Last Updated on August 06, 2020
These are the 6 common reasons why dropshippers (especially new drop shippers) will fail. So avoid doing these mistakes if you just started dropshipping.
Written by Incomesnake
Before you begin with the analysis of the content as “why do businesses end drastically or fail,” let us clear that the topic connotes to a certain section of businessmen. Those who have started their business through “Shopify” and have not gained possible results; the piece of advice is not for them.
We are here with the five reasons for those who are genuinely involved in the business of drop shipping stores. The concept is to help them in understanding why their business is not showing results even after putting so much effort.
Based on researches and feedback, here we have listed some of the primary reasons for the failure; take a look
Picking up a wrong or bad niche
The foremost reason for the failure of the business is selecting the wrong niche and selling the wrong product.
In the drop shipping business, if you have shortlisted the product based on the designed characteristics, things will become easy.
Illegal or Prohibited products
A specific set of products comes into the category of unlawful and are not allowed for sale. Well, on the other side, some can be posted for online sale, but it is not possible to run advertisements on it.
It is not only the Google ads, but most of the other ad platforms will show no support at all. Therefore, the ideal platforms known for bringing traffic will not work for these products.
Explaining with the help of the example, there is a product called CBD oil. It is mostly used for helping the joints. But this product is prohibited; it means you can sell it online, whereas running a traditional ad through Google or FB is not possible.
Products that are copyrighted
It is the usual thing that no one is authorized to sell copyrighted products without permission. Going on the web, you will definitely find t-shirts, bags, etc. with Game of Thrones logos and other stuff. Though people are crazy about it, being a copyrighted product, this business will fail.
Hence, it is a common reason behind the failure of a drop shipping business.
Unable to search the right supplier
The need for a right supplier is essential for a drop shipping business, or else it will fail in a few days or months.
Mostly drop shipping business works on the arbitrage model where the products are purchased at a low price, and then it is sold for a high price.
Now, take an instance, where you have started to drop shipping business through Shopify for digital calculators. On the other hand, your supplier is selling the same product at a cheaper rate on eBay or Amazon.
It is where the meaning of real and fake supplier comes into the prospects and a reason behind the failure. For a long-lasting model, you should not look for any random deal at all.
Does the drop shipping business from China really show results?
If you are relying on the drop shipping business solely from China to other states, then it might fail. Selling from China to other countries takes almost three weeks and even more. Along with this, the packaging is printed in a foreign language too.
We are not saying that the drop shipping business with China will fail, whereas it can be ignored as a potential reason too.
Dealing with the business model of China, your focus must be on dealing with a product that is worth waiting for. It is the only way to sustain in the market and make the customers happy.
Today, the association of the Chinese business model considering the drop shipping is negative. The negativity is not only on the communities but is prevalent in the mainstream too. Therefore, if you are thinking of connecting suppliers from China with other states, then there are chances for the business to fail.
It is not like the complete business model of China is bad or wrong. When stored in the warehouse, and nearby the customers, it would be easy to connect with good reviews.
It will assist in re-packaging the products, in helping the customers in understanding the details of the package and make it long-lasting.
A bad relationship with the supplier
One of the examples, that we have shared just now; yes, the digital calculator one. In this case, your supplier is selling the product in the other states at a cheaper rate. Here you are the customer, and based on the event, you will go through dissatisfaction.
Considering the situation, the sellers, after listening to your issues, may not be interested in sharing a solution through emails or calls. Plus, the order products are reaching the wrong customers with extra drop shipping fees.
Such events are common with domestic drop shipping suppliers, and hereby one section or sector can’t be targeted. Executing business in this manner will kill your business.
Even though you are processing your business with domestic suppliers or walking with a drop-ship lifestyle model, a bad supplier or a bad relationship with the supplier is something to be vigilant about.
When your drop shipping site is not following the rules of professionalism, then you might suffer from a failure in the business.
Didn’t get what am I saying?
