21 Common Dropshipping Mistakes To Avoid (2020 Guide)
Finding ways to profit from the dropshipping business? Get in line. Thanks to dropshipping thousands of people are now trying their luck to earn big bucks from the comfort of their homes. But do they succeed?
They know what they’re doing right, but the problem lies elsewhere. Most individuals don’t realize where they are going wrong. To save you from this menace and help you generate an acceptable revenue from drop shipping, I have compiled an extensive list of 25 common mistakes that you may be making. But first, let’s get you well versed with the basics of drop shipping–what it is and how it works.
What is the Drop Shipping Model?
Dropshipping is the latest trend where a store does not stock up its inventory but follows the drop-shipping model. It is a method where the store purchases the product from a third-party and has it delivered to the buyer’s address. For this, the business owner earns a predetermined commission. The entire drop shipping model depends on this commission as their source of profitability.
The key differentiator here is that the retailer doesn’t stock the goods rather gets them delivered directly through the manufacturer or a wholesaler (generally).
How Drop Shipping Works on Shopify
The dropshipping process begins by finding the most suitable suppliers spread across the area. This proves very beneficial in getting the packages delivered as soon as possible. You could physically find suppliers or find a Shopify app integration to connect with thousands of suppliers in your region.
The next step is simple, whenever your store gets an order to inform the retailer so they can get the order delivered quickly. If you’re using an app integration to manage your sales, you can automate the entire process. This makes the process a lot simpler and hassle-free. The products in such a case are delivered directly from the supplier to the customer–wherever they are located.
To sum it up, dropshipping is a great business model for aspiring businesses and entrepreneurs. It allows you to check various downsides of different business ideas with minimal risk. Now you know what drop shipping is and how it operates but this post was to show you how you mustn’t operate. So, without further ado let’s find out.
21 Mistakes Drop Shippers Make in 2020
1. Selling Trademarked Products
This mistake can easily cost you your store. Selling trademarked goods without legal permission can take you out of business. Any item with a logo, character, or brand name embellished on it requires a license to sell. If you don’t have valid documents and permission to sell the product the patent company has the authority to sue your business. This may result in your store being shut down or cost you a lot of money to settle the claim.
To get a license you must pay a certain amount. It can range between a few hundred dollars to millions depending on the owner’s demand. If you wish to avoid getting in trouble with recognized brands, try selling white-label products.
2. Not Being Honest
The first rule of drop shipping–don’t commit to impossible deadlines. It may sound great but if you cannot deliver the product to the customer within a specified period, let them know. By keeping them in the dark you are compromising the integrity of your store and losing the consumer’s trust. Lying to customers about the shipping dates can cause mayhem later.
Communicate with the supplier and find out how soon they can deliver the package to the customer. Assuming they give you 20-30 days, give the buyer this exact time frame. If you tell them their package will be delivered within two weeks, that’s not the truth. Be honest always, that’s rule number one.
3. No Marketing Strategy
Start generating a buzz for your store as soon as you are sure about starting it. Promotions, advertising campaigns, and any form of exposure help your store to prosper. Before getting started, make sure you have a dedicated Facebook and Instagram page to support and promote your store.
Finding your store on a social media platform develops trust among consumers and that is vital to run any business. Post engaging content and rope in as many people as possible. For the paid alternatives, you can publish paid ads on popular platforms like Google, Facebook, and so on. Fair warning–don’t spend more than you can afford. You may lose track of your spending on marketing once the leads start coming in. I suggest you create a budget and more importantly stick to it.
4. Bad/Non-existent Customer Service
Customers don’t look for great quality products when buying goods online. Don’t get me wrong, they want a good quality product, but they also want a seller they can trust. This trust can be developed with the help of amazing customer service. That’s a rare quality among new businesses and possibly your best bet as a store owner.
When stores/businesses fail to provide the necessary information, the customers are forced to replace them. So, make sure you are always available to answer any doubt that your buyers may have. Hire a team of professionals to provide exceptional customer services around the clock. When the customers are satisfied, they will promote your brand by recommending it to their friends and families.
5. Unprofessional Website
What’s worse than delayed deliveries? A shabby website.
