To ensure success, you must avoid dropshipping mistakes along your dropshipping journey. Contrary to popular belief, dropshipping is not a get-rich-quick scheme, regardless of what you've heard on the internet.
It's much more common to hear a dropshipping success story than a failure. No one is using social media to discuss why their dropshipping store tanked. The truth about dropshipping is similar to the truth about everything else. Many more fail than succeed.
Dropshipping isn't without risks – things happen that could derail your success and ruin your business.
This blog post will outline 20 essential tips to help you avoid common dropshipping mistakes and hit the ground running with your dropshipping business.
<a href="https://webtoolsadvisor.com/dropshipping/dropshipping-mistakes/"><img style="width:100%;" src="https://webtoolsadvisor.com/infographics/wta-dropshipping-mistakes-to-avoid-infographic-2023.jpg"></a><br>Infographic by: Web Tools Advisor <a href="https://webtoolsadvisor.com/dropshipping/dropshipping-mistakes/">Dropshipping Resources - Web Tools Advisor</a>
20 Dropshipping Mistakes to Avoid & Tips to Prevent Them
If you follow these dropshipping tips in your online business, you'll be on your way to a successful dropshipping career!
1. Having unrealistic expectations
If you set your expectations from the beginning too high, you will most likely be frustrated when things don't go as planned.
For example, somebody expects to make millions within the first year of launching their business. This is simply unrealistic and leads to disappointment. The only get-rich-quick scheme is winning the lottery, and those odds are slim.
According to Investopedia, the odds of claiming the jackpot in a Powerball drawing are 1 in 292.2 million. To put that in perspective, you have a 1 in 1,222,000 chance of death or injury from lightning in a given year and a 1 in 57,825 chance of dying from a hornet, wasp, or bee sting during your lifetime.
You'll need to temper your expectations initially to ensure you stay in business long enough to enjoy profits. Unrealistic expectations can quickly kill an eCommerce store.
Tip to Prevent: Set your goal as a level of income you must make. The level you must make to stay in business with a reasonable return. This will keep you focused and on point toward what is realistic.
2. Not doing enough product research
Selecting poor-quality products is one of the most common dropshipping mistakes. Poor quality products will result in low sales, and, as a business owner, you cannot afford to sacrifice either of these.
To avoid this, it is essential to do plenty of product research before selecting the products you will sell.
Here are some tips that can help:
- Read customer reviews online or in magazines to understand what people think of the product. This will help you make a more informed purchase decision and ensure that customers are happy with the product.
- Check the supplier's branding and see if they have been caught using fake or misleading labels or selling knockoffs. Ensure all your products bear the correct information so customers know exactly what they're getting.
Tip to Prevent: Multiple free and paid tools assist in product research. Spend time familiarizing yourself with them and then leverage them to understand better which products are best for your dropshipping store.
3. Niching down too much
Niching down is typically a good thing, but when you niche down too much, you lower your audience to a level that won't allow you any flexibility and severely limits your exposure. Niching down is not as bad as choosing the wrong niche, but it can cause problems.
You want your site to have a well-defined audience but not one so small that you satisfy their needs with a single sale with no hope of repeat business. Niching down can be rewarding but also risky.
Tip to Prevent: Choosing a niche that meets your needs is best done initially. Again, researching profitable niches, the growth of the product categories within the niche, and the CAGR of a niche will help you better understand how to carve out your niche.
Additional Niche Research Resources
- Top Dropshipping Niches in 2023
- Top Dropshipping Niches for Women
- Top Dropshipping Niches for Men
4. Undercutting pricing
When it comes to pricing, there are a few things you need to keep in mind. Always have a competitive price that will make you stand out.
However, a competitive price is not the same as undercutting your price to a level that impacts your profitability. By that, we mean you must have a floor price, a price you will not go below.
If you have done your calculations correctly, you will know what that price is, and you won't lower beyond it. This will ensure your profit doesn't dip to an unsafe level.
Tip to Prevent: Set your floor price, and don't go below that price. Make sure you calculate your expenses carefully, including the hard and soft costs of running the business, to ensure your price setting accurately reflects what you need to make to keep the business running realistically.
