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How to Save Costs for Your Dropshipping Business in 2023?

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How to Save Costs for Your Dropshipping Business in 2023?
CJMar. 23, 2023 08:49:25985

Is that your account once suddenly got frozen due to suspected fraud then made you unable to process any transactions and even lost access to the funds?

 

Is that you who has once been experiencing delays in receiving payments, even ended up receiving no explanation for the delays after trying to contact the processor?

 

Are you dropshippers whose accounts are terminated due to a high chargeback rate?

 

It’s believed that every dropshipper has heard about or even gone through similar troubles like these - you rely on your payment processor to handle transactions smoothly and efficiently, however, once there’s any payment issue arises, your dropshipping business is going to be damaged and you are likely going to lose money.

 

These sound like nightmares, especially for those new gamers who are at a key moment of scaling up their dropshipping businesses now.

 

To help you avoid such cases from happening and to save costs while growing, we are going to list the most common payment problems that haunted dropshippers and share the latest solution to help you save costs for your dropshipping business!

 

 

Payment Issues that Bring Dropshippers Additional Costs

 

#1 Overpaying for Processing

 

Processing fees are charges that payment processors impose on your transactions. These fees are typically a percentage of the transaction amount and a flat fee per transaction.

 

The fees vary depending on the provider, the volume of transactions, and the payment method used.

 

The cost of processing charges can be added up quickly, especially if you are processing a large volume of orders, or working with a payment processor with a higher percentage of rates.  

 

#2 Chargebacks 

 

Chargebacks occur when a customer of you disputes a transaction and requests a refund from their bank or credit card company, which is the most seen issue that dropshippers are fighting with, you may want to save the customer and save your cost at the same time, but it is usually not an easy task.

 

Chargebacks can result in additional costs for dropshippers, including chargeback fees, lost revenue, and potential damage to your brand image.

 

#3 Fund Holds

 

And for fund holds, this can be a headache for dropshippers, as it may cause cash flow problems for dropshippers who need the funds to pay their suppliers.

 

The payment processor may hold the funds if the dropshipper is considered violating policies like processing transactions on behalf of another business or by using a personal account for business transactions, selling high-risk products like adult products, or a customer disputed an order because of product damage or shipping delay.

 

 

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#4 Account Closures

 

Account closure must be the worst situation that dropshippers do not want to face. The reason of shut down an account can be different due to a variety of reasons, but in general, the primary reason is related to the suspicion of repeated fraudulent activities, and high chargeback rates.

 

Account closure could bring a significant impact on a dropshipping business, as it could result in the loss of access to the platform or marketplace where the business operates, along with any associated customer data, order history, and other valuable assets, eventually resulting in unbearable costs and loss of customers.

 

 

How to Avoid These Additional Costs While Dropshipping?

 

 Overpaying or even getting your dropshipping business shut down can be a frustrating and costly experience.

 

To avoid this from happening, there are some ways that you can take to ensure that your business stays in compliance with the rules and regulations of your payment processor.

 

#1 Choose a right payment processor

 

 Choosing a reliable payment processor is essential to save costs for your dropshipping business.

 

It’s important to look for a payment processor that is transparent with their fees and pricing with advanced security measures to protect your transactions and offers responsive customer support. 

 

After all, a reliable payment processor can help sellers avoid issues that may lead to accounts being shut down from the very beginning.

 

While choosing a payment processor, you would like to take a detailed look at if there are any reviews, testimonials, and feedback from other dropshippers to get an idea of their experience with the processor;

 

Make sure you understand the fees associated with each payment processor, including transaction fees, chargeback fees, and monthly fees;

 

Another important aspect is - Look for payment processors that offer fraud detection, encryption, and other strong security features.

 

What’s more, you need to make sure that the payment processor you choose integrates with your eCommerce platform, this will make things much easier to manage your transactions and orders!

 

 

#2 Optimize Customer Service Process

 

Maintaining good customer service is crucial for avoiding high chargeback rates and customer disputes. There are many things you could do to optimize the customer support process:

 

Try to respond more promptly to customer inquiries, provide more accurate product descriptions and shipping information, and prepare special offers for unhappy shoppers to avoid returns and refunds.

 

In this way, the risk of chargebacks can be reduced and your payment account can be in good standing.

 

Due to the special selling model of dropshipping, it seems that sometimes the processor policy is more restricted for dropshippers.

 

In this case, working with reliable dropshipping suppliers will also give you more confidence - you would like your supplier partner to have a steady processing time, powerful local warehouse service to make the shipping faster and provide you purchasing deposit, and even free inventory management service.

 

#3 Monitor Your Chargeback Ratio

 

Targeting the reasons behind chargebacks is crucial to lowering the chargeback rate. Common reasons for chargebacks include fraudulent activity, customer disputes, and delivery issues.

