Launching a Product - Is drop shipping part of a product launch strategy?

Hello, my name is Ian Peterman, and on today's episode we're going to be talking about how to launch a product, and I'm answering the question, is dropshipping part of a product launch strategy? Now, first I want to talk about what is dropping— dropshipping. I'll talk about what is effective, why it's effective, what to avoid, and a launch strategy. Now, first, dropshipping, you know, what is it? It's something that is purely managed. If you're a dropshipper, it means that you are buying a product from a manufacturer and they are shipping it directly. They're dropshipping it to your customer, meaning that you skip the additional part of you having another warehouse where your product, you know, you buy some from manufacturer, get it shipped to you, and then you reship it to the customer. And this kind of model works really well, or can work really well. There's a bunch of systems that you can use. There's places like AliExpress and other sites that you can actually plug into websites. So there's a lot of dropship companies out there. That are pretty easy to set up. And then there's also a larger set. So companies will also— they technically are in dropshipping, but they aren't what you think of as a dropshipping company because they are a bigger brand, they're a bigger company, and they still don't have their own warehouses. And they have someone producing the product and they have it shipping directly from them to the customer. So the idea of bringing this down to the micro level where you could set up a quick e-com website connected to a platform like AliExpress and be able to have products that's on there just sold on your website for a certain markup and they handle all the shipping and everything, that is just a simplification of what other companies have been doing for a long time. The second thing I wanna talk about is why it's effective. So the reason it's effective is you're dropping one of the steps of shipping, which shipping is always a large component of cost, especially the last part of shipping between to a customer. You can also cut down on warehouse costs. You can cut down on a few different costs. And basically you're removing a middleman, not in terms of a company, because you're actually, you would likely be holding yourself, but you are reducing an extra step. That doesn't need to be there necessarily. If it's a product that's made exclusively at a manufacturer, they're able to QC everything, manage everything for you. They're able to, you know, produce it, everything kind of in-house on their own. And maybe you're branding a product. So this would apply if you're ordering, you know, something like somebody else is ordering, say mug, coffee mug, for example. And you are getting yours with your logo, but they produce the same mug and it's used by many different people, you're using a dropshipping model ideally because they're already producing the, the product. They're producing it and you're making a minor customization. So in minor customization products, dropshipping is a great strategy in order to launch a product because it saves you time, it saves you setting up additional warehousing, saves an additional step. And depending on where you're shipping in the world, if the manufacturer is in the market you're actually selling to, it'll actually reduce the actual shipping cost for your end customer. Or if you're eating that cost, it'll save you that cost and it'll be a little bit cheaper. So companies also do that model when they, you know, even if they own their own manufacturers, but sometimes they'll partner with different manufacturers to manufacture a product inside of a specific country. That way it's produced locally and can be shipped locally, saving carbon emissions, saving shipping costs, things like that. So it can be a really effective strategy at reducing some of the costs, and you can sometimes be quicker to market. So if you do have a product that is more a customization on a standard product, and even if it's You know, say you have a main product that is really custom. It's your main product. You put a lot of design into it. It is, you know, potentially patented and all that stuff is what you think of as a real— this is our product. And then maybe you have secondary products that are attachments or accessories or things like that that go with it, but don't— you don't necessarily sell. Maybe you sell these accessories separately. People can purchase them. Separately rather than bundled together, then working with a manufacturer that can dropship is gonna be a really effective way to help reduce the development time, because instead of trying to set up all the things to manufacture it in-house or to produce it, ship it to a warehouse, repackage it, all that stuff, you can work with someone to do a dropship, customized dropship, then it allows you to launch your main product and a series of little products, which I've talked about in terms of creating a product line or product family that can help broaden your initial launch quickly and effectively. Third thing I wanna talk about is what to avoid. Now, of course, this has come up when I talk with companies about launching and what products they should dropship. There's a lot of really cheap products out there for dropshipping. It's part of why it's done. It can be really effective if you want really cheap products. It's something