Everyone wants to sell you on the dream that a dropshipping business changed their life. Gurus will try to sell you on courses and subscriptions to help you get started with your own dropshipping business. But, dropshipping isn’t as easy as it looks and can cost you if you don’t know the truth. In reality, gurus are making more money on courses than on their own dropshipping business. Here are 10 things you need to know about dropshipping that no guru will tell you.
1. Margins Are Small
Many dropshippers spend a lot of money on inventory and don’t receive a lot of profit margin. Plus, you’ll have to be very selective about what products you sell. Some of the best products become oversaturated very quickly. Rarely does any one successful product stay a best-seller for long. Many dropshippers have said that it is not an easy business model.
2. Shipping Is Complicated
One of the major downfalls of dropshipping is that it can take significant time to ship products from the manufacturer to the customer. It can take as long as 2-3 weeks! This can be frustrating for customers who are used to fast shipping times from many retailers like Amazon that offer even same-day delivery.
3. It’s Very Competitive
With many people turning to the dropshipping model, you will constantly be vying for the same products. You’ll have to adjust your offerings often if you want to stay profitable. If you don’t constantly tweak your business, you’ll most likely miss out on sales.
4. Customer Service Is a Full-Time Job
If you think that dropshipping is passive income, think again. Customer service will take up a lot of your time. You’ll also have to handle returns and complaints. Unhappy customers may also initiate chargebacks. This can be a nightmare for the health of your business.
5. Marketing is Expensive
You’ll spend a lot of money on social media marketing on TikTok and Facebook. If you want to rank on Google, you’ll also have to use SEO. To stay competitive, you’ll have to invest in advertising. Unfortunately, you’ll have to spend money to get your product noticed. The days of free organic product marketing are over due to changes in sites’ algorithms.
6. You Can’t Control Product Quality
Since you are outsourcing shipping, you really can’t control product quality. This means that you won’t be able to catch faulty or defective products being sent to customers. Many say that dropshipping is just a cash grab and doesn’t foster customer loyalty. In many ways, this is true.
7. You Aren’t Building a Sustainable Business
Dropshipping is laser-focused on creating profits, not building a brand. There isn’t any customer retention because of this. You’ll have to pay more in advertising for customer acquisition than a typical small business, and your churn rate will be high. All these things combined mean that your dropshipping business probably won’t be sustainable over time. Most dropshippers fail after 3-6 months. What you’re really doing is lining the pockets of manufacturers.
8. You’ll Need a Lot of Skills
It’s not just about selecting products and making money. Dropshipping requires skills in marketing, ad copywriting, product research, web design, and customer service. You have to wear many hats for very little return.
9. Scammers Are Prevalent
Some scammers will try to sell you fake products. It’s very hard to find reputable manufacturers. Beware of fake reviews as well. You don’t want to throw away money and get scammed.
10. Holding Inventory Is Better
While dropshipping may seem easy and appealing, it’s better to build your business from the ground up and not rely on manufacturers to execute a pivotal piece of your business. Instead, buy your own inventory and focus on building your brand. In the long run this will help you be more successful.
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