Last Updated March 6, 2023
Starting a business is difficult; it's the path less taken with treacherous terrain, unpredictable results, and intense competition. Unfortunately, contrary to popular belief, creating a successful business is incredibly difficult—a reality marked by higher failure rates and financial instability.
For dropshipping entrepreneurs, this reality is even more pronounced. As a result, Dropshipping often requires an “all-in” mentality to survive and ultimately succeed in a highly competitive and rapidly changing industry.
However, certain habits can lead to failure among dropshipping entrepreneurs—practices that may lead them to financial ruin. This article will discuss the five worst habits dropshipping entrepreneurs should avoid and some… new dropshippers should consider using themselves.
Dropshipping Business Challenges to Avoid
With any business model, certain challenges come with it, but there are a few key challenges that entrepreneurs should keep in mind. Trying to overcome them can lead to dropshippers creating or adopting bad habits to try and circumvent the issues they face.
Launching your company is frightening
Many would-be entrepreneurs aren't sure they have what it takes to be a successful dropshipper which often leads to hesitation and fear of failure. This can manifest in several ways, such as settling for a low-quality product, not doing enough market research, or cutting corners to save money.
All the hard work and energy you've invested into creating your brand, choosing a product, packaging it correctly, establishing a reliable shipping system, and ensuring that your store looks immaculate can be nerve-wracking – primarily since you dedicated so much time to get every detail just right.
Of course, this line of thinking leads you down a path of self-doubt. What if no one notices that you launched your store? What if something goes wrong during the launch? What if you fail?
In all likelihood, you might, but shouldn't you just quit now? Of course, you could, but then you wouldn't forgive yourself for not trying. Self-doubt is a normal part of life and the entrepreneurial journey, but acting upon it can be dangerous. After all, not taking a chance on your dream business is likely more detrimental than having an imperfect launch.
Rejection is not optional, it's mandatory
As an entrepreneur, dismissal is commonplace in the early stages of a new business and happens at nearly every step. From buyers to investors and suppliers– rejection can be found all around. This regular experience of being pushed away or turned down can have severe psychological tolls on your self-worth and motivation, making it difficult to make sound decisions confidently.
To succeed as an entrepreneur, you must learn to take these inevitable rejections in stride rather than allowing them to define your journey. Instead, entrepreneurs must take each rejection as an opportunity to learn from and gain perspective rather than letting it halt their progress. Each rejection should bring a renewed drive and conviction to tackle the next challenge and perfect their craft.
Running a business isn't easy, but it's worth it
Entrepreneurship is a unique journey; the more challenging the path, the more meaningful it becomes. So take pride in every small victory, whether you're just starting or taking your business to new heights.
As you make your way forward, be sure to plan, look after yourself, network with others for support–and most importantly, cultivate determination as an entrepreneur's life can bring many hardships but also great rewards. Every obstacle overcome will help prepare you for even bigger challenges that may lie ahead.
Entrepreneurs are a lonely bunch
One of the many things dropshippers must prepare for is the loneliness that comes with ‘being the boss.' It can be hard to find someone to talk to who understands what it means to take on the challenges of entrepreneurship.
As a solo business owner, you'll feel isolated and alone due to the scarcity of individuals around you who share your entrepreneurial vision. You'll likely have no one to collaborate or consult with upon making critical decisions that will steer the trajectory of your enterprise. You should expect plenty more people not to understand your goals and call you ‘crazy' for having the ambition to create something.
That's why entrepreneurs need to find communities, networks, and mentors to help them along their journey. You can develop a strong support system by surrounding yourself with inspiring people who have experienced similar struggles.
Entrepreneurship is a non-linear journey
Strap in and prepare for the roller coaster of entrepreneurship. Every day brings new adventures and challenges, from unanticipated operational issues to obtaining financing, recruiting staff, sourcing materials, and ensuring quality control. Embrace each surprise as an opportunity to prove your mettle.
