Table of Contents
- 1 RESEARCH TOO MUCH
- 2 NOT ENOUGH PRODUCT REsearch
- 3 SELLING TOO MANY VARIETY
- 4 CHOOSING THE WRONG NICHE
- 5 Relying too heavily on suppliers
- 6 UNDERCUTTING PRICES
- 7 IGNORING REVIEWS AND CUSTOMER FEEDBACK
- 8 SKIMPING ABOUT YOUR WEBSITE
- 9 ARE YOU READY TO MARKET?
- 10 BLACKHAT SEO PRACTICES
- 11 INFLUENCER MARKETING
- 12 HAS NO SYSTEM FOR RETURNS
- 13 NOT PLANNING TO GO ON THE HOLIDAYS
- 14 GIVING up TOO early
- 15 Last Thoughts
It’s easy to start your own business in today’s 21st century. This is one of the best things about modern life.
These days are gone.
You can still own a business in physical locations, where you store and manufacture your products, but dropshipping is a great way for entrepreneurs to start a new business.
Dropshipping is, in its simplest form, the process of setting up an online store, selling a product you find, then dropping it off to a manufacturer or vendor.
Because your customers’ purchases are shipped directly from manufacturers, there is no need for you to maintain inventory or store shelves, nor do you have to hire employees.
Although this description is simplistic, it is really a simple explanation of how a dropshipping company works.
Yet, drop shippers make costly errors that can have a negative impact on their business, both in terms how satisfied customers are and the revenue they generate.
We’ll show you how to avoid the most common mistakes. These mistakes can be avoided, regardless of whether you are just starting out in dropshipping or a veteran with a high income business that generates six to seven figures per year.
This story has been told so many times that we have lost track of the number of times.
One Saturday afternoon, a person sits around and ends up on a YouTube dropshipping video. They then watch another dozen. They might also read dropshipping blog articles.
They are convinced that this is the key for their financial future by the end of the day.
Dropshipping is easy. Dropshipping is a great way to make money.
They are excited to find a product and build their website. Many times, they will go to Fiverr to get it done cheaply.
They launch with everything in place. They’ve only made a few sales, but not enough to make a significant income. They stopped believing that dropshipping was a fraud after a month.
Dropshipping can be a viable option to start your own ecommerce company. However, dropshipping, like many “get rich quick” plans is not easy. It often requires a lot of hardwork.
Dropshipping is a time-consuming business that requires energy and hard work. Many people give up before they have a chance at success.
You can lower your expectations and realize that you are playing a long-term game. Over time, you will find the success that you were looking for.
RESEARCH TOO MUCH
Doing your research is something we strongly advocate. We encourage people to do their research. You can understand the risks before you take on any responsibility. It is important to spot potential problems before they become serious problems.
Some people tend to overanalyze (guilty as well). It is dangerous to dive in without researching. However, it is equally deadly to overanalyze and research to the point that you are paralysed.
You should balance your research to find the right balance. Dropshipping basics can be learned from various resources. However, you will never know everything. You’ll still learn a lot through doing.
Making mistakes is part of learning. You may think you can research your own way to perfection. But, if you only study and don’t actually apply what you learn, it’s not true. You won’t succeed.
NOT ENOUGH PRODUCT REsearch
Didn’t we just say that too much research is a problem?
Selecting products is one area you should take your time, really dig into the research.
What are the things you should be thinking about when looking at products? These are the basics:
- Are the products selling well?
It seems like an easy task, but many drop shippers get caught up in the excitement of selling a product that they believe is perfect. However, months later, it turns out that nobody is buying that product.
You should always consider the sales velocity when selling items on AliExpress. It’s unlikely that the product is right for you if it doesn’t move.
- What is the profit margin for this business?
Perhaps you have an item that attracts orders like crazy. That’s great, right? But not so fast.
It might not be worth your while if the item is in high volumes and has a small profit margin. Before making a decision, make sure to check the margin.
- How much competition do you have?
You’ll also want to look for a product with a high sales volume and decent profit margin. Also, you want one with low competition.
You won’t be as successful as more experienced drop shippers if you start off as a drop shipper. You can be a successful drop shipper if you find the right niche item and stay ahead of the curve.
SELLING TOO MANY VARIETY
We mentioned in the previous mistake that finding a niche is important. Let’s dive deeper into this topic.
A niche is a specific area in which you will build your business. It may seem like being the dropshipping Amazon version is the best option, as more variety can mean more customers. But that’s not how it works.
You’ll be able to market your dropshipping business more effectively if you choose a niche.
You can target specific customers by focusing on a niche. This will allow you to better target your marketing efforts so that you reach the right customers.
Your niche is what you are interested in and create your business around it. Do not try to be all things to all people. It is important to be a specialist.
CHOOSING THE WRONG NICHE
While we are on the subject of niches, it is important to choose the right niche.
You want to select products that are in your area of interest at least marginally.
It’s okay to choose a niche that doesn’t work. This simply means that you should cut your losses and find a new niche. This headache can be avoided by conducting market research before you go.
Researching your niche the same way as your products will be beneficial. Although market research is not something that everyone enjoys, it can help make dropshipping easier by helping you understand the pitfalls and opportunities in your niche.
Relying too heavily on suppliers
Dropshipping businesses require trust. Dropshipping is not a business where you are the product or the shipping. You have to trust the supplier to fulfill orders on time and accurately.
These are just some of the issues that you might have with suppliers
- Increase your prices and reduce your margins
- Shipping items on time is a problem
- Items that can be backordered
- Not fulfilling orders and going out of business
These are just a few of the problems dropshippers often face. The solution is to use multiple suppliers whenever possible. If this is not possible, you might consider a contract with your supplier.
