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Lewis Smith Dropship Unlocked: How To Handle Product Returns With High-Ticket Dropshipping

By Lewis Smith - Dropship Unlocked 

Transcript

Everybody, it's Lewis Smith here, and if you're starting your own dropshipping business, and you've been thinking about maybe selling high ticket products, you might have been wondering what happens when a customer wants to return a product, right? That's something that does happen. It's not a topic that many people want to talk about, but that's what we're going to be covering today. So if we haven't yet met before, my name is Lewis Smith, and in today's video, what we're going to be focusing on is how to build and run one of these high ticket dropshipping businesses efficiently, and we're going to focus on... So high ticket dropshipping meaning selling product upwards of three, four, £500 per item. What do you do when a customer wants to return one of those products, right?

So before we get started with today's video, if you're really serious about this stuff, if you're kind of at the point where you want to jump in and create one of these dropshipping businesses, you can head over to DropshipUnlocked.com/FREE, where we're running a free on-demand training. So you can learn exactly how you might be able to do it yourself. So when it comes to running one of these high ticket dropshipping businesses, we all know that you've got to offer great customer service. There's no two ways about it. You have to do that.

That's the first one, but I think a huge question that holds a lot of people back is they think with high ticket product, so high value products, they're like, "Well, won't I be putting myself at more risk than if I just sold cheap products?" Or, "What if something goes wrong with that high ticket product? Won't I be on the hook for it?" Because the primary reason why people build these types of businesses is because they want that freedom back. They want that freedom over their time, right, so they can kind of step back and set the business up. So it's kind of semi-automated.

They want to be able to run it from anywhere. That's important, and that's something that this type of business model can really provide, and the other thing is because they want it as a long term business, right? They don't just want a flash in the pan bit of quick cash and then kind of gone tomorrow. They want something that's going to be around and going to support them and their family for years to come, but even though they're in a position where they're able to invest in getting their business up and running and started, they're not looking for the short term volatile business that's like rollercoaster up and down. They want stability and sustainability over the long term, and they're prepared to go out there and build relationships with real brands and suppliers because they want the type of business that they can stand behind and allows them to sleep comfortably at night.

But they're often worried because they think, "Well, with high ticket products, won't they be on the hook for any issues or damages or customer return requests?" And they think, "Won't those return requests be really expensive if I have to pay for those out of my own pocket, and the products are worth thousands. Will that cause me huge headaches?" And I think that that's the worry, that they end up getting left with a lot of stock, because that's not the reason why most people start this business. They don't want to be lumbered with tons and tons of products that they then have to find storage for. That's not the idea of running one of these businesses. So I completely understand why people feel like that. It makes sense. I get it.

And they want that lifestyle business that they can just run from anywhere. Okay, that's kind of the thing. So they are legitimate concerns, but they're unfounded because here's the thing. If you work directly with UK brands, reputable brands and suppliers based in the UK and you sell high quality products that are high value as well, so upwards of three, four or £500, even above 2000, £3000 per item, right? It won't be a problem, and here's why.

So the first thing to say is that we never recommend that our clients sell anything like fashion items, apparel or clothes, anything like that. The primary reasons being twofold, right? The first is the returns rates are way too high. Customers that buy those types of products, it's always the wrong size. They always need to return it. There's too many variables. You don't want to be selling stuff like that if you're trying to run a stress-free business. So stay away from apparel and things like that, and clothes and fashion items.

Now, the other thing is that there's not enough profit in sales of that value because if you can sell a product, as we covered in a recent video, that's worth over £300, your profit per sale is so much higher. Meaning you can acquire the customers at a profit still after paid traffic, and that's how you scale. And so when we show our clients how to contact these brands and manufacturers here in the UK, we talk them through what to say to them, and one of the things that we say to bring up in that initial conversation with the supplier is ask them the question, "In the unlikely event that a customer does want to return one of your products, what happens? How do you manage this?"

And then what happens is the good brands, the brands that you will want to work with, will always stand behind their products. If they're willing to stand behind their products, it's because they're selling good quality, reputable products, and so if a product arrives damaged or faulty, or there's something wrong with it, the good brands are always going to offer some kind of guarantee. They're always going to be happy to arrange collection or replacement of that item. So that means that you, as the seller, do nothing. You kind of like facilitate the process and say, "Well, suppliers going to collect it and this is going to happen," and that's fine, but remember, we're talking about like 1% of cases here. It's not a huge return rate, but the nice thing is with these products, the suppliers manage them because it's all domestic, it's all within the same country, no shipping needs to happen.