Your website sets the vide of your store, it must feel welcoming and lively if you wish to attract customers. A poorly constructed website only confuses your visitors. For people experienced in coding HTML websites, you can easily modify any WordPress template to create your store. For those who have no idea how to do that, simply buy a store on Shopify and get a theme (paid or free) that works well with your shop’s aesthetic. This is a paid option; however, it is much cheaper than paying a web designer hundreds or even thousands of dollars.
6. Not Establishing a Solid Base
This is a common problem faced by amateurs, they see a dropshipping website and immediately begin listing every item on their store. It’s true that the more products your store has the more profit you can earn (supposedly). However, you may not be equipped to serve an audience this big yet.
Narrow down the products that you dropship on your store to satisfy the customers. As they say, “Jack of all trades, master of none”. Don’t dive into selling every type of product, find a niche that you understand and can specialize in. This way the customers will see you as a specialist and whenever they want to buy a product that you specialize in, guess who they’ll turn towards.
7. Selecting a Random Niche
You can select from hundreds of niches before settling for the most suitable one for you. However, don’t pick a niche randomly. Before choosing the niche, conduct thorough research and understand the basics of that niche. Instead of selecting a cliched niche, talk to people, use the internet and the power of Google to find out what people like to shop online.
I strongly recommend picking a niche that you’ve already experienced and gained knowledge of. This will give you a lot of ideas to market the products efficiently and more effectively. Selling a product that appeals to you will also allow you to be more persistent.
8. Stealing the Policies from Existing Stores
Store policies can be boring, I agree. But as a store owner, you cannot overlook this aspect of owning a store. Copying policies of similar stores may seem like a great idea but it may backfire in more ways than you can imagine.
The problem here is that the policy may comply with the aim of the site you copy it from. But that does not mean it will fit your requirements and what you’re trying to achieve with your store. Another issue is that the policy you copy from may not be legally concise. In a court of law, such policies barely stand a lawyer or judge’s examination. It is best if you hire an experienced attorney to write a comprehensive and legally sound policy for your store.
9. Promising the Lowest Priced Products
Lower costs attract more customers, that’s correct. But if you continue to offer products for cheap rates, you are destined to face a loss. In this competitive dropshipping market, the profit margin decreases every day. You cannot keep decreasing the cost of products to compete with others, it is not a viable option. Instead, try replacing this advantage with phenomenal customer service, a vivacious website, and specializing in the niche. This allows you to earn higher profits as the customers come to you for quality, customer service, and experience rather than cheaper products. People nowadays care more about the quality, specialization, and customer support offered by stores than the cost of products.
10. Ignoring the Holiday Season
This is perhaps the biggest mistake you are making. No store can operate 365-days a year. Considering the holidays is important as most suppliers do not deliver during the holidays. It would not be an overstatement to say that there will be the least transactions during this season.
The solution here is to contact your suppliers in advance and gain knowledge of their schedule beforehand. Once you get hold of their schedule, stock up some items before the holidays or increase the delivery duration until the supplier is next available. If both these options are not possible then it is best to temporarily remove the items from your list.
11. Not Screening Suppliers
It is no surprise that your future as a drop shipper depends on the supplier as they control the shipments and deliveries. If your supplier consistently delivers goods later than promised or sends customers defective products get ready to say goodbye to your dropshipping business.
The products may be great but does your supplier offer good service and customer care? The reliability of suppliers plays a critical role in the success of your business.
12. Being Dependent on a Single Supplier
It is always a bad choice to be dependent on a single supplier. What if they are not available? What if they suddenly stop working with you? What if their company shuts down for good?
You may have deliveries pending, the customers are waiting for their orders but with the supplier out of the picture how will you manage? For this reason, it is never a good idea to have only one supplier. They may be perfect but that doesn’t mean you don’t need a new one. You cannot have dissatisfied customers as it will negatively impact your store. So, be prepared and have backup suppliers just in case things take a turn for the worse.
13. Not Maintaining a Good Relationship with Suppliers
Don’t boss around the suppliers all day. You do not own them; at any time, they can decide to discontinue working with you. Therefore, it is recommended to maintain a good relationship with suppliers. This not only keeps your business up and running but also gets you multiple benefits like discounts and priority deliveries. Instead of blaming them for late deliveries or and issue, work with them to solve the problems quickly.
Never think you have control over their products because you don’t. If you give them a reason to hold a grudge against you and your business, then you can say goodbye to their services as your supplier.
