Mixed Deck — All Dropshipping Topics Flashcards

In the sale and purchase of items, the payment must be made:

Answer: All paid at the time of the contract

This answer suggests a scenario where payment for goods is required upfront and in full when the sales agreement is made. In many business transactions, including typical dropshipping models where a customer pays the dropshipper before the order is placed with the supplier, immediate and complete payment is a common practice to secure the transaction. This ensures the seller receives funds before fulfilling the order.

The sale and purchase of goods that are not owned by the seller is forbidden, except buying and selling for buying and selling:

Answer: Both are right

While some legal or religious frameworks generally prohibit selling goods one does not own, dropshipping operates within specific permissible exceptions. These exceptions typically involve the seller having a confirmed right or immediate ability to acquire the goods upon sale, effectively acting as an intermediary. The answer 'Both are right' suggests that multiple conditions or types of exceptions apply, validating such transactions for dropshippers.

How many types of competitors are there?

Answer: 2 types

In business strategy, competitors are commonly categorized into two main types: direct and indirect. Direct competitors offer similar products or services to the same target market, while indirect competitors offer different products or services that fulfill the same underlying customer need or desire.

How does offering live chat support impact conversion rates on a dropshipping store?

Answer: It increases conversions by answering pre-purchase questions in real time

Live chat support resolves buyer hesitations instantly, reducing friction in the purchase decision and consistently improving conversion rates.

Sales schemes by stocking products and reselling them to consumers with the operational process being handled by resellers are called

Answer: Stockist

A stockist is a type of reseller who not only buys and resells products but also maintains a physical inventory of those goods. They are responsible for managing this stock and handling the operational processes involved in selling directly to consumers, differentiating them from dropshippers who don't hold inventory.

If the dropshipper determines the selling price, taking profit by increasing the price given by the supplier, in this practice the dropshipper is called a dropshipper

Answer: Seller

When a dropshipper determines their own selling price, often by adding a markup to the price provided by the supplier, and directly sells to the end customer, they are acting as a seller. In this capacity, the dropshipper is responsible for marketing, customer service, and setting their own profit margins, much like a traditional retailer.

What is 'user-generated content' (UGC) and why is it valuable for dropshipping ad creatives?

Answer: Content created by real customers (photos, reviews, videos) used in ads to build authenticity

UGC (real customer photos and videos) performs strongly in ads because it looks authentic and relatable, outperforming polished studio-produced content.

Which calculation gives a product's true profit per sale in dropshipping?

Answer: Selling price minus product cost, shipping, fees, and ad cost

Real profit subtracts every variable cost—product, shipping, transaction fees, and advertising—from the sale price.

What role does targeting a passionate niche play in finding winners?

Answer: Passionate audiences buy more readily and repeatedly

Hobbyists and enthusiasts spend freely on products tied to their passion.

How does a broad target audience affect a product's winning potential?

Answer: A larger audience allows more scaling room

Products appealing to wide audiences can scale ad spend without exhausting the market quickly.

Which of the following best describes a 'private label' dropshipping arrangement?

Answer: A supplier manufactures a product under your own brand name

Private label dropshipping involves a supplier making products branded under your store's name, increasing perceived value and brand differentiation.

What pricing formula do most dropshippers use as a starting point for setting retail prices?

Answer: Product cost × 2.5 to 3 (keystone pricing or better)

Multiplying the product cost by 2.5–3x is a common baseline that covers ad spend, platform fees, shipping, and leaves a profit margin.

What is the purpose of a reseller's permit (resale certificate) in the US?

Answer: To buy inventory tax-free for resale

A resale certificate lets a seller purchase goods without paying sales tax because tax is collected at final sale.

Type of shipping rate where you can set flat shipping rates based on the types of products ordered

Answer: Per-type rates

Per-type shipping rates allow businesses to establish different flat shipping costs for various categories or types of products. This approach is beneficial when certain product types, such as heavy or fragile items, inherently incur higher shipping expenses, offering a more tailored pricing strategy than a single universal flat rate.

Why is shipping time an important factor when choosing a supplier?

Answer: Slow delivery leads to refunds and bad reviews

Long delivery times frustrate customers and increase refund requests and negative reviews.

Why might a beginner choose a niche store over a general store?

Answer: Targeted audiences are easier and cheaper to reach

A focused niche lets you target a specific audience with relevant, cost-effective marketing.

Under FTC rules, when must a dropshipper notify a customer of a shipping delay beyond the stated time?

Answer: Promptly, with an option to cancel for a refund

The FTC Mail Order Rule requires prompt notice and a cancellation option when promised shipping times can't be met.

What is the primary goal of a 'video ad creative' in a dropshipping Facebook campaign?

Answer: To demonstrate the product in action and capture attention in the first 3 seconds

Effective video ads hook viewers in the first 3 seconds and show the product solving a problem or being used, dramatically increasing click-through rates.

Which feature helps a dropshipping store reduce cart abandonment through automated follow-up messages?

Answer: Abandoned cart email sequences

Automated abandoned cart email sequences remind potential customers of items they left behind and often include a discount incentive to complete the purchase.

What is 'competitor price matching' and what is its main risk in dropshipping?

Answer: Matching a competitor's lower price, which can trigger a race to the bottom destroying margins

While matching competitor prices can retain customers, it can trigger a destructive pricing war that erodes everyone's margins without building brand value.