Unfortunately, you're bound to have more lows than highs in the early stages of starting your business because you must first build a solid foundation. Building that solid foundation takes time and patience, but that's how successful companies are made; entrepreneurship is a journey with unexpected twists and turns.
Entrepreneurs Experience Burnout
Entrepreneurship can be intimidating, requiring one to juggle many responsibilities, such as marketing, customer service, web design, and more. In addition, operating your business 24/7 means that work often takes priority over life. With such a busy lifestyle, giving up on self-care and succumbing to damaging habits is easy.
At the time, you may think it's best to ignore yourself for a while, but you'll eventually feel the impacts of no movement, no food, and insufficient sleep. Burnout is a slow burn, it's like you're a frog in a pot of water that's slowly heating up, and you don't realize it's happening.
Starting a business is no easy feat, but the rewards can be worth it. Take care of your mental and physical health, build a strong support system, learn to take a higher risk, and remain resolute in the face of adversity. In other words, be prepared for any possibility.
5 of the Worst Habits of Dropshipping Businesses
In our practical world, dropshipping may appear straightforward for anyone looking to capitalize on a fast sale. Nevertheless, achieving success requires patience and dedication – you're sure to make mistakes while mastering the art of dropshipping.
Navigating the dropshipping world may seem like a piece of cake, but it takes more than just marketing skills to be successful. However, problems arise when dropshippers believe they can avoid mistakes by adopting poor habits.
Ignoring Your Physical and Mental Health
Investing in your well-being will not only improve your health, but it can also bolster the success of your online business. This is because entrepreneurs must prioritize their well-being for peak performance.
For example, are you frequently staying up late at the office? Many hardworking professionals proudly wear it as a sign of dedication to their company or mission. Working countless hours in the workplace demonstrates how much they are personally invested and committed to achieving success, right?
You can be personally invested in your business and keep your health in check. But, by ignoring the merits of self-care, you've bought a one-way ticket to “Founders burnout.”
Acknowledge the merits of self-care
- Minimize stress by exercising – Sadly, 96% of people fail to stick to their personal development goals due to strong tendencies towards activities with more tangible results.
- Get quality sleep – Sleep deprivation can seriously impede your productivity, motivation, and overall health. While entrepreneurs think that forgoing breaks or cutting back on sleep will help them get ahead, this is untrue. Instead, make rest periods a part of your daily routine to ensure optimal results and well-being.
- Create a workspace you enjoy – most offices are designed to fit a function, not necessarily the individual. If you are working from home, create a workspace that allows you to be productive. From stationery to artwork, your office space should inspire and motivate you.
- Fuel up when you need energy – even if you are taking care of yourself, don't be afraid to take a break and treat yourself to something that will boost your energy. After all, your journey is an endless cycle of hustle – rewards are essential for motivation. So grab that Starbucks coffee and return to work.
- Check your mental health – unfortunately, approximately 72% of entrepreneurs have mental health issues; the best thing to do is speak to a therapist. Entrepreneurs who don't take their health seriously can easily fall into depression, as burning the candle at both ends can often increase feelings of anxiety and depression.
The best entrepreneurs value their life and take their mental well-being and physical health seriously, and if you don't start doing it, you'll fail as a dropshipper. That's not being rude or demeaning anyone's ability; it's just a fact.
- Download wellness apps – people can use these to deal with mental fatigue, stress, or depression properly; successful entrepreneurs always use these apps to meditate or provide mental clarity amidst the chaos.
- Listen to wellness podcasts – podcasts provide us with daily motivation, ideas for streamlining processes, and mental clarity. Listening to wellness podcasts can help entrepreneurs stay on top of their game and avoid depression or anxiety.
Interact with others
It's a shame, but many entrepreneurs are so focused on their businesses that they forget to invest in relationships. Relationships provide us with much-needed support and feedback.
- Mentorship – mentors help entrepreneurs by giving them guidance and advice based on personal experience. Connecting with a business coach can be invaluable, especially when improving your skillset.
