If you are an entrepreneur or planning to start your business, dropshipping could be an ideal option. It allows you to test waters without much investment upfront. It also lets you learn and grasp a lot of information on the way before you eventually make it big.
This article brings together a compilation of the common mistakes that you should avoid. Points covered in this article are an exhaustive list of the errors that one could make.
What Exactly is Dropshipping?
Dropshipping, as we know, is an order fulfillment technique. It is a business model that spares the retailer or the seller from inventory management. Instead, the seller can just connect with a supplier or manufacturer and get the goods shipped directly to the customers.
The process involves learning about the business with a lot of flexibility as the seller does not get involved with the inventory management and handling the goods. Moreover, it offers much fewer risks and protects the seller from catastrophic losses. As the initial cost is lower, making profits with the dropshipping business is faster and easier.
This may appear like a straightforward method or model of business, but there are a lot of misconceptions around it. Misunderstandings and overlooking certain essential aspects of the business could be disastrous.
23 Dropshipping Mistakes to Avoid
Dropshipping gives a headstart to any seller to launch their eCommerce business, and this may create ideal situations to commit mistakes. You might be influenced by other successful businesses and would want to jump into the trade right away. This may lead you to step into unknown areas of the business and unknowingly miscalculate the outcomes.
Therefore, this guide of dropshipping will take you through a tour of common mistakes made by beginners while they gear up for their online business.
#1 Having Unrealistic Expectations
Having unrealistic expectations in the dropshipping business can easily come to any beginner. It is a result of certain factors such as not having to handle the products upfront, not having to manage an inventory and no overhead of coordinating things simultaneously.
Moreover, dropshipping allows the business owner to enjoy freedom from all the above factors and also have it easy to expand the business. However, this has its cons when it comes to expected returns. The same reasons could lead to the individual anticipating unrealistic profits which may not be the case. Eventually, the entire process could give rise to annoyance and disappointment.
It is, therefore, advised that you set your expectations right. No matter how easy and lucrative it may seem from a distance, dropshipping like any other business needs to be handled with immense dedication and care.
#2 Not Doing Enough Product Research
Market Research is an activity that combines many other methodologies which help you establish a successful and sustainable business. It is an amalgam of multiple techniques that help you evaluate the significance and value of a product.
It is a task that has to be inevitably undertaken at your end to learn about the relevance of the product you are considering for dropshipping business. It gives you all the answers and solutions required for creating a business strategy that is armed with information to take the next crucial steps.
#3 Spending Too Much Time Choosing a Product
This could be another mistake that could be detrimental in establishing your business. Also, it cannot be completely eliminated, considering that you are an entrepreneur who is looking to collect as much information as possible, for your niche.
Although it is important to spend enough time collecting the relevant information, you should not take too long to decide on important matters. The decisions that you take at this stage should not only be well-informed but also be timely. Timely and quick decisions shall set the ground for your future benefits. You must analyze how much information is enough, and decide when to stop with it. Believing in your research skills is the key. More time spent here implies a delay in establishing your business and delaying the income.
#4 Niching Down Too Much
A common recommendation before you start with your dropshipping business is to decide your dropshipping niche. Well, that’s true. However, scrutinizing too much on the niches could, in fact, potentially impact your trade.
Too much trimming down of your niche could affect how you name your business or branding. Here’s an example to understand this better.
If you decide to sell ladies tops, you are most likely to name your store around the same product i.e. the Tops for Ladies. However, instead of naming it specifically designed for the tops, you could rather have a more generalized name for your brand that indicates you sell something concerning women. This way, if you decide to sell trousers or formals for ladies, you would not have to rework the name.
This example explains to us why too much niching down would also not be a good idea.
#5 Selling Too Much Variety
You decide to start an online business and have fairly completed your homework of deciding on the niches you would be selling. On the way, you decide that there are multiple options that you could sell as you see a prospect in all of those niches and products. So, you start with the women’s clothing, men’s garments, kids’ clothing, and also kitchen utilities.
You are probably contemplating it as an ideal model that ensures that at least some of the dropshipping products will always drive your business.
Diversifying your business at this level could have its problems. You could face a problem with the branding as now, you do not have one single niche but so many different varieties that you do not know of one category to focus on.
#6 Picking the Wrong Niche
You may encounter the problem of landing with the wrong niche due to one of the following cases:
- There’s a lot of competition: You know you have a lot of hard work to do if you are surrounded by a lot of competition. The more the competition, the higher the efforts you need to make.
- The niche is too broad: A broad niche has a lot of audience for it but also has a lot of competition to fight with. You would undeniably want to avoid this.
- People are not interested: This could be a very unfortunate situation to be in. Conducting another research could be an option when you look to change your niche.
- No scope of growth: Despite having earned a name for yourself among your target audience, you would not want to get stuck with a small set audience forever. If your niche does not allow you to move beyond your already acquired audience, then it is the wrong niche you have picked up.
