Low startup costs, ease, flexibility, and no inventory needs make dropshipping feel like a walk in the park. But as with any business, risks are associated with starting a dropshipping venture. And It’s best to be aware of the common five dropshipping mistakes and ways to avoid them, so you are not taking any chances.
Dropshipping can turn into your worst nightmare if you commit the mistakes we will discuss in this article. But worry not; becoming aware is the first step towards avoiding these mistakes.
5 Common Dropshipping Mistakes and How to Avoid Them
1. Partnering With the Wrong Suppliers
In the dropshipping model, your customer is on one side of the business and your supplier on the other. If your supplier fails to meet your needs and your customer’s expectations, you can be in hot waters.
Running an online business means you are neither interacting physically with your customer nor your supplier. Therefore, doing your research while choosing a supplier is almost obligatory.
Don’t just look at the product descriptions and supplier profiles. Get in touch with them, and ask them questions about manufacturing, delivery, pricing, and priorities. Schedule calls with them, see how often they respond, ask for reviews, and test samples.
Take your time to research and vet the supplier to ensure there aren’t any ambiguities in your partnership. The supplier you choose can make or break your dropshipping business.
Also, it hurts to rely on a single supplier when they can no longer work with you. It’s best to distribute your production to have a backup.
2. Product Listing Problems
When listing products on your online store, pricing mistakes are typical, especially when you have many products to sell. Additionally, inventory updates are a daily task to keep track of. If you work with several suppliers and various products, things can get messy.
If a customer makes a purchase against the incorrect pricing, you either have to inform the supplier or incur the cost yourself. Also, if product details like size, color, and shipping information are not as agreed with your supplier, it can ruin your customer’s buying experience.
Thanks to the digital advancements in the eCommerce realm, there are tools available for various dropshipping business operations. You can automate product imports, inventory updates, and order forwarding with applications like Syncerize to have peace of mind once settings are optimized according to your needs.
3. Setting Unrealistic Price Margins
Many beginners are prone to setting unrealistic product price margins without paying heed to the price sensitivity of their target segment. Devising a customized pricing strategy for your business model is key to penetrating the market.
A simple 40% increase in the supplier’s wholesale rate does not qualify for a 40% profit margin. Other expenses associated with running a dropshipping business range from running a website to marketing and using any dropshipping tools. These costs need to be considered while determining your selling prices.
Careful consideration of the expenses shall inform the price margins you lock for selling products in your online store.
Research your competitor’s pricing strategy and customer behavior and do A/B testing to determine what works for your business. Your prices should not be low to cover your expenses or high to drive customers away.
4. Underestimating Marketing Skills to Sell
When it comes to dropshipping, a lot of stress is made on sourcing the right product. Even if you get your hands on the perfect product, you still need skills to bring eyeballs to your online store to sell and make a profit.
This is where marketing comes to the rescue. A study by Microsoft crowned SEO as one of the most valuable skills for marketers to learn. Your business needs marketing to create brand awareness, build an audience, generate leads, and convert it into loyal customers. You would have to build an interactive website with engaging UI optimized for smartphones and do SEO and email marketing. Leverage social media to engage with your audience and drive sales.
Underestimating marketing is one of the major mistakes incurred by beginner and advanced drop shippers. To become successful at dropshipping, you need to create content and run ad campaigns to stand out from your competitors. You need to stay adaptable to the industry trends and market demands.
5. Not Focusing On Your Customer
Your business exists because of your customers, and if you are not giving them due importance, then soon there won’t exist your business anymore.
Successful dropshipping businesses give priority to their customer queries and complaints- responding in a timely and effective manner. They take accountability for their customer experience. Invest in customer support.
If you aim to go big, make your user experience as seamless and trouble-free as possible, even if you have one customer.
Spend your time and energy building customer trust. Display customer reviews and testimonials on your website, have refund policies in place, and incorporate secure payments options to convey the legitimacy of your brand.
Most of your customers return for the repurchase of your products if satisfied. By focusing on your customer, you are focusing on your business.
You can even outsource this to a business team or rely on virtual assistants in the early stages of your dropshipping venture. As your business grows, you need more hands to meet customer support needs.
Like any business, dropshipping requires management, communication, decision-making, and other soft skills that become potentially damaging if not given due weight. Be sure you stay away from these mistakes to sail smoothly on your journey to generating revenue and scaling your dropshipping venture.
