Increasingly popular in the eCommerce space, dropshipping businesses come with their own set of particularities and challenges.
While the technicalities of dropshipping, such as shipping and returns, can seem daunting for the uninitiated, with some good planning and policies in place it can become a very lucrative activity.
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What is Dropshipping?
Dropshipping is a fulfillment method. When a customer buys a product from your online store the order is sent to your dropshipping partner (supplier/wholesaler or manufacturer) who prepares the order and ships the items directly to your customer rather than you shipping them yourself.
In other words, the online store owner never has the actual physical products that it sells in hand.
This model is attractive for online businesses as it eliminates the need for a warehouse and inventory and allows the business owner to focus on managing the website and the company as a whole without having to think about fulfillment.
Do Dropshipping Businesses Need to Have a Shipping Policy?
You may be under the impression that a shipping policy is not required as the online store does not actually ship out the items themselves. That would be wrong.
Shipping is increasingly complex when running a dropshipping business. Most of the time, you will be dealing with multiple suppliers that each have their own policies, practices, and shipping costs.
On the other hand, having more than one supplier is a great approach to take to make sure that you are never out of stock.
What you have to keep in mind is that from the customer’s point of view – the dropshipper doesn’t exist.
The customer makes their purchase directly on an online store, the supplier simply fulfills the order, usually in unbranded packaging.
The online store’s business name is the one that will appear on the invoice, not the supplier’s.
This is why the online store is the one that needs to have a shipping policy, as it is where the customers are going to go look for one.
What to Include in a Dropshipping Shipping Policy?
Like any other eCommerce store, your shipping policy is a section on your website that contains information in regards to delivery methods, costs, and timeframes.
As discussed above, the customer who visits your website generally doesn’t know that you use a supplier to fulfill your orders, which means that your shipping policy will look like any other online store.
What you will want to do before you even start thinking about drafting a policy is reviewing your various suppliers’ shipping policies as they can vary significantly and take them all into account when writing yours.
Your shipping policy should include the following information:
Where You Deliver
You may decide to offer delivery inside your home country only, especially if the items that you sell are large and would be subject to high shipping costs.
On the other hand, if you are selling smaller items, you may wish to offer international shipping.
If you do, you will have to confirm with your suppliers that the carriers that they use can ship worldwide and determine if some countries are excluded.
You should also verify if the carriers used can ship to P.O. boxes and military addresses, which are both common exclusions.
Shipping Costs & Options
If your supplier offers different shipping options, standard/express, or a choice of carriers, for example, it would be wise to list them out in a table, along with the respective cost associated with each delivery method.
The shipping costs may vary depending on which one of your suppliers is fulfilling the order. In today’s competitive online marketplace, you may wish to set a general flat-rate for your customers and assume the difference in costs, which will likely average out at the end of the year.
Flat rate shipping is usually more attractive for online shoppers than costs that are calculated at checkout and can come as a surprise.
Customs & Duties
If you offer international shipping, don’t forget to include a statement warning your customers that the package that they will receive may be subject to their local country’s taxes and duties.
You should also indicate that those are at the sole responsibility of the customer, as it can be hard for a business to calculate or estimate those costs, which can be significant depending on the destination country.
Delivery Timeframes & Handling Time
This is especially important in the case of dropshipping businesses as a lot of them use suppliers located in Asia, AliExpress, for example.
These suppliers usually have long lead times, think a month or two sometimes from the moment the order is placed.
Your customers need to know this before they place an order, as most people are used to the extra-fast shipping times of Amazon and the likes.
Your customers may be willing to wait longer for the lower prices that you offer – this is often, after all, what differentiates a dropshipping business from a more traditional online retailer that holds inventory.
Again, since you are not in charge of fulfilling, packaging, and shipping your orders, you may wish to indicate that delays can happen and that your timeframes are estimates only.
Ask your suppliers how long it typically takes for them to fulfill and pack orders, as the handling time can differ greatly from a wholesaler to another.
Not to mention that the global freight situation can change unexpectedly from one day to another, which is something that you have to take into account when drafting your shipping policy.
Since you are not in charge of packing and shipping orders, it would be good practice to mention in your shipping policy that a delivery address cannot be modified once the order is placed or has been shipped.
An address change is something that a typical online business could potentially handle, but when you are dealing with a third-party, communication can sometimes take time and your supplier may not be willing to go the extra length, as their role is limited to fulfillment and does not involve offering customer service.
Your supplier should be able to provide you with the name of the carrier and a tracking number for each order that it ships on your behalf.
You can specify in your policy that your customers will receive a tracking number by email once the order has been shipped and include a link to the website where they can track their order to limit the number of emails that you receive related to shipping and which would be hard for you to answer.
Refunds, Returns & Exchanges
Summarize your return and refund policy in your shipping policy to make it easier for your customers to decide if they wish to shop with you or not.
This should include the basics, such as how long your customers have to request a return or a refund after receiving their order, the acceptable circumstances in which it can be requested, and how to proceed to do so.
It should also cover the return shipping costs and include an easy way for shoppers to contact your customer service team.
You should include a link to your detailed return policy for transparency. If you need help drafting a return and refund policy for your dropshipping business, check out our article on the subject.
Where to Display Your Shipping Policy?
You should create a section on your website that is dedicated to shipping and returns and it should be easy to find.
You can easily create a new page for it through your eCommerce platform and reference it in your website footer like this:
You may also want to remind your customers to have a look at it before placing an order by including a link to it on your product pages. The more transparent you are with them, the better as this will help you build a trusting relationship with them.
This is especially important in the case of dropshipping businesses as there are usually a lot of websites selling the same products as you.
Dropshipping Policy Examples and Template
For examples of shipping policies used by major e-retailers as well as a template that you can customize for your dropshipping business, click here.
Writing a Shipping Policy for Your Dropshipping Website
Drafting an adequate shipping policy when you are dropshipping all comes down to asking your potential suppliers the right questions: their handling time, processes, the carriers that they use, where in the world they can deliver to and the costs, the typical delivery times and how customers can track their orders.
You should aim to make your potential customers’ decisional process easier and encourage them to buy from your website rather than from a competitor’s. This can be done by being transparent with them in regard to your shipping practices.