5. Ignoring reviews and customer feedback
Feedback is essential for any business – dropshipping included. The faster you can respond to customer complaints and reviews, the better.
You'll not only placate your customers but also show that you value their opinion and understand their needs. Make sure you're taking the proper action to enhance customer satisfaction ratings.
This will help improve long-term loyalty and generate more returning traffic from satisfied customers. In turn, this will help boost your online store's sales potential.
Many dropshippers fail to try and understand the needs of the customer base, and this causes a lot of friction that needs to be overcome.
Tip to Prevent: Set customer satisfaction as your primary task to take care of every day. Don't let customer feedback go unnoticed or left unresponded. And take the time to reward positive feedback, as this type of peer-to-peer user-generated content is the most important your business can receive.
6. Skimping on your website
Successful entrepreneurs know that a good website is essential for any eCommerce business and for making money online. It provides a platform to sell products and services and serves as your customer's first point of contact.
You are guaranteed to increase traffic and customer conversion rates by ensuring your online store is user-friendly and looks great on all devices. This is an area beginner dropshippers fail to recognize.
Furthermore, ensure high-quality images and impressive product descriptions. Chances are, you are selling the same product as others, so making it stand out from the noise is vital for success.
A great user experience is vital for success. From selecting the best dropshipping platform to outfitting it with a look and feel that meets your user's needs, a website is your primary driver.
Tip to Prevent: Select a platform you are familiar with and understand how to use. Selection of your eCommerce hub is not something you'll likely want to change once established, so choose wisely and ensure you have the knowledge and support on how best to use it.
7. Not having a marketing plan or investing in marketing
Without a marketing plan, it's hard to know where you are going wrong or measure your success. Having a budget and sticking to it is essential – too much can harm your business.
You need to create a strategy that focuses on channels and tactics based on your market research. Try answering the following questions.
- Where are your customers online?
- What messaging resonates with them?
- What content type will suit your needs best?
- What marketing channels are worth investing in?
- Do we have the budget for paid advertising?
Answering these questions will help you to get started with your planning.
Tip to Prevent: Understand that you'll likely need between $10,000 and $20,000 in paid marketing spend to get traffic to your store in the first few months. You'll want to fail fast and find the best strategies for you as quickly and effectively as possible, so visits lead to transactions and the marketing budget grows to be sustainable.
8. Influencer marketing
Influencer marketing is a great way to reach your target audience with unique and engaging content. Be mindful that influencer marketing is much riskier than other methods of promotion.
Before starting anything, a plan and strategy are crucial, as not all influencers are created equal. Ensure you vet them carefully and choose those who will add value to your campaign rather than take away from it.
Ensure the campaign's goals are clear from the start – this will help keep everyone on track.
Tip to Prevent: Be weary of “freelance” influencers – they may not work for you but are looking out for their own interests first! Additionally, influencers are potential budget busters, so don't use your dedicated marketing budget on an influencer marketing play.
9. Not having a system for returns
It is essential to have a system in place for returns. This will help you protect your business and ensure you earn profits on the products you sell.
Some common reasons businesses lose money through returns include not having a return authorization number (RAN) set up, shipping products of low quality, and charging high shipping fees.
To avoid these problems, accurately track inventory from your supplier and use reliable carriers and shipping methods. Properly handling returns is one way to provide great service to your customer base.
Tip to Prevent: Always ensure you sell products that meet customer expectations. Your business reputation remains intact and loyal customers stay with you for extended periods. If you start to see a pattern of returns on a certain product, drop that product from your store immediately. If it's a top seller, look for another supplier if you think it is a supplier issue. If it's a manufacturing problem, remove it completely.
10. Not planning for the holidays
The holidays are a time of great celebration and joy, but they can also be stressful if the business is not running smoothly. The most common mistakes made during the holiday season include the following:
- Not doing enough research into seasonal trends. This includes figuring out what products will be popular, what colors will sell well, etc.
