Selling other people’s home goods without worrying about storage or shipping while receiving a cut of the profits? If that sounds too good to be true, it’s because it is — dropshipping is less of a get-rich-quick scheme, and more of a get-rich-after-a-long-time-and-with-lots-of-hard-work scheme.
That’s not to say dropshipping is a bad idea — it just takes more effort and planning than most people think. This does double if you’re selling home goods like artwork, pillows, lamps, furniture, bedding, curtains, or general home decor. Based on a 2015 report, home goods were the second-fastest growing industry in ecommerce.
So, we wanted to give anyone interested a head start with a guide that covers the fundamentals. Here’s everything you need to know about dropshipping home goods.
How to Choose Your Niche
The very nature of home goods is intimate: unlike other industries based more on necessity, home goods are more about taste and personality. The best way to succeed is to home in on an ecommerce niche and cater specifically to people with the same taste and personality.
Your first step is finding which markets have an opening that you can fill. Posh, antique, handcrafted, postmodern — the styles are as diverse as the people who like them. Although you should always gravitate towards products and customers groups that you’re personally passionate about, at the end of the day your final decision should be determined by competitive research.
Check what products are trending, both in sales and in online searches. You’re looking for products with over 100,000 monthly searches for the top three keywords.
Google Trends and Google Adwords are great resources for gauging how popular certain keywords are and may help inspire you on what people are looking for but can’t find. You should also check out your competitors to see what they’re offering, and how much.
What Types of Products to Sell
Dropshipping has separate concerns than traditional ecommerce, so you have to look at your product range from a different perspective.
For starters, cheaper items — under $50 — tend to be better for dropshipping because returns aren’t as disastrous. Returns are a big expense for dropshippers, so too many returns on costly items could drive you out of business. Besides, low-cost items also sell better in general, and in a competitive market like dropshipping, every sale counts, even if you just make a few dollars.
However, you could also go in the other direction and dropship large and expensive items too cumbersome for your own storage. For home goods, this is typically mattresses and furniture, from table chairs to king-sized beds.
Because large furniture would be too costly to store and ship for all but the most successful home goods retailers, dropshipping becomes the most viable option. You can essentially have your cake and eat it too: you can offer the mattresses and furniture your shoppers, without having to worry so much about the problematic logistics.
Just keep in mind that most customers still prefer buying furniture in person (as of a 2016 report). If you choose to sell furniture online, make sure you have a market for it first.
Where to Find Suppliers
The supplier-seller relationship is vital to dropshipping. You’re essentially business partners — you share your successes and failures with each other — so make sure you’re choosing the right people before committing.
Luckily, there’s plenty of suppliers to choose from, as you can see by these lists:
- Free List of USA Drop Shipper Suppliers (Watchman Advisors)
- Alibaba Suppliers (Alibaba)
- Supplier Directory (BigCommerce)
- Best Dropshippers for Ecommerce (Ecommerce Platforms)
Make sure you reach out to a large pool of suppliers to ensure you’re getting the best deals available. Regardless of how many you choose to work with, you should contact at least 20 to get a good idea of what’s standard.
No matter which supplier you choose, don’t forget to sign a Dropshipping Agreement Contract. If your supplier is doing something illegal, this contract makes sure you won’t be held accountable.
What Platforms to Use
Where you host your ecommerce store has more to do with your niche and branding than whether or not you’re dropshipping. All other factors being equal, you can successfully run a dropshipping company anywhere, as long as it suits your niche. For example, folksy or handcrafted home goods would do well on Etsy, rare goods would face less competition on Amazon, etc.
That said, Shopify seems to be one of the most popular choices for dropshippers for two reasons. First, Shopify is designed to accommodate first-time ecommerce entrepreneurs, with an easy DIY interface to help you learn the ropes. Second, Shopify offers the best-received dropshipping apps, including favorite Oberlo. These apps make it just a little easier to work with suppliers and organize a dropshipping business.
For home goods specifically, Wayfair is an industry leader, but may not be right for everyone. More defined niches may fall outside Wayfair’s mainstream approach, and other sellers cite excessive restrictions as a reason to avoid selling there.
Additionally, Houzz seems to be gaining steam in the online home goods industry, so consider them as an alternative. As a private company, they don’t release their figures, but some estimates suggest they surpass Wayfair.
How to Handle Web Design and Branding
The look and feel of your site will largely be determined by your platform. For example, as we touched upon in our WooCommerce vs. Shopify comparison, WooCommerce has more customization options via WordPress plugins, while Shopify, with all its convenience, has a relatively limited selection of templates. Consider how much personalized web design would benefit your niche before deciding on a platform.
But no matter which platform you’re on, branding will always be an issue. The dropshipping business is inherently antagonistic to branding — after all, it’s not your logo on the product. Dropshippers everywhere have to go the extra mile to create a recognizable brand presence, relying more heavily on customer experiences such as return policies, satisfaction guarantees, and social media engagement.
How to Use Social Media
Social media serves two major functions in dropshipping. First, it provides a direct connection to your shoppers — just like in every industry — for enhanced customer relationships, hearing new ideas, better service, and damage control.
The second function is testing and validating your business ideas. Check to see what people are saying about your products on social media, noting their complaints and praises. You should also check what people are saying about potential products you’re considering offering — social media is a great tool to use in your niche and product research mentioned above.
Strategic Uses for Traditional Ecommerce
You don’t need to be a full-time dropshipper to take advantage of dropshipping. Traditional ecommerce stores can use dropshipping for four secondary benefits to complement their main business:
Testing New Products.If you’re unsure whether your existing customers will be interested in a certain product, you could try dropshipping it for a temporary period. This reduces the risk of experimenting since you don’t have to worry about buying too much stock on a product no one wants.
Testing New Locations.Likewise, you can use dropshipping to experiment with new geographic locations if you’re considering expanding your shipping range. You can test whether or not it would be worth it to open a new warehouse or fulfillment center, again with reduced risk.
Offering Products Difficult to Ship.As we mentioned above, if your store could benefit from heavy or bulky products, dropshipping lets you offer those products without losing money on storage or extra shipping fees (including taxes in certain locations).
Safeguard from Overselling.During periods of high sales like the holidays, dropshipping gives you extra protection against overselling. If you don’t have the stock to meet sales demands, you can dropship the excess. You won’t make as much money, but you’ll keep your customers satisfied.
Conclusion: Homely Goods
Because they’re so personal, home goods are more sensitive to branding and customer engagement than other categories. That connection to your shoppers is vital for reaching your niche group. Unfortunately, those areas are a weak point in dropshipping, as we mentioned above. If you’re going to successfully dropship home goods, you’ll have to go the extra mile in making your online store feel like a home.