Dropshipping is often recommended as a popular, modern way of doing business online. It’s become popular because it’s relatively easy to start, has low upfront costs, and allows you to sell a wide variety of products online without running your own stock, you just need to run the online store!
Easy… Right?
Hmmm… I don’t think so… I’m going to explain, in my opinion, why not to get into dropshipping, I’ll list the main disadvantages to starting a dropshipping business, and why I’d suggest starting another type of online business instead.
What exactly is DropShipping?
So, Dropshipping is an eCommerce business where the retailer, or you, the “dropshipper” sells products to customers online without physically stocking or handling the items yourself.
A dropshipper partners with suppliers or manufacturers who store the products and fulfill orders on their behalf.
How Dropshipping works
As the dropshipper, you need to select a range of products to list on your online eCommerce store. These products usually come from companies which are set up for Dropshipping… A few examples of these include SaleHoo, Doba, and Worldwide Brands, AliExpress or other services such as print-on-demand services that print and ship products as orders come in.
You, the dropshipper, then registers a domain name and creates an online store, with a unique name and brand identity. This is usually easiest done on platforms like Shopify or WooCommerce, where you will then list the selected products and hopefully sell them online.
As with any website or online business, it’s up to you to do the digital marketing and social media to drive traffic to your eCommerce store.
When a site visitor is interested in your product(s), they become a customer and place an order on the your eCommmerce store to purchase your dropshipping product. They pay for the product on your site and then you forward the order to the supplier for them to process.
The supplier processes the order, packages the product, and ships it directly to the customer. The customer typically doesn’t know that the product is being shipped by the supplier, as the dropshipper’s branding is used. You are the middle-man between the customer and the supplier.
Your business makes a profit from the difference between the price you’ve charged the customer and the cost price that you pay to the supplier.
Dropshipping is usually made to sound very good, they’ll don’t often tell you the cons of dropshipping or why not to get into dropshipping, so be sure to do some research before you get into it.
Getting into drop shipping
Platforms like Alibaba and Shopify have made it very easy for anyone to start an online business nowadays. These platforms provide all the necessary tools to set up a store quickly, cutting out the need for large initial investments or knowing how to build your own website. This accessibility has opened the door for many dropshipping entrepreneurs to enter the market with not much stopping them.
This has led to a saturated market in dropshipping, making it very competitive. As a result, businesses often need to invest in paid advertising to get found. Platforms such as Google and Facebook offer targeted ad services, but success in this crowded space requires a bigger budget and an advertising strategy to effectively reach potential customers and bring them to your dropshipping store.
Reasons why not to get into Dropshipping: cons of dropshipping:
As mentioned… This is just my opinion on why I don’t think dropshipping is a good business.
Besides the facts that dropshipping may limit your ability to create a unique brand for your business. Everything you sell is associated with the companies that supply and deliver the products, not your own brand, and so I’ve created a list of reasons as to why not to get into dropshipping.
These are what I think are the cons of dropshipping:
1) It’s not that simple
Dropshipping might not be as simple as they make it out to be.
When you start doing this business, remember that the costs for shipping can increase quickly. People who do dropshipping have to handle everything, like finding suppliers, processing orders, handling returns, and helping customers. You’ll also need to take care of your websites, attract visitors online, and keep an eye on the stock and shipping prices from the manufacturer, which all takes a lot of time and admin.
2) Low profit margins
The success of a dropshipping business depends a lot on your website traffic. If you’re just starting an online store, it might take some time to attract customers.
In dropshipping, you often buy products individually instead of in bulk, which means your profit margins are not as high. You may also have to pay extra fees to the wholesaler for handling each customer’s order, like picking, packing, and shipping. So, you won’t make a lot of money until you grow your business and have a large amount of customers which would then allow you to increase your profit margins.
3) It’s very competitive:
Many people wanting to start an online business find dropshipping appealing because it doesn’t require much upfront money, but this popularity has led to a lot of competition. You’ll probably find various companies selling the same items from the same suppliers, and as a result, customers may find better deals by buying from other sellers.
Bigger companies can lower their prices to attract customers more easily because they have the resources to do so. Smaller businesses, on the other hand, might have to sacrifice some of their profits to offer lower prices. This can make it difficult for them to find new customers and retain the old customers.
4) Maintaining quality is difficult:
Dropshipping lots of products means you can’t easily check all of the products you’re selling, to make sure they’re as described.
This can be a problem if the quality isn’t very good. Customers will complain to you about late deliveries, damaged items, missing things, and other issues, instead of reaching out to the supplier. Even if it’s not your fault, a batch of bad products can make customers unhappy, cost you money, and lead to negative feedback or reviews.
5) No proper control over stock:
Whether or not you can meet your customers’ orders depends on whether your suppliers have enough products in stock.
If your suppliers run out of stock, you might have to temporarily stop selling their items. This could lead to longer wait times for customers and/or even losing some customers. Even if you’re doing everything correctly, your business could be at risk if your suppliers don’t deliver what they promised.
6) Customizer service issues could arise easily
If the customer is unhappy with the quality of their product, or something doesn’t work as it should, you are the middle-man for the product return, so you’ll need to talk to the companies that supply the products and try to fix these problems
If a supplier is slow to process an order, it will take longer for the customer to receive their purchase, and then you’ll need to keep the customer informed about the order and when they will receive it.
When a customer calls you with a question, it can take a while to find the answers because you might not have all the necessary information. This can lead to delays in communication as you go back and forth between the customer and the supplier. Since it takes longer to solve the problem, customers might start looking for other places to buy what they need.
Conclusion, just my opinion:
My dislike for dropshipping is simply a matter of personal preference.
The cons of dropshipping are what turns me off of this as a business. I’m just not interested in the model, as it also doesn’t align with my passions or business goals. The dropshipping process can be filled with challenges, from supplier issues to shipping delays, which can complicate business operations and cause unnecessary headaches.
For me, the potential downfalls outweigh the benefits way too much, and there are much better options out there!
Leave a Reply