- Attend events – attending online networking events and programs like virtual conferences or webinars can open you up to new ideas and opportunities. Moreover, these will help you increase your visibility as a dropshipping entrepreneur.
- Join groups – online groups or communities with like-minded people can help you stay motivated. These groups provide a great platform to get constructive criticism, ask questions, and interact with potential partners.
Engage in hobbies
Entrepreneurs aren't just ignoring and separating themselves from those around them; they also ignore their hobbies. This doesn't mean you should ignore your business, but rather that you should also make time for yourself to do the things that make you happy.
This could mean taking up painting, photography, or even gardening. Doing something outside of work will provide a nice break from the daily hustles of dropshipping and give you something to look forward to after your workday.
Operating Your Online Store Without a Clear Business Plan
You need an effective business plan if you want your dropshipping store to survive. You should also ensure it is updated frequently as the industry and consumer trends change constantly. An excellent online business plan will help you map your strategies and objectives and remain focused on what's most important.
All too often, inexperienced business owners launch their venture without comprehending the current market trends, budgeting necessities, or company mission. Unfortunately, this narrow-mindedness can lead to disastrous outcomes. However, an overarching goal provides direction when faced with hardships and is an excellent benchmark for measuring success.
- Not validating your business ideas – People fail to conduct market research which causes costly miscalculations and can damage a new enterprise. To stand out in the dropshipping space, take the time to understand your competition and how to differentiate from them.
- Don't get tempted by other business owner models – Consider researching options such as wholesale, subscription-based models, or even white labeling to determine which suits you best. Then, work on the dropshipping model you chose before trying another one.
- Stick to the two main market types: B2B and B2C – Don't limit yourself to just one or the other; rather than serving just businesses or consumers, see if your dropshipping store can do both or set up independent stores later to target different markets.
- Pick your niche, understand it – It's essential to understand if your dropshipping niche is right for you before diving into it. When the demand for a niche is low, and there are already too many established competitors, starting a business in that area may not be worth it. To get the best market view, look at your competitor's online reviews, social engagement habits, blogging schedule, public relations, and SEO. Also, keep an eye on the long-term impacts of niching your business; if you go too specialized, you risk losing potential customers in the long run.
Ultimately, succeeding as a dropshipping entrepreneur requires much more than hard work and dedication—it's also about making smart decisions.
No product research
Intelligent decisions require careful planning and perhaps a little foresight, but no dropshipper is magical and therefore has to rely on the right tools. A crucial part of this is researching products and suppliers. Without good-quality products, you won't survive, no matter how much advertising or marketing you do.
Researching new suppliers, products, and industry trends can be time-consuming and require significant energy. However, spending time on research is necessary if you don't want to waste resources on products that won't sell.
Don't spread yourself too thin; try to sell many products simultaneously. Adding more products to attract more customers doesn't always help.
- Best Dropshipping Products in 2022 to Maximize Profit & Propel Growth
- Best Dropshipping Suppliers USA & International in 2022 to Improve Your Online Success
Don't worry about SEO…yet
SEO isn't all that, but as much as it sounds counterintuitive, it isn't. SEO is essential for eCommerce businesses, but it's not the starting point. In the beginning, you'll work closely with your suppliers, leaning on them and using their resources to ensure your target customers see your store.
Then, once you've established solid product descriptions and advertising structure, focus on creating a great user experience and high-quality content daily. Then, as you make the content, start optimizing it.
No marketing strategy
Preparing your marketing plan is much simpler when you have crafted a successful eCommerce website and are familiar with your customer's desires and where to locate them. On the other hand, if these components aren't entirely understood, constructing an effective strategy can be like playing the game of “pin the tail on the donkey.”
In other words, you're operating blind and passing off a trial-and-error tactic as a fully-fledged strategy without any course of action. On the other hand, marketers with a plan are 313% more likely to succeed.