- Oversized orders that cannot be fulfilled on time due to stock constraints or inadequate shipping infrastructure.
- Failing to account for shipping and handling costs when setting prices.
- Not having enough different SKUs available so buyers can find the perfect gift for everyone on their list becomes increasingly difficult as the number of people buying increases during busy seasons like Christmas Eve and New Year's Eve.
Tip to Prevent: If you want to take advantage of the holiday push, you'll want to start planning for it in August. If this is your first year dropshipping, you'll want to set realistic expectations for the first time as the amplification of what you need to do as a dropshipping business owner is profound and keeping up with it all is too much unless you've experienced it before.
11. Assuming website launch means you're done
The #1 mistake business owners make is building a stellar website with all the bells and whistles and assuming because it is top-notch, they can sit back and watch the sales tally.
That is not the case, never the case for a brand new dropshipping store or any other business for that matter. It takes time, energy, and money to build up traffic and sales, just like it does with any business, on or offline.
You must have marketing tactics in play and never assume your website is a draw in and of itself.
Tip to Prevent: Build your site with the intention that its launch is day one of your dropshipping story and everything prior is preamble. This way, you'll be as energized as you were getting it ready once it launches. Don't forget that marketing must be a big part of your dropshipping store's success.
12. Trying to do everything manually
Trying to do everything manually can be extremely stressful and time-consuming. Not only is it a waste of your valuable resources, but it also means you're constantly struggling to keep up with what's happening.
That's why it's important to delegate tasks as much as possible – this will free up your time so that you can focus on the really important things.
Remember, you don't have to be an expert in everything to be successful, and more often than not, knowing how to offload technology to teammates is a valuable asset.
Tip to Prevent: Don't forget that technology is the application of knowledge for practical purposes. Meaning that it is developed to be used to provide efficiency and to extend capabilities beyond what humans are capable of. Leverage it to your advantage.
13. Giving up way too quickly
Dropshipping can be a very successful business model, but it does take time to see results. Make sure you don't give up too quickly; stick with it until you start seeing positive changes.
Stay focused. Set intermediate goals that are accomplishable short term, so you're not just looking at the store's profitability as the only objective that matters.
Be patient – dropshipping success may not happen overnight, but the effort will be worth it.
Tip to Prevent: Set benchmarks for what success looks like. A few notable ones should go a long way to helping you see success in meaningful ways; your first visit, your first organic keyword ranking, your first sale, and your first positive customer comment or review. These are a few to look out for and celebrate when they happen.
14. Neglecting SEO
SEO is one of the most critical factors in online marketing. By neglecting it, you're putting your business at a disadvantage. Luckily, there are a few simple things you can do to help improve SEO performance:
- Choose your platform wisely (see #6). Some platforms better support SEO than others, WooCommerce and Shopify are tops on the list, and they have more add-ons or extensions that provide SEO capabilities.
- Ensure your website is optimized for search engine visibility, including ensuring all text and images are correctly tagged and optimized for search engines.
- Connect social media platforms to the store and subsequent content marketing efforts. You will find many potential customers by leveraging it regardless of how much competition there is on social media.
- Use Google Analytics to track traffic and conversions – understanding which aspects of your site drive customer engagement will help you make changes that result in higher conversion rates.
- Regularly update content on your website so that customers feel like they're getting value. It's a bad idea not to rely on content to aid in growing organic traffic. Paid marketing efforts will only take you as far as you have the budget to support them. Organic traffic is essential for longevity.
Tip to Prevent: Search engine optimization takes time and typically involves adding and improving content. With this in mind, have other marketing tactics in place while your SEO value grows, so you are not putting all your marketing eggs in one basket.
15. Not knowing your financials
Dropshipping requires a sound business plan and financial analysis before starting out. Make sure you're tracking sales and performance metrics so that you can make informed decisions about scaling your operations up or down.
Be aware of common dropshipping mistakes, such as overpriced items, low-quality products, or insufficient inventory to meet customer demand.
If you don't have a good handle on the money coming in and going out, you'll likely be in a tough situation when you realize your financial position.