- You lack expertise over the niche: To establish yourself as the best in the business, you need to back it up with a combination of expertise and experience. If you lack either of these, then your audience could find it difficult to identify with your product or trust you.
Yet, if you find yourself in this situation do not get dissuaded. It only means that you need to move on with a new niche that helps you overcome the problems you are facing.
#7 Relying Too Heavily on Suppliers
When you start your dropshipping business, you count on the manufacturer and supplier, as they make an essential part of your business. Also, gradually on the way, you tend to build a good rapport with your supplier. However, relying too much on a single supplier could backfire.
Diversifying your supplier base could be a key decision here. Make a list of suppliers that are efficient and accountable. Setting up a supplier database allows you to relax even in times when one of the suppliers backs out or is not in a position to deliver. Alternatively, you can get into an agreement with your current supplier to mutually agree on the terms related to delivery, shipping, costs, and other issues.
#8 Undercutting Pricing
Cutting down the prices is something that almost all the sellers contemplate at some point or the other in their business. Also, it works well for the eCommerce giants like Walmart and Amazon. You might think about cutting down the prices as a lucrative way to see through the competition. However, being relatively new in the area the customers might have other thoughts about you as a seller. If they see you selling at a lower price, they may start to doubt your and your product’s credibility.
This is because the trust of your brand and products takes time to establish among your customer base. So, cutting prices may not be that great an idea after all.
#9 Ignoring Reviews and Customer Feedback
Being attentive towards customer feedback is essential. Now, you may think why is it important to you if you are a dropshipper and do not handle the products or inventory directly. You are treating yourself as only an intermediary between the consumer and the manufacturer.
It is time to review how you’ve been performing and how does the consumer view you and your products. They may have certain complaints or feedback for improvement for a product. You must make a note of those as ultimately, it is your business that gets affected if you do not take cognizance of the reviews and corrections mentioned by the customers.
#10 Skimping on Your Website
Purchasing a domain and hosting, collaborating with cheaper designers to establish an eCommerce website for a business canal be accomplished in a matter of hours today. All the excited young individuals ready to get on the dropshipping van might think of it as the easiest part of the business.
The truth is far from this. Your website reflects your thought process and is an interface between you and your customers. They do not know you personally but know only as much about you as you let them know through your website. You would certainly want them to think well about you and your brand.
It is, therefore, important to spend time on your website. It is an equally essential aspect of your business as is any other.
#11 Not Having a Marketing Plan
With all your homework done and the website ready, you are now ready for customers to make purchases. However, it would be wrong at this stage to miraculously expect people to drop by and make purchases as you haven’t worked on your marketing.
You might wonder, despite the SEO and other usual stuff, why isn’t your marketing not working. Well, this is because you need to have a robust marketing plan in place. It is a detailed process that does not happen on its own, but needs your efforts and work around with multiple simultaneous options to achieve that.
- Paid advertising
- Email marketing
- Using social media
The list is elaborate and you may choose the options you deem fit and that work well for you.
#12 Using Influencer Marketing
As the name goes, influencer marketing utilizes the potential and reach out of an influencer to promote a product. No wonder, it has become a trend these days. But, having your product promoted by an influencer or a celebrity could cost a lot.
Apart from being an expensive technique, influencer marketing may not even match the level of success it seems to promise. Using other methods of marketing or the conventional old methods could be more effective. Creating a competent website or working on networking are some other options we would recommend instead.
#13 Not Having a System for Returns
Dropshipping involves you as a middleman between the manufacturer or supplier and the buyers. You may also assume your responsibilities are limited to simply being available for purchase by the consumer.
It is important to understand that the customer may return an order and as a part of the retail business, you must be prepared for that. Although the returns will eventually be handled by the supplier, you are the one who has stakes through your online presence. You have to live up to the expectations you have set through your journey so far.
Customers make a note of their experience with you not only in terms of purchasing but also while returning the products. You need to ensure that they have a good customer experience to share about you. A seamless and smooth operation is what you should aim for to make the customer a repeat or returning customer and help with customer retention.
#14 Not Planning for the Holidays
Holidays are opportunities, cash in on them. Most dropshippers fail to organize on this front and miss out on a lot of such potential profits. Do not let yourself miss out on these. All you need to do is draw a chart with all the prominent holidays of the year noted down. Planning ahead of the holiday season could translate into revenue.
Alongside this, stay connected with your suppliers and inform them about your planning and that they could experience a heavy rush of orders.
Overall, you could make a handsome amount just because you planned and prepared well.
#15 Not Optimizing Your Shopify Store
It is good to be informed that while working with the Shopify theme editor, you get a default view which is a desktop view. While working with it, it is easy and inevitable to forget about optimizing. Nonetheless, it’s a mistake you should avoid. Ensure that your store is optimized for visitors who will use a phone. Therefore, an app that is mobile phone optimized could garner more potential than the non-optimized one.