- Don't use Facebook Advertising; stick to Google Ads initially – Facebook Ads can be incredibly expensive, and most people on the platform are there to scroll through their feeds. So you could potentially waste precious ad spend; most dropshippers prefer to use Google Ads as it's more cost-effective. In addition, you can easily track your ads' performance, how long people stay on your website, and your conversions.
- Using influencer marketing – As a new business utilizing an influencer to market your products and services may be out of reach. Since it's a trend these days in marketing, it's also quite expensive, especially if the influencer has a large following. These celebrities may also not provide the value they promise, leaving you further behind.
- Not knowing buyer personas or target audience – Quality business research for dropshipping, or any business model, requires excellent product ideas and intense customer research. Unfortunately, while checking in on data about products is part of the process, many new dropshippers neglect the critical step of building a customer profile. Having a thorough understanding of your customers – who they are, what motivates them, and the behavior patterns that result from it – you'll be able to give them an experience tailored precisely to their needs.
Treating business like a hobby
The problem with treating your business like a hobby is that it can quickly become a burden. It's easy to set yourself up for failure by not planning, tracking results, and continuously improving your products and services.
Additionally, when working on something you don't envision as an investment or career opportunity, it's easy to give up when it gets tough. If you treat your enterprise as a hobby and not as a real business opportunity, it's unlikely that you'll see much success in the long run.
Having Unrealistic Expectations
It's easy for any beginner in the dropshipping business to become overly optimistic due to certain factors like not having to manage products directly, no inventory management required, and a lack of overhead associated with coordinating multiple tasks. However, don't let the facade fool you.
While dropshipping does offer entrepreneurs the invaluable opportunity to be freed from certain financial and logistical burdens, making it easier than ever to grow a business, that's not all there is to it. It would be best to remain dedicated for your venture to thrive; adjust your thinking early and expect to take on specific roles and tasks to make your business successful.
Promising optimistic delivery times
We get it; it's tempting to attract more customers by promising fast delivery times. However, unless you have a solid logistics strategy and can consistently meet those expectations, this is a surefire way to set your business up for failure.
Realistic delivery times should be based on the available shipping options. If you're not Amazon sending Prime packages or you're not working with a reliable logistics partner, chances are your delivery times won't be as fast.
Nonetheless, it would be best if you still strived to provide the best value possible. If you can, try to set up a tracking system, a shipping logistics program, or a shipping calculator to ensure customers know when their orders will arrive.
Expecting easy money
Dropshipping is a real business. And like any other venture, it requires hard work and dedication to succeed. Even now, you'll see many gurus promising easy money with dropshipping.
Unfortunately, these claims are often unsubstantiated; they are unrealistic because they scratch the surface and only show you the good things that could happen with your dropshipping business.
- Giving up too quickly – the gurus don't tell you about the ones that quit too early or show you the data of how many dropshipping businesses fail due to poor choices or unrealistic expectations. For the record, only 10% of dropshipping companies make it through the first year.
- Choosing poor marketing tactics – no one is a perfect marketer from the get-go, so don't let that stop you from trying. Curb the temptation to go after easy marketing schemes because that's all they are. If you want to invest in actual marketing tactics, avoid placing ads on the wrong platforms, promote products to an audience you don't understand, and don't skip performance tests.
- Not knowing your financials – New businesses, especially dropshipping companies, will encounter many initial expenses, which causes problems with cash flow. Starting a business requires numerous payment responsibilities, such as marketing and promotion fees, website setup costs, and supplier advance payments.
Expecting one vendor/supplier to keep your business going
It takes time to build a working relationship with a producer. But what would happen to your business if your manufacturer decides they no longer want to work with you? What if your producer's business collapses while you have some pending orders?
You may find it very rough if you never had a backup. A backup supplier is the safest way to ensure your business will keep running even if one of your producers goes belly up.
