The dropshipping business model allows you to offer your customers a wide range of inventory without the need of purchasing it up front.
It is much cheaper than opening up a brick and mortar store. Your typical business will have a lot of costs and expenses compared to a dropshipping e-commerce store.
Due to its lower barrier of entry, many people come into dropshipping thinking they will make it rich quick.
1. The Wrong Mindset
Many people who start their first dropshipping business tend to think it is a get rich scheme. To be honest, I had this same mindset when I first started.
After a few months of not seeing results, I realized I had to treat my e-commerce store as a real business.
You have to have the right mindset when you are ready to invest your time and money into your dropshipping business.
You have to believe that your efforts and hard work will give you the results you want.
2. Treating it as a Business, Not a Hobby
Anything worthwhile will take time, discipline and patience. You need to create a store which represents your brand, cores, and values.
Customers are one click away from buying from your competitors if your store comes off as a bit spammy or your pricing is too low or too high.
You won’t see success immediately, but being consistent every day and working on your business day by day, it will compound the results you will achieve in the future.
You must also continue learning new skills such as sales and marketing. This will come in handy if your business relies on PPC advertising.
Understanding how to market and sell are great skills which you need in order to scale your business.
You can also use an online store builder like Shopify to set up your business and running in a short amount of time.
Like any business, you need discipline and patience when you’re starting out with dropshipping.
3. Not Mastering Marketing
There are many moving parts required to build and maintain a successful dropshipping business. Designing a logo, website graphics and tweaking your website can be a lot of fun.
However, marketing and driving traffic to your website should be your main focus after you have automated most aspects of your business.
Dedicating time in learning how to create high-quality ads and converting your customers should be your main priority long term.
Optimizing your website for search engines can help drive more traffic to your store.
Most e-commerce stores convert at 1-2%. If you have less than 100 visitors on your site, it is much more difficult to make sales.
Ads are a great way of driving more traffic and sales, but SEO can help rank your store higher.
Creating value through blog posts and optimizing your product pages can help build a loyal following.
Website optimizations you can try include:
- Adding Scarcity and Urgency
- Customer reviews and testimonials
- Social Proof through your social media platforms
- Website colors, images and text
- Is your website mobile friendly?
4. Incorrect Pricing
Your main goal of a dropshipping business is to remain profitable. For example, if you are selling a $4.99 product, you should be pricing it at $19.99.
When pricing your products, you will need to take into consideration the cost of goods, marketing, expenses such as monthly fees for subscriptions and outsourcing your daily tasks which can be automated.
Do not price your products too low because it can affect your profit margins and cash flow.
Use your competitors as a benchmark but never undercut your prices just because a competitor is pricing their products low.
You can also try and increase your customer’s average order value to improve your profits.
Read more about pricing your products here.
5. Lack of Resources
You cannot run a business when you’re low on funds. This will take a longer time for you to see a return on your investments.
You will need money to run ads, test products, and ordering products. It’s recommended to target at least 5 audiences when testing products with Facebook ads.
You will have less potential finding a winning product with low ad spend.
When you’re low on funds, running a business is very challenging. You’re more likely to take shortcuts in order to keep the cash flow coming into your business.
The more shortcuts you take, the more problems you will make.
6. Spending Too Much Time on a Product
It is easy to fall in love with a product while you’re testing ads. However, spending time and money promoting a product which does not return any sales will waste your marketing budget faster.
Keep it simple and find what is already working and replicate it. You can check out my research methods here.
When you’re testing products with paid ads, its key to test and eliminate ads which are performing poorly quickly.
You can also focus on other aspects of your business to increase sales such as: improving your product description, increasing average order value, offer upsells, bulk purchases and discounts.
7. Failing to Outsource
As your business starts to pick up and you’re getting consistent sales, it’s important to create a system so that your main focus is scaling the business.
Tasks which you can outsource include customer service, product research, importing products and updating your store, social media manager and Facebook Ad tester.
You can outsource these tasks to freelancers on websites such as Upwork. There are hundreds of freelancers who are very eager to help you get to the next level.
It can take some time searching for the perfect candidate, but having the right teammate will make your life easier when running your business.
8. Spot the Real from The Fake Gurus
When I first started dropshipping, I got a bit obsessed with finding the latest information which I thought would be the answer to my business problems.
With the abundance of information out there, it is very common to come across people who may present themselves as an expert but in reality, they are not.
They would usually bait you by providing value before promoting their program/course to you.
I’ve seen many people fall victim to these gurus and overpriced courses which contains information that can be found on the internet for free.
If you are interested in purchasing a course, I recommend looking for reviews and past student results to see if the person selling the course is legitimate and knows what they are teaching.
If you see them showing off fancy cars or flashing their expensive watches, just run.
If you are interested in learning more about dropshipping and creating a profitable Shopify store, Click here to read my review on one of the best dropshipping courses in 2019.
9. Longer Shipping Times
With e-commerce giants like Amazon who offer prime delivery, customers are now used to and expect fast shipping.
When you are dropshipping products from China, shipping times can take at least 13-20 days.
Customers usually are not willing to wait this long for their order to be delivered.
If you can find suppliers that are located in the same country you are targeting, that works out the best.
You must reassure your customers that they can trust your business by using a more reliable shipping method like ePacket shipping.
Standard shipping which you might as well just refund the customer now to save you the trouble.
Using ePacket shipping will provide your customers with a tracking number which helps increase their trust with your business if there are delays with shipping.
It is also a good idea to show shipping times clearly on your product page to reduce your customer’s concerns in the long run.
10. Unreliable Suppliers
This plays a big part in your success as a dropshippier. Having a great online store is useless if there are constant problems with your suppliers.
Your supplier is responsible for packing and shipping your orders to your customers on time. You will have little control on this side of the business but it is the reality of dropshipping.
If your suppliers are located in China, it is important to double check their shipping methods and past customer reviews.
Popular items can run out before your supplier receives your order so its best to regularly check in with them about stock levels.
It’s also a good idea to note down multiple suppliers in case something happens to your main supplier. It can save you time on back orders and customer complaints.
11. Understanding Who Your Customers Are
Depending on your chosen niche, your customers will have unique ways of responding to your brand and your marketing.
Before running any ads, it’s a good idea to analyze your competitors to see how they structure their ads, product descriptions and email marketing on their website. Pay attention to the style of copywriting and what images they use.
Knowing who your customers are will help you succeed more with your paid ads. By targeting the right audience, you’re more likely to receive more user engagement and lower ad costs.
Click here to learn more about starting your own successful dropshipping business.