Besides, there are greater chances of people visiting using their phones instead of tablets or laptops.
#16 Assuming “Build it and they will come”
Setting up a website and displaying products is only half the job done. People must get to know about the authenticity, efficacy, and value that your products can offer to them. For this, you must ensure a well-equipped launch and marketing strategies.
- Facebook Ads
- Google Ads
- Instagram marketing
- Email marketing
- Pinterest marketing
- Content marketing
These are some of the cost-effective strategies you can look to adopt.
#17 Trying To Do Everything Manually
There is a strong underlined presence of automation in today’s eCommerce, and rightly so.
Automated dropshipping can help you with all the tasks that you now achieve manually. It utilizes apps or software that accomplish the given tasks. It can help you with tasks like finding a good product, shipping information, fetch product information for adding to your store, contact suppliers, apart from many other.
There are various types of dropshipping automation you can use:
- Automated product pricing
- Automated promotions
- Automated order tracking
- Automated order fulfillment
- Automated Social Media
- Automated customer service to name a few.
Automating your dropshipping business could lend a huge helping hand in scaling up your business.
#18 Giving Up Way Too Quickly
You have set up everything as planned. With enough ads placed on various social media platforms, enough networking, and an impressive website, you are waiting for the big rush. However, it’s just not happening and your business doesn’t seem to be taking off.
This could be a very dissuading atmosphere and you could be mulling over giving up.
We advise you to hang on as the dropshipping business could take its on time before making it big with the customers. Maybe, you could devise your formula for success. Something that uniquely works for you. There could be various methods that you will have to test and try.
#19 Neglecting SEO
SEO is very relevant in today’s age as it gives you results in an accumulated manner. This is to say that although it may not seem to perform in short term, SEO could do wonders in the long run. So, getting a team that assists you with an effective SEO for your online store could well be a part of your success story.
#20 Choosing Poor Marketing Tactics
Poor marketing is something that every beginner in the dropshipping business should be wary of. Every business owner needs to know its intended customer base and understand the market before further attempts to achieving success.
Here are some of the common mistakes in marketing:
- Seller promotes the product to everyone and without analyzing his target audience
- Misplaced ads on the wrong platforms
- Inadequate promotions
- Not conducting any performance tests
Avoid these mistakes and ensure that all the measures are taken to curb poor marketing.
#21 Having No Knowledge About the Target Audience
Lack of research and insufficient statistical data can be injurious to the financial health of your business. When you do not have this specific information, you are bound to lag behind with the information on your target customers as well.
This mistake can be avoided simply by collecting the following information:
- Income level
- Marital status
- Education level
All these factors will contribute to streamlining the process and narrowing down the definition of the target audience.
#22 Learning No Lessons
A mistake that stands out from all the others is not learning from past mistakes. Every business owner makes mistakes in the business; there could be neglecting SEO, not conducting enough research or marketing, not adapting to new trends or any other mistake.
In order to move ahead progressively in your business and lead it towards success, you need to be mindful of your mistakes and also remember to take all measures to avoid them in the future.
#23 Not Knowing Your Financials
When you start your business, there are a lot of initial expenses that you will encounter. These include paying for the marketing and promotions, paying for setting up a website, upfront payment to the suppliers, to name a few. While you have so many expenses in the pipelines, it would be advisable to draw a chart with all the financial expenses and the capital at hand.
The bottom line is you need to keep your finances update so that all your profits, losses, revenue, and all other financial details are in front of you.
You can learn more about these financial terms such as gross income vs. net income, net profit, gross profit to help you keep your finances intact.
How Deskera Can Help with Dropshipping?
Get rid of all your queries and anxieties with Deskera’s guidance and learn how to dropship. Relieve yourself from all the sales questions that you may have and learn how the profit and loss statements should look like.
Learn email marketing for small business, email campaigns compliance, and also ways to improve cash flow.
Besides these, you may also want to learn about top accounting trends and bookkeeping basics for entrepreneurs. A new business owner may also want to get help with knowledge on how to send invoice, accounting systems, what is accounts payable automation.
Apart from these, Deskera’s All-in-One model, you can have all your invoicing, accounting needs in one place. Measuring your revenue against the business goals has never been so easy before. Deskera Books empowers you to create invoices, track expenses, and have a real-time view of financial reports.
Conclusion and Key Takeaways
We hope to have helped you with knowledge on the mistakes to avoid in the dropshipping business. Based on our observations, we can highlight the following points:
- Dropshipping is a business model that spares the retailer or the seller from inventory management. Instead, the seller can just connect with a supplier or manufacturer and get the goods shipped directly to the customers.
- While the mistakes could be innumerable, we have enlisted 23 dropshipping mistakes to avoid on your journey.
- Some of these mistakes include relying too heavily on suppliers, not optimizing, undercutting prices, selling too much variety, and giving up too easily.