So when that happens, in that one scenario, the customer will contact you, you'll contact the supplier, the supplier will collect the products usually the next day, and then they'll either replace the product if the customer just wants a new one, if it was faulty or damaged in transit or something, or they'll just refund you as the seller, as the retailer, and you can just pass that refund on to the customer. So how easy is that compared to brands that would say, "We're not doing this," and by the way, if they say, "We're not helping you," if a brand says to us, "You manage the returns, that's on you." We usually don't work with them. There's plenty of brands out there. We don't need to be dealing with companies that aren't willing to stand behind their products, and so, if an item gets damaged in transit on the way to a customer, which happens from time to time. Sometimes stuff gets rattled around and crashes around and gets damaged.

Then we always make sure that those deliveries are insured, right? So it doesn't fall on us. The courier has an insurance policy. We just help the customer fill out the paperwork and it's done. They get the replacement paid for. It's all good. So, I mean, I'm telling you this, but that stuff rarely happens, but when it does, in the rare event that it does, you are covered. Now, if you're selling products from China, that's going to be problematic because that's obviously going to happen a lot more frequently and if it does, you're not going to be able to get those products back to suppliers. So you are going to be paying for those out of your own pockets. So it is worth considering if you're at that stage where you're wondering which model to go down.

So I'll share a perfect example of why this is so important in just a moment, but before I forget, if you're really interested in doing this stuff in your own business, and you want to learn how we do it in the dropshipping businesses that we run in the UK as well, you can head over to DropshipUnlocked.com/FREE for a much more in-depth training on how this works.

So I remember this one time when I was, I think I was about to go to university, right? So I was like a young student just out of school, and I was looking for a laptop to buy, to help me through my studies at university, and I'd been shopping around online. I've been kind of doing my research. Trying to find the best possible laptop in the budget that I had. I can't remember what model it was or anything. It was a while back now, but I was searching online and I remember I'd found this specific model of laptop, and I thought, "Right, this is the one I'm going to go with. It has all the specs. Everything's kind of right for what I want," and I went down to speak to my parents and said, "Guys, I think I found the one I'm going to buy. This is it. Any objections, happy for me to press buy?" And I remember my mom's first reaction was, "Why don't we see if John Lewis have it?" You know, the department store? So I thought, "Well, I mean, okay. Yeah, I'll have a look."

So I looked it up online and I thought, "Okay. I'll look up this model." It turns out John Lewis did sell the product as well, and I thought, "Okay, that's fine, but it's cheaper on the site I found it on." So I thought, "Why don't we just go to that one?" And my initial reaction was obviously just go with the cheapest site, but both of my parents' reaction was like, "If John Lewis have it, let's 100% buy it from them because in the event that anything does go wrong, we're covered. We're safe as customers because John Lewis are quite famous for their really flexible, good returns policy." And so their previous experience, and my parents' previous experience with this brand was so positive with their returns policy, that it gave them a huge bias towards shopping without brand again, despite price, right?

So that's the biggest thing because the thing that really struck me is that they were happy to pay more just because of the easy returns policy. So think about that. When you're advertising your products to customers and you're selling high ticket products, you've got to think that the likelihood is customers aren't going to need to return products. You might have like a 1% of customers that would, if things do go wrong, but remember in that case, you're covered anyway. So it doesn't really matter. But if you make a very, very easy and clear returns policy and you work with brands that offer that, then you're always going to win that sale over a competitor for the customers that find that important, and I just shared with you a perfect example of when that returns policy trumps everything else, including price, right?

By the way, if you're interested in how we do this specifically on the dropshipping stores that we run, you can head over to DropshipUnlocked.com/FREE for an on-demand training on exactly how to do it yourself.

So to wrap it all up, then the brands that can offer hassle-free and easy returns, and the ones that are happy to stand behind their products and say, "We will cover it if anything goes wrong." If you partner with brands like that, you're nearly always going to win customers over low quality competitors that are offering even cheaper products, but have difficult returns policies, i.e products have to go back to overseas to be returned back to where they came from, and often those brands will have to pay for returns out of their own pockets hence why they have such difficult returns policies.

But your advantage, if you're working with UK brands is just, they cover it, and remember, the nice part is this rarely happens with high ticket items. So in the 1% of cases that it does, or 2%, whatever it might be, by working with UK brands, you know they're going to cover you for it. So you're not in trouble. So it gives you that that peace of mind. Gives you that longterm security stability knowing that you can have a business that you're proud to stand behind. So wouldn't you rather have that than have to lose sleep over the stress of having to cover the cost of a return if it ever did happen out of your own pocket. That's the question. So with that said, I just wanted to thank you guys all for joining me today.

Hopefully you found this one useful. If you have any questions, as always, then feel free to put them in the comments. If you found this helpful, could you do a favor and just give the video a quick like, and if you know anybody else that you think would find this helpful that is maybe on the verge of starting their own dropshipping business, then please do feel free to tag them in the comments, share it, whatever. And don't forget if you want to go deeper into this stuff, and you want to know how you might be able to apply this to your own dropshipping business and head over to DropshipUnlocked.com/FREE for a free on-demand training. So that's it for today's video guys. I thank you very much for joining and we'll speak again soon.

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