional manner. After all, your entire store’s reputation is in your suppliers hands. These days with the thousands of review sites out there, there very little room for error. Your drop ship supplier must be on the ball, be reputable and verified that they conduct their operations to the highest of expectations.
If you’re looking to find the best dropshippers on the net, I suggest that you take a look at World Wide Brands.
Alternatively, there is an option to spread your membership payments over 2 months.
Currently World Wide Brands have a great promotion saving you $30 off their lifetime membership if you pay for the whole thing up front. These promotions are very rare so if you’re ready to start sourcing from real pre-qualified wholesalers and dropshippers, act now andf claim your discount to obtain your membership for just $269.