- Not building a relationship with your suppliers – Suppliers are the lifeline of any online business. Initially, relations between you and them are usually limited to communication regarding product availability and shipping logistics; this may include a mix of phone conversations, emails, or Skype calls. However, if you allow this to continue, your suppliers may begin to take advantage of the situation. Build a better relationship with them so that when their goods are in low supply, they will prioritize you.
No Financial Plan for Your Own Business
The bottom line is you need to keep your finances updated so that all your profits, losses, revenue, and all other financial details are in front of you.
If you don't, your online business will look like a mess of virtual duct tape, misdirected marketing, terrible web design and user experience, and a lack of understanding of the financials. Conversely, your dropshipping business will succeed more when your finances are in order. Period.
Understanding the initial expenses
- Incorporating – Incorporating your business can provide numerous benefits, including tax deductions, limited liability protection, and more credibility. In addition, incorporation is vital in creating a successful dropshipping business; ensure you know the incorporation process.
- Rent – A lease or rental payments may be necessary if you plan on running your business out of a physical location. When budgeting for the company, you can manage the cash flow for rent, deposits, and other costs associated with the premises.
- Business Documents – Including the Articles of Organization, EIN, Business Cards, Business licenses, and more. Legal documents are essential for running a dropshipping business and should be included in the initial expenses. If you don't want to do it yourself, you can incorporate using services like LegalZoom or LegalTemplates.
- Market Research – You cannot start a successful dropshipping business without proper research. Researching the industry, customers, suppliers, and your dropshipping niche are essential for creating an outstanding company. Thorough research can help you determine the best strategies and position yourself competitively; many entrepreneurs use tools like Google Trends, SEMrush, or Ahrefs.
- Marketing and Promotions – It takes money to make money. So when it comes to marketing, you must create a plan outlining the costs associated with marketing your products. Advertising can include email campaigns, website creation, hiring a content writer, and managing your presence on social media.
- Setting up your online store – Developing a website requires substantial time, money, and technical know-how. You're in luck if you already have the skills to build your store. If not, website-building platforms like Shopify or BigCommerce can help you get started with an online store.
- Website design – A website doesn't just appear out of thin air. Invest in a professional design team if you want a unique and profitable website; this could include everything from website content to SEO and graphic design.
Gross income vs. net income
Gross income is the total revenue from goods sold, while net income is the amount left after subtracting expenses like taxes and overhead costs. In addition, Gross income deals with the Cost of Goods (COGS) or the costs of the goods used to manufacture or create a product. Therefore, dropshippers must understand the difference between gross and net income. But why?
Gross profit vs. net profit
Gross profit is the difference between sales and the cost of goods sold. This helps you determine how efficiently your business manufactures products. Net profit, on the other hand, is the difference between gross profit and operating expenses and helps investors or creditors understand the overall profitability of your business.
Believe it or not, you don't need to make huge profits to stay in business. However, profit margin gives you an idea of how much your business makes. It's calculated by subtracting the COGS from revenue and dividing it by sales.
A higher margin equals a healthier business, while a lower margin means you should adjust your pricing or reduce costs. Knowing your profit margin will help you understand what you're getting into with dropshipping and what to expect month by month.
Banks, potential investors, angel investors, and other financing sources require an understanding of the difference between working capital and funding. Working capital is the money used to pay for operational costs, such as marketing, inventory, and salaries.
Funding is the money you borrow or receive to cover upfront costs like setting up a website or paying suppliers. You must understand how to manage your working capital and secure sufficient funding before launching a dropshipping business.
No Preparation for the Unexpected
Predicting the future is impossible, no matter how prepared you think you think you are. Dropshipping is a volatile industry and requires an aptitude for adaptability. You must be agile and adjust your strategy quickly to keep up with changing markets, trends, and technologies.
- Vendor Issues – Having only one vendor often leads to complications, and once you have one issue with your vendor, it can cause a ripple effect and affect your bottom line. Therefore, you must stay vigilant when vetting vendors and selecting the right partner.
