- By: Ricky Hayes May 20, 2021
11 Costly Dropshipping Mistakes To Avoid When You’re Starting Out
Dropshipping business model has made it incredibly easy for budding entrepreneurs to start their business online. There is no upfront money involved, and anyone can start a business at any time without worrying. Sure, dropshipping isn’t as complicated as running a brick-and-mortar store. But some dropshipping mistakes can be costly.
The good news is you can easily avoid common dropshipping mistakes that everyone else is making to have an edge with your first dropshipping store.
In this dropshipping beginner guide, we’re going to highlight some of the most common dropshipping mistakes. Remember, all these mistakes are avoidable, and we’ll precisely show you how in this post.
What Is Dropshipping And How Does It Work?
Dropshipping is an order fulfillment method that doesn’t need an owner to purchase inventory upfront. When you get an order, you pass it on to the supplier, who then packs and ships the order to the final consumer.
Dropshipping Facts You Need To Know
If you think dropshipping is a source of making easy money online, let us tell you it is very different from what you think it is.
The dropshipping business model is becoming more challenging in recent years. But as they say, no pain, no gain.
So before you put all your investments in a dropshipping business, it is critical to understand the hurdles that come along with this industry.
Yes, you don’t need a lot of money to start a dropshipping store. But then you have to compromise on profit margins as well. After all, you get what you pay for. You put low overhead in the beginning, and you receive low profit in the end.
The biggest downside of dropshipping is that the huge share of your earnings goes to the supplier. That’s the reason why many dropshipping businesses find it hard to cover their routine site management and advertising expenses from dropshipping revenues.
The low barriers to entry make dropshipping a highly competitive business space. Also, as there’s no start-up capital required to start a dropshipping business, thousands of business-minded people enter this space every year to improve their income.
Startups especially suffer a lot as they have to reduce their profit margins to stay competitive. Also, many times, what you’re selling is being sold by multiple dropshippers. If you’re a startup, it would be tough for you to compete with your rivals who’re selling the exact same products as yours and have the resources to beat your prices.
Unlike general ecommerce stores that control everything single-handedly, dropshipping needs you to depend on your vendors. Since suppliers are responsible for packaging and shipping, it would become challenging for dropshipping store owners to satisfy their customers if any issue arises.
Remember, you’re the one handling customer’s concerns despite knowing that many things are simply beyond your control.
Maintaining an effective line of communication can become a challenging task too, as you’ll be acting as an intermediary between a supplier and customers. If one responds slowly, the entire communication process grinds to a halt.
Fortunately, there are not many legal formalities involved with a dropshipping business framework. But you may still have to deal with illegitimate suppliers at some point.
Some vendors are even involved in other illegal activities like using trademarks or intellectual properties of other brands.
When you collaborate with any supplier, you automatically become responsible for whatever illegal activities your vendor is up to.
Difficult To Build A Brand
If your goal is to brand your own brand, dropshipping might not be a good option for you. No matter how much you work hard, all credit will go to the actual brand in the end.
People admire branded products because they love the brand. They’re least interested in the source from where they acquired that product.
11 Costly Dropshipping Mistakes To Avoid When You’re Starting Out
You must have seen plenty of posts advising dropshippers to follow a certain guideline to succeed. But we believe it’s better to focus on things you MUST NOT do to excel as a dropshipper.
This section highlights 11 dropshipping mistakes that will cost your business money and reputation.
1. Choosing The Wrong Niche
The first most critical step to building a dropshipping store is choosing a niche.
There are so many things that can go wrong while picking the niche for your business. Some of them include:
Going Into A Broad Niche
In an attempt to capture a big market, many beginners pick a niche that is too broad. While broad categories like electronics and clothing can work for dropshipping giants, it will not work for startups.
Here are a few disadvantages of picking a broad dropshipping niche if you’re starting out:
- No Branding Leads To Lower Conversions
Buyers tend to trust brands that deal with niche products. For instance, if we need to buy electronic items, we’ll approach a store that mainly deals with electronics instead of someone offering clothing, health supplements, and other gadgets besides electronics.
- Marketing Challenges
Startups usually have a limited marketing budget. Trying to market everything in your broad niche store can cost your business lots of money.
Even if you try to implement free traffic strategies, you may still have to face challenges with a broad niche.
- Search Engine Rankings
Search engines rank websites based on how authoritative and relevant they are in terms of content and other ranking factors.
That goes without saying that getting your new dropshipping store ranked higher on SERPs isn’t an easy task when you already have so many high authority sites in your competition.
When you work in a single niche and prove your authority, the chances of your site getting ranked better on Google will be high.
- Choosing An Out-Dated Niche
Another costly dropshipping mistake many new dropshippers make is they choose products that were trending a decade ago.
If you’re also following the same strategy, let us tell you it won’t work in 2021.
If you want to get real success in dropshipping, it is essential to choose stuff that people want today.
