Drop shipping. The new affiliate marketing for online entrepreneurs. It seems like overnight drop shipping became super popular, but there are a few small and large problems with running a drop shipping business. I would know as I ran one! In this article, I’m going to outlining some of those problems, so you can be more informed before jumping into drop shipping and falling flat on your face.
Shipping Times Take Forever
Envision the last time you bought a product online. How long did you wait for it? My guess is less than 5 days, and you probably waited less than 2. This now becoming the standard for ordering a product online.
Now, how long are your drop shipped products going to take to arrive at your customers door? 7 days? 14 days? 25 days?!? For us, it was around 15–20 days, and people got pissed even with tracking information. With the instant society we live in, delivery times over a week and half will make people feel like they’ve been ripped off.
Profit Margins Are Low
The biggest appeal to buying something from a drop shipping website is usually a low price. Because of this, the amount of actually profit you make per sale is extremely low. Add shipping costs, advertising costs, and hosting costs into the mix, you could be earning next to nothing for each sale you make.
For us, advertising cost was the big factor. This can controlled and optimized, but you need to be prepared to put a lot of money into doing this, which is something many people starting a drop shipping business don’t want to do.
Setting Yourself Apart Is Extremely Difficult
What makes you unique from everyone else selling the exact same products as you? You have got to figure it out because there are DEFINITELY other people selling the EXACT same products as you. The reason I know this is because:
1) Drop shipping is now extremely prevalent, and the chances of you being the ‘first ever’ person to think of drop shipping those products is rare.
2) Someone is already selling your product! That is the entire premise of drop shipping. You buy it from someone else selling on a site like AliExpress and resell it. You have to be at least sell it better than your supplier.
Failure to figure this out will result in no one buying from you, and instead, they will buy from a competitor. You have to have a unique thing that makes you different. We had trouble figuring this out, and it was one of the main reasons we ended up failing.
Suppliers Will Screw You
There is nothing more annoying than getting some orders and not being able to quickly fulfill them because you’ve chosen a shitty supplier. Not only will it take 2 weeks for your order to get from factory to the consumer, it may take a week or two for them to ship it! That’s a total of one month from order to shipping.
Luckily, you can find good suppliers. You’ll just have to check reviews, order products yourself, and test, test, test. If you don’t, you risk your customers testing for you, and they will blame you if the product takes for ever or doesn’t come at all. To them, it is 100% your fault even if you had no control over the process.
*I think it is worth noting that ALL of these problems are solvable, but you can’t solve them if you don’t know they exist. Before you start a drop shipping business, make sure you have a solution for each of these issues.*
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