Mishandling damaged or lost items
When dealing with small or fragile items, mishandling or loss can become a problem. It would be best to consider shipping costs and replacing lost or damaged items.
You can mitigate this risk by working with experienced, reliable shipping partners and offering insurance on your products.
Return policies can make or break your business. An easy-to-understand return policy will keep customers happy and ensure they return to you in the future.
- Order changes or Cancellations – order issues are expected in the dropshipping business. Preparing to handle any changes or cancellations your way is key to creating customer loyalty and avoiding disputes with vendors.
No customer service
Good customer service sets you apart from the competition when selling products. Answering questions, addressing issues, and providing general assistance will help build customer loyalty. You must be prepared to offer added value to your customers or risk losing them.
- 24/7 Customer needs – customers expect you to be available at all times. You must be able to respond to customer inquiries quickly and have an effective system for handling orders and returns.
- No chat or email system in place – chat and email systems are essential for efficient communication. An automated chat system can help customers in real time, while an email system can provide quick responses.
Tips That Will Jumpstart a Personal and Professional Growth Mindset
When starting a business, it's important to have a growth mindset. This means having the drive and determination to take risks, challenge yourself and make a real impact in your customers' lives. Here are some tips to get you started:
Know When to Hire Help
If you can't afford to use or don't have time to set up automation tools, an extra set of hands may help clear your plate and help you refocus.
- Part-time vs. Full-time – Decide whether hiring a part-time or full-time employee would be beneficial. Part-time employees may be more flexible and have the skills to help you with the day-to-day business tasks. Plus, part-time may work better for your business overall if you don't yet have the workload to keep a full-time employee busy.
- Help can handle Necessary and Unnecessary Menial tasks – Consider outsourcing some operations to free up some of your time. This allows you to focus on more important tasks that move the needle and grow your business. For example, a virtual assistant could help manage your calendar, emails, and customer service inquiries.
Use Data Analytics
Data analytics is a powerful tool that can help you make informed decisions. Data can provide valuable insights into customer behavior, preferences, product trends, and delivery times. With data analytics, you'll be able to measure the success of your campaigns and optimize your strategies for maximum efficiency.
- Review customer feedback and online reviews – Surveys are an excellent way to collect and review customer feedback. Additionally, reading and responding to online reviews can be good practice, help you engage with customers, build relationships, and gain insight into their needs.
- Google Trends – Google Trends is a powerful tool for understanding the latest search trends and staying ahead of the competition. You can use Google Trends to discover trends and adjust your product offerings accordingly.
- SEO Strategy – Since Google is so tightly woven into most of our daily activities, spend time building an SEO strategy optimized for search engine rankings. An SEO-friendly website, eCommerce store, marketing materials, and blog will help you in the long run.
Look to the Future and Innovate
Unless you only plan to run your business for a few years, you must continually look for ways to innovate. In the early days as an entrepreneur, invest in research and development, use artificial intelligence tools, or discover what your customers need and develop new products to meet those needs.
- Build a System – Creating systems to manage the various elements of your business will help you stay organized. This will also make it easier for you to focus on growth and scaling. Additionally, you should create systems to help you measure your strategies' success and target those performing best. It may be best to look at all-encompassing tools like Groove or Builderall to create a system from one platform.
- Invest in the right dropshipping technology – Investing in the right dropshipping technology can help you save time and money. Automation tools like Spocket for Shopify stores and Dropified for WooCommerce can help streamline your dropshipping process.
Dropshipping Entrepreneurs Habits Wrap-up
Dropshipping is an incredibly competitive industry with numerous challenges and rewards. Don't let yourself get carried away by what seems like easy money. Instead, face these potential pitfalls head-on and try to improve and learn from your mistakes.
The distinction lies in how you bounce back from those obstacles—we often learn just as much from our blunders as we do when achieving success, maybe even more. If you can identify and comprehend these common slip-ups, it will be easier for your business to overcome potential adversities.