Welcome back to Make Money Bro. Today we are continuing our information drive around dropshipping. A lot of people are getting into drop shipping as a side hustle, but many don’t take the time to do proper research into their new business operation. We want to help change this. Today, we will help you decide the best countries to dropship to. If you pair this with our recommended way to find trending products and produce video ads for your products, you should be well on the way to becoming much better at dropshipping than a majority of the population 🙂
Shouldn’t we all just sell in America?
This is the scenario most people face. They are starting their new dropshipping store and they automatically decide that they will target America. They have heard it is the biggest market and therefore they want to jump right in and sell there.
I can see why people think this way. Ecommerce sales in America are expected to reach over half a billion dollars in the next few years. Buying online is a massive part of the American way of life, driven mostly by Amazon. It is now part of normal life to order things from Amazon rather than walk or drive down to your local shop.
The problem is that everyone is thinking the same thing. Can you imagine how many people around the world are opening dropshipping stores and targeting the US market every day. It would blow your mind.
I am not saying that you will fail if you target America, it’s a big market with a lot of potential customers. You would just be more likely to face stiff competition in this market. Therefore, I would encourage you to research alternatives before you set out on your dropshipping journey.
It is amazing how globalized the world has become in my lifetime. It is the easiest it has ever been to connect with people on the other side of the world to you, so why not take advantage!!
How do we decide which other countries to target?
It’s all well and good saying we need to broaden our dropshipping horizons outside America, but how do we decide which other countries are good to target?
In this article, I will give you a set of solid criteria that you can use to judge any country by.
As this article and website are both in English, I assume that most people reading are from English speaking countries. For this reason, I will write this article from the standpoint of someone creating English language dropshipping stores.
Without further ado, these are the main criteria you should look at when deciding which countries to dropship to:
When marketing our dropshipped products, we want to make sure we are marketing to enough people with the buying power to buy our products. These people should have enough disposable income that buying an average-priced product online doesn’t seem like a big deal to them.
Of course, when advertising on most platforms, you can do a number of things to target the more affluent people with decent success. For example, when marketing through push ads you could only target people using more expensive models of phones.
However you want to make sure that a country has enough of these people before you take the time to market to them. From a country wide approach, this is where finding out average buying power metrics are important.
I found an awesome tool HERE which allows you to sort countries by their purchasing power. I would only consider working with countries that are in the top 20-30 when listed by purchasing power. These are countries where people should have the highest disposable incomes.
Knowledge of English
Purchasing power is not the only factor we should look at, we also need to consider the level of English knowledge and understanding in a country. For example, Macao was at the top of the list of countries by purchasing power, but the English proficiency there is poor. This would mean that you would have to translate all of your adverts and dropshipping stores to Chinese. For me, this is a no go.
I would want to find a good potential country, which also has an excellent or very high level of English. Run some campaigns there, and if they make any money at all you could then start looking into translations if you wanted (assuming the country’s first language is not English).
English First is a company that operates a network of English language centers. What they also do is provide a free research document yearly which rates many countries by English proficiency (see below for a sample).
This is a quick and easy way to get a good idea as to whether you could run English campaigns in those countries. Personally, I would only run English campaigns in the top bracket of ‘very high’ proficiency. Of course, if English is a country’s first language it likely won’t be on this list (in case you were wondering).
Straight away, Luxembourg jumps out to me as being high up in the purchasing power and English proficiency ratings. Should you just go jump on this market now? Are they the hidden gem of dropshipping markets?
We are not quite there yet, there are a few other important factors to consider…..
Proximity to your suppliers
When considering a country, you should make sure that the shipping times are decent between that country and the location of your suppliers.
For example, many people are using suppliers from China. A big thing when dropshipping out of China is to make sure that ePacket is available. ePacket is a fairly cheap but fast method of delivery out of China. Shopify has an excellent article listing all the countries that ePacker currently delivers to. Make sure the country you want to supply to is on the list and also check that the products you want to sell actually support ePacket deliveries to that country.
It would be even better to actually find a guinea pig customer in the country you are thinking of targeting and ask them to help you test delivery times. Send them the product from the supplier and see how the delivery time is. This would also help you test if this product might have potential problems getting through customs in the targeted country.
Size of the market
You need to make sure that a country you want to target has a big enough market to make it worthwhile for you to sell there. The example of Luxembourg above is a great one. At the time of writing, the population of Luxembourg is just over 613,000 people, and their ecommerce spending is valued at around 800 million euros. Not much at all. That’s about the same population as Detroit in America! I am not saying that this makes Luxembourg terrible, if it also had low competition you might still find success.
Compare the Netherlands with Luxembourg though, and you can see what a small fish Luxembourg is. The Netherlands has a population of 17 million people and the value of their ecommerce spending is 25 Billion Euros!!
What I would recommend is if you are unsure about the size of a market relative to the amount of competition, simply do a small test campaign. Spend $100 or so on some promotions in that country and see how it goes. You might be surprised!
Potential Conversion Rates
Having an idea what kind of conversion rates you can expect in a country would be another key piece of information to guide your choice of countries to work with. Oberlo is a company that helps link suppliers with dropshippers, and they did a decent study a few years back all around different countries’ conversion rates.
They took 2.5 million visitors to a particular store and categorised them by country and measured the conversion rate of each. 2.5 million people is a pretty decent sample, but I still wouldn’t take this as a definitive result. Look on it as something that could guide your choice rather than define it.
If you go over to Oberlo and view this list, the Scandinavian countries stick out more than most other regions. Denmark was at the top of their list with an almost 5% conversion rate, for example. Australia was at a whopping 4% too.
Don’t just default to America!
I hope after reading this article it will give you some inspiration to research other markets other than the great US of A. I have to say that I did the same when I first started out in dropshipping, as do many others I am sure. By pushing the boat out a bit and exploring some less well-trodden paths, you could find yourself some amazing new markets for your dropshipped products!
If you have any tips of your own or inspirational stories about countries you have dropshipped to, we would love to hear all about them in the comments section below.