Tip to Prevent: Financial staying power is a game changer, so having the skills to handle finances is vital for longevity. If you don't know how to handle the books or don't want to learn, best to outsource that part of the business to a professional. This isn't an area you want to be cute with. The wrong moves will push you out of business quickly.
16. Over-reliance on a single supplier
A good and reputable supplier is worth their weight in gold. Still, each supplier is handling hundreds of dropshippers, getting communication from hundreds more that think they want to dropship and running a business in between.
Diversification and supplier vetting is a big deal. You are essentially partnering with someone you've never met in a business with tremendous financial implications for yourself. They'll be fine; they have hundreds of other customers. Remember that, and choose suppliers that have proven themselves.
Tip to Prevent: Suppliers are not a dime a dozen, as the saying goes. Establishing a mutually beneficial relationship with a supplier has merit and comes with benefits like exclusivity or expedited fulfillment. It pays to treat all your suppliers as an extension of your business as they handle 50% of it or more on your behalf.
17. Investing in the wrong software
When it comes to dropshipping, the wrong software can cost you a lot. Not only will you struggle with shipping and inventory management, but you might also waste your time and money on products that don't sell well.
We're not referring to your eCommerce platform but sales software, marketing platforms, fulfillment tracking, shipping, and all the other pieces and parts that comprise the entire business operation.
Tip to Prevent: Walk before you run with this one. Sifting through all the options available for a single piece of software is difficult. Our advice is to implement when needed. Don't pile on three or four different platforms that each come with a learning curve that you don't have time to straighten. Implementing as needed will allow you more time to evaluate, select, and learn how to use.
18. Not focusing on the customers
Not focusing on the customer experience can have disastrous consequences for your business. If you're not doing your research first, you run the risk of dropshipping products that are not quality or shipping processes that aren't efficient.
Your customer's needs must be a priority as they are paramount to your success. Being available 24/7 means answering customer questions regardless of how time-consuming it may be initially – this shows genuine concern and attention toward their experience with your business.
Tip to Prevent: The best customer-oriented businesses understand how to handle customer needs efficiently and effectively. This is an area where technology can truly help. Adding chat support is an option many customers love.
There are a tremendous number of excellent chat and help desk options available. Additionally, adding how-to's for using the products you sell, video demonstrations, and providing access to guides, manuals, etc., greatly reduces customer service needs while providing excellent customer value.
19. Not understanding shipping fees
Shipping is one of the most competitive arenas for online merchants. And rightfully so, the cost of delivery is the second leading cause of cart abandonment at 36%, and according to AlexisPartners, 95% said that shipping costs impacted their decision to purchase.
Offering free shipping is a significant value add and a truly competitive advantage but not always easy to do. To prevent profit loss, you have to have a good understanding of how shipping works.
The best way to combat this is to choose a dropship supplier that makes shipping easier for you.
Tip to Prevent: Make sure you factor shipping fees into your product calculations and select which products to sell. You can offer free shipping, but you also need to understand you will likely not receive free shipping, so that cost needs to be removed from your margins, or you need to raise the product cost to maintain your margins.
20. Deficient policies
It is important to ensure your policies are specific and relevant to your business. This way, you can avoid potential legal issues and reassure customers that you take their safety seriously.
You must also be transparent with your policies to eliminate ambiguity or confusion, leading to a more positive customer experience.
Last but not least, ensure you have a copy of all the policies in place handy for reference – especially if changes are made, or new guidelines are issued from time to time.
Tip to Prevent: Understanding which policies you need is easier than knowing what needs to go in them. Consulting with an attorney is a logical next step to protect your livelihood. You can also download policies from sites like LegalZoom or LegalTemplates and customize them for your specific use case.
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How to Avoid Dropshipping Mistakes Wrap-up
Running a successful dropshipping company is challenging and rewarding. You want to reduce dropshipping mistakes so you can enjoy the rewards more. The first step is understanding what mistakes others have made and taking action to put in place the correct elements that will lead you toward success.
Mistakes are inevitable, a part of learning how to dropship. Learning from those and not repeating them is the key to dropshipping success.