If you are just getting started with an ecommerce business, dropshipping can be a good fulfillment option. In dropshipping, the burden of shipping an order lies on the shoulders of a dropshipping company. Your only job is to provide the dropshipping company with customer information and they will handle the order fulfillment.
While it may seem straightforward to you, dropshipping is a challenge. There are a lot of misconceptions surrounding the business. For this reason, you may be easily tempted to jump into the business right away. However, such an action could cause you to make mistakes that could greatly impact your dropshipping business. In this article, we check out the 10 most common mistakes to avoid when dropshipping.
10 Common Dropshipping Mistakes To Avoid
- Have Unrealistic Expectations
- Not Doing Product Research
- Posting Too Optimistic Delivery Dates/Times
- Offering Different Shipping Fees
- Publishing Generic or Vague Policies
- Selling Copyrighted/Trademarked Goods
- Relying On A Single Producer
- Picking The Wrong/Broad Niche
- Inefficient Return System
- Competing on Price
10 Common Mistakes To Avoid In Dropshipping
Dropshipping provides beginning sellers with a stepping stone for getting into ecommerce. It might give them an ideal channel for getting their feet in the ecommerce industry. Dropshipping allows you to test the waters without investing much money. If you are just getting started with dropshipping, here are the things you should avoid.
1. Have Unrealistic Expectations
As a beginner, you might be very eager to get started right away and set high expectations from the business. Dropshipping is a lucrative business but do not expect to gain a profit within a month or two. Just like any business, you need to be dedicated and patient. It takes time and effort before you can see a return on investment.
Setting unrealistic expectations can lead to disappointments and demotivation. The success of your business will depend on various factors that you need to address first. You need to learn a lot before reaping the fruits of your hard work. When you start with high expectations, you might give up early without seeing your dropshipping business take off. Dropshipping does offer easy money but it needs your dedication and commitment as well.
Take outside factors into consideration and set your expectations right. There are challenges and obstacles that will come along the way that you need to handle first to ensure that everything will go smoothly as far as your dropshipping business is concerned.
2. Not Doing Product Research
Product research is essential to ensuring the success and sustainability of your dropshipping business. The idea is to look for a product that will resonate with your target audience. It is worth noting that it will take several tries for you to find the right product. Product research can help you keep a pulse on your customers and understand what will be effective for them.
While product research is an important process, you should not take too much time to find the product. You should also make sure that the product you will put on your website will still be relevant and valuable to your customers. Product research provides you with the necessary information to ensure that it will be something that your users will buy and love.
Product research will also come in handy if you do not know what your customers think of your product. It will help you understand customer needs and pain points. If possible, request test products from your supplier. This way, you will have an insight into what your customers will be receiving.
3. Posting Too Optimistic Delivery Dates/Times
Shipping time can have an impact on the purchase decisions of your customers. In your desire to please them, you may be tempted to be optimistic with your delivery dates and times. In reality, it can be difficult to predict delivery dates and times. Many factors can affect the shipping date and time of a product. You really cannot be sure when a shipment will arrive. It can be expedited or delayed so never post unrealistic shipping dates and times.
It is understandable to promise customers quick delivery of their orders. But then again, it is something that is out of your hands. While long shipping dates can easily frustrate customers, never promise them fast shipping time. Customers can become frustrated if your suppliers won’t be able to deliver their items on the date you promised.
Make sure that you coordinate with your supplier regarding the shipping time. Then provide customers with a time range that matches that of your supplier. Another option is to find a local shipping company to reduce shipping times. Never forget to keep customers in the loop so they know the status of their orders.
4. Offering Different Shipping Fees
Although offering different shipping methods can help your conversion rate, you do not want to have too many that you cannot manage. Customers only want their products to be delivered at the quickest time and lowest price possible.
There are two ways you can go about with your shipping fees. You can offer free shipping or charge a flat rate for deliveries. If you choose free shipping, you can integrate the shipping cost into the product price. Offering free shipping is a good way of attracting your target audience. 90% of shoppers would shop online more if given the option of free shipping.
Whatever route you decide to take, the important thing is to be transparent with your shipping fees. You don’t want customers abandoning their carts because they were charged with hidden fees. At the onset, inform them about how much they will pay and be sure to stick to that or they will take their business elsewhere.
5. Publishing Generic or Vague Policies
Being new in the dropshipping industry, you may be tempted to copy and paste policies from other websites. You may be offering similar products or belong in the same niche but their policies may not be suitable for what you are offering. Furthermore, there may be some policies that you cannot afford.
