Dropshipping Taught Me Sales Is Hard
If you don’t know, dropshipping is an online business model used to sell products. In dropshipping, the retailer (website) will transfer all of its sales to the manufacturer rather than holding the product themselves. Typically, the retailer will buy products at a wholesale price from the manufacturer, collect the products, then sell to consumers for more money than they paid to earn a profit. In dropshipping, consumers will buy the product from the retailer at a retail price, and then immediately the retailer will buy the product from the manufacturer at the wholesale price. Then the product will be shipped out directly to the customer without the retailer ever seeing the product.
Dropshipping is a great concept in theory. It gets the customer their product, just like in a regular business model. It saves the retailer the time and money of storing and collecting the products. It also is risk-free for the retailer. If the customer doesn’t buy the product, the retailer does not lose any money because the retailer only pays for the product when the customer pays.
Being the inexperienced kid that I am, I thought this business model was perfect for me. Not a lot of money upfront, pretty easy to manage. Everything sounded great, so I got to work.
I researched everything I had to do for about three days on YouTube. I learned how to make a website that entices people to buy with Shopify. I learned how AliExpress was a great, cheap, Chinese wholesaler that was very popular and specialized in dropshipping.
I learned how to do Facebook, Instagram, Snapchat, Google, and influencer advertising.
I spent hours watching videos on marketing funnels and how to target an audience.
Finally, I was ready to launch my first business.
My first product was chargeable fingerprint smart locks. I thought they were genius. I probably charged about $20 per lock on my website and they cost about $10 on AliExpress. I made a killer website with nice pictures and great information. My business name was Pangea Products. I felt so accomplished. I started paying for some Facebook/Instagram ads and let the sales roll in.
Only there were no sales. After about a week of paying for ads, I realized what I was doing was not working at all.
So I switched it up. “Probably a bad advertisement,” I said to myself. So I made a new, better-looking ad to put on Facebook and Instagram. I spruced up the website a bit and tried again. Two days later, your boy got his first sale. I had never been so happy. I fulfilled the item with the manufacturer and celebrated. I had spent about $50 in advertising and I only made $14 back, but it didn’t matter — I was making progress. The rest of the week I didn’t make any changes. I figured if I can get one, I can get two, right?
I suppose Rome wasn’t built in a day. “Maybe I have a bad product”, I thought to myself. So I found a new product. I called it the Tri-Tech Charger. It charges an Apple phone, Apple Watch, and AirPods, all in one — the ultimate Apple charger. Pretty cool, huh? Well, I thought so too.
This time around, I left my fingerprint lock on my page, but I headlined the Tri-Tech Charger. I got everything set up: the website, the ads. I was ready to put my online store to the test. I launched my ads, and after a week I had…
Zero sales. Yep, a real gut check. I guess selling things on the internet isn’t as easy as it sounds. Still, I didn’t give up. For the next month and a half, I kept trying different products, different ads, everything. I even started a clothing store.
All of them failed miserably. When I say “miserably,” I mean I was negative almost $400. Also, that one sale I made got refunded. The shipping took so long that I was forced to give the customer a refund.
Obviously, I wasn’t as smart as I thought I was. Dropshipping seemed like such an easy way to make money when I first started. Turns out selling products is a lot harder than it seems. After two months, I had to stop. I was losing too much money too quickly. I couldn’t sustain what I was losing.
However, I can without a doubt say that in the two months of pursuing this business, I learned more about business than I ever did in high school. I was 16 and setting up marketing campaigns for a legitimate business. Sure I wasn’t successful, but it gave me experience. Personally, I wasn’t upset about losing $400 or wasting time. I look at it as an investment in my education. So when I’m able to restart my entrepreneurship venture, I will be more prepared than I was before.
What I Learned About Dropshipping
During these two months, I picked up a few things about dropshipping.
- The shipping times are terrible. I was using a Chinese supplier, so it makes sense the shipping times are long. However, if you do use a U.S. supplier or a supplier in your country, you should have a better experience. Usually, though, U.S suppliers are a lot more expensive, so your profit margins will take a hit.
- AliExpress products are of low quality. There are comments and reviews of products breaking easily, and if you’re trying to build a long-term, profitable business, I would advise using a different supplier.
- Dropshipping can’t beat Amazon FBA. Not only is Amazon more trusted by customers, but it has two-day shipping. So when I try doing this again, I will be doing Amazon FBA rather than dropshipping.
- Starting a business from the ground up is hard. It’s very difficult to become a trusted brand if no one tries you when you’re first starting out. People don’t like taking a risk, so if your business seems at all sketchy or like a risk, they will not purchase your product or service. Half the battle is proving legitimacy.
- There is no shortcutting a brand. Just because you have a name and a website doesn’t mean you're a business. Customers look at location, employees, reviews, and lots of other small details to know you are a legitimate business. Small details are everything, especially online.
- You can’t be afraid to fail. Because 90% of the time you will. If you're afraid to lose money or you know you can’t keep going even after you’ve failed, then entrepreneurship may not be for you. You have to be the kind of person that learns from their mistakes, understands where they went wrong, and tries again.
- Don’t listen to YouTube ecommerce gurus. They do a great job of making everything seem like a get-rich-quick scheme. Listening to them is how I got into dropshipping, and while I’m glad I tried ecommerce, it was definitely a lot harder than it seemed.
Overall, I am very happy I had this experience. Even though I failed, I have no regrets. I learned a lot. There are some things that can only be learned through experience that are way more valuable than a measly $400. In the grand scheme of my life, it’s a small price to pay for a lifetime of knowledge.
So if you are thinking about starting a business venture in the ecommerce market, do it! Stop waiting for the right time or making sure you’re prepared because, surprise, you’ll never be. You just have to dive into it and do your best. Being afraid of failure is being afraid of success. So don’t be afraid.
“The real test is not whether you avoid this failure because you won’t. It’s whether you let it harden or shame you into inaction, or whether you learn from it; whether you choose to persevere.” — Barack Obama