One of the beautiful things about living in the 21st century is that it’s easier than ever to start an eCommerce business.
The days where you needed oceans of cash, expensive property for warehouses and storefronts and teams of employees are a relic of the past century.
Sure, you can still run a business with physical locations where you manufacture and store your products before they’re purchased by customers, but dropshipping has changed the game for entrepreneurs looking to start a business with minimal investment.
In the simplest terms, dropshipping basically involves setting up an eCommerce site, finding a product that you want to sell that can be drop shipped from a vendor or manufacturer, and then advertising and selling that product.
Since the purchases your customers make are shipped directly from the manufacturer, you don’t need to buy or carry inventory, maintain stores, or even have employees.
Granted, this is a pretty simplistic description of how a dropshipping business works, but it really is basically that simple.
And yet, despite this simplicity, drop shippers still regularly make costly mistakes that impact their business both in terms of how well they satisfy customers and how much revenue they can generate.
Today, we’ll break down the most common mistakes so you can avoid them. Whether you’re just dipping your toe into the dropshipping pool, or you’re a seasoned veteran who’s generating six or seven figures a year in income, eliminating these mistakes will take your business to another level.
15 Most Common Dropshipping Mistakes
1. Unrealistic Expectations
We’ve lost count of how many times we’ve heard this story:
Someone is sitting around one Saturday afternoon and eventually lands on a dropshipping YouTube video. Then they watch a dozen more. Maybe they go read some dropshipping blog articles.
By the end of the afternoon, they’re convinced this is the key to their financial future.
Dropshipping will be easy. If you don’t have to purchase and carry products or deal with shipping, it’s basically a license to print money, they think.
Excited, they immediately find a product, build their website (often heading over to Fiverr to do it on the cheap), and maybe even splurge on a “Make a Million Dollars with Dropshipping!” online course.
With everything set up, they launch, and…crickets. Two months later, they’ve maybe made a few sales but hardly the life-altering income they expected. Another month in, they quit convinced that dropshipping is a scam.
While dropshipping is absolutely a viable way to have your own ecommerce business, like most “get rich quick” plans, the quick is relative and often involves a lot of hard work.
Building a dropshipping business takes time, energy, and effort. Most people quit before they’ve even given themselves a chance to succeed.
Lower your expectations, understand you’re playing a long game, and over time you will actually find the success you expected right out of the gate.
2. Spend Too Much Time on Research
We are big fans of doing your research. In fact, we tell people to never skimp on their research. Research allows you to understand what you’re getting into before you get into it. Spotting potential problems before they become real problems is a valuable thing.
However, some of us tend to overanalyze things (guilty as charged). Diving in without doing your research is a recipe for disaster, but overanalyzing and researching to the point of analysis paralysis (and never starting because of it) is just as deadly.
Try to find the balance with your research. Get a good grip on the basics of dropshipping from the resources out there, but understand that you’ll never know everything and you’ll learn a lot by doing.
Mistakes are part of the process. Thinking you can research your way to perfection is partially true, only because if you spend all your time studying and never actually implementing what you’ve learned, you’ll never fail. But you’ll never succeed either.
3. Not Doing Enough Product Research
Wait, didn’t we just talk about doing too much research?
One area where you will want to take your time and actually dive deep into the research pool is when it comes to selecting products.
What should you be considering when you’re looking at products? For starters, these things:
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Is the product selling?
Seems like a no-brainer, but in their excitement to get started, many aspiring drop shippers latch onto a product they think sounds perfect, only to realize months later that no one is actually buying that product.
If you’re selling items through places like AliExpress, make sure you look at the sales velocity. If it’s an item that isn’t moving, it’s not the right product for your business.
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Is there a good profit margin?
Maybe you’ve found an item that draws orders like crazy. Great, right? Not so fast.
If the item moves in huge volumes but has a very slim profit margin for you, it might not be worth your time. Check the margin before making a decision.
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How much competition is there?
Finally, you’ll want to find a product that has a good sales volume and a decent profit margin. You’ll also want to find one that has low competition.
As a starting drop shipper, you’re probably not going to be as good at moving profitable items as the bigger, more established sellers. If you can find a niche item and get ahead of the curve, that’s a recipe for success.
