Dropshipping may have gained a lot of popularity, primarily due to the low cost of entry, but having little worries about inventory isn’t the end. There are a lot of dropshipping failures and the reasons behind them are plenty too.
Whereas some fail due to a fundamental flaw in their entire business model, for others, it can be narrowed down to their store. To have a fighting chance in this highly competitive industry, you need to have a theme that is optimized for conversions.
To get the most out of any visitor, use a theme like Debutify. It can be of help in designing and positioning page elements the right way. Download Debutify, the highest converting free Shopify theme.
Here’s a look at some of the leading causes of dropshipping failures in 2020 and how to avoid them:
Table of Contents
Doing Little Research
Before you even set up a store, it is important to visit others. Talk to some people who have already tried out dropshipping. Don’t listen to just those who are doing well. Try to hear from some who failed at it and find out why.
There are two major areas where poor research will definitely cost you. One is the products. Don’t pick a product just because you see it around a lot. Common products can be hard to sell, especially since you’ll have multiple larger competitors.
The second area is operational costs. From your Shopify store plan to your internet connection, physical or cloud storage, themes, additional apps, banking/transaction fees, dropshipping can be expensive. You may think of ways to undercut your competitor, but they usually cost.
Make sure you’ve set aside enough money for as many of the tangible things as you need. Do the same for any services and operations you imagine you’ll undertake, say in response to competitors. Don’t just list the costs, find out by how much they change each year.
Selecting The Wrong Dropshipping Supplier
Once you’ve set up your store, you need a supplier for your products and shipping. The main mistake new store owners make is going to the big supplier databases and getting the cheapest supplier. The thinking behind this is usually to try and get a good markup.
There are many other important factors to consider when picking a dropshipper. Their warehouse network for starters. This will let you know how quickly they can deliver to certain areas. It is hard to find one who can deliver everywhere with nearly the same speed.
Make sure they can cover many regions efficiently. Your product can turn out to be popular, but mainly in a region in the extreme corner of the country. This can make a supplier who was effective with your first few orders to a different region seem incompetent.
Pick those with centrally positioned warehouses that allow them to reach most areas of the country at roughly the same time. Their know-how in handling fragile products, and the ability to rotate packaging types, and customize them must also be considered.
Also ensure to find out their return procedures, tracking policies, and carrier options. If they can handle order processing, the better.
Starting Out With Too Many Products
While it’s possible to attract a lot of traffic by having a large number of products, it isn’t necessarily a given. A catalog with a lot of product listings poses different challenges in many areas such as marketing and shipping.
When you start out with one product or no more than three, you have the ability to learn everything that is particular to that product. Maybe it doesn’t do well when transported in a hot container. This is the case with DJ vinyls. It might be that it easily breaks.
If a customer orders for it along with some other less fragile products, it can arrive damaged and leave them disappointed. Delivery aside, marketing 500 products can be a headache. If you decide to go for influencers, you may need a lot more of them to cover various categories.
Some products will also demand more attractive photography with models while others may not. Take for instance a fridge and a party dress, makeup kit or jewelry. It may be hard to use artwork or videos that combine a lot of these products, for some audiences.
A good way to approach your product catalog is to start out with no more than five products. This gives you a chance to include a few that go well together, and some that are totally different.
From there, you can slowly learn about which ones move faster and are less stressful to sell. Say two work out and the other three don’t. Drop the three, then pick a new set of five, following the same makeup.
The more you do this, the more you’ll find it easy to add more than five at a time and have more than half of them doing well. To ensure that you have all your products displayed the right way once you step up, use a theme like Debutify that has a Product Tabs add-on.
This will make it easier for them to be clickable, searchable, and most importantly, buyable. Download the free Debutify theme to get the most conversions from your product pages.
Picking A Niche You Don’t Really Like
When picking a niche, it is important to ask yourself how much time you spend doing that activity. Or reading about it. Even more importantly, look around you and see how many of your friends, online or offline, neighbors, workmates, etc. are into it.
Many new store owners see something in a movie, TV show, or documentary and just find it cool because of how it was portrayed. They also hear from the people around them that some items are really expensive because they are rare.
To be successful at a niche, start by immersing yourself in the culture. If you want to sell scented candles, buy a few. Read about how they are made and why some are cheaper than others. Find out what times people light them the most.
It could be that they are occasionally lit, meaning that you’re going to have to wait a while before you sell a customer another. Or maybe there could be spas and massage parlors, restaurants, or other places that use them regularly.
You’ll need to know this if you’re to know who exactly to sell to and stay in business. Join the groups and forums. Write down the names of the most mentioned scents. A good goal for any niche business is to have a niche within the niche.
To make sure you have that one flavor of flavored tea that most other people don’t. Physical events like trade shows and festivals may be a good place to find the rarest stuff. And also to find the person/people who can supply it consistently.
With niches, you’ll also have to do a lot of work finding out which people are very known within those circles. An Instagram beauty influencer with tens of thousands of followers may still fail to help you move even just ten units of a non-beauty product.
Find out some proven strategies on how to pick an eCommerce niche here.
For a lot of dropshipping store owners, their model is this simple; “If they don’t know where to find it themselves, I can charge them as much as I want.”
It is not uncommon to see someone post a basic-looking product with a high price, only for someone to comment with a cheaper source. Sometimes these high prices are due to genuinely high costs of making the product available. But many times, it is just outright greed.