In simple words, if we draw an unethical drop shipping site, then it is the one which has been created in a few hours, and there is nothing vital in the same. The easy ways to identify those websites are through broken links, check out processes not defined, no contact address, and so on.
To make drop shipping sites work in bringing traffic, you should make it trustworthy. It is the only way you can drag customers from the target sector, and there are ultimate ways to make these things happen.
When you are just launching a website of drop shipping but do not have a set plan to work on it. And this will be the time when you will realize the first instance of failure or dropping of the business. Even when you will be bringing traffic, hardly any of the customers will show a response.
For a drop shipping business, you should give some time to learn basic and advanced ideas and techniques. It will take your efforts, but the results will be impressive.
Not assisted by a sound customer support team
Imagine, you have rectified all the above issues and the ones which are discussing below like an excellent niche, nice suppliers, etc. In addition, the traffic ratio is how and is exceeding time. In the initial days, it would be to handle customers when the range is small. But coming on the larger base, there will be a requisite for a team known as customer support.
It is a vital part of any business if the focus is to maintain customer’s satisfaction to the newest extent and make them stay for long.
You can easily reach out to many virtual assistant providers who are working towards helping businesses with customer support at every level.
A PIECE OF TIP
If this is the time, which is making you feel that it is only the customer support you need to fix. Adding virtual assistants will be the solution, and if you put your energy in the right direction, both sales will increase, and customers will come more often.
On the contrary, an absence of customer support can bombard you with bad and negative reviews. It will reduce the rating of you drop shipping business, and it will tend to go down.
Customer support can be acknowledged as a massive contributor in the drop shipping business as well as elevating the success rate. It is always the bad experience of the customers that results in the failure of businesses.
With time, your business will grow, and to reach the higher levels, your focal point should be on upgrading the customer support too.
When you are starting the business, then you can take charge of customer support. It is not like walking up the hill, as you just have to reply to emails, answer calls, staying active on the live chat. For all of these, you can take off a mobile application for instant updates.
Start proffering exceptional customer support to all your customers and nothing will go off beam. When a customer undergoes the feeling that they are no more important for you, it gives new business to your competitors. Not staying vigilant with this act will fail your business.
The mindset is fixed
Any business which is not maintained and upgraded on a timely basis, then possibly it will go down within no duration. If a drop shipping company is equipped with all the features like niche, customers, website, etc. but it is still. Here begins the problem, and it is said as a fixed mindset.
When the business is not showing good results, then it means failure. With one trick or only one method, it won’t be possible to create equilibrium in any manner.
Things work when the mindset keeps on improving and not when it is fixed.
The mindset of current or budding entrepreneurs is they start a business where the net profit on a monthly basis is around 10,000$. In the early days, it will feel good and will offer extreme comforts. Also, the number of travel and tourism will keep on becoming more than usual. But if they stay with a set mentality of not working for enhancing the net profit, the business will take the first step in going down. Slowly, it will go off to 9, 8, 7, and count goes off.
How to curtail the problem of a fixed mindset is there any solution? Is there any way to move with the growth mindset?
The initiative to be taken here is by investing and reinvesting the profits again and again with a motive to grow your business.
You can do it by bringing in new content, researching the new aspects, increasing ad budgets, bringing new techniques. It can be further added with new ad channels or renting a team.
In your mind, you should keep only one thing; get the money back into the business with every passing year. It might take some more clocks to run for the investments to show up with returns, so hold patience. Let the working area growing and excelling.
Going short with determination
By now, we have told you the prominent reasons causing the business to go down, and it’s time for a magical bonus.
Going short with determination is one of the reasons behind business breakdown.
If you are expecting no setbacks, then it will not happen as it is a reality.
Meanwhile, you are having a discussion, or a mere thought will pass over your mind. Any of these will make you feel “oops how did I miss it” or “I should have tried it years back.”
Forgetting such things are healthy as in business, the wheels move all the time. Setbacks will be there, but with determination, it won’t last long.