you've got to be careful of, and you want to avoid working with a manufacturer that is, you know, doesn't produce products very often, hasn't been around very long, doesn't have a track record. You want to avoid any dropship company, any manufacturer that says they can do that, that doesn't have the right quality control. isn't able to give you samples. So you would want to vet them in the same way that you would any other manufacturer. But in addition to that, you need to vet their process for actually shipping out. So you want to make sure that if you have your website and it says it ships right away and it ships on certain speeds, you know, whether it's second day air or ground or whatever that's going to look like, you want to make sure that the dropshipping company, who's actually doing the shipping, that they're able to actually meet those requirements and ship quickly. One of the things that a lot of companies do, or a lot of people starting dropshipping companies, is they'll use, you know, a cheaper manufacturing location. So they'll, you know, for example, they'll supply, get their product made, and dropship from China even though they're US-based. And sometimes there's that shipping difference and that shipping time. And so you want to be aware of What does the dropshipping company do? What kind of shipping do they offer? And make sure that you can align it with your brand where you're actually selling it, because you're not going to have that buffer of ordering it from, say, China, shipping it to the US, storing it, and being able to ship things very quickly, right? You're not going to be able to ship it, uh, next day inside the United States. You're going to be paying a lot more because you're shipping it from a different country That's if you're marketing in the US. So you wanna just be aware of that. You wanna avoid things like that if it's gonna impact your brand and if it's not something that you are willing to share and say, oh, this shipping's gonna take a week. If that's an immediate turnoff for a customer, then you wanna be aware of where the company is based and how they're shipping. Fourth, launch strategy. So when working with dropshipping, you want to go through the same process as you would with manufacturing. You want to make sure you get samples, you want to test their shipping. Ideally, you want to make sure, especially if they're using non-standard shipping methods, so if they're shipping from a foreign country, you want to make sure that the product can arrive on time. So having a couple test locations around the market that you're using Making sure that it arrives, checking quality of the packaging, what does delivery look like, making sure it looks like it comes from you, 'cause it's part of the point is it is, the dropshipper is shipping on your behalf. So you wanna make sure that that packaging and the experience matches your brand and conveys that it's your product rather than, oh, it looks like they just shipped some other person's product to me. So you want, and part of your launch strategy, to figure out, What do you need? Is there— what needs to be set up? The nice part is typically it's very little setup because they're already producing a product or a similar product to yours, and you're just basically facilitating a purchase between your market and the people you're advertising to and your customers and a product that already exists at least, you know, 80%, say, and you're modifying only a small amount. And so You want to— you'll be able to do a very short launch. It's usually something that when we're launching, if I'm developing a product and say we have secondary products that use this system, then we just do a very quick— we maybe in the last month or 2 spool up some dropshipping, and then they usually match up, you know, whatever long we've taken to develop the product. We only need a couple months to actually spool up dropshipping and make sure it's all vetted and everything's going to work out well. So hopefully this gives you some ideas on how dropshipping is used and can be used as part of a product launch strategy. It's very effective for certain products, especially accessories, things like that that tie into your first product and can make it so that when you launch, you're not just launching one product, you're launching a product with some accessories or a product with some secondary products, and it helps give you a little bit broader— it fills out your your e-commerce website a little bit more. Always looks a little weird when you just have one product, so it can be a really smart way to add products to your product line without incurring that higher development cost that your main, you know, show-off product— that's your main hero product, it's what you want, it's the problem solver— you want to be able to flush that— flush out that website and fill in the different products so you have a little bit more than just one. So that can be a great strategy for achieving that. Hey, thanks for watching. We really appreciate our viewers. And if you haven't subscribed yet, please do subscribe to our channel so you can get more great videos like this in your feed and like the video. If you want to learn more about the Peterman Design Firm, please check us out on our website, petermanfirm.com. You'll find a link in the information in the description. And of course, we're on all social media as well, so check us out there. All right, thank you.