14. Being Oblivious About Your Inventory
If you list an item as “In Stock”, don’t blame the customer for expecting a timely delivery. Calling them later to tell them their delivery will be delayed as the item is out of stock will only make them angry.
Since you don’t have control over the inventory, always stay in touch with your supplier and ask them to keep you informed. At times when the product is not available, don’t take any order for the product and offer the customer an apology. Inventory management is a basic criterion for the selection of a good supplier.
15. Expecting Too Much
Yes, dropshipping can improve your bank balance but it is not realistic to expect it to turn you a millionaire overnight. You won’t be earning six figures each month (at least not if you have only started). Dropshipping requires a lot of patience. Successful drop shippers wait for months (years even) to generate a living out of their drop shipping business.
If you are waiting to cross unrealistic milestones, sooner than later you are bound to be disappointed. If you aren’t prepared mentally, it is very easy to quit even before you have started.
16. Not Realizing the Power of SEO
Many store owners set up eye-catching websites but forget the one thing that can make or mar their business–Search Engine Optimization.
SEO offers an incredible Return on Investment (ROI) in the long run. It requires more time and money, yes. But that is only a small price to pay compared to returns that it generates. With the power of SEO, you can boost your store’s ranking on the search engines. It is a fact that the links on the first page of the search engine result page are the most clicked ones. To get your store at the top of the search engine results, using SEO tools maybe your best option.
17. No Returns Policy
Running an online store is not easy, you must deal with many problems including returns. Returned or canceled orders can cause a lot of hassle if there is no returns policy in place. Suppose a customer ordered the wrong product and wishes to return the package or the supplier has delivered a damaged product. Either way, you will have to initiate a refund for the order. Confer with your suppliers before getting into business with them about how such situations will be managed and how the refunds will be initiated. Ensure all returns are quickly handled as it leaves a lasting impression on the customers.
18. Handling Problems Poorly
It is not uncommon for customers to make mistakes when placing their orders. Some may have ordered the wrong size while some may have ordered the wrong quantity whereas some may have placed the order mistakenly. How you manage such situations speaks volumes about your business.
If the customer files a complaint, it is better to refund their payment and cancel the order. If you decide to continue shipping it may end up with a negative review from the customer. Such negative reviews are enough to permanently scar your store’s integrity.
19. Not Providing Basic Order Information
For any drop-ship business, it is important to provide valid tracking information to the customers. Display the customer’s order details and status on your store by setting up a channel. If there is any delay, the customer will automatically be informed when they check the status.
20. Absent Product Description
People like to read as much information about the product as possible before investing in it. If you do not add a comprehensive product description with the product, the chances of people buying it reduces significantly.
Research on the product and list the vices and virtues along with the description. However, make sure you do not oversell the product. If it does not meet the customer’s expectations, then they are sure to leave a bad review.
21. Giving Up!
Lastly, the golden rule of owning a drop shipping business is to never give up. You’ve made mistakes, that’s alright. What’s important here is to learn from these mistakes and still come up with a solution to avoid them in the future. You cannot instantly earn thousands of dollars in profits, that’s not possible. Set small goals and gradually watch your dropshipping business scale new heights. Ensure that you invest in an effective marketing strategy so that if your competition decides to quit, their customers are directed towards your store.
Now that you are aware of the commonly made mistakes by drop shippers, you are prepared to start your dropshipping venture. Make sure you don’t repeat these mistakes and watch your dropshipping business take off.
If your new to dropshipping or even an intermediate dropshipper, I highly suggest you take a proper course to learn how to dropship properly. Now, you don’t need to get a course especially since, there’s a lot of fake gurus now a days claiming to be experts and charging ridiculous prices for their garbage courses but, if you running paid ads and you don’t know what your doing, you could lose some serious amount of money.
That’s why I highly recommend getting a high quality course. I have reviewed over 50+ dropshipping courses on here. And there is only one course which I feel comfortable recommending called eCom Elites. It’s by a guy named Franklin Hatchett who has been doing this for years now. Franklin did dropshipping even before it got super popular. Another thing is, this course is one of the cheapest courses you can get and the course is filled with a TON of amazing information. Other gurus charge thousands of dollars for a single module on eCom Elites. You can read my eCom Elites Review here to find out if it’s right for you or not.
If you for some reason don’t want to purchase the course, you can check out my beginners guide to dropshipping here.