It is also worth noting that some of these policies are not legally sound. For instance, they may ask you to break some laws in your state. They may not be even legally sound or hold up to a lawyer’s scrutiny. These policies may eventually get you into legal problems. Make sure that there are no legal loopholes in your policies to avoid future repercussions.
It is best to research and write policies that are compatible with your business. At the end of it all, you would always protect your website and business. Have an attorney who specializes in small businesses craft your policies for you. This may entail additional costs on your part but it will protect you from any future lawsuits.
6. Selling Copyrighted/Trademarked Goods
Another huge mistake you can make in dropshipping is selling copyrighted or trademarked goods. You are prohibited from selling merchandise of sports teams (NFL, NBA, and other leagues), characters (Marvel, Disney, and others), company logos, or catchphrases or slogans unless you are licensed to do so otherwise you can be held liable for lawsuits.
Securing a license will cost you between a few hundred to a thousand dollars, depending on the company that owns the copyright or trademark to the product. Without this license, you will not be authorized to sell these goods. Aside from paying substantial fines and penalties, you could also be required to pay damages to the copyright or trademark holder.
Before selling a product, conduct a thorough research about it. Check for any trademarks or patents about it. However, if you want to sell the copyrighted or trademarked product, obtain permission from the copyright owner. Ask them if you could be one of their distributors or resellers. This way, you could spare yourself from copyright or trademark infringement.
7. Relying On A Single Producer
In a dropshipping business, suppliers are an essential part of your business. They are responsible for order fulfillment. If you are just getting started with dropshipping, it can be tempting to partner with just one supplier. This mistake could eventually backfire on you. What if they run out of items or increase their prices? How would they be able to fulfill orders?
With this in mind, you should not rely on just one supplier. There are things that you cannot control like the supplier deciding to terminate their partnership with you or going bankrupt. Having multiple suppliers is the way to go. This way, the order fulfillment process will not experience any delays.
Look for suppliers with a track record for efficiency and accountability. By doing so you will have alternatives in case one supplier is unable to fulfill orders. Negotiate with your partners on the terms of delivery, shipping costs, and other issues. This way you would not have to worry about continuing to satisfy your customers.
8. Picking The Wrong/Broad Niche
Dropshipping is a competitive industry which makes it hard for startup businesses to compete against the more established companies. One of the biggest mistakes you can make in dropshipping is picking a wrong/broad niche. Choosing the right niche is important in dropshipping because it is where you will build your customer base and marketing strategies.
It is understandable why you may find yourself in a wrong or broad niche thinking that you will be able to capture a big audience and make quick money in the process. However, this can be a huge mistake. If there is a lot of competition in your chosen niche, you may need to put in more effort. In addition, they may not be your target audience.
Rather than choosing the most popular niches, pick the stable ones. With these niches, your products will be relevant for a certain period of time instead of spiking and tanking with the trends. Look for stable niches to ensure a guaranteed and continuous income. Avoid volatile products that are subject to frequently increasing interest.
9. Inefficient Return System
There is no perfect product and no matter how awesome you think they are, there will always be issues and customers will request for a return or refund. You may think that it is your partner supplier that is in charge of returns and refunds but in reality, your reputation will also be at stake. That is why it is important to have a clear and simple return system.
Statistics show that over 60% of shoppers will examine the return policy before purchasing. In addition, 62.58% of online shoppers expect retailers to offer returns within 30 days of purchase. Even though it is the supplier who will handle returns and refunds, you should still be ready for such eventualities. This is part of providing shoppers with a good customer experience.
10. Competing on Price
As a startup dropshipping business, you might be tempted to beat the competition by reducing your price to generate more sales. If you think lowering costs can give you a competitive edge, think again. Lowering prices will only work for established companies who have already gained the trust of their companies.
Since you are just starting in the industry, customers may think twice about doing business with you. They might doubt the credibility of your products and business as a whole. At the same time, it will reduce your profit margin. You may need to sell more to recover the potential earnings you could have if you sold products at their original price.
As much as possible, try to maintain the normal prices or sell only high-priced items to increase your return on investment. Earn the trust of your customers first and when you do, reducing your prices can be offered to them as an incentive.
Dropshipping can be a lucrative venture when done right. Understanding and avoiding these 10 mistakes is the key to becoming successful and increasing your earning potential.
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