Such store owners usually target a small group of people with some money, but the secret always comes out. When setting prices for your products, ask around to find out what customers’ main pain point is.
For many customers, finding the right shoe or clothing size can be a problem. If you find a way to present as many size options as possible, you might be able to charge higher prices overall. This is because people know they won’t always have to refit these items.
There are newer undergarment brands that have managed to charge fairly high prices by catering to all sizes. The same goes for makeup brands with support for numerous skin complexions.
High prices are therefore not bad, they just have to be properly justified. Always do research on the people you want to sell to. The more price-sensitive they are, the more you’ll have to find an extra value proposition in order to charge higher.
Poor Money Management
Because of the various costs that come with running an online store, dropshipping can be cash-intensive. It may not start out that way, especially with just 1 product and a few sales a month. But once your catalog expands and you start moving products faster, things change.
Imagine forgetting that your subscription for an add-on service or your domain name is about to expire. Or spending a chunk on ads only to have a bad month that leaves you unable to pay your assistant or settle some other cost.
While these scenarios may not be so common if you are a one-man army or small team things can become overwhelming.
You may fail to stay on top of affiliate programs, discounts, coupons, etc., and all the other ways in which changes in suppliers, carriers, and delivery times affect your money flow. To avoid instances that could lead to product unavailability and more, always write everything down.
Use a journal/notes app to note every inflow and outflow the minute it happens. This means that you have something that a professional can start.
As you get busier with the store, consider setting aside some money to pay an accountant to go through your records occasionally. Especially when your tax obligations start rising. Always take off the money for your next immediate costs.
Save some of what you make so you can make longer payments in some areas and enjoy lower costs. Try to go from having next month’s money to having the next quarter's or 6 months’ money.
You can find some basics on how to manage your eCommerce finances here. For a slightly more detailed accounting guide, visit here.
Lack Of Patience
This is mostly hurtful in marketing. When you start a campaign, there’s a lot of time that just goes into just getting people to notice. Many shoppers don’t just go from “never heard of them” to “let me get five of those” in a few clicks and minutes.
People save links to pockets. The screenshot images. Read/view later. They send them around in different groups to find out who has dealt with the store before and how they found it.
Even with massive ads, if you lack tons of social proof, getting sales from a group you targeted may take a while. Don’t forget, there are a lot of other stores advertising to those same people. It’s even tougher if you’re dealing with inexpensive or health-related products.
When you try things for a few weeks and just change them without understanding why they didn’t work, you kill the momentum. That means you’ll always be in a state of starting afresh. Always set clear goals with a timeline. Sometimes, try out different things at the same time.
You can have an automatic discount, and also an influencer-specific coupon code. As long as they are strategies that don’t interfere with each other fundamentally, you can learn a lot, faster.
If you want to be making a profit within 6 months, have enough money to run for at least a year. Always have more money than you need for a particular period. Many people actually give up when they have already gone from zero to a point where things are starting to work.
Trying To Change The Game Fast
As a new dropshipping store owner, it’s not advisable to just jump on the latest trends. You want to offer augmented reality and 3D experiences before you even have a product shoot? Slow down. First master the basics.
This goes as far as the small details. Fonts, pop-ups, dynamic, or animated page backgrounds. Multiple colors and other complex designs. Don’t rush into all that. Leave room for improvement. Try out a few things at a time.
Check to see if there’s anyone doing something futuristic before you do it. Make sure the research shows that your audience needs it.
Failure To Re-Invest In The Business
Just because something works, doesn’t mean it always will. It’s important to make small changes every now and then. This could be adding new products. It may be providing more payment methods and carrier options.
Currency options. Ways of reaching you. It might even be changing your entire store theme for instance. If you decide to change your theme, make sure you go with one that simplifies shopping on any device.
You can also benefit from good button styles since they can make your call to action (CTAs) more effective. Download the free Debutify theme to get your store into that next level of sales volume.
Don’t be that store owner who is using the same product images as a hundred other store owners. The same goes for descriptions and a lot of other tiny details. You can learn more about how to make stand-out product descriptions here.
Poor Customer Support
This is a very crucial part of any business, not just dropshipping. That being said, it can have an even stronger impact on sales, depending on how you do it. Online shoppers surrender their money before even seeing the product itself, just images.
This makes many nervous. Your support should cover every part of the customer journey, from helping them find a specific product, to checking out, tracking a shipment, and even making a return. Take note of the most common questions you receive.
Create a section for them on your FAQ page. Make changes in any background areas of the business that can help reduce those complaints. This may go as deep as changing dropshipping suppliers. Customer feedback is one of the best ways to learn. Pay close attention to it.
All-in-all, lack of persistence remains one of the main reasons for dropshipping failures. People just want to get rich quick and aren’t willing to wait. Especially when it costs them so little to start, but the costs of improvements are always rising.
If you stay in and endure the storm, your product picks, marketing choices, and customer care will start to align at some point. Just stay humble and be willing to always learn from your mistakes and not repeat them.
With a solid theme helping you display products in the right way at the right time, the traffic you drive your way through SEO, ads, influencers, and other efforts will steadily turn into sales.
Download Debutify, the highest-converting free Shopify theme that will have your store ready to convert when you finally start getting many visitors.