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4. Selling Too Much Variety
In the last mistake, we mentioned finding a niche, so let’s take a deeper dive into that topic.
A niche is a narrowly focused category where you’ll build your business. You may assume that being the dropshipping version of Amazon is the way to go, because more variety means you will potentially attract more customers, but that’s not really how it works.
By picking a niche, whether that be something broad like “fitness equipment” or more focused like “exercise bands”, you’ll be better able to market and brand your dropshipping business.
By focusing on a niche, you’ll be able to target very specific customers. This will help you better focus your marketing to reach the right potential customers.
Find a niche that interests you and build your business around that. Don’t try to be everything to everyone. Specialization is key.
5. Picking the Wrong Niche
And while we’re on the topic of niches, it’s important to pick the right niche.
Ideally, you want to choose products in an area you’re at least marginally interested in on some level, that has a steady stream of sales, that has relatively low competition, and has a good profit margin.
If you choose a niche that doesn’t work out, it’s not the end of the world. It simply means you need to cut your losses and try a new niche. You can potentially avoid this headache by doing your market research upfront.
You will benefit from researching your niche in the same way you researched your products. No one loves doing market research, but understanding the opportunities and pitfalls presented by a niche before you buy in can make your dropshipping journey a lot less stressful.
6. Relying Too Heavily on Suppliers
Any dropshipping business is going to require a certain amount of trust. After all, you’re not carrying the products or doing the shipping personally, which means you’re going to depend on the supplier to fill orders accurately and in a timely fashion.
Here are just a few issues you may face with your suppliers:
- Raising prices and cutting into your margin
- Not shipping things on time
- Backordered items
- Going out of business and not fulfilling orders
These are just some of the common issues dropshippers face. The solution here is to rely on multiple suppliers for your products when possible. If that’s not a viable option, then see if you can enter into a contract with your supplier.
If you can, you can agree to terms on pricing, shipping, and other potential issues ahead of time.
7. Undercutting Pricing
At some point early in your dropshipping career, you’ll invariably think “I could really spur more sales if I just undercut the competition on the price.”
The idea of a loss leader product is not new. However, it works for giant retailers like Amazon and Walmart because shoppers trust them.
When you lower prices well below the competition as a dropshipper, it tends to make potential customers wary. A deal that sounds too good to be true often is, and low prices will generally convince customers they’re buying an inferior product (even if your product is the same as the competition).
Beyond that, you also cut into your own profit margin. So, while you may make more sales, you’ll have to generate more sales to make the same revenue you’d have made at the original price.
8. Ignoring Reviews and Customer Feedback
One of the great things about dropshipping is that you don’t manufacture items, you don’t keep them in a warehouse, and you aren’t shipping them to customers. You’re essentially a middleman between the customer and the supplier.
Because of this, dropshippers will often assume they can ignore customer feedback and reviews. After all, a damaged or lost item is the shipper’s problem and not yours, right?
Not exactly. While shipping problems do indeed lie with the supplier, you’re the public-facing company the customer identifies with. As such, their mistakes affect you a lot more than you realize.
Pay attention to feedback. If a customer has a problem, reach out to the supplier and help resolve it.
9. Skimping on Your Website
As mentioned earlier, many new drop shippers will want to jump into the business with both feet. They’ll go out and purchase a domain for their website, then head over to Fiverr or some similar site and hire the lowest-priced web designer to build them the home for their future eCommerce empire.
You can get many great products (including website design) through Fiverr. However, you generally get what you pay for. Skimping on the website design is a recipe for disaster.
Your website is where customers will decide whether or not to do business with you. As such, you’ll want it to look professional and be functional. You’ll also want it to work flawlessly on mobile devices.
Spend the time (and money) to get a professional-looking site. It will pay for itself in the long run.
10. Not Having a Marketing Plan
For some reason, a lot of people start a dropshipping business, put up their site and listings, and then just expect people to magically find them through the magic of organic SEO.
Unfortunately, this approach doesn’t work particularly well, especially when you’re starting out.
Your dropshipping business is like any other business in the sense that you will need to devise a marketing plan to let the world know you exist.
What kind of marketing plan you go with is up to you. You may build an email list. You may do paid advertising. There is no shortage of options out there.