 

You want to figure out where goes wrong, so when the chargeback is unavoidable, at least make it meaningful.

 

To prevent chargebacks from piling up, it is also important to track them in real time. Payment processors usually provide tools to help you monitor your chargeback activity, such as chargeback alerts, reports, and dashboards.

 

Using these tools to stay informed of any chargebacks and take immediate action to address them can definitely help you to have more control over the chargeback ratio.

 

#4 Prepare a Backup Plan

 

Preparing a backup plan can actually help protect a dropshipping business from the worst case of getting accounts shut down.

 

For example, having a contingency fund can help you to cover unexpected expenses somehow; constantly paying attention to alternative payment providers - more options means more possibilities to reduce the reliance on traditional payment processors who do not like dropshippers that much.

 

Tailored Payment Solution for Dropshippers - CJ Pay

 

 

No other one knows dropshippers better than dropshippers! To help dropshippers fight chargebacks,  CJ Pay, as a first-ever payment processor built by dropshippers is launched now for dropshippers!

 

As the first payment solution tailored for dropshipping businesses, CJ Pay knows better about what troubles dropshippers the most!

 

We know you want to pay more in processing fees, want to avoid fund holds and reserves, want to reduce the chargeback and what’s more important - grow your dropshipping business more safely this year! Let’s take a look at how exactly CJ Pay can do for you:

 

✅ Interchange Plus Pricing Model for Dropshippers: Lower rates start at 1.2% + $0.49 per transaction

 

For dropshippers who are using a flat-rate processor, you may be overpaying for most of your transactions! Now it’s time to try the Interchange Plus Pricing Model instead:

 

The model consists of two parts: the interchange fee and the markup. A model like interchange plus pricing is transparent, which means you know exactly what you're paying for, and you only pay for what you use! This model also supports you to lower your markup to help boost sales because it is flexible!

 

The most exciting part is, CJ Pay offers dropshippers rates as low as 1.2% + $0.49 per transaction! Don’t worry about hidden fees, because you can easily see the breakdown of your fees on your CJ Pay dashboard!

 

 

✅ A support team for dropshippers to help to avoid fund holds & chargebacks

 

As a payment solution made by dropshippers, we understand the unique challenges that come with this business model.

 

CJ Pay is dedicated to helping dropshippers avoid fund holds and account terminations.

 

It got implemented several measures, such as advanced fraud detection systems, strict underwriting processes, and regular account reviews, to minimize the risk of holds and terminations. In case of a chargeback, CJ Pay has a dispute resolution process to help you resolve the issue.

 

The team will also work closely with you to address any issues that may arise and assist in the process of resolving them. If you are a beginner, CJ Pay also offers tools and resources to help you learn more about how to reduce the potential risk and help you to keep your account safe.

 

  

Robust security measures keep your transactions secure

 

CJ Pay takes the security of your transactions very seriously! It uses industry-standard security measures such as SSL encryption, secure socket layer technology, and fraud detection tools to keep your transactions secure.

 

CJ Pay is also fully PCI compliant, which means that it meets the security level set by the Payment Card Industry Data Security Standard - at the same time it supports all major credit cards, including Visa, Mastercard, American Express, Discover, and more!

 

✅ Seamless integrations with popular eCommerce platforms

 

To provide more convenience for dropshippers, CJ Pay developed a seamless integration with popular eCommerce platforms like Shopify, Magento, WooCommerce, and so forth waiting for dropshippers from different platforms to choose from. 

 

So we also believe that CJ Pay is the payment solution that can help you explore more opportunities in the journey of dropshipping by not only saving additional costs but also providing a smooth and effortless connection to take care of your sales!

* CJ Pay is currently only available to the US marketplace, sorry for any possible inconvenience.

 

 

Final Words

 

For dropshippers, choosing the right payment processor to save the costs that may hold you back is an important decision that can have a significant impact on the way of exploring the vast opportunities and the benefits you could earn from dropshipping, this amazing online selling model.

 

By taking all the practical factors that lead to additional costs and damage your payment account safety into consideration, you could do better to take control of your costs on fees that transactions generated, you also have the chance to choose a better payment processor that meets the unique needs of your dropshipping business and provides a positive experience for your customers. 

 

And if you are wondering which one to try first, then CJ Pay is ready to be your partner to back you up, to offer you the right combination of features and benefits for your business, to help you minimize the risk of fraud and chargebacks, save you from overpaying.

 

What’s more important, is to make the transaction experiences smoother and more satisfying for dropshippers so that you can be reassured from burdens and focus on scaling your businesses again!

 

 

 

Stop Overpaying by Switching to CJ Pay Today!

 

 



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