You can agree to terms regarding shipping and pricing if you are able.
In your early days of drop shipping, you will think that “I could really increase sales if the price was lower than the competition.”
It is not a new concept to have a loss-leading product. It works well for big retailers like Amazon and Walmart, because customers trust them.
Dropshippers tend to be more cautious about pricing than the competition. Low prices can convince customers that they are buying inferior products, even if the deal sounds too good to true.
You also reduce your profit margin. You will have to sell more to achieve the same revenue as you would have at the original price.
IGNORING REVIEWS AND CUSTOMER FEEDBACK
Dropshipping has many great benefits. You don’t have to manufacture products, you don’t store them in a warehouse and you don’t ship them to customers. The supplier and customer are inextricably linked through you.
Dropshippers often believe they can ignore customer reviews and feedback. Dropshippers often assume that if an item is damaged or lost, it is the shipper’s fault.
But not exactly. Shipping problems may be with the supplier. However, it is you that the customer will identify with. Their mistakes can have a significant impact on you, even more so than you might realize.
Listen to customer feedback. Reach out to your supplier if you have a problem.
SKIMPING ABOUT YOUR WEBSITE
Many drop shippers want to get into the business from the beginning, as we mentioned. They will purchase a domain, then go to Fiverr to hire the best web designer to create their online store.
Fiverr offers many amazing products, including website design. You generally get what your pay for. It is not a good idea to skimp on website design.
Customers will make their decision about whether to do business with your company through your website. It should look professional and function well. It should also work seamlessly on mobile devices.
It is worth the effort and money to create a professional looking website. It will pay off in the long-term.
ARE YOU READY TO MARKET?
Many people set up dropshipping businesses, create listings and put up websites, expecting people to find them by organic SEO.
This approach is not very effective, especially if you are just starting out.
Dropshipping is just like any other business. You will need to create a marketing plan so the world knows you exist.
It is entirely up to you what kind of marketing plan and how you use it. An email list can be built. You may do paid advertising. There are many options.
This is the key message: If you want to reach your potential customers, you must plan and budget for marketing. Branding is also important.
BLACKHAT SEO PRACTICES
Many drop shippers are influenced by the concept of marketing and will seek shortcuts to increase their online presence.
It can take time to build an SEO presence for your website. However, there are Search Engine Optimization services that will help you get noticed quicker.
Search Engine Optimization is a complex field. If you break these rules, you will be penalized.
These are known as “Blackhat SEO” because they mimic the look of bad cowboys wearing black hats. Blackhat SEO can give you an edge, but you’ll be penalized with lower search results if you get caught. Google is very adept at catching people playing the system.
Even though the temptation to get a little bit of illegal push may sound appealing, the punishment is not worth it.
Influencer marketing is a hot topic these days. There are many instances when paying an online personality for promotion of your product can pay off in the long-term.
Drop shippers are often tempted to hire an influencer to help promote their business on YouTube and other social media platforms, even though it may not be a viable strategy.
Influencer marketing can be expensive. The highest paying influencers command the highest rates. It is likely that the most expensive micro-influencers that a drop shipper can afford won’t provide enough return to justify the expense.
Instead, invest that money in a better website or traditional marketing strategies.
HAS NO SYSTEM FOR RETURNS
No matter how good your product is, customers will eventually want to return it. This is a part of retail life.
It’s possible to assume that you are an intermediary and that the supplier is responsible for the return. You would be right in half.
Your reputation is at risk, even though the supplier will eventually handle returns. You will need to have a clear, easy-to-follow return procedure with your vendor. Also, ensure that you monitor returns to ensure that your customers receive replacements or refunds promptly.
Consider a return an opportunity. Customers who are able to return their purchases with ease will be more inclined to shop with the retailer in the future.
Dropshipping businesses will benefit from a strong returns system.
NOT PLANNING TO GO ON THE HOLIDAYS
Everybody understands the importance and significance of Black Friday through Christmas, at least in the States. However, there are many other holidays throughout the year that drop shippers don’t take advantage of.
This is a huge mistake. You could end up losing a lot of money depending on what niche you choose to work in.
Look at the calendar and plan ahead. Make sure to market your products around holidays that have a link. You can increase sales by marketing on other holidays and random days.
What about the big holidays? Make sure to keep in touch with your suppliers so they are ready for the increased order volume. There is nothing that can ruin your business quicker than unhappy holiday shoppers who don’t receive their gifts on time.
GIVING up TOO early
Dropshipping will convince you that affiliate marketing is more lucrative than dropshipping. Dropshipping and affiliate marketing both can provide life-changing income streams, but neither is it the easy “set it and forget” business model that online gurus want you to believe.
Dropshipping requires dedication, hard work, and time. You’ll need time to learn new skills, plan, research and build your infrastructure.
Once all of that is done, you can launch your website and see that customers aren’t flooding it with orders.
That’s okay. Dropshipping can be a marathon.
Be realistic and set achievable goals. You should aim to make $200 per month. Once you have reached that goal, figure out how you can make $500 per month. Be prepared for the highs and lows. This is how running a business works.
Do not give up when you face adversity. If the first few months are not enough to provide enough income for you to quit your job, continue working.
Many drop shippers give up too soon and get discouraged. Sometimes success is hard work and takes time. Keep going.
Dropshipping is a huge favorite of ours. Dropshipping is a great way to start your own business and get to financial freedom. Dropshipping is a great way to make extra income, or to launch an ecommerce business. It’s much cheaper than starting a traditional retail store.
Dropshipping isn’t always an easy path. You can avoid the 15 mistakes that we have highlighted in this article and you will be able skip some of the difficult lessons.
Learn more about dropshipping and inventory management. Subscribe to our blog to stay up to date with our latest posts.