The key takeaway here is that you will need to plan and budget for marketing if you hope to actually reach your potential customers. Plan for branding too.
11. Using Blackhat SEO Practices
Building on the idea of marketing, many drop shippers will look for shortcuts to help boost their online presence.
Building an SEO presence for your site takes some time under the best of circumstances, but some Search Engine Optimization services will offer tactics designed to get you noticed faster.
The problem here is that Search Engine Optimization has some pretty well-defined rules. Breaking those rules, while possible, will get you penalized when you get caught.
These practices are called “Blackhat SEO” (because in the cowboy movies, bad guys wore black hats). Utilizing Blackhat SEO methods can get you a boost, but understand that when you get caught (and Google is very good at catching people gaming the system), you will be penalized with lower search rankings.
So, while the idea of getting a little illegal push can sound enticing, the punishment isn’t worth the reward.
12. Using Influencer Marketing
Influencer marketing is all the rage these days, and there are plenty of instances where paying an online personality to promote your product can pay off in both the short and long term.
However, new drop shippers often think they can get ahead of the competition by hiring an influencer to promote their business on YouTube, Instagram, TikTok, or some other social media platform long before it’s an actual viable strategy.
Influencer marketing is not cheap. The influencers with the biggest followings command the highest rates. Odds are the micro-influencers a new drop shipper can afford will not provide enough return on the investment to make the expenditure worthwhile.
Spend that money on building a better website and traditional marketing initiatives instead.
13. Not Having a System for Returns
No matter how great the product you sell is, there will come a time when a customer wants to return it. This is just a fact of retail life.
You may assume that because you’re just an intermediary that the return is the responsibility of the supplier. And you’d be half right.
The supplier will ultimately handle returns, but it’s your reputation that’s on the line. Because of that, you will want to make sure you have a clear and easy to follow return process set up with your vendor, and you will want to monitor returns to ensure your customers get refunds or replacements in a timely manner.
Look at a return as an opportunity. Customers who find retailers with painless return processes are more likely to continue to shop with them in the future.
Having a good returns system is a benefit for your dropshipping business.
14. Not Planning for the Holidays
Everyone understands the importance of Black Friday through Christmas (at least here in the States, anyway), but there are countless other holidays throughout the year that most drop shippers fail to take advantage of.
This is a big mistake. Depending on the niche you’ve chosen to work in, you could be leaving stacks of cash on the table.
Plan ahead, look at the calendar, and make sure you’re marketing your products around holidays where there’s a link. Even lesser holidays or random novelty days can provide opportunities for you to boost sales.
And as far as the big holidays? Always touch base with your suppliers and make sure they’re prepared for the increased order load. Nothing can kill your business faster than disappointed holiday shoppers who didn’t get their gifts before the big day.
15. Giving Up Too Early
Marketing hyperbole will have you convinced that dropshipping is the easiest road to wealth since affiliate marketing. And while both dropshipping and affiliate marketing can create life-changing income streams for you, neither is the simple “set it and forget it” business online gurus would have you believe.
Dropshipping takes work, time, and dedication. Like any other business, you’ll need to spend time learning new skills, figuring out plans, doing research, and building your infrastructure.
When all that’s done you can finally launch and realize customers aren’t flooding your fancy new website or crashing your server with orders.
And that’s all right. Dropshipping is a marathon.
Set manageable and realistic goals. Aim to make $200 a month. When you hit that, figure out how to make $500 a month. Prepare yourself for the peaks and valleys. This is how owning a business works.
Above all else, don’t give up at the first sign of adversity. When those first few months don’t provide enough income to quit your day job, keep at it.
Too many drop shippers get discouraged early on and throw in the towel. Success often takes time and looks like hard work. Keep at it.
Final Thoughts
We are huge fans of dropshipping. It’s a fantastic way for people to create their own business and path to financial freedom. Whether you just want to dabble to generate extra income or launch a full-scale eCommerce business, dropshipping can help you achieve your goals for a fraction of the cost of launching a traditional retail enterprise.
The path to dropshipping success isn’t always easy or straightforward. However, by avoiding the 15 mistakes we’ve pointed out in this article, you’ll be able to skip learning some difficult lessons the hard way.
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