Dropshipping is a convenient way to test products in the
e-commerce marketplace without having to invest a lot of money on inventory,
warehouse space, and staff to handle customer's orders. It is also a great way
to sell large, expensive, or hard to handle the merchandise.
However, dropshipping is not an easy, no-effort way to make
a lot of money selling on the internet. It takes a lot of hard work to do your
market research to select potential profitable products, hard work to check out
your competition so you can price your items properly, hard work to develop
unique and creative advertising and marketing methods to convince potential
customers to buy from you, rather than from your competition.
Top 10 Dropshipping Mistakes
Choosing a Niche
Many people choose a Niche by reading some posts or by some
recommendations. This can create a problem sometimes. If the owner doesn't know
much about a niche like having no interest. Then a store owner can find
difficulties in finding demanded products. It can create a problem in product
research.
Chasing the money
98% of the marketers out there get into this business and
chase the money. I know, because I was one of them. I had a jewelry store and
did very well with it until I got burned out. I couldn't do it anymore and
walked away from it. Learn from my mistakes, and go into a niche you have an
interest in.
Confusing Website Structure
Store structure should be simple. So, if the consumer wants
to buy a T-shirt then there should be a proper URL structure that will list all
T-shirt. If the site structure is not good then this will lead to low conversion.
General Store
Design a store in such a way that even a layman can easily
understand site design and can easily browse it. This can increase conversion
rates.
Store Design
You pay for the convenience of having someone else handle
inventory and service, and often you pay a heavy premium for that convenience.
Suppliers add a mark-up to the cost of packing materials, they will add a
mark-up to shipping costs, and often they will mark-up their labor costs. After
all, nothing is free
Information
Your dropship supplier must keep you informed about
inventory levels and any price changes. If you are selling on Amazon, eBay, or
other similar sales platforms and you cancel too many orders because of a back
order situation from your supplier, your service ranking will be affected and
if your metrics drop too low your selling account may be suspended or even canceled
Convenience
Dropshipping can be executed on a global scale. However, if
you are buying and selling worldwide, you need to be sure you understand that
each context you enter is not the same. So if you pick a local marketplace,
understand their local clientele, price level, buying behavior, payment terms,
profit margins, level of after-sales service.
Items are not always cheaper
People perceive DropShipping as a high margin and easy to do
business. This is not always the case, due to the low barrier of entry, it is
easier and easier for people to create a website, find some products and start
advertising them!
Because the cost to start up was so low, some stores sell
their products with very small margins, and sometimes will even accept a small loss just to get customers and revenue.
You can mitigate these problems by providing value above and
beyond the physical product. For example, providing an easy to navigate store,
with simple to use tracking pages and good customer service will instantly give
you an advantage over a website that has rock bottom prices, poor sales pages
and awful customer services.
Bundling items doesn't always work
When creating your store, you will more than likely work
with more than 10 different suppliers. One of my stores has over 100 different
suppliers, and they each have their own warehouse, shipping companies, and time
frames.
This makes bundling customer orders together impossible. If
your customer buys Item A, B, and C, and they are all from different suppliers,
you will firstly incur 3 different shipping charges, you will then also be
given 3 different tracking numbers and lastly, you will have 3 different
potential time frames for the items to arrive.
You can mitigate or at least make this issue smaller by
using a fewer number of suppliers as well as explaining to customers beforehand
that shipping in smaller quantities or separate packages can reduce tax. When
creating your store, you will more than likely work with more than 10 different
suppliers. One of my stores has over 100 different suppliers, and they each
have their own warehouse, shipping companies, and time frames.
Someone makes a
mistake
DropShipping does add a new level of complexity when it
comes to making mistakes.
Suppliers do and will make mistakes when it comes to orders,
they might send out the wrong color, the wrong size, sometimes the completely
wrong item and you are the faces of that company. You are the one who has to
sort out the issue by talking to both the supplier and the customer, you have
to find a way to solve the problem and fix it for the customer.
By finding a good supplier you can reduce this risk, so look
for ones who have lots of orders, high feedback ratings and have a good store
pages. Ones who are just starting out or don't have much in the way of feedback
or reviews may cause you problems and sometimes can't handle the sheer volume
of orders that you can be giving them (trust me, it's happened to me)
