Tops Reasons That Why Dropshipping Business Fail & How To Avoid Them

by sathishkumar ramesh April 23, 2020

Dropshipping emerged as one of the popular e-commerce business models, because it offers so many benefits for retail sales.

In this dropshipping business the owner has no need to maintain a stock of goods.

Instead of storing the stocks the dropshipper purchases the product from the supplier who handles the stock and the shipping.

To start the dropshipping business, the dropshipping owner needs only minimal investment.

This minimal investment attracts many budding entrepreneurs and here the problem begins, just because the newcomers assume that dropshipping is easy and they jump into it without prior research.

Without proper practice, they often wind up going out of business and losing their initial investment just as quickly.

Dropshipping business models is not that much easy to handle in spite it holds some tricky parts to carry over, including multiple business processes, customer service needs, choosing the right supplier, and marketing your store.

But when compared to the conventional inventory the dropshipping model is quite easier to handle.

The best way to do successful dropshipping business is to learn continuously about the dropshipping model, how it works, how others did mistakes in this dropshipping business and how they overcome all those mistakes.

Let's start to discuss here some of the common dropshipping mistakes and also discuss the tips to steer your business in the right direction.

How do businesses fail at dropshipping?

Choosing the wrong niche

Choosing the wrong niche is the main reason for dropshipping businesses to fail.

To attract customers and make revenue, you should pick the niche that is currently trending and has the potential to be successful in the market.

For choosing the right choice you should need to do more research on your niche.

If you haven’t done much research, you might compound the problem.

In the initial stage, always be careful and not choose a competitive niche, you’ll end up competing with giants like Amazon and eBay. If you continue this way, you’ll end up wasting your time, money, and effort.

Selecting the wrong platform

Business owners often find it difficult to choose the right dropshipping platform.

There are several different approaches you can take to create your platform :

By creating your website on a hosted platform
creating a seller account on an e-commerce site like Amazon or eBay,
Creating your own dropshipping website.

If you choose one of these randomly without weighing your options, you’re likely to face problems along the way such as reduced customer turnout and eventually poor revenue.

Choosing the wrong suppliers

Once you learn well what to sell and how to sell in your dropshipping business, then the next step is finding reliable suppliers.

In this dropshipping business it is more important to find good suppliers and maintain good ties with them.

You can find the verified suppliers from most e-commerce platforms, but you have to carefully pick the right person from that list.

Always try to meet your dropshipping supplier/ dropshipping wholesaler in person before you finalize a deal with them.

Buy them the sample products and test it personally and also check their shipping times before you think to finalise the deal

Lack of starting capital

Most of the business owners think that this dropshipping needs only minimal investment and capital, but they failed to remember about the monthly business budget or save some funds for rainy days.

Keep in mind, always you have to keep money to make money. If you fail to keep a minimal budget for your operations and processes then you have a chance of your whole business to crash.

Be aware if your customers are not satisfied with the dropshipped products and they return products, ask for refunds, then you may need to get funds out of your reserves, so make sure that you have sufficient savings and can access them.

Inefficient customer support

Customer support plays an important role in dropshipping. First-time sellers tend to assume that once a sale is made, the customers are no longer in the loop.

If you fail to provide sufficient resources for your customer support then it will spoil your online reputation and can eventually lead to the downfall of your business.

What Are The Things To Learn From These Mistakes?

Do research on your niche

Once you decide to begin a dropshipping business, then gather the news more about the dropshipping business and read as much as you can about it in general and about niches that do well.

If you are new to dropshipping business then try to avoid products like food, electronics, and items which can damage easily like glass and ceramic.

Also, go for a niche where the products attract minimal shipping charges and are less likely to be returned.

Next, find out how much demand your products have in the market. You can use tools like Google Trends to gauge interest in various countries using simple keyword search with the names of your products.

How to choose the right platform

Before choosing a platform, make a list of the influential factors like target audience and building a customer base, availability of funds, technical expertise, making profits and so on.

Based on your list, you can answer questions like what products you’re selling, how you choose to sell these products, who you’re targeting as your audience, and what business strategies you have in hand to run your business.

All of these factors will help you choose the appropriate platform.

If you have the funds to invest and good technical expertise, you can choose to create your own dropshipping website.

By selling products on your own dropshipping website, you can exercise control over the selling process, customize your dropshipping website, and make your dropshipping store flexible enough to suit your needs.

Randomly check your platform’s pricing, user-friendliness, flexibility, and customer support, because those can vary between platforms.

How to choose the right suppliers

If you’re choosing from an e-commerce platform’s list of verified suppliers, pick the most reliable ones with the most experience.

The best way to find a supplier is to talk to your manufacturer and see if they have connections with any legitimate wholesalers.

Then you can try doing a background check on those suppliers or you could try looking them up on the internet to find out more about them.

You can also attend trade fairs to meet and connect with suppliers. Once you find good ones, call them up or meet them in person before taking things further.

Provide valuable customer support

If a customer has a problem with their order, you should always be ready to resolve it quickly.

Also, if your customer prefers phone over email or live chat, be ready to schedule a call to resolve the issue.

Check your public and private communication platforms for questions and complaints, and answer them promptly

Be alert not to have negative feedback on your Facebook or Instagram page for other customers to see.

Hope this blog provides you the most valuable information if you have any queries then visit us at https://dropshipsiteforsale.com/ and talk with our experts at Skype: support@dropshipsiteforsale.com and whatsapp us at +91 9489472059