Dropshipping is one of the easiest ways to start an online business. To do so, you only need to launch an online store and connect with reliable suppliers and manufacturers.
But even if dropshipping allows you to earn money within the comfort of your home, be sure you’re fully informed about all of the “ins and outs” of running this type of business.
It will help if you also learned what to avoid so that it will be easier to set out on a growth path.
Dropshipping Pitfalls to Avoid
Although you might get off to a rocky start, the dangers aren’t all that bad.
Here are some of the most common challenges you might face in setting a dropshipping store and how you can prevent them from happening:
Un-optimized Online Store
Although a platform like Shopify makes it easy to set up a dropshipping store, many beginners still struggle to get it right.
One mistake is having poor web design, because it lacks credibility. Without top notch design, most users will click on your site and then bounce before you can even say, “dropshipping.”
It’s vital that you put in the time and effort it takes to get the design, content, and functionality just right. All of your product descriptions, calls to action, copywriting, and images should all be of very high quality.
If you get all of these things right from the get-go, you’ll have a higher chance of succeeding in the long run.
Lack of Order Visibility
The moment that your shoppers click on “Buy,” they want to know everything about their order as soon as possible. However, for drop shippers who aren’t controlling the entire fulfillment process, this can be complex to manage.
The main priority for dropshipping is to set customer expectations.
By knowing the inventory’s availability and typical delivery duration, you can deliver more accurate estimates to your customers. The key here is working with the best fulfillment service companies.
This is one of the most common problems that you will experience with dropshipping.
Even suppliers and order fulfillment companies have a hard time keeping their ecommerce partners informed about product availability.
This often happens when someone orders from your store, and it turns out that the item is out of stock. Or the item has been discontinued.
When this happens, the best way to handle it is to call your client. Don’t just inform them via snail mail! If you have the means, you can source your items from a different supplier.
Alternatively, you can suggest different alternatives to the customer. Some of them will be quite happy to change their order and add another product in place of the discontinued or out-of-stock option.
Things can quickly get out of hand when complications happen in the return process.
While shipping and return policies are integral to ecommerce sites, many business owners find it quite dull to research and develop policies that suit their specific businesses.
All too often, store owners are tempted to publish vague and generic policies that are not sound or applicable to an ecommerce store. To avoid this from happening, both suppliers and store owners need to agree in advance how returns should be made.
Having a well-researched policy on your ecommerce website will allow you to develop an organized and automated system. Doing so will save you and your customers a lot of irritation and confusion in the long run.
After Amazon introduced prime delivery, people started preferring it because they can get their orders in just a day.
But the thing about dropshipping is that it usually comes from China. Therefore, shipping times for orders can last 20 days or more. A lot of people can’t wait this long to get their products.
That’s why you should provide them with at least a tracking number to give some credibility. And any time an order isn’t processed on time, you should give your customers a reason and reset expectations for when they can have the item delivered at a later date.
Mishandled Damaged or Lost Items
When a customer encounters a problem with their order, they’re already dissatisfied with your service.
Ideally, you want to offer a quick and easy solution to them, not fuel the fire. It would be best to develop a process that will manage and handle order issues and make your customers feel accommodated.
Facebook Ad Policy Violations
Facebook is an essential aspect of dropshipping. Without Facebook Ads, it is much harder to test out your products and start scaling your store over time.
Many newbies commit mistakes that go against Facebook Ad Policies, resulting in their Facebook accounts getting banned. This has even led many entrepreneurs to quit dropshipping because it’s challenging to get “unbanned” once you get into Facebook jail.
Even if you do get your ban lifted, there’s still a chance that you’ll get booted again in the future, especially if you don’t take the time to get more educated about Facebook’s ad policies.
Low Profit Margins
A product moves from the hands of the manufacturer through a supplier, the storefront, and finally, to the consumer.
Markups are to be expected along the way. Doing so allows merchants to pull a profit.
However, online selling is a challenging game to play and is extremely competitive. Most merchants often find themselves in a price war, continually lowering their prices.
This results in merchants selling their products at low prices, which can result in selling at a net loss. Also, note that margins do vary greatly depending on the product type.
Failing to Develop Your Own Brand
Although you’re not the one who manufactures your products, you’re still running a full-fledged dropshipping business.
If other people can sell the same thing to your target customers, you should provide them a good reason why they should pick you over the competition.
Having a strong brand identity and a cohesive offering allows you to leave a mark on your customers. This will pave the way for recurring transactions in the future. Hopefully, you’ll also be able to establish a large base of loyal customers in the long run.
Relying on a Single Dropshipping Supplier
This is one of the most common mistakes drop shippers make: putting all of their eggs in a single basket.
You might contact a supplier and then establish an ongoing drop shipping arrangement. What happens next is that you leave the fate of your entire business to them.
But what happens if that same supplier runs out of stock, goes out of business, or encounters other issues that can affect you as well?
In the end, that will leave your scrambling to find a replacement supplier.
This can also result in a loss of sales and other order fulfillment issues, both of which can damage your brand in the long run.
The best solution is to set up arrangements with different suppliers. Or at least have a back-up of suppliers to lean on if your primary supplier encounters a problem.
High Product Cost
Most users who visit your dropshipping store will be comparing the prices of your product with other stores. That’s because many people are now aware that they can quickly get better deals elsewhere.
If they think that they can find that product at a much lower price, then they’ll leave your store and buy from another website.
So, as much as possible, keep your prices reasonable, but make sure that your business still stays profitable. Try to balance both.
Running a dropshipping is pretty straightforward. However, it requires attention to detail.
That’s why we understand if you commit mistakes when you are new to dropshipping. Luckily, there are ways you can avoid making these ecommerce blunders.
So, embrace these mistakes, learn from them as much as possible, and keep going!
All images provided by the author under his or her own license.
Disclaimer: The views and opinions stated in this post are that of the author, and Return On Now may or may not agree with any or all of the commentary.