- Choosing A Wrong Dropshipping Niche
Okay, we know there is no formal definition of a wrong or a right niche. But some products have a higher return or refund rate.
It’s also critical to choose a niche you’re most passionate about. Last but not least, try to choose products that need no after-sales service.
2. Using Only AliExpress For Dropshipping
There is no denying the fact that Ali Express is one of the most prominent dropshipping giants, and almost every dropshipper uses this platform at some point. But if you want to excel in the world of dropshipping, you have to choose a supplier that is both fast and reliable.
Sadly, AliExpress can’t guarantee both.
Remember, customers will file a chargeback when they don’t get their package on time. So, it would be great if you choose a supplier from the US who respects delivery deadlines and is easy to communicate with.
3. Failing To Optimize Your Dropshipping Store
The traffic you receive on your store depends on how well you have optimized your site for a seamless customer journey.
While there are so many different ways you can optimize your dropshipping store for the maximum user experience, we’re going to highlight 3-optimization essentials every dropshipping store should have in place for conversions.
Product Page Optimization
Product pages are the most important pages on your website where your customers spend most of their time. Make sure you optimize those pages perfectly to capture your audience’s attention.
To optimize product pages, you must include high-quality images with optimized keyword-centric descriptions to showcase the true benefits of your products to your customers.
Your website speed is another essential factor you must pay attention to before setting up your dropshipping store. Get rid of heavy plug-ins and apps, minify codes, and optimize images to give your users a fast and seamless user experience.
Website Design And Structure
Visitors only spend time on websites they feel are navigable and easy to explore. Select a simple yet feature-rich theme for your dropshipping store that helps you display each product category with utmost perfection and accuracy.
4. Failing To Increase Customer Lifetime Value
Another dropshipping mistake many budding entrepreneurs make is they keep their entire focus on acquiring new customers. Sure, customer acquisition is beneficial, but it takes time and money to have more customers onboard.
Instead of throwing your money on customer acquisition tactics, it is better to retain your existing customers. Dropshipping stores that successfully increase their customer lifetime value witness noticeable results in a limited period.
5. Not Having A Solid Return And Refund Policy
Even if you sell the most premium products, you may have to face returns at some stage. Yes, it is the supplier’s responsibility to return products, but it’s your credibility that’s at stake.
That’s why it’s imperative to have a well-defined returns and refunds policy on your website. Do not copy/paste content from other dropshippers, as you have to get this step right if you really want to excel as a dropshipper.
6. Trying To Do Everything Manually
While it may be tempting to save a few bucks by doing every single thing on your website manually, such dropshipping mistakes can cost your business lots of money. Automation is expensive, but it is worth it.
Try to automate every step on your website so that your customers can enjoy a seamless journey.
It’s also critical to outsource tasks you believe are beyond your expertise. For instance, if you think you cannot write engaging descriptions, you can hire a creative writer to do this job for you. Similarly, if handling finances is something you aren’t confident about, you can have an accountant or a tax specialist on board to help you out with these tasks.
7. Giving Up Way Too Early
Even if you’re not getting much traction at the start, do not lose hope and keep on working. Dropshipping is time-consuming, and you have to invest in your skills, effort, time, and money to see some tangible results.
But once you’re on track, things will eventually get easier.
8. Undercutting Prices
If you think you can get an edge over your competitors by undercutting prices on your store, you’re not alone.
Many dropshippers make this mistake and get to the point where it becomes difficult for them to maintain sustainability.
Many times customers refuse a deal because it sounds too good to be true. Also, when people buy any product that is available below the market rate, they have the concept of inferior and low-quality products in mind.
Above all, when you’re selling anything below a market price, you’re compromising on your own profit margin.
So, instead of reducing prices, try to find more creative ways to sell your product at the same price it is available in the market.
9. Making Mistakes With Facebook Ad Policies
Facebook is an integral part of dropshipping marketing strategy. You cannot scale your store without having an effective Facebook ad policy.
The biggest challenge newcomers face is they don’t get the anatomy behind ads, which results in getting their account banned forever.
Make sure you carefully go through Facebook ad policies to ensure your account does not get banned.
Again, if you’re not sure of your Facebook marketing skills, it is a good idea to seek the help of a professional Facebook marketer.
10. Not Paying Attention To Content Marketing
The most important tip on our dropshipping beginner guide is ignoring your dropshipping content marketing strategy.
You’ll miss out on a chance to convert prospects when you copy/paste your manufacturer’s descriptions as it is on your store. People admire creativity and authenticity, and when you fail to deliver both, you ruin your reputation with your own hands.
11. Ignoring Customer Feedback
Your customers are your biggest asset. That’s why you should make every possible effort to make your buyers happy. Satisfied customers will not only act as a lifelong asset for your business, but they also become your brand advocates and promote your business within their social circles to increase your sales.
Dropshipping for beginners isn’t a joke. We hope this post has helped you learn some of the basics of dropshipping and the most common dropshipping mistakes (that are also avoidable) to create brand awareness and improve your profit margins.