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How to Find More Winning Products for Dropshipping - 3 Common Reasons Why Many Fail to Scale

Almost every experienced dropshipper is aware of the importance of product research and testing because they directly affect the chances of discovering winning products for your ecommerce store. That is why many dedicate significant resources to this aspect. However, great investment does not always bring great returns due to various obstacles. In this blog post, we will analyse three challenges that many dropshippers encounter in their journey to find winning products and what you can do to overcome them and maximise your growth potential.

1. Low Unique Product Rate

As mentioned above, many store owners invest in a strong product research team. However, they are often trapped in ‘the more the better’ fallacy. In other words, hiring more staff for product research does not always help them produce better results. In particular, as the team becomes more ‘crowded’, it is more likely that team members find and research the same products. This means even though the team manages to meet their goals (e.g. 10 products a day), only a small portion of them are unique products. Essentially, not only is this an opportunity cost in testing other types of products and a waste of your resources, but it also hinders you from finding more winning products.

With that being said, we will propose a simple solution for your business, which involves two components - dividing and unifying.

  • ‘Dividing’ means splitting the entire product research team into smaller groups, who focus on specific types of goods, e.g. personal care items, consumer electronics, and apparel. This makes the process more efficient with lower product duplication.

  • ‘Unifying’ refers to the act of compiling all the research outcomes and updates into a centralised system, which makes the process of monitoring progress and cross-reference easier.

For a more in-depth guide, you can also refer to another blog post of ours. Nevertheless, you should be aware that product duplication will always be an issue no matter what and how much you try, and it is only problematic when the duplication rate is high.

2. Low Quality Product Research

Setting and meeting KPIs is essential in running any business because it allows managers to have a better understanding about their teams’ progress. This requires constant measuring and monitoring of data. For most dropshipping stores, the most important KPIs include the numbers of products that need to be researched, approved, launched, and/or tested. However, having those figures in place without adopting a system to keep track of them often leads to lower overall performance. For instance, in order to meet the quantitative goals, many lower the product research criteria. As a result, even if the products are approved for launching, it is likely that they would not attract many customers. Not only does this decrease your chances of discovering new winning products but it takes away the resources that you could have utilised on more fruitful activities.

In short, you should not compromise the quality of research just to meet the quota for research quantity. Therefore, you should have a clear guideline and list of criteria that needs to be met before a product passes initial phases of approval. You should also emphasise to your team that the number of criteria should not be lowered without approval from supervisors. Moreover, one person in the team, preferably the leader, should be tasked to vet the list of researched products at the end of the day, or the week depending on the pace of your business. In particular, he/she needs to remove any duplicate products and ensure research quality in case they are overlooked by the researchers.

3. Low Quality Product Sourcing

Now you are probably convinced that maintaining research standards for both quantity and quality is critical. However, solely focusing on them would not guarantee you great success. In addition, you should aim to source products of high quality. We all know that no one likes low quality goods because of their low functionality and short useful life. Furthermore, it often causes customers to write bad reviews on your store website or page, thus deterring new customers from purchasing these products and undermining your credibility and reputation.

This issue often arises from the fact that dropshippers do not have a good understanding about their suppliers and the local market where they source goods. Moreover, their manufacturers are often based in China, and if dropshippers don’t speak the local language (e.g. Mandarin, Cantonese), many things are lost in translation. If this is something that you are struggling with, you are recommended to work with a dropshipping agent. Firstly, a trustworthy agent has extensive and long-term relationships with a large pool of factories. This ensures that they can obtain attractive deals for you in terms of pricing and quality. Moreover, they have an unlimited product catalogue, which means they can source almost any item for you. Secondly, they also assist you with other back-end matters such as inventory management and order fulfillment, enabling you to focus on other aspects such as building a stronger customer base.

With over 30 years of logistics experience, Xianchao Logistics began to branch out to serve the dropshipping industry in 2015. With our experience in logistics fulfilment and close relationships with suppliers, our company has risen to help different dropshippers grow their businesses over these years. We believe that our company’s success and growth will only come with helping our clients grow. For instance, as a reliable dropshipping agent, we believe it is our responsibility to safeguard your business and your interests. Therefore, under no circumstances do we ever disclose your winning products to others.

Do you have a dropshipping business to grow? Discuss with us and let’s get started ASAP!

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