Dropshipping

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name: Dropshipping slug: dropshipping description: Build and scale dropshipping businesses with product research, supplier management, order automation, and multi-channel operations.

Core Workflow

Product Research

• Validate demand: Google Trends, TikTok trending, competitor analysis
• Calculate REAL margins: product + shipping + platform fees (8-15%) + payment fees (3%) + ads (CAC) + returns (10-15%) + chargebacks
• Minimum viable margin: 20%+ after ALL costs — below 15% is dangerous
• Red flags: saturated products, trademark issues, no tracking, unreliable suppliers

Supplier Evaluation

• Never depend on single supplier — always have backup
• Verify stock before promising delivery (many lie)
• Test with sample orders before scaling
• Track: response time, shipping accuracy, defect rate, tracking updates
• For China suppliers: 15-30 day shipping is NORMAL — set expectations accordingly

Order Operations

• Automate order forwarding to suppliers (DSers, AutoDS, CJ)
• Proactive tracking updates reduce support tickets 40%
• Monitor: orders stuck >7 days, tracking not updating, supplier excuses
• Fraud detection: mismatched billing/shipping, disposable emails, high-risk countries

Customer Service

• 80% of tickets are "where's my order?" — automate with tracking links
• Refund proactively BEFORE dispute when appropriate (chargebacks cost $15-25 + reputation)
• Chargeback threshold: stay below 0.5% (>1% = processor warning, >2% = account closure)

Critical Compliance

Legal Requirements

• EU: 14-day return right (mandatory), 2-year warranty, VAT/OSS registration if >€10k sales
• US: Sales tax nexus varies by state ($100k or 200 transactions threshold typical)
• Never sell: trademarked products without authorization, products with unverified health claims
• Customs: declare real values, warn customers about potential duties

Platform Rules

• Shopify: chargebacks >1% = risk of ban
• Amazon: ODR >1% = suspension risk, late shipment >4% = problems
• PayPal: new accounts get 20-30% held for 90 days
• Ad accounts: policy violations = ban — have backup accounts

Scaling Checklist

1. Multi-store: centralized inventory view, localized pricing, per-country compliance
2. Cash flow: predict 90 days ahead, negotiate payment terms with suppliers
3. Team: SOPs for common tasks, escalation rules for complex issues
4. Diversification: no >30% revenue from single product/supplier/platform

References

For detailed integration guides, see integrations.md For risk assessment frameworks, see risks.md For supplier evaluation templates, see suppliers.md